Transphorm(TGAN) - 2023 Q3 - Quarterly Report

Financial Performance - For the three months ended December 31, 2022, Transphorm reported net revenue of $4,493,000, a decrease of 2.4% compared to $4,604,000 for the same period in 2021[26]. - The net loss for the three months ended December 31, 2022, was $10,460,000, compared to a net loss of $4,164,000 for the same period in 2021, representing a 151% increase in losses[26]. - For the nine months ended December 31, 2022, the company reported a net loss of $21.8 million, compared to a net loss of $5.2 million for the same period in 2021[37]. - Revenue decreased by $5.8 million, or 30.4%, to $13.3 million for the nine months ended December 31, 2022, compared to $19.1 million for the same period in 2021[208]. - Net loss increased by $16.6 million, or 316.5%, to $(21.8) million for the nine months ended December 31, 2022, compared to $(5.2) million for the same period in 2021[208]. Expenses and Losses - The cost of goods sold for the three months ended December 31, 2022, was $7,162,000, resulting in a gross loss of $2,669,000 compared to a gross profit of $669,000 in the same period of 2021[26]. - Total operating expenses for the three months ended December 31, 2022, increased to $7,229,000, up 33% from $5,437,000 in the same period of 2021[26]. - The company has incurred significant operating losses primarily due to research and development expenses and general administrative costs[174]. - The company anticipates an increase in general and administrative expenses due to costs associated with being a public company and business growth[193]. Cash and Assets - Cash and cash equivalents decreased to $23,149,000 as of December 31, 2022, from $33,435,000 as of March 31, 2022[23]. - The company’s total assets as of December 31, 2022, were $49,245,000, a slight increase from $48,646,000 as of March 31, 2022[23]. - The company’s accumulated deficit as of December 31, 2022, was $200,446,000, up from $178,638,000 as of March 31, 2022[23]. Revenue Breakdown - The Company reported $3.960 million in commercial product and service revenue for the three months ended December 31, 2022, an increase of 9.3% from $3.623 million in 2021[82]. - Government contract revenue decreased to $0.533 million for the three months ended December 31, 2022, from $0.981 million in 2021, a decline of 45.5%[82]. - The company reported that four customers accounted for 73.3% of its revenue for the nine months ended December 31, 2022, down from 81.6% in the same period of 2021[175]. Inventory and Write-offs - The company experienced a significant inventory write-off of $2.8 million during the nine months ended December 31, 2022, compared to $202,000 in the prior year[37]. - The Company recognized a $2.8 million inventory write-off for the three months ended December 31, 2022, compared to $8,000 for the same period in 2021[91]. - The Company recorded an inventory total of $7.476 million as of December 31, 2022, up from $6.330 million as of March 31, 2022, representing an increase of 18.1%[90]. Research and Development - Research and development expenses for the nine months ended December 31, 2022, were $5,895,000, an increase of 15% from $5,023,000 in the same period of 2021[26]. - Research and development expenses increased by $0.7 million, or 44.5%, to $2.3 million for the three months ended December 31, 2022[203]. - The company has invested in research and development to support new product development and improve product performance, which is essential to remain competitive[184]. Stock and Equity - The Company has 750 million shares of common stock authorized, with 56,861,743 shares issued and outstanding as of December 31, 2022[126]. - The Company has 5,144,788 shares available for grant under the 2020 Equity Incentive Plan as of December 31, 2022[142]. - The total stock-based compensation expense for the three months ended December 31, 2022, was $1.123 million, an increase from $848,000 in the same period of 2021[153]. Going Concern - The company has substantial doubt about its ability to continue as a going concern due to historical losses and future expected losses[45]. - The company expects to incur significant expenses and operating losses in the foreseeable future, driven by the addition of sales personnel and increased promotional activities[176].