Company: NAVN
Filing Date: 2025-09-19
Form Type: S-1
Source: 0001628280-25-042130
Chunk: 342

Company: Navan, Inc.
Filing Date: 2025-09-19
Form: S-1
Chunk 342
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 discount to the conversion price ranging from 20% to 35% that increases with the passage of time. The share-settled redemption features of the convertible notes represent embedded derivatives requiring bifurcation. We recorded the initial fair value of the embedded derivative liability of $43.1 million as a discount on the convertible notes’ face amount. Refer to Note 3 — Fair Value Measurements for additional detail regarding the embedded derivative liability. The debt discount is amortized to interest expense at an effective interest rate of 13.5% through the extended maturity date. If no conversion or settlement event is

F-29 NAVAN, INC. AND SUBSIDIARIES Notes to Consolidated Financial Statements

triggered prior to the notes’ maturity, the convertible notes will be redeemed at a 12.5% internal rate of return (“IRR”). The 12.5% IRR payout at maturity is incorporated into the effective interest rate calculation. The convertible notes are presented on the consolidated balance sheets at their original issuance value plus PIK interest, net of the unamortized debt discount and issuance costs, and are not marked to fair value at each reporting period. The net carrying amount of the convertible notes was as follows (in thousands):

|                                                                                                                               | As of January 31, |     |          |
|                                                                                                                               |              2025 |     |     2024 |
| Principal.................................................................................................................... |          $125,000 |     | $125,000 |
| Unamortized debt discount....................................................................................                 |            -7,456 |     |  -13,581 |
| Unamortized debt issuance costs........................................................................                       |              -498 |     |     -906 |
| PIK interest added to principal balance...............................................................                        |            65,348 |     |   44,174 |
| Net carrying amount..........................................................................................                 |          $182,394 |     | $154,687 |

Interest expense related to the convertible notes was as follows (in thousands):

|                                                                                                                             | Year Ended January 31, 
                   2025 |     |    2024 |
|:----------------------------------------------------------------------------------------------------------------------------|-----------------------:|:----|--------:|
| Amortization of debt discount................................................................................               |                 $6,124 |     |  $9,267 |
| Amortization of debt issuance costs....................................................................                     |                    409 |     |     618 |
| PIK interest............................................................................................................... |                 21,