BEL FUSE INC NJ

BEL FUSE INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The condensed consolidated balance sheets and statements of operations, comprehensive income, stockholders’ equity and cash flows for the periods presented herein have been prepared by the Company and areunaudited. In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the consolidated financial position, results of operations and cash flows for all periods presented have been made. The results for thethree months ended* March 31, 2024* arenot necessarily indicative of the results to be expected for the full year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in the Bel Fuse Annual Report on Form10-K for the fiscal year ended* December 31, 2023*.

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted from these condensed consolidated financial statements pursuant to the rules and regulations, including the interim reporting requirements, of the U.S. Securities and Exchange Commission (“SEC”). The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts and the disclosure of contingent amounts in our condensed consolidated financial statements and accompanying notes. Actual results could differ from these estimates.

The Company’s significant accounting policies are summarized in Note1 to the consolidated financial statements of the Company included in the Company’s Annual Report on Form10-K for the fiscal year ended* December 31, 2023*. There wereno significant changes to these accounting policies during thethree months ended* March 31, 2024*, except as discussed in “Recently Adopted Accounting Standards” below and as follows:

Cash, Cash Equivalents and Investments

Cash equivalents include short-term investments in money market funds and certificates of deposit with an original maturity ofthree months or less when purchased. Accounts at each U.S. institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to*$250,000.* Substantially all of our U.S. cash and cash equivalents balances are in excess of the FDIC insured limit. The Company periodically invests its excess cash in money market funds and U.S. Treasury Bills. The Company's cash and cash equivalents are placed with high credit quality financial institutions.

The Company has held to maturity securities comprised of U.S. Treasury Bills. These investments are classified as held to maturity as the Company has the intent and ability to hold these investments until they mature. The held to maturity securities mature within the next12 months. The table below shows the amortized costs, associated gross unrealized gains and associated fair value of the held to maturity securities at* March**31,* 2024:

In determining the fair value of the Company's held to maturity U.S. Treasury securities, the Company utilized Level1 inputs of the market price for comparable securities as of* March 31 2024.*

Investments

We account for non-marketable investments using the equity method of accounting if the investment gives us the ability to exercise significant influence over, butnot control, of an investee. Significant influence generally exists if we have an ownership interest representing between20% and50% of the voting stock of the investee. Under the equity method of accounting, investments are stated at initial cost and are adjusted for subsequent additional investments and our proportionate share of earnings or losses and distributions.

Equity in earnings of unconsolidated affiliates, in the consolidated statements of operations, reflects our proportionate share of the investee's net income, including any associated affiliate taxes. Our proportionate share of the investee’s other comprehensive income (loss), net of income taxes, is recorded in the consolidated statements of stockholders’ equity and consolidated statements of comprehensive income. In general, the equity investment in our unconsolidated affiliates is equal to our original equity investment plus our share of those entities' undistributed earnings subsequent to our investment .

We evaluate our equity method investments for impairment at least annually or whenever events or changes in circumstances indicate, in management’s judgment, that the carrying value of an investment* mayhave experienced an other-than-temporary decline in value. When evidence of loss in value has occurred, management compares the estimated fair value of the investment to the carrying value of the investment to determine whether an impairment has occurred. If the estimated fair value is less than the carrying value and management considers the decline in value to be other than temporary, the excess of the carrying value over the estimated fair value is recognized in the financial statements as an impairment. See Note2,* "Investment in Innolectric", below, for our discussion on specific equity method investments.

Where we are unable to exercise significant influence over the investee, or when our investment balance is reduced tozero from our proportionate share of losses, the investments are accounted for under the cost method. Under the cost method, investments are carried at cost and adjusted only for other-than-temporary declines in fair value, distributions of earnings, additional investments, or in the case of an observable price change in an orderly transaction for an identical security.

All amounts included in the tables to these notes to condensed consolidated financial statements, except per share amounts, are in thousands.

Recently Adopted Accounting Standards

In* March 2020,the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU")2020-04, Reference Rate Reform (Topic848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting*("ASU2020-04"). ASU2020-04 provides temporary optional guidance on contract modifications and hedging accounting to ease the financial reporting burdens of the market transition from the London Interbank Offered Rate (“LIBOR”) to alternative reference rates. In* January 2021,the FASB issued ASU2021*-01, which refined the scope of Topic848 and clarified some of its guidance as part of the FASB’s monitoring of global reference rate activities. This updated guidance was effective upon issuance, and the Company was initially allowed to elect to apply the amendments prospectively through* December 31, 2022.In December 2022,the FASB issued ASU2022*-06, Reference Rate Reform (Topic848*), Deferral of the Sunset Date of Topic848**, which extended the date by which companies could elect to apply the amendments to December 31, 2024.During January 2023,the Company amended its credit agreement and related interest rate swap agreements to transition the reference rate from LIBOR to a Secured Overnight Financing Rate ("SOFR") effective January 31, 2023.In connection with these amendments, the Company adopted ASU2020*-04 in thefirst quarter of2023 and elected to apply the relevant practical expedients within the guidance. The adoption of this guidance didnot have a material impact on the Company's consolidated financial statements.

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In* June 2016,the FASB issued ASU2016*-13, Financial Instruments–* Credit Losses (Topic326): Measurement of Credit Losses on Financial Instruments*(“ASU2016-13”),as amended. The new guidance broadens the information that an entity must consider in developing its expected credit loss estimates related to its financial instruments and adds to U.S. GAAP an impairment model that is based on expected losses rather than incurred losses. On January 1, 2023,the Company adopted ASU2016-13. The adoption of this standard didnot have a material impact on the Company's consolidated financial statements.

Accounting Standards Issued ButNot Yet Adopted

In* November 2023,the FASB issued ASU2023*-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. Additionally, it requires a public entity to disclose the title and position of the Chief Operating Decision Maker (CODM). The ASU doesnot change how a public entity identifies its operating segments, aggregates them, or applies the quantitative thresholds to determine its reportable segments. The new standard is effective for fiscal years beginning after* December 15, 2023,and interim periods within fiscal years beginning after December 15, 2024,with early adoption permitted. A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements. We expect this ASU to only impact our disclosures withno* impacts to our results of operations, cash flows and financial condition.

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): Improvements to Income Tax Disclosures*, which focuses on the rate reconciliation and income taxes paid. ASU2023-09 requires a public business entity (PBE) to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least5% of total income tax payments, net of refunds received. For PBEs, the new standard is effective for annual periods beginning after* December 15, 2024,with early adoption permitted. An entity mayapply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025and continuing to provide the pre-ASU disclosures for the prior periods, or mayapply the amendments retrospectively by providing the revised disclosures for all periods presented. We expect this ASU to only impact our disclosures withno* impacts to our results of operations, cash flows, and financial condition.

On* February 1, 2023,the Company closed on a noncontrolling (one-third) investment in Germany-based innolectric AG (“innolectric”) for consideration of€8.0 million (approximately $8.8 million as of the February 2023closing). Transaction costs associated with the Company's investment in innolectric amounted to $1.3 million and these costs have been recorded as part of the carrying value of the investment. Under the terms of the investment agreement, if innolectric achieves certain EBITDA thresholds within a specified timeframe, the Company would be committed to acquiring the remaining shares of innolectric at that time. The accompanying condensed consolidated balance sheet reflects the fair value as of the February 2023closing of the initialone*-third equity method investment, inclusive of transaction costs, of $11.0 million, and a separate liability of $1.0 million associated with the net fair value of the put and call options related to the remaining shares pursuant to the agreement in the event certain profitability thresholds are met.

This passive investment creates a strategic alliance that is focused on Electric Vehicles (“EV”) on-board power electronics, and in particular next generation fast-charging technology. Withno product overlap, this relationship expands the Bel eMobility Power portfolio, further enhancing Bel's competitive position in this emerging field. Our investment in innolectric is accounted for using the equity method and we have determined that the innolectric investment isnot a variable interest entity (VIE). Results from this investment have been included in Bel's Power Solution and Protection segment and amounted to income of $0.2 million during thethree months ended* March 31, 2024* The Company adopted a policy to record its share of innolectric's results on aone-month lag on a consistent basis to allow time for innolectric to provide its financial statements to Bel.

Related Party Transactions

From time to time, the Company provides cash loans to innolectric to fund working capital needs and further business development. During thethree months ended* March 31, 2024,the Company provided an incremental loan to innolectric in the amount of€0.5 million. As of March 31, 2024and December 31, 2023,the Company had loans outstanding to innolectric in the aggregate amount of€2.5 million (approximately $2.7 million at the March 31, 2024exchange rate) and€2.0 million (approximately $2.1 million at the December 31, 2023exchange rate), respectively. These loans bear interest at a rate of 5% per annum. This balance is shown as a related-party note receivable on the accompanying condensed consolidated balance sheet at March 31, 2024and December 31, 2023.*

On* June 1, 2023,*the Company completed its divestment of Bel Stewart s.r.o., a former subsidiary in the Czech Republic which has historically been reported within Bel’s Connectivity Solutions segment. The business was sold to PEI Genesis (“PEI”) for total consideration of $5.1 million, subject to working capital adjustments. The divestment of this non-core business was a strategic decision which allows the Connectivity Solutions segment to focus on its main product categories serving customer end markets such as commercial air, defense, industrial and networking which better align with its long-term growth objectives.

The carrying amounts of the major classes of assets and liabilities included as part of the sale were as follows:

The following table provides information about disaggregated revenue by geographic region and sales channel, and includes a reconciliation of the disaggregated revenue to our reportable segments:

The balances of the Company’s contract assets and contract liabilities at* March 31, 2024* and* December 31, 2023* are as follows:

The change in balance of our unbilled receivables from* December 31, 2023* to* March 31, 2024* primarily relates to a timing difference between the Company’s performance (i.e. when our product is shipped to a customer-controlled hub) and the point at which the Company can invoice the customer per the terms of the customer contract (i.e. when the customer pulls our product from the customer-controlled hub). Our deferred revenue balance at* December 31, 2023* and* March 31, 2024* primarily relates to customer prepayments on invoices related to surcharges and expedite fees, which will be recorded as revenue in the period in which the related finished goods are shipped to the customer.

Transaction Price Allocated to Future Obligations:

The aggregate amount of transaction price allocated to remaining performance obligations that havenot been fully satisfied as of* March 31, 2024related to contracts that exceedone* year in duration amounted to $6.7 million, with expected contract expiration dates that range largely from 2025 –2026**.** It is expected that $0.7 million of this aggregate amount will be recognized in 2025, $6.0 million will be recognized in 2026 and the remainder will be recognized in years beyond2026. The majority of the Company's orders received (butnot yet shipped) at* March 31, 2024is related to contracts that have an original expected duration ofone* year or less, for which the Company is electing to utilize the practical expedient available within the guidance, and are excluded from the transaction price related to these future obligations. The Company will generally satisfy the remaining performance obligations as we transfer control of the products ordered to our customers.

The following table sets forth the calculation of basic and diluted net earnings per common share under thetwo-class method for thethree months ended* March 31, 2024and2023*:

Fair value is defined as an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants based upon the best use of the asset or liability at the measurement date. Entities are required to use a fair value hierarchy which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. There arethree levels of inputs that* may*be used to measure fair value:

Level1 – Observable inputs such as quoted market prices in active markets;

Level2 – Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

Level3 – Unobservable inputs about which little orno market data exists, therefore requiring an entity to develop its own assumptions.

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As of* March 31, 2024* and* December 31, 2023*, our available-for-sale securities primarily consisted of investments held in a rabbi trust which are intended to fund the Company’s Supplemental Executive Retirement Plan (“SERP”) obligations. These securities are measured at fair value using quoted prices in active markets for identical assets (Level1) inputs and amounted to $0.2 million at* March 31, 2024* and$0.3 millionat* December 31, 2023*.

Throughout2024 and2023, the Company entered into a series of foreign currency forward contracts, the fair value of which was$0.2 million at* March 31, 2024* and$0.5 million at* December 31, 2023*. The estimated fair value of foreign currency forward contracts is based on quotes received from the applicable counterparty, and represents the estimated amount we would receive or pay to settle the contracts, taking into consideration current exchange rates which can be validated through readily observable data from external sources (Level2).

The Company is a party totwo interest rate swap agreements as further described in Note10, "Derivative Instruments and Hedging Activities". The fair value of the interest rate swap agreements was$4.3 million at* March 31, 2024* and $4.0 million at* December 31, 2023*, which was based on market data, and represents the estimated amount we would receive or pay to settle the agreements, taking into consideration current and projected future interest rates as well as the creditworthiness of the parties, all of which can be validated through readily observable data from external sources.

The fair values of our derivative financial instruments and their classifications in our condensed consolidated balance sheets as of* March 31, 2024and December 31, 2023*were as follows:

The Company doesnot have any financial assets measured at fair value on a recurring basis categorized as Level3, and there wereno transfers in or out of Level1, Level2 or Level3 during thethree months ended* March 31, 2024* or* March 31, 2023*. There wereno changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during thethree months ended* March 31, 2024* or* March 31, 2023*.

There were no financial assets accounted for at fair value on a nonrecurring basis as of* March 31, 2024* or* December 31, 2023*.

The Company has other financial instruments, such as cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, which arenot measured at fair value on a recurring basis but are recorded at amounts that approximate fair value due to their liquid or short-term nature. The fair value of the Company’s long-term debt is estimated using a discounted cash flow method based on interest rates that are currently available for debt issuances with similar terms and maturities. At* March 31, 2024* and* December 31, 2023*, the estimated fair value of total debt was $60.0 million at each date, compared to a carrying amount of $60.0 million at each date. The Company didnot have any other financial liabilities within the scope of the fair value disclosure requirements as of* March 31, 2024*.

Nonfinancial assets and liabilities, such as goodwill, indefinite-lived intangible assets, long-lived assets and the net liability related to the put/call options pursuant to the innolectric investment agreement, are accounted for at fair value on a nonrecurring basis. These items are tested for impairment upon the occurrence of a triggering event or in the case of goodwill, on at least an annual basis. Based on the Company's assessment, it was concluded thatno triggering events occurred during thethree months ended* March 31, 2024* or* March 31, 2023*.

The components of inventories are as follows:

Property, plant and equipment consist of the following:

Depreciation expense was $2.3 million and$2.1 million, respectively, for thethree months ended* March 31, 2024and2023*. Depreciation expense related to our manufacturing facilities and equipment is included in cost of sales and depreciation expense associated with administrative facilities and office equipment is included in selling, general and administrative expense within the accompanying condensed consolidated statements of operations.

At* March 31, 2024,a total of $2.0 million of property was classified as assets held for sale within other current assets on the accompanying condensed consolidated balance sheets related to property in Glen Rock, Pennsylvania and several buildings in Zhongshan, PRC. At December 31, 2023,*a total of $1.3 million of property was classified as assets held for sale within other current assets on the accompanying condensed consolidated balance sheets related solely to the buildings in Zhongshan, PRC.

Accrued expenses consist of the following:

The change in warranty accrual during thethree months ended* March 31, 2024* primarily related to repair costs incurred and adjustments to pre-existing warranties. There wereno new material warranty charges incurred during thethree months ended* March 31, 2024*.

Restructuring Activities:

Activity and liability balances related to restructuring costs for thethree months ended* March 31, 2024* are as follows:

The new charges and ending liability balance noted above for severance costs largely relate to an initiative within our Connectivity segment related to the transition of certain manufacturing from our Glen Rock, Pennsylvania facility to other existing Bel sites. The balances as of* December 31, 2023related to the Company’s facility consolidation project in the PRC wherebytwo* of our Magnetic Solutions manufacturing sites were consolidated into a single new site.

Our primary objective for holding derivative financial instruments is to manage foreign currency exchange rate risk and interest rate risk, when deemed appropriate. We enter into these contracts in the normal course of business to mitigate risks andnot for speculative purposes.

Foreign Currency Forward Contracts

Under our risk management strategy, we periodically use foreign currency forward contracts to manage our short-term exposures to fluctuations in operational cash flows resulting from changes in foreign currency exchange rates. These cash flow exposures result from portions of our forecasted operating expenses, primarily compensation and related expenses, which are transacted in currencies other than the U.S. dollar, most notably the Chinese renminbi and the Mexican peso. These foreign currency forward contracts generally have maturities ofno longer thantwelve months, although occasionally we will execute a contract that extends beyondtwelve months, depending upon the nature of the underlying risk.

We held outstanding foreign currency forward contracts with notional amounts of$22.1 million and$25.8 million as of* March 31, 2024* and* December 31, 2023*, respectively. The Company's foreign currency forward contracts related to the Chinese renminbi are designated as cash flow hedges for accounting purposes and as such, changes in their fair value are recognized in accumulated other comprehensive loss in the consolidated balance sheet and are reclassified into the statement of operations within cost of goods sold in the period in which the hedged transaction affects earnings.

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Interest Rate Swap Agreements

To partially mitigate risks associated with the variable interest rates on the revolver borrowings under the Company's credit agreement (as defined and described in Note11, "Debt", below), in* November 2021,we executed a pay-fixed, receive-variable interest rate swap agreement with each of two multinational financial institutions under which we, prior to the January 2023amendment described below which transitioned the reference rate from LIBOR to SOFR, (i) paid interest at a fixed rate of 1.3055% and received variable interest ofone*-month LIBOR on a notional amountof $30.0 million and (ii) paid interest at a fixed rate of 1.3180% and received variable interest ofone-month LIBOR on a notional amount of$30.0 million (as amended to date, the*“2021* Swaps”). The effective date of the2021 Swaps was* December 31, 2021,and settlements with the counterparties began on January 31, 2022and occur on a monthly basis. The2021* Swaps will terminate on* August 31, 2026.In January 2023,and in connection with related changes to its credit agreement, the Company amended the2021* Swaps to transition the related reference rates in these agreements from LIBOR to SOFR, effective* January 31, 2023.Under the amended2021* Swaps, the Company is required to pay interest on the notional amount at the rateof 1.334% and 1.348%, resp ectively, in exchange for the daily SOFR rate plus 10 basis points.

The2021 Swaps are designated as cash flow hedges for accounting purposes and as such, changes in their fair value are recognized in accumulated other comprehensive loss in the consolidated balance sheet and are reclassified into the statement of operations within interest expense in the period in which the hedged transaction affects earnings.

Fair Values of Derivative Financial Instruments

See Note6,**"Fair Value Measurements" for the gross fair values of the Company's derivative assets and liabilities as of* March**31,* 2024 and* December 31, 2023.*

Derivative Financial Instruments in Cash Flow Hedging Relationships

The effects of derivative financial instruments designated as cash flow hedges on accumulated other comprehensive loss (“AOCL”) and on the condensed consolidated statements of operations for thethree months ended* March 31, 2024and2023* were as follows:

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The losses related to the foreign currency forward contracts are included as a component of currency translation adjustment on the accompanying condensed consolidated statements of comprehensive income for thethree months ended* March 31, 2024* and2023.

Derivative Financial Instruments Not Designated as Hedging Instruments

Gains recognized on derivative financial instrumentsnot designated as hedging instruments in our condensed consolidated statements of operations for thethree months ended* March 31, 2024and2023* were as follows:

The Company has a Credit and Security Agreement with KeyBank National Association (as amended, the "credit agreement" or the "CSA"). The CSA provides a $175 million 5-year senior secured revolving credit facility ("Revolver"), with a sublimit of up to $10 million available for letters of credit and a sublimit of up to $5 million available for swing line loans. Revolving loans borrowed under the CSA mature on* September 1, 2026.At March 31, 2024* and* December 31, 2023*, outstanding borrowings under the revolver amounted to$60 million at each date. The unused credit available under the credit facility was $115 million at each of* March 31, 2024and December 31, 2023.The Company incurred $0.4 million and $1.0 of interest expense during thethree* months ended* March 31, 2024and March 31, 2023,respectively, in connection with interest due on its outstanding borrowings under the CSA during each period, including the effects of the2021* Swaps and amortization of deferred financing costs. During* January 2023,the Company amended its CSA and related2021* Swaps to transition the reference rate from LIBOR to SOFR effective* January 31, 2023**.*

The interest rate in effect at* March 31, 2024and December 31, 2023was 2.47% at each date. Our full debt balance at each March 31, 2024and December 31, 2023was covered by the2021* Swaps, as further described in Note10, "Derivative Instruments and Hedging Activities". No outstanding borrowings were subject to a variable interest rate at* March 31, 2024or December 31, 2023.*

The credit agreement contains customary representations and warranties, covenants and events of default. In addition, the credit agreement contains financial covenants that measure (i) the ratio of the Company’s total funded indebtedness, on a consolidated basis, less the aggregate amount of all unencumbered cash and cash equivalents, to the amount of the Company’s consolidated EBITDA (“Leverage Ratio”) and (ii) the ratio of the amount of the Company’s consolidated EBITDA to the Company’s consolidated fixed charges (“Fixed Charge Coverage Ratio”). If an event of default occurs, the lenders under the credit agreement would be entitled to take various actions, including the acceleration of amounts due thereunder and all actions permitted to be taken by a secured creditor.

At* March 31, 2024,*the Company was in compliance with its debt covenants, including its most restrictive covenant, the Fixed Charge Coverage Ratio.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company isno longer subject to U.S. federal examinations by tax authorities for years before2020 and for state examinations before2017. Regarding foreign subsidiaries, the Company isno longer subject to examination by tax authorities for years before2013 in Asia and generally2015 in Europe.

As a result of the expiration of the statutes of limitations for specific jurisdictions, it is reasonably possible that the related unrecognized benefits for tax positions taken regarding previously filed tax returns* maychange materially from those recorded as liabilities for uncertain tax positions in the Company’s condensed consolidated financial statements at March 31, 2024*. The Company’s liabilities for uncertain tax positions totaled$19.9 million and$19.8 million at* March 31, 2024* and* December 31, 2023*, respectively, of which $3.5 million are expected to be resolved during2024 by way of expiration of the related statute of limitations. These amounts, if recognized, would reduce the Company’s effective tax rate.

The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provision for income taxes. During thethree months ended* March 31, 2024* and2023, the Company recognized$0.1 million, in each period, of interest and penalties in the condensed consolidated statements of operations. The Company has approximately $2.1 million and $2.0 million accrued for the payment of interest and penalties at* March 31, 2024* and* December 31, 2023*, respectively, which is included in liability for uncertain tax positions in the condensed consolidated balance sheets.

The Company maintains the Bel Fuse Inc. Employees’ Savings Plan, a defined contribution plan that is intended to meet the applicable requirements for tax-qualification under sections401(a) and (k) of the Internal Revenue Code of1986, as amended. The expense for thethree months ended* March 31, 2024and2023* amounted to $0.6 million and $0.4 million, respectively. The Company’s matching contribution is made in the form of Bel Fuse Inc. Class A common stock. As of* March 31, 2024*, the plan owned 284,384 and 59,709 shares of Bel Fuse Inc. Class A and Class B common stock, respectively.

The Company also maintains a Nonqualified Deferred Compensation Plan (the "DCP"). With certain exceptions, the Company's contributions to the DCP are discretionary and become fully vested by the participants upon reaching age 65. The expense amounted to less than $0.1 million during each of thethree-month periods ended* March 31, 2024and2023.* As the plan is fully funded, the assets and liabilities related to the DCP were in equal amounts of $1.1 million at* March 31, 2024and $1.0 million at December 31, 2023.*These amounts are included in other assets and other liabilities, respectively, on the accompanying condensed consolidated balance sheets as of each date.

The Company's subsidiaries in Asia have a retirement fund covering substantially all of their Hong Kong based full-time employees. The expense for thethree months ended* March 31, 2024and2023* amounted to$0.1 million and$0.6 million, respectively.

The Company maintains a SERP, which is designed to provide a limited group of key management and other key employees of the Company with supplemental retirement and death benefits. As discussed in Note6 above, the Company has investments in a rabbi trust which are intended to fund the obligations of the SERP.

The components of SERP expense are as follows:

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The service cost component of net benefit cost is presented within cost of sales, research and development costs or selling, general and administrative expense on the accompanying condensed consolidated statements of operations, in accordance with where compensation cost for the related associate is reported. All other components of net benefit cost, including interest cost and net amortization noted above, are presented within other income/expense, net in the accompanying condensed consolidated statements of operations.

The following amounts are recognized net of tax in accumulated other comprehensive loss:

The components of accumulated other comprehensive loss at* March 31, 2024* and* December 31, 2023* are summarized below:

Changes in accumulated other comprehensive loss by component during thethree months ended* March 31, 2024* are as follows. All amounts are net of tax.

(a) This reclassification relates to the amortization of prior service costs and gains/losses associated with the Company's SERP Plan. This expense is reflected in other income/expense, net on the accompanying condensed consolidated statements of operations.

Legal Proceedings

The Company is party to a number of legal actions and claims,none of which individually or in the aggregate, in the opinion of management, are expected to have a material adverse effect on the Company's consolidated results of operations or consolidated financial position.

On* June 23, 2021,a patent infringement lawsuit styledBel Power Solutions, Inc. v. Monolithic Power Systems, Inc., Case Number6:21cv00655,* was filed in the United States District Court for the Western District of Texas (Waco Division) by Bel Power Solutions, Inc. against Monolithic Power Systems, Inc. ("MPS") for infringement of various patents directed towards systems, methods and articles of manufacture that provide a substantial improvement in power control for circuits, including novel and unique point-of-load regulators. On* July 27, 2023,*the Western District of Texas court filed an Order granting MPS’s motion for summary judgment of non-infringement. The Court’s memorandum and opinion is forthcoming. The Company is evaluating its options for appeal.

In connection with the Company's2014 acquisition of the Power-One Power Solutions business ("Power Solutions") of ABB Ltd., there is an ongoing claim by the Arezzo Revenue Agency in Italy concerning certain tax matters related to what was then Power-One Asia Pacific Electronics Shenzhen Co. Ltd. (now Bel Power Solutions Asia Pacific Electronics Shenzhen Co. Ltd, or “BPS China”) for the years2004 to2006. In* September 2012,the Tax Court of Arezzo ruled in favor of BPS China and cancelled the claim. In February 2013,the Arezzo Revenue Agency filed an appeal of the Tax Court’s ruling. The hearing of the appeal was held on October 2, 2014.On October 13, 2014,BPS China was informed of the Regional Tax Commission of Florence ruling which was in favor of the Arezzo Revenue Agency and against BPS China. An appeal was filed on July 18, 2015before the Regional Tax Commission of Florence and rejected. On December 5, 2016,the Arezzo Revenue Agency filed an appeal with the Supreme Court and BPS China filed a counter-appeal on January 4, 2017.The Supreme Court has yet to render its judgment. The estimated liability related to this matter is approximately$12.0 million and has been included as a liability for uncertain tax positions on the accompanying condensed consolidated balance sheetsat March 31, 2024* and* December 31, 2023*. As Bel is entitled to be fully indemnified in this matter per the terms of the stock purchase agreement with ABB, a corresponding other asset for indemnification is also included in other assets on the accompanying condensed consolidated balance sheets at* March 31, 2024* and* December 31, 2023*.

In connection with the Company's2021 acquisition of EOS Power ("EOS"), there is an ongoing claim asserted with respect to EOS by the Principal Commissioner of Customs (Preventive), Mumbai related to customs duties and imposed fines and penalties dating back to1994. The original demand was in the amount of approximately$1.4 million, of which EOS has paid $0.5 million. EOS filed an Appeal in2016 which is pending with the Customs, Excise and Service Tax Appellate Tribunal in Mumbai related to the $0.9 million balance of the original demand net of EOS' payment. As part of the EOS acquisition agreement entered into in* March 2021,the Company is entitled to be indemnified for this matter for a period of 7 years from the acquisition date. The Company is unable to determine at this time what amount, if any, mayultimately be due in connection with this claim. As such,no estimate was accrued as of March 31, 2024*.

The Company isnot a party to any other legal proceeding, the adverse outcome of which is likely to have a material adverse effect on the Company's consolidated financial condition or consolidated results of operations.

The Company operates inone industry with three reportable operating segments, which represent the Company'sthree product groups, consisting of Power Solutions and Protection, Connectivity Solutions and Magnetic Solutions. The primary criteria by which financial performance is evaluated and resources are allocated are revenue and gross profit. The following is a summary of key financial data: