Navitas Semiconductor Corp

Previous wording

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.

Current wording

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 worldwide 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.

Previous wording

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 months ended March 31, 2025 and 2024, we spent approximately 90% and 87%, respectively, of our revenue on research and development. Navitas’ research and development activities are located primarily in the US and China.

Current wording

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, data centers, and new energy sectors, which include EV, renewables and energy storage. 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, 2025, we spent approximately 79% and 85%, resp ectively, of our revenue on research and development. Navitas’ research and development activities are located primarily in the US and China. In the three and six months ended June 30, 2024, we spent approximately 93% and 90%, respectively, of our revenue on research and development.

Previous wording

•declines in average selling prices due product advances and market competition;

Current wording

•declines in average selling prices due to product advances and market competition;

Previous wording

•changes in customer and distributor relationships including the impact of the Q4 2024 disengagement with a significant distributor and the ability to replace the associated volumes with a combination existing and new distributors;

Current wording

•changes in customer and distributor relationships including the impact of the Q4 2024 disengagement with a significant distributor and the ability to replace the associated volumes with a combination of existing and new distributors;

Previous wording

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. We provide a non-conformity warranty which is not sold separately and does not represent a separate performance obligation. Our product revenue is diversified across the United States, Europe, and Asia. We consider the domicile of our end customers, rather than the distributors we sell to directly to be the basis of attributing revenues from external customers to individual countries. Revenue for the three months ended March 31, 2025 and 2024, excluding channel inventories, were attributable to end customers in the following countries:

Current wording

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. We provide a non-conformity warranty which is not sold separately and does not represent a separate performance obligation. Our product revenue is diversified across the United States, Europe, and Asia. We consider the domicile of our end customers, rather than the distributors we sell to directly to be the basis of attributing revenues from external customers to individual countries. Revenue for the three and six months ended June 30, 2025 and 2024, excluding channel inventories, were attributable to end customers in the following countries:

Previous wording

Dividend income consist of income earned on money market treasury funds that are recorded as cash equivalents.

Current wording

Dividend income consists of income earned on money market treasury funds that are recorded as cash equivalents.

Previous wording

Revenue for the three months ended March 31, 2025 was $14.0 million compared to $23.2 million for the three months ended March 31, 2024, a decrease of $9.2 million, or 40%. The decline in sales was due to the decline in mobile, EV, and industrial markets.

Current wording

Revenue for the three months ended June 30, 2025 was $14.5 million compared to $20.5 million for the three months ended June 30, 2024, a decrease of $6.0 million, or 29%. The decline in sales was due to the decline in industrial China markets.

Previous wording

Dividend income consists of income earned on our money market treasury funds that are recorded as cash equivalents on our consolidated balance sheet. Decrease of $0.9 million is primarily due to decreases in our investment balances in March 31, 2025 compared to March 31, 2024.

Current wording

Dividend income consists of income earned on our money market treasury funds that are recorded as cash equivalents on our consolidated balance sheet. Decrease of $0.7 million is primarily due to decreases in our investment balances in June 30, 2025 compared to June 30, 2024.

Previous wording

During the three months ended March 31, 2025, we recognized a $8.1 million gain from the change in fair value of our earn-out liabilities. The decrease in the gain of our earn-out liabilities of $18.1 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 $2.42 as of March 31, 2024 to $0.24 as of March 31, 2025.

Current wording

During the three months ended June 30, 2025, we recognized a $28.0 million loss from the change in fair value of our earn-out liabilities. The change of $35.5 million was primarily a result of the increase of the closing price of our Class A common stock listed on the Nasdaq, resulting in the increase in the estimated fair value of the earnout shares from $1.53 as of June 30, 2024 to $3.31 as of June 30, 2025.

Previous wording

Income tax provision for the three months ended March 31, 2025 remained relatively flat when compared to the income tax benefit of $0.1 million for the three months ended March 31, 2024. We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

Current wording

Income tax provision for the three months ended June 30, 2025 remained relatively flat when compared to the income tax provision of $0.1 million for the three months ended June 30, 2024. We expect our tax rate to remain close to zero in the near term due to full valuation allowances against deferred tax assets.

Previous wording

In October 2024, we began applying the equity method to account for our joint venture investment. We recognized our proportionate share of the joint venture’s loss from the quarter, resulting in a net loss of $0.3 million for the quarter ended March 31, 2025.

Current wording

In October 2024, we began applying the equity method to account for our joint venture investment. We recognized our proportionate share of the joint venture’s loss from the quarter, resulting in a net loss of $0.2 million for the quarter ended June 30, 2025.

Previous wording

Cost of revenues for the three months ended March 31, 2025 was $8.7 million compared to $13.7 million for the three months ended March 31, 2024, a decrease of $4.9 million or 36%. The decrease was primarily driven by a decline in sales coupled with product mix.

Current wording

Cost of revenues for the six months ended June 30, 2025 was $20.9 million compared to $26.1 million for the six months ended June 30, 2024, a decrease of $5.3 million or 20%. The decrease was primarily driven by a decline in sales coupled with product mix.

Previous wording

Research and development expense for the three months ended March 31, 2025 of $12.7 million decreased by $7.6 million, or 37%, when compared to the three months ended March 31, 2024. This is primarily driven by a decrease in stock-based compensation of approximately $3.5 million, coupled with a decrease in headcount and employee costs as a result of the Company’s 2024 reduction in force (“2024 Restructuring Plan”) announced in Q4 of fiscal year 2024. Additionally, decline of approximately $1.9 million related to decreases in R&D product development costs.

Current wording

Research and development expense for the six months ended June 30, 2025 of $24.2 million decreased by $15.0 million, or 38%, when compared to the six months ended June 30, 2024. This is primarily driven by a decrease in stock-based compensation of approximately $10.3 million largely resulting from the reversal of expense following the resignation of a senior management member who held 2021 LTIP Options, coupled with a decrease in headcount and employee costs of $4.5 million as a result of the Company’s reduction in forces, and a decline of approximately $2.7 million related to decreases in R&D product development costs, which was partially offset by a $2.2 million NRE impairment.

Previous wording

We announced cost-reduction plans (“2024 Restructuring Plan” and “2025 Restructuring Plan”). The plans include a reduction in headcount with the majority of the costs consisting of employee severance and benefits. We incurred $1.5 million related to this plan for the three months ended March 31, 2025.

Current wording

We announced cost-reduction plans that include a reduction in headcount with the majority of the costs consisting of employee severance and benefits. We incurred $1.5 million related to this plan for the six months ended June 30, 2025.

Previous wording

On March 19, 2025, the Company entered into an At-The-Market Offering Agreement (the "ATM Agreement") with Jefferies LLC ("Jefferies") for the sale of shares of its Class A common stock, par value $0.0001 per share. Under the terms of the ATM Agreement, the Company may offer and sell shares of its Class A common stock having an aggregate offering price of up to $50,000,000 from time to time through Jefferies, acting as the sales agent. As of March 31, 2025, the Company has not sold any shares under the ATM agreement. In connection with establishing the ATM program, the Company incurred offering-related costs of approximately $0.3 million.

Current wording

We entered into an Open Market Sale Agreement SM (the “Sale Agreement”) with Jefferies LLC (“Jefferies”) on March 19, 2025. We subsequently completed ATM One and ATM Two. Each agreement permits us to sell, from time to time, shares of its Class A common stock, par value $0.0001 per share, with an aggregate offering capacity of up to $50.0 million, through Jefferies acting as sales agent. As of June 30, 2025, we had sold approximately 11.1 million shares under ATM One and 8.7 million shares under ATM Two, resulting in gross proceeds of approximately $100.0 million and offering-related costs of $3.3 million in total.

Previous wording

As of March 31, 2025, we had cash and cash equiva lents of $75.1 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.

Current wording

As of June 30, 2025, we had cash and cash equiva lents of $161.2 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.

Previous wording

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.

Current wording

We expect our operating and capital expenditures to increase and 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.

Previous wording

The following table summarizes our consolidated cash flows for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table summarizes our consolidated cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

We derive liquidity primarily from cash on hand and equity financing activities. As of March 31, 2025, our balance of cash and cash equivalentswas $75.1 million, which is a decrease of $11.6 million or 13% compared to December 31, 2024.

Current wording

We derive liquidity primarily from cash on hand and equity financing activities. As of June 30, 2025, our balance of cash and cash equivalentswas $161.2 million, which is a increase of $74.5 million or 86% compared to December 31, 2024.

Previous wording

For the three months ended March 31, 2025, net cash used in operating activities was $13.5 million, which primarily reflects a net loss of $16.8 million, adjusted for a non-cash gain of $8.1 million related to changes in the fair value of our earnout liability, non-cash stock-based compensation of $7.0 million, amortization of intangible assets of $4.7 million, depreciation of $0.8 million and an aggregate cash used in operating assets and liabilities of $2.2 million. Specifically, operating cash flow was mainly impacted by increases in inventories of $0.6 million, increases in prepaid expenses and other current assets of $0.6 million, decreases in lease liabilities of $0.5 million, a decrease in accounts payable, accrued compensation, and other accrued expenses of $1.7 million, partially offset with decreases in accounts receivables of $1.2 million.

Current wording

For the six months ended June 30, 2025, net cash used in operating activities was $24.8 million, which primarily reflects a net loss of $65.9 million, adjusted for a non-cash loss of $19.9 million related to changes in the fair value of our earnout liability, amortization of intangible assets of $9.5 million, non-cash stock-based compensation of $6.1 million, depreciation and amortization of $1.7 million offset by aggregate cash inflows from changes in operating assets and liabilities of $2.0 million. Specifically, operating cash flow was mainly impacted by decreases in other assets of $1.0 million, decreases in accounts receivable of $0.8 million, increases in accounts payable of $0.7 million, decreases in inventories of $0.4 million, partially offset with decreases in lease liabilities related to lease payments of $0.8 million.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $19.8 million, which primarily reflects a net loss of $3.7 million offset by adjustments for non-cash stock-based compensation of $13.5 million, non-cash gains of $26.2 million in earnout liabilities, amortization of intangible assets of $4.8 million, and an aggregate cash used in operating assets and liabilities of $7.8 million. Specifically, increases in inventories of $10 million due to wafer purchases, decreases in customer deposits of $2.9 million partially offset by a $3.7 million decrease in accounts receivable and a decrease in accounts payable, accrued compensation and other expenses of $0.5 million.

Current wording

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 decreases in accounts receivable of $3.2 million and prepaid expenses and other current assets of $1.4 million.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was primarily attributable to minimal fixed asset purchases.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was primarily attributable to fixed asset purchases of $0.7 million.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 of $5.4 million was primarily due to $2.5 million cash funding of a joint venture and $2.9 million for purchases of fixed assets.

Current wording

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.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2025 of $0.9 million was primarily due to proceeds from stock option exercises of $0.1 million and proceeds from our employee stock purchase plan of $0.8 million.

Current wording

Net cash provided by financing activities for the six months ended June 30, 2025 of $98.5 million was primarily due to proceeds from stock option exercises related to our ATM offering of $100.0 million, proceeds from stock option exercises of $1.0 million, and proceeds from our employee stock purchase plan of $0.8 million. This was partially offset by the cost of our ATM offerings of $3.3 million.

Previous wording

Net cash provided by financing activities for the three months ended March 31, 2024 of $2.0 million was primarily due to proceeds from stock option exercises of $0.2 million and proceeds from our employee stock purchase plan of $1.8 million.

Current wording

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.