Transphorm Announces Fiscal Fourth Quarter 2021 Financial Results

GOLETA, Calif.--()--Transphorm, Inc. (OTCQX: TGAN)—a pioneer in and global supplier of high reliability, high performance gallium nitride (GaN) power conversion products, today announced financial results for the company’s fiscal fourth quarter of 2021 ended March 31, 2021, which reflects the Company’s new fiscal year-end period.

Revenue for the fiscal fourth quarter of 2021 increased 20% sequentially to $2.4 million due to record product sales driven by the expanding adoption of Transphorm’s GaN devices for power conversion applications. This compares to revenue of $2.0 million in the fiscal third quarter of 2021 and $1.1 million in the fiscal fourth quarter of the year ended March 31, 2020. For the full fiscal year 2021, revenue was $12.7 million, compared to $12.5 million in the full fiscal year 2020.

Operating expenses on a GAAP basis were $5.2 million in the fiscal fourth quarter, compared to $4.5 million in the prior quarter and $5.1 million in the fiscal fourth quarter of 2020. Fiscal fourth quarter 2021 operating expenses consisted of R&D expenses of $1.8 million and SG&A expenses of $3.4 million. On a non-GAAP basis, operating expenses in the fiscal fourth quarter of 2021 were $4.5 million, compared with non-GAAP operating expenses of $3.7 million in the prior quarter and $4.7 million in the fiscal fourth quarter of 2020.

GAAP net loss for the fiscal fourth quarter of 2021 was ($6.6) million, or ($0.16) per share, compared to a GAAP net loss of ($4.7) million, or ($0.13) per share, in the prior quarter and a GAAP net loss of ($4.2) million, or ($0.13) per share, in the fiscal fourth quarter of 2020. On a non-GAAP basis, net loss for the fiscal fourth quarter of 2021 was ($5.2) million, or ($0.13) per share, compared to a non-GAAP net loss of ($4.7) million, or ($0.13) per share, in the prior quarter and a non-GAAP net loss of ($6.1) million, or ($0.19) per share, in the fiscal fourth quarter of 2020.

For the full fiscal year 2021, GAAP net loss was ($20.3) million, or ($0.56) per share, compared to a GAAP net loss of ($13.1) million, or ($0.45) per share, for the full fiscal year 2020. On a non-GAAP basis, net loss for the full fiscal year 2021 was ($15.5) million, or ($0.42) per share, compared to a non-GAAP net loss of ($13.6) million, or ($0.47) per share, in the full fiscal year 2020.

Cash and equivalents as of March 31, 2021 were $9.5 million, compared to $14.6 million as of March 31, 2020.

Commenting on the current fiscal first quarter of 2022, Transphorm’s President and Co-founder, Primit Parikh, stated, “Following our strong results and record product revenue in the March quarter, we have continued to secure new design wins and experience growing customer demand for Transphorm’s GaN power devices. Throughout the current quarter our team has been focused on ramping both volume production shipments and future capacity, and we remain on track toward our goal of having the capacity to ship more than 1 million GaN devices for Adapters per month by the end of calendar 2021. We are also continuing to leverage the field-proven reliability, quality and performance of Transphorm’s devices to extend our market leading position in GaN products for high-power applications, including gaming, crypto-mining and data centers – for which Transphorm’s latest Gen 5 product will also be commercially released in the coming quarter.”

Change of Fiscal Year

As previously announced, Transphorm recently completed the change of the Company’s fiscal year end from December 31 to March 31. This change was implemented as part of the Company’s preparations for a planned application to uplist to the Nasdaq Capital Market in the second half of calendar 2021.

Recent Business Update Conference Call

There will be no conference call associated with today’s press release. The Company encourages interested parties to access the previously hosted business update conference call held on Tuesday, May 18, 2021. A replay and the supporting presentation materials from the May 18 conference call is available in the Investors section of Transphorm’s website at www.transphormusa.com.

About Transphorm

Transphorm, Inc., a global leader in the GaN revolution, designs and manufactures high performance and high reliability GaN semiconductors for high voltage power conversion applications. Having one of the largest Power GaN IP portfolios of more than 1,000 owned or licensed patents, Transphorm produces the industry’s first JEDEC and AEC-Q101 qualified high voltage GaN semiconductor devices. The Company’s vertically integrated device business model allows for innovation at every development stage: design, fabrication, device, and application support. Transphorm’s innovations are moving power electronics beyond the limitations of silicon to achieve over 99% efficiency, 40% more power density and 20% lower system cost. Transphorm is headquartered in Goleta, California and has manufacturing operations in Goleta and Aizu, Japan. For more information, please visit www.transphormusa.com. Follow us on Twitter @transphormusa and WeChat @ Transphorm.

Non-GAAP Financial Measures

This press release includes and makes reference to certain non-GAAP financial measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.

Transphorm believes that the presentation of non-GAAP financial measures provides important supplemental information to management and investors regarding financial and business trends relating to the Company’s financial condition and results of operations. Transphorm believes that these non-GAAP financial measures provide additional insight into Transphorm’s ongoing performance and core operational activities and has chosen to provide these measures for more consistent and meaningful comparison between periods. These measures should only be used to evaluate Transphorm’s results of operations in conjunction with the corresponding GAAP measures. The non-GAAP results exclude the effect of stock-based compensation, depreciation, amortization and change in fair value of promissory note.

A reconciliation between GAAP and non-GAAP financial results is provided in the financial statements portion of this press release.

Forward-Looking Statements

This press release contains forward-looking statements (including within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended) concerning the Company’s planned application to uplist to the Nasdaq Capital Market, the Company’s technology and anticipated product offerings, industry acceptance of GaN technology, and the Company’s pipeline and future anticipated growth. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “may,” “will,” “should,” “would,” “expect,” “plan,” “believe,” “intend,” “look forward,” and other similar expressions among others. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: risks related to Transphorm’s operations, such as additional financing requirements and access to capital; competition; the ability of Transphorm to protect its intellectual property rights; and other risks set forth in the Company’s filings with the Securities and Exchange Commission. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statement, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise.

 

Transphorm, Inc.

Condensed Consolidated Balance Sheets (audited)

(in thousands except share and per share data)

 

 

March 31, 2021

 

December 31, 2020

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

9,500

 

 

$

14,694

 

Accounts receivable, net, including related parties

1,618

 

 

844

 

Inventory

2,223

 

 

1,627

 

Prepaid expenses and other current assets

953

 

 

1,061

 

Total current assets

14,294

 

 

18,226

 

Property and equipment, net

1,360

 

 

1,324

 

Goodwill

1,302

 

 

1,397

 

Intangible assets, net

914

 

 

988

 

Other assets

274

 

 

291

 

Total assets

$

18,144

 

 

$

22,226

 

 

 

 

 

Liabilities, convertible preferred stock and stockholders’ deficit

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

3,140

 

 

$

3,182

 

Deferred revenue

505

 

 

674

 

Development loan

10,000

 

 

10,000

 

Revolving credit facility, including accrued interest

10,150

 

 

10,153

 

Unfunded commitment to joint venture

1,866

 

 

1,466

 

Accrued payroll and benefits

1,410

 

 

1,215

 

Total current liabilities

27,071

 

 

26,690

 

Promissory note

16,128

 

 

15,392

 

Total liabilities

43,199

 

 

42,082

 

Total stockholders’ deficit

(25,055

)

 

(19,856

)

Total liabilities and stockholders’ deficit

$

18,144

 

 

$

22,226

 

 
 

Transphorm, Inc.

Condensed Consolidated Statements of Operations

(in thousands except share and per share data)

 

 

Three Months Ended March 31,

 

Twelve Months Ended March 31,

 

2021
(audited)

 

2020
(unaudited)

 

2021
(unaudited)

 

2020

(unaudited)

Revenue, net, including related parties

$

2,425

 

 

$

1,100

 

 

$

12,696

 

 

$

12,505

 

Operating expenses:

 

 

 

 

 

 

 

Cost of goods sold

1,788

 

 

1,455

 

 

7,015

 

 

6,543

 

Research and development

1,780

 

 

1,466

 

 

5,898

 

 

7,430

 

Sales and marketing

663

 

 

518

 

 

2,319

 

 

2,276

 

General and administrative

2,733

 

 

3,092

 

 

9,969

 

 

8,447

 

Total operating expenses

6,964

 

 

6,531

 

 

25,201

 

 

24,696

 

Loss from operations

(4,539

)

 

(5,431

)

 

(12,505

)

 

(12,191

)

Interest expense

187

 

 

189

 

 

758

 

 

760

 

Loss in joint venture

1,468

 

 

1,419

 

 

6,885

 

 

3,995

 

Changes in fair value of promissory note

699

 

 

(2,321

)

 

2,093

 

 

(2,187

)

Other income, net

(314

)

 

(531

)

 

(1,940

)

 

(1,659

)

Loss before tax expense

(6,579

)

 

(4,187

)

 

(20,301

)

 

(13,100

)

Tax expense

 

 

 

 

 

 

 

Net loss

$

(6,579

)

 

$

(4,187

)

 

$

(20,301

)

 

$

(13,100

)

Net loss per share - basic and diluted

$

(0.16

)

 

$

(0.13

)

 

$

(0.56

)

 

$

(0.45

)

Weighted average common shares outstanding - basic and diluted

40,274,660

 

 

31,912,170

 

 

36,571,712

 

 

29,093,258

 

 
 

Transphorm, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

 

 

Three Months Ended March 31,

 

2021
(audited)

 

2020
(unaudited)

Cash flows from operating activities:

 

 

 

Net loss

$

(6,579

)

 

$

(4,187

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

Inventory write-off

7

 

 

169

 

Depreciation and amortization

197

 

 

236

 

Recovery from doubtful accounts

(48

)

 

 

Stock-based compensation

513

 

 

132

 

Interest cost

187

 

 

189

 

Gain on sale of equipment

(40

)

 

 

Loss in joint venture

1,468

 

 

1,419

 

Changes in fair value of promissory note

699

 

 

(2,321

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

(690

)

 

(668

)

Inventory

(603

)

 

(264

)

Prepaid expenses and other current assets

108

 

 

(603

)

Other assets

17

 

 

9

 

Accounts payable and accrued expenses

(195

)

 

(179

)

Deferred revenue

(169

)

 

 

Accrued payroll and benefits

195

 

 

(83

)

Net cash used in operating activities

(4,933

)

 

(6,151

)

Cash flows from investing activities:

 

 

 

Purchases of property and equipment

(164

)

 

 

Investment in joint venture

(968

)

 

(1,548

)

Net cash used in investing activities

(1,132

)

 

(1,548

)

Cash flows from financing activities:

 

 

 

Proceeds from sale of equipment

4

 

 

 

Proceeds from stock option exercise

2

 

 

18

 

Payment for repurchase of common stock

 

 

(211

)

Loan repayment

 

 

(50

)

Proceeds from issuance of common stock, net of offering cost

950

 

 

19,741

 

Net cash provided by financing activities

956

 

 

19,498

 

Effect of foreign exchange rate changes on cash and cash equivalents

(85

)

 

(26

)

Net (decrease) increase in cash and cash equivalents

(5,194

)

 

11,773

 

Cash and cash equivalents at beginning of period

14,694

 

 

2,875

 

Cash and cash equivalents at end of period

$

9,500

 

 

$

14,648

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

Interest expense paid

$

153

 

 

$

 

Supplemental non-cash financing activity:

 

 

 

Conversion of preferred stock to common stock in connection with the Reverse Merger

$

 

 

$

85,658

 

 
 

Transphorm, Inc.

Reconciliation of GAAP and Non-GAAP Financial Information (unaudited)

(in thousands except share and per share data)

 

Three Months Ended

Twelve Months Ended

 

March 31,

 

December 31,

 

March 31,

 

March 31,

 

March 31,

 

2021

 

2020

 

2020

 

2021

 

2020

GAAP net loss

$

(6,579

)

 

$

(4,712

)

 

$

(4,187

)

 

$

(20,301

)

 

$

(13,100

)

Adjustments:

 

 

 

 

 

 

 

 

 

Stock based compensation

 

513

 

 

 

705

 

 

 

132

 

 

 

1,906

 

 

 

555

 

Depreciation

 

123

 

 

 

130

 

 

 

133

 

 

 

499

 

 

 

553

 

Amortization

 

74

 

 

 

74

 

 

 

103

 

 

 

296

 

 

 

593

 

Changes in fair value of promissory note

 

699

 

 

 

(927

)

 

 

(2,321

)

 

 

2,093

 

 

 

(2,187

)

Total adjustments to GAAP net loss

 

1,409

 

 

 

(18

)

 

 

(1,953

)

 

 

4,794

 

 

 

(486

)

Non-GAAP net loss

 

(5,170

)

 

 

(4,730

)

 

 

(6,140

)

 

 

(15,507

)

 

 

(13,586

)

 

 

 

 

 

 

 

 

 

 

GAAP net loss per share - basic and diluted

$

(0.16

)

 

$

(0.13

)

 

$

(0.13

)

 

$

(0.56

)

 

$

(0.45

)

Adjustment

 

0.03

 

 

 

-

 

 

 

(0.06

)

 

 

0.14

 

 

 

(0.02

)

Non-GAAP net loss per share - basic and diluted

$

(0.13

)

 

$

(0.13

)

 

$

(0.19

)

 

$

(0.42

)

 

$

(0.47

)

Weighted average shares outstanding - basic and diluted

 

40,274,660

 

 

 

35,719,749

 

 

 

31,912,170

 

 

 

36,571,712

 

 

 

29,093,258

 

       

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

March 31,

 

December 31,

 

March 31,

 

March 31,

 

March 31,

 

2021

 

2020

 

2020

 

2021

 

2020

GAAP Operating Expense

$

5,176

 

 

$

4,524

 

 

$

5,076

 

 

$

18,186

 

 

$

18,153

 

Adjustments:

 

 

 

 

 

 

 

 

 

Stock based compensation

 

475

 

 

 

657

 

 

 

116

 

 

 

1,790

 

 

 

493

 

Depreciation

 

123

 

 

 

130

 

 

 

133

 

 

 

499

 

 

 

553

 

Amortization

 

74

 

 

 

74

 

 

 

103

 

 

 

296

 

 

 

593

 

Total adjustments to GAAP Operating Expense

 

672

 

 

 

861

 

 

 

352

 

 

 

2,585

 

 

 

1,639

 

Non-GAAP Operating Expense

$

4,504

 

 

$

3,663

 

 

$

4,724

 

 

 

15,601

 

 

 

16,514

 

 

 

 

 

 

 

 

 

 

 

 

Contacts

Investor Contacts:
Shelton Group
Brett Perry | Leanne Sievers
1-214-272-0070 | 1-949-224-3874
sheltonir@sheltongroup.com

Company Contact:
Cameron McAulay
Chief Financial Officer
1-805-456-1300 ext. 140
cmcaulay@transphormusa.com

Contacts

Investor Contacts:
Shelton Group
Brett Perry | Leanne Sievers
1-214-272-0070 | 1-949-224-3874
sheltonir@sheltongroup.com

Company Contact:
Cameron McAulay
Chief Financial Officer
1-805-456-1300 ext. 140
cmcaulay@transphormusa.com