Transphorm(US:TGAN)2024-02-20 21:15Financial Performance - Total revenue for the three months ended December 31, 2023, was $4,670,000, a 4% increase from $4,493,000 in the same period of 2022[24] - Gross profit for the three months ended December 31, 2023, was $75,000, compared to a gross loss of $2,669,000 in the same period of 2022[24] - Net loss for the three months ended December 31, 2023, was $10,001,000, slightly improved from a net loss of $10,460,000 in the same period of 2022[24] - The company reported a comprehensive loss of $9,790,000 for the three months ended December 31, 2023, compared to a comprehensive loss of $9,939,000 in the same period of 2022[26] - For the nine months ended December 31, 2023, the company incurred a net loss of $24.6 million, compared to a net loss of $21.8 million for the same period in 2022, representing an increase in losses of approximately 12.7%[45] - The company reported a basic loss per share of $0.54 for the nine months ended December 31, 2023, compared to $0.38 for the same period in 2022, reflecting a worsening of 42.1%[57] - The company reported cash, cash equivalents, and restricted cash of $7.95 million at the end of the period, down from $23.65 million at the end of the previous year, reflecting a decrease of approximately 66.4%[39] - The company has an accumulated deficit of $242.1 million as of December 31, 2023, highlighting ongoing financial challenges[45] Expenses - Research and development expenses increased to $2,839,000 for the three months ended December 31, 2023, up from $2,325,000 in the same period of 2022, representing a 22% increase[24] - Total operating expenses for the three months ended December 31, 2023, increased by $1.8 million, or 24.4%, to $9.0 million compared to $7.2 million for the same period in 2022[164] - General and administrative expenses increased by $1.0 million, or 27.6%, to $4.4 million for the three months ended December 31, 2023, primarily due to increased legal expenses and stock-based compensation[171] - The company incurred stock-based compensation expenses of $4.43 million for the nine months ended December 31, 2023, up from $2.34 million in the prior year, representing an increase of 89.5%[45] - Sales and marketing expense increased by $1.3 million, or 37.2%, to $4.9 million for the nine months ended December 31, 2023, from $3.6 million for the same period in 2022[178] Assets and Liabilities - Total current assets decreased to $20,952,000 as of December 31, 2023, down from $30,688,000 as of March 31, 2023, reflecting a 32% decline[19] - Total liabilities decreased to $14,412,000 as of December 31, 2023, down from $24,837,000 as of March 31, 2023, indicating a 42% reduction[19] - Cash and cash equivalents decreased to $7,951,000 as of December 31, 2023, from $15,527,000 as of March 31, 2023, a decline of 49%[19] - Total stockholders' equity as of December 31, 2023, was $18,250,000, down from $19,615,000 as of March 31, 2023, a decrease of 7%[21] Revenue Sources - Government revenue for the three months ended December 31, 2023, was $1,495 million, significantly up from $533 million in the same period of 2022, primarily due to a contract with NSTXL[60] - Revenue from related parties included in commercial product and service revenue was $1,981 million for the three months ended December 31, 2023, down from $2,917 million in the same period of 2022[60] - Revenue for the nine months ended December 31, 2023, was $15.6 million, an increase from $13.3 million in the same period of 2022[132] - Revenue for the three months ended December 31, 2023, increased by $0.2 million, or 3.9%, to $4.7 million compared to $4.5 million for the same period in 2022, primarily due to a $1.0 million increase in government contract revenue from the NSTXL contract awarded in May 2023[164] Merger and Future Outlook - On January 10, 2024, the company entered into a merger agreement with Renesas Electronics America Inc., which is expected to close in the second half of 2024, subject to customary closing conditions[46] - The company expects to continue incurring net losses until it achieves the necessary scale to generate positive cash flow from operations[45] - The completion of the Merger is uncertain, and if not finalized, it could adversely affect the company's business, financial condition, and stock price[212] - The current market price of the company's stock may decline if the Merger is not completed, reflecting investor assumptions about the Merger's success[215] - The company may face litigation related to the Merger, which could be costly and distract management from daily operations[217] - If the Merger is completed, stockholders will miss the opportunity to realize the long-term value of the company's independent strategy[215] Stock and Financing Activities - The company raised $9.94 million from the issuance of common stock during the nine months ended December 31, 2023, compared to $16 million in the same period of 2022, indicating a decrease of 37.6%[45] - The rights offering completed in August 2023 generated approximately $7.9 million in gross proceeds, with net proceeds used for working capital[140] - The Company completed a rights offering in August 2023, issuing 2,404,758 shares of common stock, generating approximately $7.9 million in gross proceeds[101] - The Company entered into warrant exercise inducement offers in April 2023, resulting in gross proceeds of approximately $7.3 million from the exercise of warrants[141]