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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2024
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number: 001-39755
Navitas Logo(R) (SELECT).jpg
Navitas Semiconductor Corporation
(Exact name of registrant as specified in its charter)
Delaware85-2560226
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
3520 Challenger Street90503-1640
Torrance,California
(Address of Principal Executive Offices)(Zip Code)
(844) 654-2642
Registrant’s telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock,
par value $0.0001 per share
NVTSNasdaq Stock Market LLC
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 183,457,686 shares of Class A Common Stock were outstanding at August 2, 2024.

TABLE OF CONTENTS
Page
Part I - Financial Information
Item 1.
Item 2.
Item 4.
Item 1.
Item 1A.
Item 5.


TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands, except shares and par value)June 30, 2024December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$111,995 $152,839 
Accounts receivable, net 22,679 25,858 
Inventories 25,159 22,234 
Prepaid expenses and other current assets 4,747 6,178 
Total current assets164,580 207,109 
PROPERTY AND EQUIPMENT, net13,259 9,154 
OPERATING LEASE RIGHT OF USE ASSETS7,820 8,268 
INTANGIBLE ASSETS, net81,563 91,099 
GOODWILL163,215 163,215 
OTHER ASSETS 8,613 6,701 
Total assets$439,050 $485,546 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable and other accrued expenses $13,113 $24,740 
Accrued compensation expenses7,749 10,902 
Operating lease liabilities, current1,886 1,892 
Customer deposit and deferred revenue6,204 10,953 
Total current liabilities28,952 48,487 
OPERATING LEASE LIABILITIES NONCURRENT6,286 6,653 
EARNOUT LIABILITY13,103 46,852 
DEFERRED TAX LIABILITIES1,040 1,040 
ACCRUED ROYALTIES NONCURRENT 1,569 1,897 
Total liabilities50,950 104,929 
COMMITMENTS AND CONTINGENCIES (Note 13)
STOCKHOLDERS’ EQUITY:
Common stock, $0.0001 par value, 750,000,000 shares authorized as of June 30, 2024 and December 31, 2023, and 183,502,186 and 179,196,418 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively
21 21 
Additional paid-in capital714,282 680,790 
Accumulated other comprehensive loss(7)(7)
Accumulated deficit(326,196)(300,187)
Total stockholders’ equity388,100 380,617 
Total liabilities and stockholders’ equity$439,050 $485,546 
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)

Three Months Ended
June 30,
Six Months Ended
June 30,
(In thousands, except per share amounts)2024202320242023
NET REVENUES$20,468 $18,062 $43,643 $31,420 
COST OF REVENUES (exclusive of amortization of intangible assets included below)12,478 10,572 26,138 18,445 
OPERATING EXPENSES:
Research and development18,971 16,791 39,200 34,186 
Selling, general and administrative15,382 13,151 31,469 32,209 
Amortization of intangible assets4,774 4,773 9,548 9,272 
Total operating expenses39,127 34,715 80,217 75,667 
LOSS FROM OPERATIONS(31,137)(27,225)(62,712)(62,692)
OTHER INCOME (EXPENSE), net:
Interest income (expense), net (72)347 (70)1,250 
Dividend income 1,361 459 3,041 459 
Gain (loss) from change in fair value of earnout liabilities7,550 (32,224)33,749 (59,976)
Other income31 20 114 31 
              Total other income (expense), net8,870 (31,398)36,834 (58,236)
LOSS BEFORE INCOME TAXES(22,267)(58,623)(25,878)(120,928)
INCOME TAX PROVISION (BENEFIT)61 (96)131 (35)
NET LOSS(22,328)(58,527)(26,009)(120,893)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS   (518)
NET LOSS ATTRIBUTABLE TO CONTROLLING INTERESTS$(22,328)$(58,527)$(26,009)$(120,375)
NET LOSS PER COMMON SHARE:
Basic net loss per share attributable to common stockholders$(0.12)$(0.35)$(0.14)$(0.75)
Diluted net loss per share attributable to common stockholders$(0.12)$(0.35)$(0.14)$(0.75)
WEIGHTED AVERAGE COMMON SHARES USED IN NET LOSS PER SHARE ATTRIBUTABLE TO COMMON STOCKHOLDERS:
Basic common shares183,127 165,606 181,493 161,086 
Diluted common shares183,127 165,606 181,493 161,086 
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(unaudited)

Three Months Ended June 30,Six Months Ended June 30,
(In thousands)2024202320242023
NET LOSS$(22,328)$(58,527)$(26,009)$(120,893)
Other comprehensive income
    
COMPREHENSIVE LOSS(22,328)(58,527)(26,009)(120,893)
COMPREHENSIVE LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST   (518)
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO CONTROLLING INTEREST$(22,328)$(58,527)$(26,009)$(120,375)
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)

Stockholders' Equity (Deficit)
SIX MONTHS ENDED JUNE 30, 2024Common stockAdditional
paid in
capital
Accumulated
deficit
Accumulated
comprehensive
loss
Noncontrolling interestTotal
SharesAmount
BALANCE AT DECEMBER 31, 2023179,196 $21 $680,790 $(300,187)$(7)$ $380,617 
Issuance of common stock under employee stock option and stock award plans3,801 — 10,734 — — — 10,734 
Stock-based compensation expense related to employee and non-employee stock awards— — 10,247 — — — 10,247 
Net loss— — — (3,681)— — (3,681)
BALANCE AT MARCH 31, 2024182,997 $21 $701,771 $(303,868)$(7)$ $397,917 
Issuance of common stock under employee stock option and stock award plans505 — 1,123 — — — 1,123 
Stock-based compensation expense related to employee and non-employee stock awards— — 11,388 — — — 11,388 
Net loss— — — (22,328)— — (22,328)
BALANCE AT JUNE 30, 2024183,502 $21 $714,282 $(326,196)$(7)$ $388,100 

Stockholders' Equity (Deficit)
SIX MONTHS ENDED JUNE 30, 2023Common stockAdditional
paid in
capital
Accumulated
deficit
Accumulated
comprehensive
loss
Noncontrolling interestTotal
SharesAmount
BALANCE AT DECEMBER 31, 2022153,629 $18 $535,875 $(154,754)$(7)$3,628 $384,760 
Issuance of common stock under employee stock option and stock award plans3,082 — 2,925 — — — 2,925 
Stock-based compensation expense related to employee and non-employee stock awards— — 14,884 — — — 14,884 
Shares issued in connection with buyout agreement4,232 — 7,509 — — (3,110)4,399 
Net loss— — — (61,847)— (518)(62,365)
BALANCE AT MARCH 31, 2023160,943 $18 $561,193 $(216,601)$(7)$ $344,603 
Issuance of common stock under employee stock option and stock award plans1,207 — 633 — — — $633 
Shares issued in May 2023 public offering, including underwriter's exercise of option to purchase shares, net of issuance costs11,500 1 86,458 — — — $86,459 
Stock-based compensation expense related to employee and non-employee stock awards— — 10,246 — — — $10,246 
Net loss— — — (58,527)—  (58,527)
BALANCE AT JUNE 30, 2023173,650 $19 $658,530 $(275,128)$(7)$ $383,414 

The accompanying condensed notes are an integral part of these condensed consolidated financial statements.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited)
Six Months Ended June 30,
(In thousands)20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss$(26,009)$(120,893)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation1,449 981 
Amortization of intangible assets9,548 9,272 
Non-cash lease expense1,178 512 
Stock-based compensation expense26,639 29,731 
Amortization of debt discount and issuance costs 85 
(Gain) loss from change in fair value of earnout liability(33,749)59,976 
Deferred income taxes 5 
Change in operating assets and liabilities:
Accounts receivable3,179 (6,026)
Inventories(2,925)166 
Prepaid expenses and other current assets1,431 (668)
Other assets576 (1,644)
Accounts payable, accrued compensation and other accrued expenses(10,373)11,832 
Operating lease liability(1,103)(527)
Customer deposit and deferred revenue(4,749) 
Net cash used in operating activities(34,908)(17,198)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment purchases(2,500)(1,000)
Purchases of property and equipment(5,639)(1,704)
Net cash used in investing activities(8,139)(2,704)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock in connection stock option exercises415 854 
Proceeds from issuance of common stock in May 2023 public offering 86,941 
Payment of May 2023 public offering costs (482)
Proceeds from employee stock purchase plan1,788  
Net cash provided by financing activities2,203 87,313 
NET DECREASE IN CASH AND CASH EQUIVALENTS(40,844)67,411 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD152,839 110,337 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$111,995 $177,748 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes$116 $ 
Cash paid for interest$ $10 
Shares issued in connection with buyout agreement$ $22,400 
Capital expenditures in accounts payable$414 $180 
    
The accompanying condensed notes are an integral part of these condensed consolidated financial statements.

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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. ORGANIZATION AND BASIS OF PRESENTATION
Navitas Semiconductor Corporation (“the Company”) designs, develops and markets next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”), silicon carbide (“SiC”) devices and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging. Power supplies incorporating the Company’s products may be used in a wide variety of applications including fast chargers for mobile phones and laptops, consumer electronics, data centers, solar products, electric vehicles and infrastructure, among numerous other applications. The Company’s products provide superior efficiency, performance, size, cost and sustainability relative to existing silicon technology. The Company presently operates as a product design house that contracts the manufacturing of its chips and packaging to partner suppliers. Navitas maintains its operations around the world, including the United States, Ireland, Germany, Italy, Belgium, China, Taiwan, Thailand, South Korea and the Philippines, with principal executive offices in Torrance, California.

Investment in Third Party
On January 3, 2024, the Company made an additional investment of $2.5 million in preferred interests in a third party. The Company’s new ownership percentage increased to 15.48%. The investment is $5.0 million and $2.5 million as of June 30, 2024 and December 31, 2023, respectively. Such investment is included in Other Assets in the Condensed Consolidated Balance Sheets and is accounted for as an equity investment under ASC 321 Investments - Equity Securities. In accordance with ASC 321, the Company elected to use the measurement alternative to measure such investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.

May 2023 Public Offering
On May 26, 2023, the Company completed an underwritten public offering (the “May 2023 Public Offering”) of 10,000,000 shares of its Class A Common Stock at a public offering price of $8.00 per share, before deducting underwriting discounts and commissions. In connection with the May 2023 Public Offering, the Company granted the underwriters of the offering a 30-day option to purchase up to an additional 1,500,000 shares of the Company’s Class A Common Stock (the “Option Shares”) from the Company at the same public offering price. On June 1, 2023, the underwriters exercised in full their option to purchase the Option Shares. The sale of the Option Shares closed on June 5, 2023. After deducting underwriting discounts and commissions and before deducting offering expenses payable by the Company, the Company received net proceeds of $75.6 million and $11.3 million from the May 2023 Public Offering and sale of the Option Shares, respectively. The total net proceeds received by the Company after deducting offering expenses was $86.5 million. The Company intends to use the net proceeds for working capital and other general corporate purposes, including potential acquisitions or strategic manufacturing investments.

Acquisitions
In January 2023, the Company announced an agreement to acquire the remaining minority interest in its silicon control IC joint venture from Halo Microelectronics International Corporation for a purchase price of $22.4 million in Navitas stock. The transaction was completed in February 2023. See Note 15, Noncontrolling Interest, for more information.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Basis of Presentation
The unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The information contained in the condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which are in the opinion of management, necessary for a fair presentation of such condensed consolidated financial statements. Operating results for the three and six months ended June 30, 2024, are not necessarily indicative of results to be expected for the full year ending December 31, 2024. Certain footnote disclosures normally included in annual consolidated financial statements prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States of America have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. The accompanying condensed consolidated financial statements should be read in conjunction with consolidated financial statements and notes thereto contained in the Company’s annual report on Form 10-K/A filed for the fiscal year ended December 31, 2023, filed with the SEC on July 23, 2024. Except as further described below, there have been no significant changes in the Company’s accounting policies from those disclosed in its Form 10-K filed with the SEC on March 6, 2024.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
2. SIGNIFICANT ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Valuation of Contingent Consideration Resulting from a Business Combination
In connection with certain acquisitions, the Company may be required to pay future consideration that is contingent upon the achievement of specified milestone events. The Company records contingent consideration resulting from a business combination at its fair value on the acquisition date. Each quarter thereafter, the Company revalues these obligations and record increases or decreases in their fair value within the Company’s Condensed Consolidated Statements of Operations until such time as the specified milestone achievement period is complete.
Increases or decreases in fair value of the contingent consideration liabilities can result from updates to assumptions such as the expected timing or probability of achieving the specified milestones. Significant judgment is employed in determining these assumptions as of the acquisition date and for each subsequent period. Updates to assumptions could have a significant impact on the Company’s results of operations in any given period. Actual results may differ from estimates.

Reclassifications
Certain items in the prior period’s condensed consolidated balance sheets and condensed consolidated statements of operations have been reclassified to conform to the presentation for the three and six months ended June 30, 2024. Dividend income was previously included within interest income (expense), net. Additionally, for the prior period, the Company reclassed $0.9 million from inventories to prepaids and other current assets related to the sales returns inventory. Lastly, the Company reclassed $1.4 million from prepaids and other current assets to other assets and $1.9 million from accounts payable and other accrued expenses to its own line for accrued royalties related to an indemnity asset and royalty liability, respectively. There was no impact to net loss and retained earnings as a result of the reclassifications.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Recently Issued Accounting Standards
In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, titled Income Taxes (Topic 740): Improvements to Income Tax Disclosures. These amendments address investor requests for enhanced transparency regarding income tax information. Specifically, they improve income tax disclosures related to rate reconciliation and income taxes paid. ASU 2023-09 becomes effective for fiscal years beginning after December 15, 2024, with early adoption permitted. While the Company is currently assessing the impact of this standard, anticipate it will result in disclosure changes only.
This Form 10-Q does not include any other newly implemented accounting standards or pronouncements beyond those detailed above. Such exclusions were made because they either do not apply to the Company or are not anticipated to materially impact the condensed consolidated financial statements.
3. INVENTORIES
Inventories consist of the following (in thousands):
 June 30, 2024December 31, 2023
Raw materials
$4,920 $7,743 
Work-in-process
15,370 10,863 
Finished goods
4,869 3,628 
Total
$25,159 $22,234 
4. PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following (in thousands):
June 30, 2024December 31, 2023
Furniture and fixtures$449 $244 
Computers and other equipment13,037 10,339 
Leasehold improvements4,060 2,360 
Construction in Progress2,086 1,114 
19,632 14,057 
Accumulated depreciation(6,373)(4,903)
Total$13,259 $9,154 
The depreciation expense was $0.7 million and $1.4 million for the three and six months ended June 30, 2024 and $0.5 million and $1.0 million for three and six months ended June 30, 2023, respectively, and was determined using the straight-line method over the following estimated useful lives:
Furniture and fixtures
3 — 7 years
Computers and other equipment
2 — 5 years
Leasehold improvements
2 — 6 years
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
5. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The accounting guidance on fair value measurements clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, the guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices for identical assets in active markets; (Level 2) inputs other than the quoted prices in active markets that are observable either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value.
The short-term nature of the Company’s cash and cash equivalents, accounts receivable and current liabilities causes each of their carrying values to approximate fair value for all periods presented. Cash equivalents classified as Level 1 instruments were $96.3 million as of June 30, 2024 and $139.0 million for December 31, 2023.

The following table presents the Company’s fair value hierarchy for financial liabilities as of June 30, 2024 (in thousands):

Level 1Level 2Level 3Total
Liabilities:
Earnout liability$ $ $13,103 $13,103 
Total$ $ $13,103 $13,103 
The following table presents the Company’s fair value hierarchy for financial liabilities as of December 31, 2023 (in thousands):

Level 1Level 2Level 3Total
Liabilities:
Earnout liability$ $ $46,852 $46,852 
Total$ $ $46,852 $46,852 
The following table provides a reconciliation between the beginning and ending balances of items measured at fair value on a recurring basis that used significant unobservable inputs (Level 3) (in thousands):

Fair Value Measurements Using Significant Unobservable Inputs
Balance at December 31, 2023$46,852 
Fair value adjustment(33,749)
Balance at June 30, 2024$13,103 
The Company did not transfer any investments between Level 1 and Level 2 of the fair value hierarchy during the three months ended June 30, 2024.

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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
6. GOODWILL AND INTANGIBLES
Goodwill represents the excess of the consideration transferred over the estimated fair value of assets acquired and liabilities assumed in a business combination. Intangible assets are measured at their respective fair values as of the acquisition date and may be subject to adjustment within the measurement period, which may be up to one year from the acquisition date. Goodwill and indefinite-lived intangible assets are tested for impairment annually, or more frequently if events or changes in circumstances indicate that it is more likely than not that the assets are impaired.

The following table presents the Company’s intangible asset balance by asset class as of June 30, 2024 (in thousands):

Intangible AssetCostAccumulated AmortizationNet Book ValueAmortization MethodUseful Life
Trade Names$900 $(844)$56 Straight line2 years
Developed Technology53,500 (24,391)29,109 Straight line
4-10 years
In-process R&D1,177 — 1,177 IndefiniteN/A
Patents34,900 (4,604)30,296 Straight line
5-15 years
Customer Relationships24,300 (4,556)19,744 Straight line10 years
Non-Competition Agreements1,900 (719)1,181 Straight line5 years
Other658 (658) Straight line5 years
Total$117,335 $(35,772)$81,563 

The following table presents the changes in the Company’s intangible asset balance (in thousands):
                
Intangible Assets, net
Balance at Balance at December 31, 2023$91,099 
Other adjustments12 
Amortization expense(9,548)
Balance at June 30, 2024$81,563 
The amortization expense was $4.8 million and $9.5 million for the three and six months ended June 30, 2024, and $4.8 million and $9.3 million for the three and six months ended June 30, 2023, respectively.

Total future amortization expense of intangible assets is estimated to be as follows (in thousands):

Fiscal Year Ending December 31,Total
2024 (remainder of fiscal 2024)$9,372 
202518,645 
202614,042 
20275,336 
20284,690 
Thereafter28,301 
Total$80,386 
There were no impairment charges during the three and six months ended June 30, 2024 and 2023.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
7. LEASES:
The Company has entered into operating leases primarily for commercial buildings. These leases have remaining terms which range from 0.3 to 5.3 years. As of June 30, 2024, no operating lease agreements contain economic penalties for the Company to extend the lease, and it is not reasonably certain the Company will exercise these extension options. Additionally, these operating lease agreements do not contain material residual value guarantees or material restrictive covenants. As of June 30, 2024, all leases recorded on the Company’s consolidated balance sheets were operating leases.
The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from non-lease components for real estate; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the consolidated balance sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments.
Rent expense, including short-term lease cost, was $0.6 million and $1.4 million for the three and six months ended June 30, 2024, respectively. Rent expense, including short-term lease cost, was $0.5 million and $1.0 million for the three and six months ended June 30, 2023, respectively. In addition to rent payments, the Company’s leases include real estate taxes, common area maintenance, utilities, and management fees, which are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component. Total variable expense was $0.1 million and $0.2 million for three and six months ended June 30, 2024 and not material for the three and six months ended June 30, 2023.
Information related to the Company right-of-use assets and related operating lease liabilities were as follows (in thousands):

Six Months Ended June 30,
20242023
Cash paid for operating lease liabilities$1,122 $933 
Operating lease cost$1,178 $930 
Non-cash right-of-use assets obtained in exchange for new operating lease obligations$530 $560 
Weighted-average remaining lease term in years4.424.83
Weight-average discount rate
3.45% - 9.25%
4.25% - 8.25%



Maturities of lease liabilities are as follows (in thousands):
Remainder of fiscal year 2024$1,109 
Fiscal year 20252,063 
Fiscal year 20261,960 
Fiscal year 20271,841 
Fiscal year 20281,687 
Thereafter436 
9,096 
Less imputed interest924 
Total lease liabilities$8,172 


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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
8. SHARE BASED COMPENSATION:
 Equity Incentive Plans
The Navitas Semiconductor Limited 2020 Equity Incentive Plan, initially adopted by the Company’s board of directors on August 5, 2020 as an amendment and restatement of the 2013 Equity Incentive Plan (“2013 Plan”), was amended and restated as the Amended and Restated Navitas Semiconductor Limited 2020 Equity Incentive Plan (the “2020 Plan”). The 2020 Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock unit (“RSU”) awards, stock appreciation rights, and other stock awards to employees, directors and consultants. Pursuant to the 2020 Plan, the exercise price for incentive stock options and non-statutory stock options is generally at least 100% of the fair market value of the underlying shares on the date of grant. Options generally vest over 48 months measured from the date of grant. Options generally expire no later than ten years after the date of grant, subject to earlier termination upon an optionee’s cessation of employment or service.
Under the terms of the 2020 Plan, the Company is authorized to issue 18,899,285 shares of common stock pursuant to awards under the 2020 Plan. As of October 19, 2021, the Company had issued an aggregate of 11,276,706 stock options and non-statutory options to its employees and consultants and 4,525,344 RSUs to employees, directors and consultants under the 2020 Plan. No awards have or will be issued under the 2020 Plan after October 19, 2021. Shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021 will become authorized for issuance pursuant to awards under the 2021 Plan (as defined below).
The Navitas Semiconductor Corporation 2021 Equity Incentive Plan (the “2021 Plan”) was adopted by the Company’s board of directors on August 17, 2021 and adopted and approved by the Company’s stockholders on October 12, 2021. Under the terms of the 2021 Plan, the Company is authorized to issue, pursuant to awards granted under the 2021 Plan, (a) up to 16,334,527 shares of Common Stock; plus (b) up to 15,802,050 shares of Common Stock subject to awards under the 2020 Plan that are forfeited, expire or lapse after October 19, 2021; plus (c) an annual increase, effective as of the first day of each fiscal year up to and including January 1, 2031, equal to the lesser of (i) 4% of the number of shares of Common Stock outstanding as of the conclusion of the Company’s immediately preceding fiscal year, or (ii) such amount, if any, as the board of directors may determine. As of June 30, 2024 the Company has issued 9,750,000 non-statutory stock options under the 2021 Plan.

Stock-Based Compensation
The Company recognizes the fair value of stock-based compensation in its financial statements over the requisite service period of the individual grants, which generally equals a four-year vesting period, except for long-term incentive performance stock options (“LTIP Options”) discussed below. The Company uses estimates of volatility, expected term, risk-free interest rate and dividend yield in determining the fair value of these awards and the amount of compensation expense to recognize. The Company uses the straight-line method to amortize stock awards granted over the requisite service period of the award, which may be explicit or derived, unless market or performance conditions result in a graded attribution.
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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
The following table summarizes the stock-based compensation expense recognized for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cost of goods sold$249 $ $249 $ 
Research and development6,438 6,947 13,808 14,124 
Selling, general and administrative6,404 5,624 12,582 15,607 
Total stock-based compensation expense$13,091 $12,571 $26,639 $29,731 

Stock Options
Generally, stock options granted under the Plans have terms of ten years and vest in 1/4th increments on the anniversary of the vesting commencement date and in 1/48th increments monthly thereafter. Stock options with performance vesting conditions begin to vest upon achievement of the performance condition. Expense is recognized beginning in the period in which performance is considered probable.
The fair value of incentive stock options and non-statutory stock options issued was estimated using the Black-Scholes model. The Company did not grant any stock option awards during the three and six months ended June 30, 2024 or 2023.
A summary of stock options outstanding, excluding LTIP Options as of June 30, 2024, and activity during the three months then ended, is presented below:
Stock OptionsShares
(In thousands)
Weighted-
Average
Exercise
Price
Weighted-Average
Remaining
Contractual Term
(In years)
Outstanding at December 31, 20232,657 $0.72 5.72
Exercised(423)0.55 — 
Forfeited or expired(14)1.06 — 
Outstanding at March 31, 20242,220 $0.76 5.55
Exercised(192)0.93 — 
Outstanding at June 30, 20242,028 $0.74 5.33
Vested and Exercisable at June 30, 20241,953 $0.73 5.29
During the three and six months ended June 30, 2024, the Company recognized $0.0 million and $0.1 million of stock-based compensation expense for the vesting of outstanding stock options, excluding $1.0 million and $2.9 million, respectively, related to the LTIP Options described below. During the three and six months ended June 30, 2023, the Company recognized $0.1 million and $0.2 million of stock-based compensation expense for the vesting of outstanding stock options, excluding $1.9 million and $4.3 million related to the LTIP Options. At June 30, 2024, unrecognized compensation cost related to unvested options was immaterial. The weighted-average period over which this remaining compensation cost will be recognized is 0.3 years.

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CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Long-term Incentive Plan Stock Options
The Company awarded a total of 6,500,000 LTIP Options (“2021 LTIP Options”) to certain members of senior management on December 29, 2021 pursuant to the 2021 Plan. These non-statutory options are intended to be the only equity incentive awards for the recipients over the duration of the performance period. The options vest in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $15 to $60 per share, coupled with revenue and EBITDA targets, measured over a seven-year performance period and expire on the tenth anniversary of the grant date. The options have an exercise price of $15.51 per share and the average fair value on the grant date was $9.14 based on the Black-Scholes model and a Monte Carlo simulation incorporating 500,000 scenarios. The weighted average contractual period remaining is 7.6 years. The Company utilized the services of a professional valuation firm to finalize these assumptions during the fiscal year ended December 31, 2023. The valuation model utilized the following assumptions:

Risk-free interest rates1.47 %
Expected volatility rates67.33 %
Expected dividend yield 
Cost of equity (for derived service period)11.77 %
Weighted-average grant date fair value of options$9.14

In connection with the “2021 LTIP Options”, the Company recognized $0.8 million and $2.4 million of stock-based compensation expense for the three and six months ended June 30, 2024, respectively. The Company recognized $1.6 million and $3.7 million of stock-based compensation expense for three and six months ended June 30, 2023, respectively. The unrecognized compensation expense related to these LTIP Options is $3.8 million as of June 30, 2024, and compensation expense will be recognized over 3.0 years. On a quarterly basis, after evaluating the 2021 LTIP Options based on the probability of achieving certain market and performance conditions, the Company may true up the 2021 LTIP Options expense as needed.
The Company awarded a total of 3,250,000 performance stock options (“2022 LTIP Options”) to a member of senior management on August 15, 2022 pursuant to the 2021 Plan. The options vest in increments subject to achieving certain market and performance conditions, including ten share price hurdles ranging from $15 to $60 per share, coupled with revenue and EBITDA targets, measured over a seven year performance period and expire on the tenth anniversary of the grant date. The options have an exercise price of $10.00 per share and the average fair value on the grant date was $2.89. The weighted average contractual period remaining is 8.1 years. The Black-Scholes model and a Monte Carlo simulation incorporated 100,000 scenarios. The valuation model utilized the following assumptions:

Risk-free interest rates2.82 %
Expected volatility rates68.48 %
Expected dividend yield 
Cost of equity (for derived service period)14.64 %
Weighted-average grant date fair value of options$2.89
In connection with the “2022 LTIP Options”, the Company recognized $0.2 million and $0.5 million of stock-based compensation expense for the three and six months ended June 30, 2024, respectively. The Company recognized $0.3 million and $0.6 million of stock-based compensation expense for three and six months ended June 30, 2023, respectively. The unrecognized compensation expense related to the LTIP Options is $1.3 million as of June 30, 2024, and compensation expense will be recognized over 3.0 years. On a quarterly basis, after evaluating the 2022 LTIP Options based on the probability of achieving certain market and performance conditions, the Company may true up the 2022 LTIP Options expense as needed.

Restricted Stock Units
The Company regularly grants RSUs to employees as a component of their compensation. A summary of RSUs outstanding as of June 30, 2024, and activity during the six months then ended, is presented below:
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

Restricted Stock Unit Awards
Shares
(In thousands)
Weighted-Average Grant Date Fair Value Per Share
Outstanding at December 31, 202312,872 $6.70 
   Granted4,346 5.66 
   Vested(2,985)6.43 
   Forfeited(27)6.04 
Outstanding at March 31, 202414,206 $6.43 
Granted557 4.27 
Vested(314)7.80 
Forfeited(179)4.45 
Outstanding at June 30, 202414,270 $6.37 

During the three and six months ended June 30, 2024, the Company recognized $9.7 million and $17.9 million of stock-based compensation expense for the vesting of RSUs, respectively. During three and six months ended June 30, 2023, the Company recognized $8.1 million and $15.4 million of stock-based compensation expense for the vesting of RSUs, respectively. As of June 30, 2024, unrecognized compensation cost related to unvested RSU awards totaled $71.5 million. The weighted-average period over which this remaining compensation cost is expected be recognized is 2.3 years.
The Company’s annual bonus plan of $4.2 million and related to fiscal year 2024 (included in accrued compensation expense liability on the condensed consolidated balance sheets), will be issued with a variable number of fully-vested restricted stock units to its employees and is expected to be settled in the first quarter of 2025. Based on the closing share price of the Company’s Class A Common Stock of $3.93 on June 28, 2024, approximately 1,063,276 shares would be issued, however the actual number of shares will be based on the share price at the date of settlement.

2022 Employee Stock Purchase Plan
In August 2022, the Company’s board of directors adopted the Company’s 2022 Employee Stock Purchase Plan (the “2022 ESPP”), subject to stockholder approval. The 2022 ESPP was approved by stockholders at the Company’s annual stockholders’ meeting held November 10, 2022. The Company authorized the issuance of 3,000,000 shares of common stock under the 2022 ESPP.
Under the 2022 ESPP, eligible employees are granted the right to purchase shares of common stock at the lower of 85% of the fair value at the time of offering or 85% of the fair value at the time of purchase, generally over a six-month period. The first offering period under the 2022 ESPP commenced in February 2023 and the second offering in September 2023. For the three and six months ended June 30, 2024, employees who elected to participate in the ESPP purchased 393,139 shares of common stock under the 2022 ESPP, resulting in cash proceeds to the Company of $1.8 million. The purchase price was $4.55, which was 15% of the fair market value in March 2024. As of June 30, 2024, the Company had 2,348,898 remaining authorized shares available for purchase. During the three and six months ended June 30, 2024, the Company recognized $0.3 million and $1.1 million of stock-based compensation expense for the 2022 ESPP, respectively. During the three and six months ended June 30, 2023, the Company recognized $0.5 million and $0.5 million of stock-based compensation expense for the 2022 ESPP, respectively.

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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Other Share Awards
In connection with the acquisition of the remaining minority interest of a silicon control IC joint venture, as described in Note 15, the Company issued 841,729 fully vested shares to certain former employees of the joint venture with a grant date fair value totaling $4.5 million. Such amount has been recognized as stock-based compensation expense during the three months ended March 31, 2023.

On June 10, 2022, the Company’s wholly owned subsidiary, Navitas Semiconductor Limited, acquired all of the stock of VDDTECH srl, a private Belgian company (“VDDTech”) for approximately $1.9 million in cash and stock. Among shares issued in the transaction, the Company issued approximately 113,000 restricted shares that are subject to time based vesting and issued approximately 151,000 restricted shares that are subject to time and performance based vesting over the four and three years, respectively, following the date of issue. These restricted shares are subject to certain individuals maintaining employment with the Company and, therefore, are accounted for under ASC 718. The Company recognized $0.2 million and $0.3 million of stock-based compensation expense related to the vesting of these shares during three and six months ended June 30, 2024, respectively. The Company recognized $0.1 million and $0.6 million of stock-based compensation expense related to the vesting of these shares during the three and six months ended June 30, 2023, respectively.
Unvested Earnout Shares
A portion of the earnout shares (discussed in Note 9 below) may be issued to individuals with unvested equity awards. While the payout of these shares requires achievement of share price targets based on the volume weighted average price of the Company’s common stock, the individuals are required to complete the remaining service period associated with these unvested equity awards to be eligible to receive the earnout shares. As a result, these unvested earn-out shares are equity-classified awards and have an aggregated grant date fair value of $19.1 million or $11.52 per share. The Company recognized $0.1 million and $0.1 million of stock-based compensation expense related to the vesting of these shares during three and six months ended June 30, 2024, respectively. The Company recognized $0.0 million and $0.3 million of stock-based compensation expense related to the vesting of these shares during the three and six months ended June 30, 2023, respectively. As of June 30, 2024 and there was no remaining compensation cost related to unvested earnout shares, except for forfeitures. Refer to Note 9, Earnout Liability.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
9. EARNOUT LIABILITY
Certain of the Company’s stockholders are entitled to receive up to an aggregate of 10,000,000 “earnout shares” of the Company’s Class A Common Stock if earnout milestones are met. The earnout milestones represent three independent criteria, each of which entitles the eligible stockholders to 3,333,333 aggregate earn-out shares if the milestone is met.
The earnout liability is remeasured at the end of each reporting period. The change in fair value of the earnout liability is recorded as part of other income (expense), net in the consolidated statements of operations.
The estimated fair value of the earnout liability was determined using a Monte Carlo analysis of 20,000 simulations of the future path of the Company’s stock price over the earnout period. The assumptions utilized in the calculation are based on the achievement of certain stock price milestones including projected stock price, volatility, and risk-free rate. The valuation model utilized the following assumptions:
June 30, 2024December 31, 2023
Risk-free interest rate
4.65 %4.05 %
Equity volatility rate
80.00 %70.00 %

As of June 30, 2024 and December 31, 2023, the earnout liability had a fair value of $13.1 million and $46.9 million, respectively, which resulted in a gain in the fair value of the earnout liability of $7.6 million and $33.7 million for the three and six months ended June 30, 2024, respectively. As of June 30, 2023, the earnout liability had a fair value of $73.0 million, which resulted in a loss in the fair value of the earnout liability of $32.6 million and $60.0 million for the three and six months ended June 30, 2023, respectively.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
10. SIGNIFICANT CUSTOMERS AND CREDIT CONCENTRATIONS
Customer Concentration
A majority of the Company’s revenues are attributable to sales of the Company’s products to distributors of electronic components. These distributors sell the Company’s products to a range of end users, including OEMs and merchant power supply manufacturers.
The following customers represented 10% or more of the Company’s net revenues for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30,Six Months Ended June 30,
Customer2024202320242023
Distributor A55 %14 %63 %*

*Total customer net revenues were less than 10% of total net revenues.

Revenues by Geographic Area
The Company considers the domicile of its end customers, rather than the distributors it sells to directly, to be the basis for attributing revenues from external customers to individual countries. Revenues for the three and six months ended June 30, 2024 and 2023 were attributable to end customers in the following countries or regions:
Three Months Ended June 30,Six Months Ended June 30,
Country2024202320242023
China66 %50 %70 %53 %
Europe*8 31 9 30 
United States14 9 11 10 
Asia excluding China12 10 10 7 
Total100 %100 %100 %100 %
*Impractical to disclose the revenue percentages by individual countries within Europe and therefore Europe is presented in total.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consisted principally of cash, cash equivalents and trade receivables. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally insured limits. The Company has not experienced any losses on cash or cash equivalents held at financial institutions. The Company does not have any off-balance-sheet credit exposure related to its customers.
The following customers represented 10% or more of the Company’s accounts receivable.

CustomerJune 30, 2024December 31, 2023
Distributor A73 %77 %
The Company has a customer deposit from a primary customer of $6.1 million and $11.0 million, as of June 30, 2024 and December 31, 2023, respectively, and the Company intends to apply a portion of the customer deposit to outstanding accounts receivable from time-to-time.

Concentration of Supplier Risk
The Company currently relies on a single foundry to produce wafers for GaN ICs and a separate single foundry to produce wafers for SiC MOSFETs. Loss of the relationship with either of these suppliers could have a substantial negative effect on the Company. Additionally, the Company relies on a limited number of third-party subcontractors and suppliers for testing, packaging and certain other tasks. Disruption or termination of supply sources or subcontractors, including due to pandemics or natural disasters such as an earthquake or other causes, could delay shipments and could have a material adverse effect on the Company. Although there are generally alternate sources for these materials and services, qualification of the alternate sources could cause delays sufficient to have a material adverse effect on the Company. A significant amount of the Company’s third-party subcontractors and suppliers, including the third-party foundry that supplies wafers for GaN ICs, are located in Taiwan. A significant amount of the Company’s assembly and test operations are conducted by third-party contractors in Taiwan and the Philippines.
The Company entered into an agreement to purchase raw materials from a supplier from September 29, 2022 through December 31, 2025, and accordingly made a $2.0 million deposit to be received as invoice credits toward future purchases. The Company is not obligated to purchase from this supplier, however, if the Company does not meet minimum purchase requirements during the term, the Company may forfeit all or a portion of its $2.0 million deposit.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
11. NET LOSS PER SHARE:
Basic loss per share is calculated by dividing net loss by the weighted-average shares of common stock outstanding during the period. Diluted loss per share is calculated by dividing net loss by the weighted-average shares of common stock and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares included in this calculation consist of dilutive shares issuable upon the assumed exercise of outstanding common stock options, the assumed vesting of outstanding restricted stock units and restricted stock awards, the assumed issuance of awards for contingently issuable performance-based awards, as computed using the treasury stock method. Performance-based restricted stock units and restricted stock awards are included in the number of shares used to calculate diluted earnings per share after evaluating the applicable performance criteria as of period end and under the assumption the end of the reporting period was the end of the contingency period, and the effect is dilutive. Restricted stock awards (but not restricted stock unit awards) are eligible to receive all dividends declared on the Company’s common shares during the vesting period; however, such dividends are not paid until the restrictions lapse. The Company has no plans to declare dividends.
Three Months Ended June 30,Six months ended June 30, 2024
2024202320242023
Weighted-average common shares - basic common stock183,127 165,606 181,493 161,086 
Stock options and other dilutive awards    
Weighted-average common shares - diluted common stock183,127 165,606 181,493 161,086 
Shares excluded from diluted weighted-average shares: ¹
Dilutive shares excluded ²4,334 10,803 5,163 10,245 
Earnout shares (potentially issuable common shares)10,000 10,000 10,000 10,000 
Unvested restricted stock units and restricted stock awards50 376 50 376 
Stock options potentially exercisable for common shares8,775 9,750 8,775 9,750 
Shares excluded from diluted weighted average shares23,159 30,929 23,988 30,371 
¹ The Company’s potentially dilutive securities, which include unexercised stock options, unvested shares, and earnout shares, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share for both the three and six months ended June 30, 2024 and 2023.
² The Company exclude the impact of restricted stock from the calculation of diluted net loss per common share in periods where we have a net loss or when their inclusion would be antidilutive.


12. PROVISION FOR INCOME TAXES

The Company determined the income tax provision for interim periods using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising during the quarter. The Company’s effective tax rate for the three and six months ended June 30, 2024 was (0.27)% and (0.5)%, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2023 was 0.2% and 0.0%, respectively. The effective tax rate for 2024 differs from the prior year primarily due to tax expense in foreign as a result of tax expense in foreign jurisdictions not impacted by valuation allowance. In each quarter, the Company updates its estimated annual effective tax rate, and if the estimated annual effective tax rate changes, a cumulative adjustment is recorded in that quarter. The Company's quarterly income tax provision and quarterly estimate of the annual effective tax rate are subject to volatility due to several factors, including the Company’s ability to accurately predict the proportion of the Company’s loss before provision for income taxes in multiple jurisdictions, the tax effects of the Company’s stock-based compensation, and the effects of its foreign entities.

The Company had no unrecognized tax benefits for the three and six months ended June 30, 2024 and 2023. The Company recognizes interest and penalties related to unrecognized tax benefits in operating expenses. No such interest and penalties were recognized during the three and six months ended June 30, 2024 and 2023.
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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
13. COMMITMENTS and CONTINGENCIES

Purchase Obligations
At June 30, 2024, the Company had no non-cancelable contractual arrangements that were due beyond one year besides lease obligations.
Indemnification
The Company sells products to its distributors under contracts, collectively referred to as Distributor Sales Agreements (“DSAs”). Each DSA contains the relevant terms of the contractual arrangement with the distributor, and generally includes certain provisions for indemnifying the distributor against losses, expenses, and liabilities from damages that may be awarded against the distributor in the event the Company’s products are found to infringe upon a patent, copyright, trademark, or other proprietary right of a third party (Customer Indemnification). The DSA generally limits the scope of and remedies for the Customer Indemnification obligations in a variety of industry-standard respects, including, but not limited to, limitations based on time and geography, and a right to replace an infringing product. The Company also, from time to time, has granted a specific indemnification right to individual customers.
The Company believes its internal development processes and other policies and practices limit its exposure related to such indemnifications. In addition, the Company requires its employees to sign a proprietary information and inventions agreement, which assigns the rights to its employees’ development work to the Company. To date, the Company has not had to reimburse any of its distributors or end customers for any losses related to these indemnifications and no material claims were outstanding as of June 30, 2024. For several reasons, including the lack of prior indemnification claims and the lack of a monetary liability limit for certain infringement cases, the Company cannot determine the maximum amount of potential future payments, if any, related to such indemnifications.
Release and license agreement
In March 2023, the Company entered into a Release and License Agreement (the “Agreement”) with a university. The Agreement stipulates the Company pay the university a total of $1.0 million over a period of three years, with the final payment by March 1, 2026. The agreement licenses the Company to sell certain products covered by a patent owned by the university, subject to the Company paying a royalty fee on revenues for covered products sold during the term. Based on an indemnity agreement entered into in connection with the Company’s acquisition of GeneSiC Semiconductor Inc. in August 2022, the Company expects to be indemnified by the sellers in that transaction for the royalty amounts up to approximately $1.0 million.

Legal proceedings and contingencies
From time to time in the ordinary course of business, the Company may become involved in lawsuits, or end customers, distributors, suppliers or other third parties may make claims against the Company. The Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company is not currently subject to any pending actions or regulatory proceedings that either individually or in the aggregate are expected to have a material impact on its condensed consolidated financial statements.
14. RELATED PARTY TRANSACTIONS
Joint Venture
In 2021, Navitas entered into a silicon control IC joint venture with Halo Microelectronics Co., Ltd. (“Halo”), a manufacturer of power management ICs, to develop products and technology relating to AC/DC converters. Navitas’ initial contribution to the joint venture was the commitment to sell its GaN integrated circuit die at prices representing cost plus insignificant handling fees, in exchange for a minority interest, with the right to acquire the balance of the joint venture based on the future results of the venture (among other rights and obligations). On January 19, 2023, the Company announced an agreement to acquire the remaining minority interest in the joint venture as well as rights to certain intellectual property from Halo and its U.S. affiliate for a total purchase price of $22.4 million in Navitas stock. See Note 15, Noncontrolling Interest, for more information.

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NAVITAS SEMICONDUCTOR CORPORATION
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Related Party Leases
The Company leases certain property from the family member of a senior executive of the Company, which expired in March 2024, and is now a month-to-month lease. During the three and six months ended June 30, 2024, the Company paid an immaterial amount in rental payments in relation to this lease. These payments were made at standard market rates in the ordinary course of business. There was no rent obligation as of June 30, 2024.
The Company leases certain property from an entity that it is owned by an executive of the Company, which expired in September 2023, and was on a month-to-month lease through May 2024, and then was terminated. During the three and six months ended June 30, 2023, the Company paid an immaterial amount in rental payments in relation to this lease. These payments were made at standard market rates in the ordinary course of business.

15. NONCONTROLLING INTEREST

In July 2021, the Company formed a joint venture for the purpose of conducting research and development on technology in the area of AC/DC converters for chargers and adapters. Refer to Note 14.
On August 19, 2022, the Company obtained control of the joint venture, and no consideration was paid pursuant to the Change of Control Agreement. The Company consolidated the fair value of the net assets of the joint venture as of August 19, 2022, and the Company reports noncontrolling interests of the joint venture as a component of equity separate from the Company’s equity. The fair value of the noncontrolling interest and net assets is based on estimates. The Company’s net income (loss) excludes income (loss) attributable to the noncontrolling interests. The fair value of the joint venture was determined based on a multiple of future annual revenues with a discount rate of 30%. In connection with the consolidation, the Company reacquired a patent license, which was fair valued at $1.0 million based on comparable transactions during the year, and will be amortized over a five year term. Goodwill of $3.1 million was recorded in connection with this transaction.
On January 19, 2023, the Company announced an agreement to acquire the remaining minority interest in the joint venture as well as rights to certain intellectual property from Halo and its U.S. affiliate for a total purchase price of $22.4 million in Navitas stock. The transaction was completed on February 13, 2023. In connection with the purchase of intellectual property, the Company recognized developed technology as an intangible asset at its estimated fair value of $4.4 million. As a result of this transaction, the Company recorded a net increase to additional paid in capital of $7.5 million representing the difference between the fair value of share consideration related to the acquisition of the remaining noncontrolling interest and the carrying value of the noncontrolling interest at the date of the transaction.
The fair value of the developed technology was estimated using the relief from royalty method, an income approach (Level 3), because of the licensing appeal of these assets The Company estimated the benefit of the ownership as the relief form the royalty expense that would be incurred in the absence of ownership. A royalty rate was applied to the projected revenues associated with the intangible asset to determine the amount of savings, which was at a rate of 10% to determine the fair value.

16. SUBSEQUENT EVENTS
The Company evaluated material subsequent events from the consolidated balance sheet date of June 30, 2024, through August 5, 2024, the date the condensed consolidated financial statements were issued. There were no material subsequent events as of August 5, 2024, except as discussed below.
On July 31, 2024, the Company entered into a letter agreement with an executive of the Company in which the executive transitioned from Executive Vice President, GeneSiC Business to Executive Vice President, Corporate Development. This transition did not change the terms of the executive’s LTIP or RSU compensation. See Item 5. Other Information, Departure of Directors or Certain Officers; Compensatory Arrangements of Certain Officers, included in this Form 10-Q for more information. In connection with the Company’s acquisition of GeneSiC in August 2022, the Company recorded non-competition agreements with a fair value of $1.9 million and a useful life of five years in connection with this executive, along with other employees. As of June 30, 2024, the non-competition agreements have a net book value of $1.2 million and is included in Intangible Assets, net on the Company’s condensed consolidated balance sheets. There is no change to the net book value of the non-competition agreements as of June 30, 2024, and the Company is evaluating the impact of the letter agreement on the non-competition agreements recorded intangible assets after the Q2 2024 Form 10-Q consolidated balance sheet date.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Unless the context otherwise requires, all references in this section to the “Company,” “we,” “us, or “our” refer to the business of Navitas and its subsidiaries. Throughout this section, unless otherwise noted, “Navitas” refers to Navitas Semiconductor Corporation and its consolidated subsidiaries.
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this quarterly report on Form 10-Q. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those set forth under the “Summary of Risk Factors” and “Cautionary Statement About Forward-Looking Statements” sections and elsewhere in this quarterly report, our actual results may differ materially from those anticipated in these forward-looking statements.
Overview
Founded in 2013, Navitas is a U.S. based developer of gallium nitride and silicon carbide power semiconductor devices that provide superior efficiency, performance, size and sustainability relative to existing silicon technology. Our solutions offer faster charging, higher power density and greater energy savings compared to silicon-based power systems with the same output power. By unlocking this speed and efficiency, we believe we are leading a revolution in high-frequency, high-efficiency and high-density power electronics to electrify our world for a cleaner tomorrow. We maintain operations around the world, including the United States, Ireland, Germany, Italy, Belgium, China, Taiwan, Thailand, South Korea and the Philippines, with principal executive offices in Torrance, California.
We design, develop and market next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”, silicon carbide (“SiC”) and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging. Power supplies incorporating our products may be used in a wide variety of electronics products including mobile phones, consumer electronics, data centers, solar inverters and electric vehicles. We utilize a fabless business model, working with third parties to manufacture, assemble and test our designs. Our fabless model allows us to run the business today with minimal capital expenditures.
Our go-to-market strategy is based on partnering with leading manufacturers and suppliers through focused product development, addressing both mainstream and emerging applications. We consider ourselves to be a pioneer in the GaN market with a proprietary, proven GaN power IC platform that is shipping in mass production to tier-1 companies including Samsung, Dell, Lenovo, LG, Xiaomi, OPPO, Amazon, vivo and Motorola. Most of the products we ship today are used primarily as components in mobile device chargers. Charger manufacturers we ship to today are worldwide, supporting major international mobile brands. Other emerging applications will also be addressed across the world.
In support of our technology leadership, we have formed relationships with numerous Tier 1 manufacturers and suppliers over the past eight years, gaining significant traction in mobile and consumer charging applications. Navitas GaN is now in mass production with 10 of the top 10 world-wide mobile OEMs across smartphone and laptops in development with 10 out of 10. In addition, our supply chain partners have committed manufacturing capacity in excess of what we consider to be necessary to support our continued growth and expansion.
A core strength of our business lies in our industry leading IP position. In addition to our comprehensive patent portfolio, our biggest proprietary advantage is our process design kit (PDK), the ‘how-to’ guide for Navitas designers to create new GaN based devices and circuits. Our GaN power IC inventions and intellectual property translate across all of our target markets from mobile, consumer, EV, enterprise, and renewables. We evaluate various complementary technologies and look to improve our PDK, in order to keep introducing newer generations of GaN technology. In the three and six months ended June 30, 2024, we spent approximately 93% and 90%, respectively, of our revenue on research and development. In the three and six months ended June 30, 2023, we spent approximately 93% and 109%, respectively, of our revenue on research and development. Navitas’ research and development activities are located primarily in the US and China.

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May 2023 Public Offering
On May 26, 2023, the Company completed an underwritten public offering (the “May 2023 Public Offering”) of 10,000.000 shares of its Class A Common Stock at a public offering price of $8.00 per share, before deducting underwriting discounts and commissions. In connection with the May 2023 Public Offering, the Company granted the underwriters of the offering a 30-day option to purchase up to an additional 1,500,000 shares of the Company’s Class A Common Stock (the “Option Shares”) from the Company at the same public offering price. On June 1, 2023, the underwriters exercised in full their option to purchase the Option Shares. The sale of the Option Shares closed on June 5, 2023. After deducting underwriting discounts and commissions and before deducting offering expenses payable by the Company, the Company received net proceeds of $75.6 million and $11.3 million from the May 2023 Public Offering and sale of the Option Shares, respectively. The total net proceeds received by the Company after deducting offering expenses was $86.5 million. The Company intends to use the net proceeds for working capital and other general corporate purposes, including potential acquisitions or strategic manufacturing investments.

Buyout of Elevation Semiconductor
On January 19, 2023, the Company announced an agreement to acquire the remaining minority interest in its silicon control IC joint venture as well as rights to certain intellectual property from Halo Microelectronics for a total purchase price of $22.4 million in Navitas stock. As Navitas was already the majority shareholder, financial results from the joint venture have already been reflected in Navitas’ historical financial statements. The transaction was completed on February 13, 2023. In connection with the purchase of intellectual property, the Company recognized an intangible asset at its estimated fair value of $4.4 million related to acquired intellectual property.

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Results of Operations
Revenue
We design, develop and market next-generation power semiconductors including gallium nitride (“GaN”) power integrated circuits (“ICs”), silicon carbide (“SiC”) and associated high-speed silicon system controllers, and digital isolators used in power conversion and charging. Our revenue represents the sale of semiconductors through specialized distributors to original equipment manufacturers (“OEMs”), their suppliers and other end customers.
Our revenues fluctuate in response to a combination of factors, including the following:
our overall product mix and sales volumes;
gains and losses in market share and design win traction;
pace at which technology is adopted in our end markets;
the stage of our products in their respective life cycles;
the effects of competition and competitive pricing strategies;
availability of specialized field application engineering resources supporting demand creation and end customer adoption of new products;
achieving acceptable yields and obtaining adequate production capacity from our wafer foundries and assembly and test subcontractors;
market acceptance of our end customers’ products; governmental regulations influencing our markets; and
the global and regional economic cycles.
Our product revenue is recognized when the customer obtains control of the product and the timing of recognition is based on the contractual shipping terms of a contract less estimated returns. We provide a non-conformity warranty which is not sold separately and does not represent a separate performance obligation.
Cost of Revenues
Cost of Revenues consists primarily of the cost of semiconductors purchased from subcontractors, including wafer fabrication, assembly, testing and packaging, manufacturing support costs, including labor and overhead (which includes depreciation and amortization) associated with such purchases, final test and wafer level yield fallout, inventory impairments, consumables, system and shipping costs. Cost of revenues also includes compensation related to personnel associated with manufacturing.
Research and Development Expense
Costs related to research, design, and development of our products are expensed as incurred. Research and development expense consists primarily of pre-production costs related to the design and development of our products and technologies, including costs related to cash and share-based employee compensation, benefits and related costs of sustaining our engineering teams, project material costs, third party fees paid to consultants, prototype development expenses, and other costs incurred in the product design and development process.
Selling, General and Administrative Expense
Selling, general and administrative costs include employee compensation, including cash and share-based compensation and benefits for executive, finance, business operations, sales, field application engineers and other administrative personnel. In addition, it includes marketing and advertising, IT, outside legal, tax and accounting services, insurance, and occupancy costs and related overhead based on headcount. Selling, general and administrative costs are expensed as incurred.
Interest Income (Expense), net
Interest income (expense), net primarily consists of interest earned from our cash on hand.
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Income Taxes
Legacy Navitas is a dual domesticated corporation for Ireland and U.S. federal income tax purposes. Refer to Note 12, Provision for Income Taxes, in our accompanying condensed consolidated financial statements elsewhere in this quarterly report.
Results of Operations
The tables and discussion below present our results for the three months ended June 30, 2024 and 2023 (in thousands):

Three Months Ended
June 30,
Change
$
Change
%
20242023
Net revenues$20,468 $18,062 $2,406 13 %
Cost of revenues (exclusive of amortization of intangible assets included below)12,478 10,572 1,906 18 %
Operating expenses:
Research and development18,971 16,791 2,180 13 %
Selling, general and administrative15,382 13,151 2,231 17 %
Amortization of intangible assets4,774 4,773 — %
Total operating expenses39,127 34,715 4,412 13 %
Loss from operations(31,137)(27,225)(3,912)14 %
Other income (expense), net:
Interest income (expense), net (72)347 (419)(121)%
Dividend income1,361 459 902 197 %
Gain (loss) from change in fair value of earnout liabilities7,550 (32,224)39,774 (123)%
Other income31 20 11 55 %
Total other income (expense), net8,870 (31,398)40,268 (128)%
Loss before income taxes(22,267)(58,623)36,356 (62)%
Income tax provision (benefit)61 (96)157 (164)%
Net loss(22,328)(58,527)36,199 (62)%
Less: Net loss attributable to noncontrolling interests— — — — %
Net loss attributable to controlling interests$(22,328)$(58,527)36,199 (62)%

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Six Months Ended
June 30,
Change
$
Change
%
(dollars in thousands)20242023
Net revenues$43,643 $31,420 $12,223 39 %
Cost of revenues (exclusive of amortization of intangible assets included below)26,138 18,445 7,693 42 %
Operating expenses:
Research and development39,200 34,186 5,014 15 %
Selling, general and administrative31,469 32,209 (740)(2)%
Amortization of intangible assets9,548 9,272 276 %
Total operating expenses80,217 75,667 4,550 %
Loss from operations(62,712)(62,692)(20)— %
Other income (expense), net:
Interest income (expense), net (70)1,250 (1,320)(106)%
Dividend income3,041 459 2,582 563 %
Gain (loss) from change in fair value of earnout liabilities33,749 (59,976)93,725 (156)%
Other income114 31 83 268 %
Total other income (expense), net36,834 (58,236)95,070 (163)%
Loss before income taxes(25,878)(120,928)95,050 (79)%
Income tax provision (benefit)131 (35)166 (474)%
Net loss(26,009)(120,893)94,884 (78)%
Less: Net loss attributable to noncontrolling interests— (518)518 — %
Net loss attributable to controlling interests$(26,009)$(120,375)94,366 (78)%

Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023
Revenue
Revenue for the three months ended June 30, 2024 was $20.5 million compared to $18.1 million for the three months ended June 30, 2023, an increase of $2.4 million, or 13%. Sales have increased due to strong mobile and consumer markets.
Cost of Revenues
Cost of revenues for the three months ended June 30, 2024 was $12.5 million compared to $10.6 million for the three months ended June 30, 2023, an increase of $1.9 million or 18%. The increase was primarily driven by revenue slightly offset by lower gross margin mobile sales.
Research and Development Expense
Research and development expense for the three months ended June 30, 2024 of $19.0 million increased by $2.2 million, or 13%, when compared to the three months ended June 30, 2023. This is primarily driven by an increase in product development by approximately $1.2 million since June 30, 2023 as it relates to EV, enterprise and solar. Additionally, salaries and benefits have increased as we build out our target end markets.
Selling, General and Administrative Expense
Selling, general and administrative expense for the three months ended June 30, 2024 of $15.4 million increased by $2.2 million, or 17%, when compared to the three months ended June 30, 2023, primarily driven by higher stock compensation expense in selling, general and administrative compared to June 2023 by around $0.8 million reflecting increases in personnel. Additionally, salaries and benefits have increased as we build out a worldwide sales force.

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Amortization of Intangible Assets
Amortization of intangible assets remained the same as we did not acquire new intangible assets.

Other Income (Expense), net
Net interest (expense) income for the three months ended June 30, 2024 was $(0.1) million compared to $0.3 million net interest income (expense), net for the three months ended June 30, 2023, primarily due to the higher interest rate received on money markets funds in the prior year three months ended June 30, 2023.
Dividend income consists of income earned on our money market treasury funds that are recorded as cash equivalents on our consolidated balance sheet. Increase of $0.9 million is primarily due to a full quarter of dividend income for the three months ended June 30, 2024 compared to only one month of dividend income for the three months ended June 30, 2023.
During the three months ended June 30, 2024, we recognized a $7.6 million gain from the change in fair value of our earn-out liabilities. The increase in the gain of our earn-out liabilities of $39.8 million was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq, resulting in the decrease in the estimated fair value of the earnout shares from $8.58 as of June 30, 2023 to $1.53 as of June 30, 2024.
Income Tax Provision (Benefit)
Income tax provision for the three months ended June 30, 2024 increased $0.2 million when compared to the income tax benefit of $0.1 million for the three months ended June 30, 2023. We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.


Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023
Revenue
Revenue for the six months ended June 30, 2024 was $43.6 million compared to $31.4 million for the six months ended June 30, 2023, an increase of $12.2 million, or 39%. Sales have increased due to strong mobile and consumer markets.
Cost of Revenues
Cost of revenues for the six months ended June 30, 2024 was $26.1 million compared to $18.4 million for the six months ended June 30, 2023, an increase of $7.7 million or 42%. The increase was primarily driven by revenue slightly offset by lower gross margin mobile sales.

Research and Development Expense
Research and development expense for the six months ended June 30, 2024 of $39.2 million increased by $5.0 million, or 15%, when compared to the six months ended June 30, 2023. This is primarily driven by an increase in product development by approximately $2.2 million since June 30, 2023 as it relates to EV, enterprise and solar. Additionally, salaries and benefits have increased as we build out our target end markets.
Selling, General and Administrative Expense
Selling, general and administrative expense for the six months ended June 30, 2024 of $31.5 million decreased by $0.7 million, or 2%, when compared to the six months ended June 30, 2023. Salaries and benefits have increased as we build out a worldwide sales force.

Amortization of Intangible Assets
Amortization of intangible assets remained fairly consistent as we did not acquire new intangible assets.

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Other Income (Expense), net
Net interest (expense) income for the six months ended June 30, 2024 was $(0.1) million compared to $1.3 million net interest income (expense) for the six months ended June 30, 2023, primarily due to the higher interest rate received on money markets funds in the prior year.
Increase of $2.6 million in dividend income is primarily due to two quarters of dividend income for the six months ended June 30, 2024 compared to only one month of dividend income for the six months ended June 30, 2023.
During the six months ended June 30, 2024, we recognized a $33.7 million gain from the change in fair value of our earn-out liabilities. The increase in the gain of our earn-out liabilities of $93.7 million was primarily a result of the decrease of the closing price of our Class A common stock listed on the Nasdaq, resulting in the decrease in the estimated fair value of the earnout shares from $8.58 as of June 30, 2023 to $1.53 as of June 30, 2024.
Income Tax Provision (Benefit)
Income tax provision for the six months ended June 30, 2024 increased $0.2 million when compared to the income tax benefit of $0.0 million for the six months ended June 30, 2023. We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

Liquidity and Capital Resources
Our primary use of cash is to fund our operating expenses, working capital requirements, and outlays for strategic investments and acquisitions. In addition, we use cash to conduct research and development, incur capital expenditures, and fund our debt service obligations.
We expect to continue to incur net operating losses and negative cash flows from operations and we expect our research and development expenses, general and administrative expenses and capital expenditures will continue to increase. We expect our expenses and capital requirements to increase in connection with our ongoing initiatives to expand our operations, product offerings and end customer base.
As of June 30, 2024, we had cash and cash equivalents of $112.0 million. We currently expect to fund our cash requirements through the use of cash on hand. We believe that our current levels of cash and cash equivalents are sufficient to finance our operations, working capital requirements and capital expenditures for the foreseeable future.
We expect our operating and capital expenditures to increase as we increase headcount, expand our operations and grow our end customer base. If additional funds are required to support our working capital requirements, acquisitions or other purposes, we may seek to raise funds through additional equity or debt financing or from other sources. If we raise additional funds through the issuance of equity, the percentage ownership of our equity holders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing equity holders. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility and would also require us to incur interest expense. We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain additional financing on terms favorable to us.
Cash Flows
The following table summarizes our consolidated cash flows for the six months ended June 30, 2024 and 2023 (in thousands):
 June 30, 2024June 30, 2023
Consolidated Statements of Cash Flow Data:
Net cash used in operating activities
$(34,908)$(17,198)
Net cash used in investing activities
$(8,139)$(2,704)
Net cash provided by financing activities
$2,203 $87,313 
We derive liquidity primarily from equity financing activities. As of June 30, 2024, our balance of cash and cash equivalents was $112.0 million, which is a decrease of $40.8 million or 27% compared to December 31, 2023.
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Operating Activities
For the six months ended June 30, 2024, net cash used in operating activities was $34.9 million, which primarily reflects a net loss of $26.0 million. This decrease to operating cash flows is partially offset by adjustments for non-cash share-based compensation of $26.6 million, depreciation of $1.4 million, non-cash gains of $33.7 million in earnout liabilities, amortization of intangible assets of $9.5 million, and an aggregate cash used in operating assets and liabilities of $14.0 million. Specifically, increases in inventories of $3.0 million due to sales increases coupled with decreases in accounts payable, accrued compensation and other expenses of $10.4 million and customer deposits and deferred revenue of $4.7 million, partially offset by an decreases in accounts receivable of $3.2 million and prepaid expenses and other current assets of $1.4 million.
For the six months ended June 30, 2023, net cash used in operating activities was $17.2 million, which primarily reflects a net loss of $120.9 million. This decrease to operating cash flows are partially offset by adjustments for non-cash share-based compensation of $29.7 million, non-cash losses of $60.0 million in earnout liabilities, amortization of intangible assets of $9.3 million, and an aggregate cash provided by operating assets and liabilities of $3.2 million. Specifically, a $11.9 million increase in accounts payable-trade, accrued compensation, and other expenses primarily due to an increase in accrued compensation expense as a result of timing, partially offset by a $6.0 million increase in account receivable and $1.6 million increase in other assets, a $0.7 million increase in prepaid expenses and other, and a decrease in operating lease liabilities of $0.5 million.

Investing Activities
Net cash used in investing activities for the six months ended June 30, 2024 of $8.1 million was primarily due to $2.5 million cash funding of a joint venture and $5.6 million for purchases of fixed assets.
Net cash used in investing activities for the six months ended June 30, 2023 of $2.7 million was primarily due to $1.0 million cash funding of a joint venture and $1.7 million for purchases of fixed assets.
Financing Activities
Net cash provided by financing activities for the six months ended June 30, 2024 of $2.2 million was primarily due to proceeds from stock option exercises of $0.4 million and proceeds from our employee stock purchase plan of $1.8 million.
Net cash provided by financing activities for the six months ended June 30, 2023 of $87.3 million was primarily due to proceeds from the issuance of common stock in May 2023 of $86.9 million and proceeds from stock option exercises of $0.9 million, offset by the payment of May 2023 public offering costs of $0.5 million.
Contractual Obligations, Commitments and Contingencies

In the ordinary course of business, we enter into contractual arrangements that may require future cash payments. As of June 30, 2024, our non-cancellable contractual arrangements consisted entirely of lease obligations. Refer to Note 7 - Leases for further information.

Off-Balance Sheet Commitments and Arrangements
As of June 30, 2024, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
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Critical Accounting Policies and Estimates
The preparation of our financial statements and related disclosures in accordance with U.S. GAAP requires our management to make judgments, assumptions and estimates that affect the amounts reported in our accompanying condensed consolidated financial statements and the accompanying notes included elsewhere in this quarterly report. Our management bases its estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our condensed consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain.
There have been no material changes to our critical accounting policies and estimates from the information in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, included in our 2023 annual report on Form 10-K.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market Conditions
Adverse changes in the global economic landscape have impacted, and may continue to affect, the demand for our products. This impact includes alterations in customer order behaviors, such as cancellations, and shifts in vendor inventory levels.

Commodity Risk
We face exposure to market price fluctuations of specific commodity raw materials, notably gold, which are integrated into our end products or utilized by our suppliers in production. Rising commodity prices result in increased costs passed on to us by suppliers, either through general price hikes or commodity surcharges. While our interactions with suppliers typically occur through purchase orders rather than long-term contracts, we strive to secure firm pricing aligned with planned production volumes.
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Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the supervision and involvement of our Principal Executive Officer and Principal Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report, pursuant to Exchange Act Rule 13a-15. Based upon this evaluation, our chief executive officer and chief financial officer have concluded that, as of June 30, 2024, as a result of the material weaknesses in our internal control over financial reporting discussed below and filed in our amended annual report on Form 10-K for the year ended December 31, 2023 on July 23, 2024 with the SEC, our disclosure controls and procedures were not effective.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified:

The Company did not fully maintain components of the COSO framework, including elements of the control environment, risk assessment, control activities, and monitoring activities components, relating to: (i) sufficiency of processes related to identifying and analyzing risks to the achievement of objectives across the entity, (ii) sufficiency of competent personnel with appropriate levels of knowledge, experience, and training in accounting for complex and non-routine transactions, and internal control matters to perform assigned responsibilities and have appropriate accountability for the design and operation of internal control over financial reporting; (iii) performing control activities in accordance with established policies in a timely manner, and (iv) performing ongoing evaluation to ascertain whether the components of internal controls are present and functioning.

The entity level material weaknesses contributed to other material weaknesses within the Company’s system of internal control over financial reporting as follows:

The Company did not design and implement effective controls, such that, personnel within the Company have incompatible duties which allow for the creation, review and processing of journal entries without independent review and authorization, which affects substantially all financial statement account balances and disclosures.
The Company did not design and implement effective controls over the accounting for share-based payments, including the long-term incentive plan awards and earnout liability.
The Company did not design and implement effective controls over the accounting for its license and release agreement.
The Company did not design and implement effective controls over the inputs and assumptions used in the valuation of the earnout liability and information utilized to classify awards as either equity or liability.
The Company did not maintain effective controls over its determination of reportable segments for purposes of segment reporting and reporting units for purposes of goodwill.

These material weaknesses did not result in a misstatement to the consolidate financial statements or disclosures. Based on additional procedures and post-closing review, management concluded that the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented, in conformity with principles generally accepted in the United States.

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Remediation Plan

We have immediately commenced developing a plan to enhance the design and operating effectiveness of our internal controls over financial reporting, including maintaining sufficient contemporaneous documentation of management review controls over accounting for share-based payments, including the long-term incentive plan awards, earnout liability, as well as the accounting for the Company’s license and release agreement, which we believe will address the material weakness described above. At least on an annual basis or as warranted due to organizational changes, we will perform a segment/reporting unit analysis. We expect our remediation will be complete prior to the end of the fourth quarter of fiscal 2024.
We have hired a Director of Information Technology at the end of 2023 to, among other responsibilities, segregate financial accounting systems access and system changes between IT and accounting department. The Company will continue to review and modify system access for accounting personnel to ensure proper segregation of duties around manual journal entries.

Changes in Internal Control Over Financial Reporting

Other than the material weaknesses described above, there have been no significant changes in our internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time we may be involved in various disputes and litigation matters that arise in the ordinary course of business. We are currently not a party to any material legal proceedings.
Item 1A. Risk Factors.
There are no material changes from the risk factors previously disclosed in Part I—Item 1A, “Risk Factors,” of our annual report on Form10-K/A for the fiscal year ended December 31, 2023, filed with the SEC on July 23, 2024, and in Part IIItem 1A, “Risk Factors,” of our quarterly report on Form 10Q for the quarter ended March 31, 2024, filed with the SEC on May 15, 2024.
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Item 5. Other Information.
Adoption and Termination of 10b5-1 Trading Plans of Directors and Executive Officers

On June 10, 2024, David Moxam, a member of the board of directors, adopted a Rule 10b51 trading plan covering up to 605,000 shares of common stock. The plan is intended to satisfy the affirmative defense conditions of Rule 10b51(c) under the Securities Exchange Act of 1934. The plan is scheduled to be effective from September 16, 2024 until February 14, 2025. All, some, or none of the shares covered by the plan could be sold under the terms of the plan. On April 1, 2024, an earlier 10b51 trading plan intended to satisfy the affirmative defense conditions of Rule 10b51(c), entered into by Mr. Moxam on December 13, 2023 and covering up to 605,000 shares, terminated automatically by its terms. No shares were sold under that trading plan.

Rule 10b51 plans are generally in the form of prearranged written plans to buy or sell company stock at predetermined times or prices. Such plans are designed to provide an affirmative defense against insider trading liability, provided they satisfy the conditions of Rule 10b51(c), including, but not limited to, a condition requiring directors and executive officers of public companies to observe a waiting period of at least 90 days, after the plan adoption date, before any trades can be executed under the plan.

The company does not undertake any obligation to report the establishment, modification or termination of any Rule 10b51 trading plans by directors or executive officers, except to the extent required by law.

Departure of Directors or Certain Officers; Compensatory Arrangements of Certain Officers.

On July 31, 2024, we entered into a letter agreement with Ranbir Singh, an executive officer of the Company, pursuant to which Dr. Singh will transition from Executive Vice President, GeneSiC Business to Executive Vice President, Corporate Development. In his new role Dr. Singh will be responsible, among other duties, for identifying and leading corporate initiatives relating to new businesses, technologies, operational capabilities, university and academic partnerships, and government partnerships and programs. Although he remains a Navitas senior executive, Dr. Singh will no longer be an executive officer (as defined in Rule 3b-7 under the Exchange Act) of the Company as of July 31, 2024.

Under the letter agreement, Dr. Singh will devote approximately half of his professional time to the corporate development role at 50% of his base annual salary in effect before the transition. Dr. Singh will continue to be eligible for an annual bonus under the Company’s annual incentive bonus program, at a target participation level of at least 60% of his base salary, with the opportunity to earn a bonus up to 150% of the target amount depending on the extent to which corporate and individual performance goals reflecting his corporate development role are achieved or exceeded. Dr. Singh will also remain eligible to participate in the Company’s group health care plan and for other benefits available to executives of the Company.

Dr. Singh’s long-term incentive performance award of non-qualified options to purchase up to 3,250,000 shares of our common stock, dated August 15, 2022 (“LTIP Award”), is not affected by the change to his role. Under the letter agreement, if the Company amends or replaces the LTIP Award, the terms and conditions of Dr. Singh’s replacement LTIP Award would be the same as those awarded to other holders of LTIP Awards.

Dr. Singh also remains eligible for payments and benefits available to employees at the rank of executive vice president under the Navitas Semiconductor Executive Severance Plan (“Severance Plan”) or under his employment letter dated August 15, 2022, to the extent any separate component of severance payments or benefits under his employment letter is more favorable to Dr. Singh. Under the letter agreement, the occurrence of a “Good Reason” termination event and corresponding obligations to provide notice and an opportunity to cure will be governed solely by reference to the definition of “Good Reason” and related terms and conditions of the Severance Plan. Further, Dr. Singh will have until December 1, 2024 to provide notice that the new role constitutes a Good Reason event as so defined. For purposes of calculating any amount of severance to which Dr. Singh is entitled, the value of his annual salary for such purposes will be based on the full amount of his salary as in effect prior to the salary reduction reflecting the new role.

In connection with Dr. Singh’s corporate development role and reduced time commitment to Navitas, the Company and Dr. Singh agreed to certain conditions and clarifications to Dr. Singh’s non-competition agreement, entered into in connection with the acquisition of GeneSiC Semiconductor Inc. in 2022. Specifically, the letter agreement confirms the parties’ understanding that such non-competition obligations do not apply to gallium nitride or silicon carbide technologies operating above 100 MHz operating frequency. As to technologies operating below that frequency, the agreement provides that the Company may waive compliance with the non-competition obligations before they otherwise expire on August 15, 2027, provided Dr. Singh complies with certain notice and other obligations, as set forth in the agreement, with respect to employment or other opportunities that may arise.

The foregoing summary of the letter agreement with Dr. Singh is qualified in its entirety by reference to the complete text of the agreement, which is filed as Exhibit 10.1 to this report and incorporated by reference herein.
38

TABLE OF CONTENTS

Item 6. Exhibits.

EXHIBIT INDEX
ExhibitDescription
10.1*
31.1*
31.2*
32.1**
101.SCH*XBRL Taxonomy Extension Schema Document
101.CAL*XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*XBRL Taxonomy Extension Label Linkbase Document
101.PRE*XBRL Taxonomy Extension Presentation Linkbase Document
* Filed herewith
** Furnished herewith



39

TABLE OF CONTENTS
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

NAVITAS SEMICONDUCTOR CORPORATION
By: /s/ Gene Sheridan
 Gene Sheridan
 President and Chief Executive Officer
(principal executive officer)
Date:August 5, 2024

NAVITAS SEMICONDUCTOR CORPORATION
By: 
/s/ Janet Chou
 
Janet Chou
 
Executive Vice President, Chief Financial Officer and Treasurer
(principal financial and accounting officer)
Date:August 5, 2024



40
Document

Exhibit 10.1

[Navitas Semiconductor USA, Inc. Letterhead]
July 31, 2024

Ranbir Singh
[**]
Dear Ranbir:
As we have discussed, this letter agreement (this “Agreement”) sets forth an agreement, dated as of the date set forth above (the “Effective Date”), among you, Navitas Semiconductor USA, Inc. (the “Company”) and Navitas Semiconductor Corporation (“NVTS” and, together with the Company and their other affiliated entities, separately or collectively, “Navitas”), regarding the following changes to your employment with the Company and NVTS. Accordingly, you, the Company and NVTS agree as follows:
1.Role and Responsibilities. Effective as of the Effective Date, you will be employed by the Company as Executive Vice President, Corporate Development, reporting directly to Gene Sheridan, CEO. Your responsibilities in this role will include:
(a)identifying, investigating, negotiating and leading, as appropriate, new corporate initiatives, in each case as directed by the CEO, which may include acquisitions, investments, joint ventures or partnerships, including those relating to new businesses, technologies, operational capabilities, university/academia partnerships and government partnerships and programs;
(b)attending industry and professional/scholarly conferences and events as necessary or appropriate for networking and the related activities listed in clause (a);
(c)attending Navitas executive management meetings as required, typically in connection with strategic planning and/or long-term business planning; and
(d)attending Navitas board meetings as requested by the CEO.
2.Time Commitment. As of and following the Effective Date, you will not be expected to devote more than 50% of your working time to Navitas matters (as compared to the time generally devoted to Navitas matters before the Effective Date).
3.Authority and Executive Officer Status; Continuing Responsibilities. As of and following the Effective Date, you will no longer be an “officer” or “executive officer” (as those terms are defined in applicable securities laws and regulations) of NVTS or the Company, you will not represent that you are an officer or agent of the Company or NVTS, and you will not be expected or authorized to act on behalf of the Company or NVTS except as may be specifically authorized by the CEO in furtherance of your duties and responsibilities described in Section 1. As a result, you will no longer have, or be subject to, the fiduciary duties of a corporate officer under the Delaware General Corporation Law, and you will no longer be subject to disclosure applicable to executive officers or officers under applicable securities laws and regulations (it being understood that these may continue to apply with respect to 2024 in relation to your role before the Effective Date). However, for as long as you continue to beneficially own more than 10% of outstanding NVTS common shares, you will remain an “affiliate” of NVTS and, accordingly, you (and other affiliated “persons” as defined in Rule 144(a)(2) under the Securities Act of 1933 (“Securities Act”)) will continue to be subject to the same SEC reporting responsibilities under Rule 144 and under
**: Redacted pursuant to 17 CFR § 229.601(a)(6).

Ranbir Singh
July 31, 2024
Page 2
Section 16 of the Securities Exchange Act of 1934 (“Exchange Act”). In addition, for as long as you continue to beneficially own more than 5% of outstanding NVTS common shares, you will continue to be subject to SEC reporting responsibilities under Section 13 of the Exchange Act and applicable regulations thereunder, including without limitation the obligation to file ownership reports on Schedules 13D or 13G under the Exchange Act, as applicable. The office of the NVTS General Counsel will continue to provide filing support and other assistance to you in connection with these reporting responsibilities. You are urged to consult with your own securities and tax counsel in connection with any transactions involving NVTS securities. Although you will not have direct reports, the CEO will identify and direct members of the executive management team and other employees to support your activities as necessary and appropriate in consultation with you.
4.Salary and Benefits. Effective May 24, 2024, your base salary will be reduced to 50% of your base salary in effect immediately prior to such date, and thereafter will be paid to you in accordance with the Company’s regular payroll practices, less all applicable taxes and other withholdings. You will continue to be eligible to participate in the Company’s group health care plan at your current premium contribution level in effect for active employees, until the date (if ever) that you become covered under another employer’s health plan. You will remain eligible for all other benefits available to other executives of the Company.
5.Annual Bonus. You will continue to be eligible for your annual bonus at a target participation level of at least 60% (as a percentage of salary actually paid during the applicable year), with the opportunity to earn a bonus up to 150% of the target amount depending on the extent to which corporate and individual performance goals reflecting your corporate development role, determined by the CEO in consultation with you, are achieved or exceeded.
6.LTIP. Your long-term incentive performance award of non-qualified options to purchase up to 3,250,000 shares of NVTS common shares, dated August 15, 2022 (your “LTIP Award”), will not be affected by any of the changes to your role or employment status reflected in this letter, and will continue in full force and effect in accordance with its terms, including the terms and conditions of the Navitas Semiconductor Corporation 2021 Equity Incentive Plan (the “Equity Plan”) and the award agreement under the Equity Plan reflecting the LTIP Award, provided, that, notwithstanding any provisions of the LTIP Award agreement or Equity Plan to the contrary, if NVTS amends or replaces the Plan and/or your LTIP Award in the future, the terms and conditions of your replacement LTIP Award will be the same as those awarded to other holders of LTIP Awards.
7.Severance Benefits. You will remain eligible for payments and benefits available to employees at the rank of executive vice president under the Navitas Semiconductor Executive Severance Plan, dated as of December 27, 2023 and as in effect on the date hereof (the “Severance Plan”), or under your Employment Letter (as defined in paragraph 11 below) dated August 15, 2022 to the extent any separate component of severance payments or benefits is more favorable to you under your Employment Letter than under the Severance Plan (such favorability to be determined by you in your discretion), provided that in no event will any such separate component be paid or provided to you more than once in connection with the same employment termination event. Subject to Section 11, for all purposes of this Agreement the occurrence of a “Good Reason” event and corresponding obligations to provide notice and an opportunity to cure will be governed solely by reference to the definition of “Good Reason” and related terms and conditions of the Severance Plan, without regard to any contrary or conflicting provisions of your Employment Letter, provided that, when those provisions are applied to you, (a) as to the circumstances reflected in the terms and conditions set forth herein (as compared to the terms and conditions of your employment in effect at any time before the Effective Date), (i) the last day for you to


Ranbir Singh
July 31, 2024
Page 3
provide written notice that such circumstances give rise to a Good Reason event will be December 1, 2024 and (ii) any and all severance payments in respect thereof shall be paid to you (if at all) no later than December 31, 2024, provided you have executed and not revoked the release of claims contemplated by the Severance Plan; (b) as to any circumstances affecting the terms and conditions of your employment which occur after the Effective Date (as compared to the terms and conditions of your employment as set forth herein), the last day for you to provide written notice that such circumstances give rise to a Good Reason event will be the later of (i) December 1, 2024 or (ii) 90 days following the initial existence of such circumstances; and (c) notwithstanding any provision of the Severance Plan or your Employment Letter to the contrary, for purposes of calculating any amount of severance to which you are entitled under the Severance Plan or your Employment Letter (including severance in respect of salary and in respect of a bonus calculated with reference to salary), the value of “annual base salary” or “base salary” used for such purposes will be deemed to be the full amount of your annual base salary immediately prior to the reduction provided under Section 4 above, increased by a percentage equal to the aggregate percentage increase (if any) in your base salary following the Effective Date and before the termination event giving rise to such severance calculation.
8.NVTS Shares. NVTS and the Company agree that none of the NVTS shares beneficially owned by you and your affiliates on the date hereof will be subject to any restrictions on sale or transfer following the Effective Date except (a) for as long as you remain an employee of Navitas (or are otherwise engaged as a service provider), you will remain subject to the applicable provisions of the Navitas Semiconductor Insider Trading Policy applicable to “Insiders” as defined therein (including without limitation scheduled trading blackout periods, requirements to pre-clear transactions with the NVTS General Counsel, and restrictions on trading while in possession of material nonpublic information about NVTS or its securities); (b) restrictions and reporting requirements under applicable securities laws (including Rule 144 under the Securities Act and Sections 13 and 16 of the Exchange Act, as applicable); and (c) the daily volume limitations imposed by Section 2.10 of the Registration Rights Agreement among NVTS, you and the other parties thereto dated August 15, 2022 (the “Registration Rights Agreement”), which restrictions shall continue to apply in accordance with their terms. For the avoidance of doubt, the restrictions under the foregoing clauses (b) and (c) will continue to apply regardless of your employment status. In addition, the board of directors will consider in good faith requests to pledge NVTS shares beneficially owned by you or an affiliate as security for the repayment of indebtedness, upon reasonable disclosure by you of the material terms and conditions of such indebtedness.
9.Activities in Relation to Non-competition Covenant and Personal Interests. You and the Company agree that, in connection with the performance of your corporate development role, and in light of your reduced time commitment to Navitas, your activities after the Effective Date may result in the identification or discovery of investment or business opportunities that may be of possible interest to (i) Navitas (whether or not such opportunities are of the type or character that are within the scope of, or involve a business similar to or competitive with, Navitas’ businesses) and/or (ii) you in your individual personal capacity (including entities or ventures in which you may be involved by virtue of this Section 9) (any of which, an “Opportunity”). In the event you identify, discover or otherwise become aware of an Opportunity which involves designing, developing, manufacturing or having manufactured, marketing, distributing or selling silicon carbide (“SiC”)-based or gallium nitride (“GaN”)-based discrete or integrated power devices that operate under 100MHz operating frequency (a “Covered Opportunity”), whether such discovery or awareness results from the performance of your corporate development role with the Company or as a result of your individual activities, the following clauses (a)-(d) will apply.
(a)You shall not engage in substantive discussions, or enter into any binding or non-binding agreement or understanding relating, directly or indirectly, to the evaluation or


Ranbir Singh
July 31, 2024
Page 4
assessment of, due diligence review of, valuation of, investment in (including the identification of potential investors), acquisition of all or any part of the equity or assets of, employment with or service to, or joint venture or other form of collaboration or partnership with, any Covered Opportunity unless, prior to doing so, you have informed the third party(ies) having authority and power over the completion of such Covered Opportunity of the existence and nature of your obligations to the Company under this Section 9. Your compliance in good faith with the preceding sentence, by itself (and without disclosure of Confidential Information (as defined in Section 10)), will not be a breach of Section 10 or require you to disclose the applicable Covered Opportunity to the Company, provided in each case that you fully comply with your other obligations below and otherwise under this Agreement.
(b)Following an initial disclosure permitted by clause (a), you shall not engage in further discussions or any of the activities of the kind set forth in clause (a) with respect to such (or any other) Covered Opportunity unless, prior to doing so, you provide written notice of the Covered Opportunity to the CEO of the Company and provide the Company with a reasonable opportunity to discuss the Covered Opportunity with you and/or such other interested parties, as the Company may determine within 10 days after receiving such notice. The Company shall have no right of first refusal, right of first offer or any other right or obligation in relation to the Covered Opportunity, except for such right to notice from you and such opportunity to discuss without obligation by the Company or any other party. If, pursuant to any contractual, fiduciary, professional or other obligation or duty owed to any third party, you are prohibited or restricted from providing the notice to the Company and/or opportunity to discuss in accordance with this clause (b), then you shall not further discuss or undertake any of the activities set forth in clause (a) in connection with such (or any other) Covered Opportunity, directly or indirectly. The Company shall treat all communications under this clause (b) as confidential and shall not disclose them to any other person or entity except as permitted by you or the applicable interested parties or as required by law.
(c)In the event NVTS and its affiliates do not pursue for any reason any Covered Opportunity as to which you have fully complied with your obligations under clause (b), then, solely with regard to your participation in such Covered Opportunity, as and to the extent disclosed in the notice provided under clause (b), NVTS shall waive compliance with your obligations (your “Non-Compete Agreement”) pursuant to Section 6.7(a) of the Agreement and Plan of Merger among NVTS, GeneSiC Semiconductor Inc., you and the other parties thereto, dated August 15, 2022 (the “Merger Agreement”).
(d)Subject to your compliance with Section 10 and the other provisions of this Agreement, and notwithstanding any provision of your Non-Compete Agreement to the contrary (i) you will not be restricted from pursuing Opportunities other than Covered Opportunities (“Non-Covered Opportunities”), either alone or in conjunction with others and will have no obligation to disclose Non-Covered Opportunities to the Company; and, further, (ii) you will not be in violation of your Non-Compete Agreement solely because you become affiliated with an entity (e.g., a private equity firm) that is pursuing, considering or investing in Covered Opportunities, provided, that you or your affiliates (other than such entity) do not invest in, participate in the management or direction of, or advise or review any proprietary or confidential information concerning, such Covered Opportunities. Without limitation, Non-Covered Opportunities include Opportunities involving SiC- and/or GaN-based devices that are solely:


Ranbir Singh
July 31, 2024
Page 5
(i)applicable in a circuit switching at greater than 100MHz (also called radio frequency or RF) power devices;
(ii)photonic devices;
(iii)micro-electromechanical system (MEMS) devices; and
(iv)combinations of the foregoing three items.
(e)For the avoidance of doubt, it is not a violation of your Non-Compete Agreement to be a consultant to a business that does not have other business lines that compete with the Business (as defined in the Merger Agreement) even if such business assembles and tests semiconductors for third parties that do compete with the Business.
10.Confidentiality. Notwithstanding any provision to the contrary in paragraph 9 above, you shall at all times comply with your obligations to Navitas with respect to the Confidential Information of Navitas. “Confidential Information” means information (including any and all combinations of individual items of information) that Navitas has developed (whether before or after NVTS’ acquisition of GeneSiC Semiconductor Inc.) or will develop, acquire, create, discover or own, that has value in or to its businesses, which is not generally known and which Navitas wishes to maintain as confidential. Confidential Information includes both information disclosed by Navitas to you, and information developed or learned by you during the course of your employment with Navitas, before and after the Effective Date (including before NVTS’ acquisition of GeneSiC Semiconductor Inc.). Confidential Information also includes all information of which the unauthorized disclosure could be detrimental to the interests of Navitas, whether or not such information is identified as Confidential Information. By example, and without limitation, Confidential Information includes any and all non-public information that relates to the actual or anticipated business and/or products, research or development of Navitas, or its technical data, trade secrets, or know-how, including, but not limited to, research, product plans, or other information regarding Navitas’ products or services and markets therefor, customer lists and customers (including, but not limited to, customers of Navitas with which you have become acquainted during the term of your employment). Notwithstanding the foregoing, Confidential Information shall not include any such information which you can establish (i) was publicly known or made generally available prior to the time of disclosure by Navitas to you; (ii) becomes publicly known or made generally available after disclosure by Navitas to you through no wrongful action or omission by you; or (iii) is in your rightful possession, without confidentiality obligations, at the time of disclosure by Navitas as shown by contemporaneous written records; provided that any combination of individual items of information shall not be considered within any of the foregoing exceptions merely because one or more of the individual items are within such exception, unless the combination as a whole is within such exception. You agree that during and after your employment with Navitas, you will hold in the strictest confidence, and take all reasonable precautions to prevent any unauthorized use or disclosure of Confidential Information, and you will not (i) use Confidential Information for any purpose whatsoever other than for the benefit of Navitas in the course of your employment, or (ii) disclose Confidential Information to any third party without the prior written authorization of the CEO of the Company. Prior to disclosure when compelled by applicable law; you shall provide prior written notice to the CEO or General Counsel of the Company. You agree that you obtain no title to any Confidential Information, and that as between Navitas and you, Navitas Group retains all Confidential Information as its sole property. You understand that your obligations under this clause 10 will continue after termination of your employment and will apply regardless of the activities you are permitted to undertake under paragraph 9.
11.Section 409A.


Ranbir Singh
July 31, 2024
Page 6
(a)This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, or an exemption thereunder and shall be construed and administered in accordance with Section 409A. Notwithstanding any other provision of this Agreement, payments provided under this Agreement may only be made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments under this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. Any payments to be made under this Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A. Notwithstanding the foregoing, the Company and NVTS make no representations that the payments and benefits provided under this Agreement comply with Section 409A and in no event shall the Company or NVTS be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A.
(b)In furtherance of the foregoing clause (a) and notwithstanding any other provision of this Agreement, if any payment or benefit provided to you in connection with termination of employment is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A that is not exempt from Section 409A as a short-term deferral or otherwise, and you are determined to be a “specified employee” as defined in Section 409A(a)(2)(b)(i), then such payment or benefit shall not be paid until the first payroll date to occur following the six-month anniversary of your termination date (the “Specified Employee Payment Date”) or, if earlier, on the date of your death. The aggregate of any payments that would otherwise have been paid before the Specified Employee Payment Date and interest on such amounts calculated based on the applicable federal rate published by the Internal Revenue Service for the month in which your separation from service occurs shall be paid to you in a lump sum on the Specified Employee Payment Date and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule.
12.Entire Agreement; Effect on other Agreements. Unless specifically provided herein, this Agreement contains all of the understandings and representations between NVTS, the Company and you relating to the subject matter in this Agreement, as applicable, and supersedes all prior and contemporaneous understandings, discussions, agreements, representations, and warranties, both written and oral, regarding such subject matter. Your employment offer letter dated August 15, 2022 (your “Employment Letter”) is hereby amended to the extent necessary to give effect to the terms of this Agreement, but in all other respects shall remain unchanged and in full force and effect. Nothing in this Agreement modifies, supersedes, voids, or otherwise alters the Merger Agreement, the Registration Rights Agreement, the Equity Plan, your LTIP Award agreement or the Severance Plan, each of which shall remain in full force and effect in accordance with its terms.
[Signature Page Follows]



Ranbir Singh
July 31, 2024
Page 7
Please indicate your agreement to the foregoing terms and conditions by signing where indicated below.
Yours truly,
NAVITAS SEMICONDUCTOR USA, INC.
By:/s/ Gene Sheridan
Gene Sheridan
President and CEO
NAVITAS SEMICONDUCTOR CORPORATION
By:/s/ Gene Sheridan
Gene Sheridan
President and CEO
Acknowledged and agreed:
/s/ Ranbir Singh
Ranbir Singh

Document
Exhibit 31.1
CERTIFICATION


I, Gene Sheridan, certify that:
 
1.    I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2024, of Navitas Semiconductor Corporation;
 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
 
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
 
(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date: August 5, 2024
/s/ Gene Sheridan
Gene Sheridan
President and Chief Executive Officer
(principal executive officer)

Document
Exhibit 31.2
CERTIFICATION

I, Janet Chou, certify that:
 
1.    I have reviewed this quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2024, of Navitas Semiconductor Corporation;
 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
(a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; and
 
(b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and
 
(c)    Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
(d)    Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
(a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
(b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
 
Date: August 5, 2024
/s/ Janet Chou
Janet Chou
Executive Vice President, Chief Financial Officer and Treasurer
(principal financial officer)

Document
Exhibit 32.1
CERTIFICATION

Each of the undersigned hereby certifies, for the purposes of section 1350 of chapter 63 of title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in the undersigned’s capacity as an officer of Navitas Semiconductor Corporation (“Navitas”), that, to his or her knowledge, Navitas’ quarterly report on Form 10-Q for the period ended June 30, 2024, fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of Navitas. This written statement is being furnished to the Securities and Exchange Commission as an exhibit to that Form 10-Q. A signed original of this statement, which may be electronic, has been provided to Navitas and will be retained by Navitas and furnished to the Securities and Exchange Commission or its staff upon request.


Date: August 5, 2024
/s/ Gene Sheridan
Gene Sheridan
President and Chief Executive Officer
(principal executive officer)
Date: August 5, 2024
/s/ Janet Chou
Janet Chou
Executive Vice President, Chief Financial Officer and Treasurer
(principal financial officer)