Debts

12 Months Ended

Mar. 31, 2022

Debt Disclosure [Abstract]

Debts

Debts

Development Loans

On April 4, 2018, the Company entered into a Loan and Security Agreement (“LSA”) and Development and License Agreement (“DLA”) with Nexperia. The LSA provided for term loans in an aggregate principal amount of up to $15.0 million, which term loans were available in tranches (Tranche A, Tranche B and Tranche B-1) and subject to the satisfaction of specified conditions. The Tranche A Loan of $5.0 million initially was scheduled to mature on the earlier of the date a specified report is required to be delivered under the DLA or March 31, 2020. On April 8, 2020, the maturity of the Tranche A loan was extended to April 30, 2020 and, on April 28, 2020, the maturity of the Tranche A Loan was further extended to June 30, 2020. On June 29, 2020, the Tranche A Loan of $5.0 million was satisfied in full when the Company transferred its Gen-4 technology development to Nexperia. The Tranche B Loan of $8.0 million and Tranche B-1 Loan of $2.0 million mature on the earlier of the date a specified report is required to be delivered under the DLA or March 31, 2021, subject to extension as provided in the LSA. On March 1, 2021, the maturity of the Tranche B Loan of $8.0 million and Tranche B-1 Loan of $2.0 million was extended to June 30, 2021. On May 18, 2021, Tranche B-1 Loan of $2.0 million was converted into a Tranche C-1 Loan, which Tranche C-1 Loan has the same terms and conditions as the existing Tranche C Loan. On June 30, 2021, the maturity of the Tranche B Loan was extended to July 16, 2021. On July 16, 2021, the Tranche B Loan of $8.0 million was satisfied in full when the Company transferred its Gen-5 and 900V technology developments to Nexperia. See Note 3 - Nexperia Arrangement.

As of March 31, 2022, March 31, 2021 and December 31, 2020, aggregate principal amount of term loans outstanding under the LSA were $0, $10.0 million and $10.0 million, respectively.

Revolving Credit Facility

The LSA also provided a $10.0 million revolving loan (Tranche C Loan) that was scheduled to mature at the earlier of (i) April 3, 2021, and (ii) the date a Change of Control (as defined in the LSA) of the Company occurs. Interest payable by the Company accrues on the outstanding principal amount of the loans during such period at a rate of 6% per annum. The credit facility is secured against certain of our U.S. patents not relating to MOCVD or epiwafer technology. On March 1, 2021, the maturity of the Tranche C Loan of $10.0 million was extended to May 18, 2021. On May 18, 2021, the maturity of the Tranche C Loan was extended to the earlier of April 4, 2023 and the occurrence of specified change of control events, and $2.0 million Tranche B-1 Loan converted into a Tranche C-1 Loan (the “Tranche C Loans” together with the Tranche C Loan) with the same terms and conditions as the existing Tranche C Loan. See Note 3 - Nexperia Arrangement.

The Tranche C Loans are recorded based on principal in the amount of $12.0 million and accrued interest (6% interest per annum). The Company recorded interest expense of $715 thousand for the year ended March 31, 2022, $150 thousand for the three months ended March 31, 2021 and $610 thousand for the year ended December 31, 2020. The Company paid interest expense of $685 thousand for the year ended March 31, 2022, $153 thousand for the three months ended March 31, 2021 and $915 thousand for the year ended December 31, 2020.

Promissory Note    

The Company’s stated value of promissory note obligation as of the dates presented consists of the following (in thousands):

	Interest Rate	Due Date	March 31, 2022		March 31, 2021
Yaskawa Note	1.00%	September 2022	$	—	$	15,523

Pursuant to ASC 825-10-15-4, the Company elected to apply the fair value option for the promissory note. As of the dates presented, the Company determined the fair value for the note, as compared to the face value, including accrued interest, as follows (in thousands):

	March 31, 2022		March 31, 2021
Yaskawa Note	$	—	$	16,128

Fair value of promissory note decreased $605 thousand for the year ended March 31, 2022, increased $699 thousand for the three months ended March 31, 2021 and decreased $927 thousand for the year ended December 31, 2020.

In October 2017, the Company issued an unsecured subordinated convertible promissory note to Yaskawa (the “Yaskawa Note”) for $15.0 million. The stated interest rate of the Yaskawa Note was 1.0%, and principal plus interest was due on the earlier of September 30, 2022, or the date of the occurrence of an Event of Default, Change of Control or an Initial Public Offering (all terms as defined in the Yaskawa Note). In connection with the Merger, the Yaskawa Note was amended to be convertible at the option of the holder into a maximum of 3,076,171 shares of our common stock at a conversion price of $5.12 per share.

On October 4, 2021, the Company entered into a Note Amendment and Conversion Agreement with Yaskawa to (i) reduce the conversion price of the Yaskawa Note from $5.12 per share to $5.00 per share and (ii) remove the limitation on the maximum number of shares of the Company’s stock that could be issued upon conversion of the Yaskawa Note. Yaskawa simultaneously elected to convert the outstanding principal amount (plus accrued but unpaid interest) under the Yaskawa Note, which as of the effective date of the conversion totaled $15.6 million, into an aggregate of 3,120,000 shares of our common stock. The Company also issued to Yaskawa a warrant to purchase up to 650,000 shares of common stock at an exercise price of $6.00 per share with a term of three years. During the year ended March 31, 2022, the Company recognized $1.2 million gain, in other income, upon the conversion of the Yaskawa Note.

In connection with its promissory note obligation, the Company recorded interest expense of $77 thousand for the year ended March 31, 2022, $37 thousand for the three months ended March 31, 2021 and $150 thousand for the year ended December 31, 2020. In accordance with the terms of the promissory note, interest is added to the principal balance and is reflected in the carrying value on the consolidated balance sheet. As of March 31, 2022, March 31, 2021 and December 31, 2020, accrued interest on the promissory note was $0, $523 thousand and $486 thousand, respectively.

In December 2020, the Company entered into a cooperation and development agreement with Yaskawa, pursuant to which Yaskawa agreed to provide $4.0 million over approximately three years to fund development activities related to industrial power conversion applications, with an initial focus on servo motor drive applications. Yaskawa provided payments of $1.0 million and $750 thousand of this $4.0 million commitment in December 2020 and July 2021, respectively. Accordingly, with respect to the $1.8 million payment, the Company recognized $1.1 million as revenue for the year ended March 31, 2022, $333 thousand as revenue for the three months ended March 31, 2021 and $333 thousand as revenue for the year ended December 31, 2020. The Company also recorded $375 thousand as revenue for services rendered but not billed for the year ended March 31, 2022.

As of March 31, 2022, the scheduled maturity, including accrued interest, of the Company’s borrowings under the Tranche C Loans was as follows (in thousands):

Year Ending March 31,
2023	$	180
2024	12,000
Total	$	12,180