Debts

9 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Debts

Debts

Revolving Credit Facility

The Company entered into a Loan and Security Agreement (“LSA”) with Nexperia on April 4, 2018 which 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 was secured against certain of the Company’s U.S. patents not relating to MOCVD or epiwafer technology. On March 31, 2019, the Company executed Amendment No.1 to the LSA which provided for a $2.0 million development loan intended to pre-fund a 1200V technology development (“Tranche B-1 Loan”). 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 or the occurrence of specified change of control events, and the $2.0 million Tranche B-1 Loan was 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.

As of December 31, 2023, there were no revolving loans outstanding, as the LSA with Nexperia terminated upon repayment of the principal and interest amount in full on April 4, 2023. There was no interest expense for the three months ended December 31, 2023. For the nine months ended December 31, 2023, the Company recorded interest expense of $8,000. For the three and nine months ended December 31, 2022, the Company recorded interest expense of $0.2 million and $0.6 million, respectively.

Equipment Financing

On December 21, 2023 (the “Effective Date”), the Company entered into an Equipment Purchase and Sale Agreement (the “Equipment Agreement”) with GlobalWafers Co., Ltd. (the “Buyer”), wherein the Company sold certain equipment associated with wafer manufacturing (the “Equipment”) to the Buyer for $2.1 million (the “Purchase Price”). The Equipment Agreement contains an option for the Company to repurchase the Equipment at any time within one year of the Effective Date at the Purchase Price, plus an amount equal to: (i) the Purchase Price, multiplied by (ii) 7.5%, divided by 12, multiplied by (iii) the number of full months that have elapsed after the Effective Date. If the Company does not exercise the option to repurchase the Equipment within one year of the Effective Date, (i) certain limitations on the Buyer’s use of the Equipment specifically applied to this Transphorm

consigned Equipment shall lapse and (ii) the Company shall pay $157,500 to the Buyer (i.e., 7.5% for 12 months, on the Purchase Price).

The Company determined that the transaction did not qualify as a sale under ASC 606 - Revenue from Contracts with Customers nor ASC 842 - Leases as a sale leaseback transaction. As such, the Company has accounted for the agreement under ASC 470 - Debt. As of December 31, 2023, the $2.1 million is included within Accounts payable and accrued expenses on the condensed consolidated balance sheets.