Transphorm Reports Second Quarter 2020 Results

GOLETA, Calif.—August 11, 2020—Transphorm, Inc. (“Transphorm” or the “Company”) (OTCQB: TGAN), a pioneer in the development and manufacturing of high reliability, high performance gallium nitride (GaN) power semiconductors, today announced financial results for the second quarter ended June 30, 2020.

First Half 2020 & Recent Business Highlights

• Introduced SuperGaN® Power FETs with launch of Gen IV GaN platform
• Partnered with Microchip Technology Inc.to combine high reliability GaN with a digital signal controller in support of accelerating GaN adoption
• Announced Hangzhou Zhongheng Electric Co. development of an ultra-efficient, GaN-based power module using Transphorm’s GaN devices
• Raised $19.7 million in net proceeds from a private placement of common stock in February
• Successfully listed common stock on the OTC market and recently granted DTC eligibility

Second Quarter 2020 Financial Highlights

• Revenue increased to $6.3 million, including $5.0 million of licensing revenue
• Net loss was $2.3 million, or ($0.06) per share
• Cash and equivalents were $9.4 million at quarter-end

“We are very pleased with the progress we demonstrated during the second quarter,” said Mario Rivas, Transphorm’s CEO. “We continue to successfully expand our comprehensive portfolio of high-voltage GaN power conversion devices, while working to drive increased adoption of our products for targeted applications, including the emerging opportunity in fast charging power adapters. Although the COVID-19 pandemic has impacted certain customers, resulting in delays of their internal development programs that could adversely affect the pace of adoption and revenue in the near-term, we are confident that our pipeline of customer engagements and design wins will drive future long-term growth.”

Second Quarter of 2020 Results

Revenue increased to $6.3 million, compared to $1.1 million in the first quarter of 2020 and $0.5 million in the second quarter of 2019. Second quarter 2020 revenue included $5.0 million of licensing revenue from a manufacturing partner, Nexperia, related to funding of technology development, as well as $0.7 million from the Company’s three-year contract with the U.S. Navy. For the first six months of 2020, revenue was $7.4 million as compared to $1.0 million in the prior year period.

Operating expenses were $4.2 million in the second quarter, compared to $5.1 million in the prior quarter and $4.2 million in the second quarter of 2019. Second quarter 2020 operating expenses consisted of R&D expenses of $1.6 million and SG&A expenses of $2.6 million.

Net loss for the second quarter of 2020 was $2.3 million, or ($0.06) per share, compared to a net loss of $4.2 million, or ($0.13) per share, in the prior quarter and a net loss of $5.9 million, or ($0.21) per share, in the second quarter of 2019.

Cash and equivalents as of June 30, 2020 were $9.4 million, compared to $14.6 million as of March 31, 2020.

About Transphorm, Inc.

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.

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, the successful execution and continuity of Company partnerships and customer engagements, the Company’s technology and product offerings, industry acceptance of GaN technology, 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.

Investor Contacts:
Shelton Group
Brett Perry | Leanne Sievers
1-214-272-0070 | 1-949-224-3874

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