Filing Summary
Registrant and period: This Form 8-K was filed by Live Oak Acquisition Corp. II, not Navitas Semiconductor Corp. The report concerns an event dated May 20, 2021, and was signed and dated May 24, 2021. Live Oak was a special purpose acquisition company (SPAC) and an emerging growth company.
Material Accounting Change
On May 20, 2021, the board, in consultation with management and the audit committee, determined that the company’s audited financial statements for the year ended December 31, 2020, should no longer be relied upon.
The determination followed the SEC’s April 12, 2021 staff statement regarding the accounting treatment of SPAC warrants. Live Oak had previously classified its public and private placement warrants as equity. It concluded that the warrants should instead be classified as derivative liabilities under ASC 815-40 and measured at fair value, with changes in fair value recorded in earnings.
Financial Impact
- The filing does not provide the revised dollar amounts for warrant liabilities, fair-value changes, net income, assets, equity, cash flow, margins, debt, or liquidity.
- The reclassification is expected to affect the balance sheet and earnings through recurring fair-value changes in the warrants.
- The filing states that expanded disclosures in the amended Form 10-K will describe the restatement and its impact on previously reported amounts.
Required Filing and Outlook
Live Oak intends to amend its Form 10-K for the year ended December 31, 2020, originally filed March 25, 2021. The amendment is expected to reflect the warrant reclassification and provide additional financial statement disclosures.
The filing does not provide operating guidance, revenue or profit forecasts, liquidity projections, or management commentary regarding the company’s business outlook.
Key Investor Verification Items
- Verify the amended 2020 Form 10-K when filed, including the revised warrant liability and accumulated fair-value impacts.
- Assess the effect of warrant reclassification on reported net income, total liabilities, shareholders’ equity, and earnings per share.
- Confirm the number and terms of the public and private placement warrants affected.
- Note that the provided filing identifies Live Oak Acquisition Corp. II as the registrant; it does not identify Navitas Semiconductor Corp. as the filing entity.