Certain former stockholders of Legacy Navitas (as defined below) and certain other persons were entitled to receive an aggregate of up to 10.0 million "earnout shares" of the Company's Class A common stock upon the achievement of certain earnout milestones as specifically described in the Business Combination Agreement and Plan of Reorganization (the “Business Combination Agreement”), dated as of May 6, 2021, by and among the Company’s predecessor entity (then named Live Oak Acquisition Corp. II), Live Oak Merger Sub Inc. and Navitas Semiconductor Limited, including as domesticated in the State of Delaware as Navitas Semiconductor Ireland, LLC (“Legacy Navitas”). The earnout milestones represented three independent criteria, each of which entitled the eligible stockholders to up to approximately 3.3 million aggregate earnout shares upon achievement of the applicable milestone, respectively. For additional information regarding the earnout arrangement and the earnout milestones, see Note 11, "Earnout Liability," to the consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2025.

The earnout obligation was primarily liability-classified. The earnout liability was initially recognized at fair value at the closing of the series of related transactions pursuant to which the predecessor entity of the Company acquired all of the equity interests of Legacy Navitas (the “Business Combination”) in October 2021 and was remeasured at fair value at the end of each subsequent reporting period, with changes in fair value recorded in other income (expense), net, in the condensed consolidated statements of operations. A portion of the earnout shares associated with holders subject to continuing service requirements was equity-classified and accounted for as stock-based compensation (see Note 10, "Stock-based Compensation," to the consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2025).

All three earnout triggering events were achieved prior to the start of the quarter. The Company remeasured the earnout liability through each applicable trigger date and recognized the resulting changes in fair value in other income (expense), net. The change in fair value of the earnout liability was recorded as a loss of approximately $211.0 million for the nine months ended September 30, 2026. There was no change in fair value during the three months ended September 30, 2026.

The earnout obligations were settled primarily through the issuance of an aggregate of 9.8 million shares of Class A common stock across Triggering Event I, Triggering Event II, and Triggering Event III. As of June 30, 2026, all earnout obligations had been settled and no earnout liability remained outstanding.

As previously disclosed, on May 18, 2026, the Company entered into a Settlement, Release and Amendment Agreement with Live Oak Sponsor Partners II, LLC (“Live Oak Sponsor”) to resolve disputes related to the calculation and vesting of certain sponsor earnout shares issued under the Sponsor Letter Agreement entered into in 2021 in connection with the Business Combination.

Pursuant to the agreement, the Company released approximately 0.7 million sponsor earnout shares from vesting, forfeiture and transfer restrictions, approximately 0.4 million sponsor earnout shares were acknowledged as previously earned, and approximately 0.1 million sponsor earnout shares were forfeited by Live Oak Sponsor and cancelled. The sponsor earnout shares were issued at the time of the Business Combination and were subject to vesting restrictions based on certain triggering events described in the Sponsor Letter Agreement.

The sponsor earnout shares subject to the settlement were issued under the Sponsor Letter Agreement and are separate from the Business Combination earnout arrangement described above. The Company accounted for the sponsor earnout share settlement within stockholders’ equity, with no gain, loss, or other impact on the condensed consolidated statements of operations.