Transphorm Announces Rights Offering for Common Stock

Transphorm, Inc. (NASDAQ: TGAN) (“Transphorm” or the “Company”) announced today that the independent Financing Committee of the Company’s board of directors has approved a rights offering available to all holders of record of the Company’s common stock, par value $0.0001 (“Common Stock”) as of 5:00 p.m., Eastern Daylight Time, on June 26, 2023 (the “Record Date”).

If the rights offering is fully subscribed, the Company intends to raise up to $15 million through the rights offering, to be used for working capital and general corporate purposes. The Company is also pursuing conventional asset-based debt financing initiatives that, if consummated and together with proceeds from a fully subscribed rights offering, are expected to provide the Company with working capital well into its fiscal year 2025.

With the enhanced momentum in Gallium Nitride power semiconductors, as evidenced by recent market activities, the Company also intends to initiate, in its second fiscal quarter, a strategic review of opportunities to enhance stockholder value. The Company’s strategic plans are not yet finalized and are subject to market conditions and other uncertainties.

The rights offering will be made through the distribution to all holders of record of Common Stock as of the Record Date of non-transferable subscription rights to purchase a fraction of a share of Common Stock, at a ratio to be determined, for every one right held at a subscription price to be determined prior to the commencement of the rights offering. Stockholders may exercise their rights at any time during the subscription period, which is currently expected to commence as soon as reasonably practicable after the Record Date and expire no less than 16 days thereafter.

The rights offering will include an over-subscription right to permit each rights holder that exercises its basic subscription right in full to purchase additional shares of Common Stock (if any) that remain unsubscribed at the expiration of the rights offering. The availability of the over-subscription right will be subject to certain terms and restrictions to be set forth in the prospectus supplement for the rights offering. If the aggregate subscriptions (basic subscriptions plus over-subscriptions) exceed the number of shares of Common Stock offered in the rights offering, then the aggregate over-subscription amount will be pro-rated among the holders exercising their respective over-subscription rights based on the basic subscription amounts of such holders.