Transphorm(US:TGAN)2023-08-14 20:28Financial Performance - Total revenue for the three months ended June 30, 2023, was $5,883,000, an increase of 14.1% compared to $5,156,000 for the same period in 2022[19]. - Gross profit for the same period was $2,088,000, up from $1,106,000, reflecting a gross margin improvement[19]. - The net loss attributable to common stockholders for the three months ended June 30, 2023, was $13,059,000, compared to a net loss of $5,353,000 for the same period in 2022[19]. - The company experienced a comprehensive loss of $7,934,000 for the three months ended June 30, 2023, compared to a comprehensive loss of $5,746,000 for the same period in 2022[22]. - The company reported a net loss applicable to common shareholders of $13.1 million for the three months ended June 30, 2023, compared to a net loss of $5.4 million for the same period in 2022, resulting in a basic loss per share of $0.22[44]. - The company reported a net loss of $7.4 million for the three months ended June 30, 2023, compared to a net loss of $5.4 million for the same period in 2022[174]. - The company had an accumulated deficit of $222.3 million as of June 30, 2023[174]. Cash and Liquidity - Cash and cash equivalents decreased to $3,311,000 as of June 30, 2023, down from $15,527,000 as of March 31, 2023[16]. - The company raised approximately $9.3 million in total gross proceeds from the exercise of existing warrants and a private placement of common stock in April 2023[82]. - The company raised gross proceeds of $7.3 million from the exercise of warrants and $2.0 million from a private placement during the three months ended June 30, 2023[182]. - The company anticipates needing additional equity or debt financing to secure funds, which may lead to significant dilution of existing stockholders' ownership[183]. - If the company fails to secure additional funding, it may need to cease operations or seek bankruptcy protection[178][181]. - The company plans to raise additional working capital through stock issuance, debt financing, or licensing of intellectual property, but there is no assurance of success in these efforts[36]. Operating Expenses - Operating expenses increased to $8,867,000 from $6,140,000, primarily due to higher research and development costs, which rose to $2,869,000 from $1,740,000[19]. - Research and development expenses rose by $1.1 million, or 64.9%, to $2.9 million, driven by increased payroll costs and stock-based compensation[138]. - Sales and marketing expenses increased by $0.4 million, or 36.8%, to $1.5 million, primarily due to higher payroll and stock-based compensation costs[139]. - General and administrative expenses increased by $1.2 million, or 36.1%, to $4.5 million, mainly due to increased payroll and stock-based compensation[141]. Assets and Liabilities - Total assets decreased to $33,715,000 from $44,452,000, indicating a significant reduction in the company's asset base[16]. - Total liabilities decreased to $10,891,000 from $24,837,000, primarily due to the repayment of the revolving credit facility[16]. - As of June 30, 2023, the company had total inventory of $8.9 million, slightly up from $8.4 million as of March 31, 2023[54]. - Accounts payable and accrued expenses totaled $6.5 million as of June 30, 2023, down from $7.9 million as of March 31, 2023[61]. Joint Ventures and Investments - The company has provided $6.1 million of its $12 million commitment to GaNovation as part of its investment in a joint venture[62]. - The company's interest in the joint venture GaNovation increased from 25% to 32.5% effective April 10, 2023, leading to a maximum funding obligation of $12.0 million over three years, of which $6.1 million has been provided as of June 30, 2023[187]. - The company's share of operating losses from the joint venture for the three months ended June 30, 2023, was $0.9 million, with losses of $2.7 million and $4.0 million for the years ended March 31, 2023, and 2022, respectively[187]. Market and Operational Risks - The company faces significant competition in the semiconductor market, with existing competitors having advantages such as greater name recognition and larger customer bases[200]. - The company is exposed to foreign currency exchange rate fluctuations, with a loss of $0.5 million from such fluctuations for both the three months ended June 30, 2023, and 2022[192]. - The company relies on third-party suppliers for raw materials and components, which poses risks related to availability, capacity, and delivery schedules[210]. - Manufacturing processes depend on specific raw materials, and delays in access could adversely affect operational results[212]. - The company is susceptible to manufacturing delays and pricing fluctuations due to reliance on third-party manufacturers, which may lead to loss of sales and customers[214]. Strategic Initiatives - The company plans to initiate a strategic review in the second fiscal quarter ending September 30, 2023, to explore opportunities to enhance stockholder value, including potential partnerships or asset sales[114]. - The company plans to pursue additional working capital through stock issuance, debt financing, and licensing of intellectual property to sustain operations[149].