Transphorm, Inc.

Thank you for standing by and welcome to Transform's first quarter fiscal 2024 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during this session, you will need to press star one one on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the call over to David Hanover of Investor Relations. Please go ahead.

Good afternoon, and welcome to Transform's first quarter fiscal 2024 earnings conference call. Joining us today from Transform are Pramit Parikh, CEO, President and Co-Founder, and Cameron McCauley, Chief Financial Officer. Before we begin, I'd like to point out that there's a slide presentation associated with today's prepared remarks. which management will be referencing during the conference call. These slides can be accessed through the live webcast linked in the investor section of Transform's website, where they will also be posted and available as a link to a PDF subsequent to today's conference call. Additionally, during the course of this call, the company may make forward-looking statements regarding the company's financial position, strategy and plans, future operations, specific end markets, and other areas of discussion. It's not possible for the company or management to predict all risks, nor can the company assess the potential impact of all factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. In light of these risks, uncertainties, and assumptions, the forward-looking statements discussed during this call may or may not occur, and actual results could differ materially and adversely from those anticipated or implied. Any projections as to the company's future performance represent management estimates as of today, August 14, 2023. Neither the company nor any person assumes responsibility for the accuracy or completeness of the forward-looking statement. The company also undertakes no obligation to publicly update forward-looking statements for any reason after the date of this call to conform such statements to actual results or to the changes in the company's expectations. For more detailed information on risks associated with the company's business, We refer you to the risk factors described in Transform's most recent annual report on Form 10-K and other subsequent filings with the SEC. With that said, it is now my pleasure to turn the call over to Transform's CEO, Pramit Parikh. Pramit?

Thank you, and good afternoon to everyone on the call. We are pleased to report a strong first quarter of fiscal 2024 with revenues of $5.9 million in our targeted range, and over 13% higher than fiscal first quarter of 2023. In less than two months from our last earnings webcast, our power products pipeline has grown to over $450 million, with our total pipeline nearly at $600 million, dominated by high power products, where Transform has a clear quality, performance, and IP differentiation. Q1 revenue, was roughly evenly split between product revenue and government revenue, the former at 3 million and the latter at 2.9 million, including a catch up from the delayed start we had reported in the prior quarter. More than 70% of the product revenue mix came from high power, where Transform continues to be the world's number one GAN company with superior high performance and reliability over every other GAN competitor, notably Emote GAN. We continue to make new advances, unlocking more capability of GAN to address even larger market segments. A good recent example is our achievement on short circuit rating capability, a key for motor drives and inverters. We continue to have increased win in the lower power arena with proliferation starting within our existing Fortune 100 accounts as well now, as well as one of the largest ODMs in the world. Additionally, We are now successfully executing on our $15 million NST Excel government contract, already securing $2.9 million of cash receipts since our June investor update. Moving on now to slide three, I will start with the high level corporate update first. Our design and momentum remains strong as we focus on expanding leadership in three key high power verticals, computing, which includes power for data centers, artificial intelligence machines, and blockchain computing, energy and industrials, which includes microinverter, UPS, and servo motors, and electric vehicles with two and three wheelers first, followed by four wheelers. On the low power side, our GaN products, both discrete and SIPs with a system in package varieties with our ecosystem partners continue to lead in efficiency and reliability with the physics-based benefits of Transform SuperGAN products versus eModeGAN technology. Coupled with a strong pipeline, we now see resumption of sequential product revenue growth in the second quarter. Second, we closed our rights offering, raising approximately $8 million of capital from our key shareholders, led by KKR, who fully exercise their pro-rata rights. As we previously discussed, we are working on securing non-dilutive asset and AR based debt financing. We also have active discussions on certain licensing possibilities as we work to secure a financial runway well into fiscal 2025. With the rights offering completed, we are now beginning our previously announced strategic review of Transform with the goal of maximizing shareholder value. Given both inbound third party interest we have received as well as strong macro interest, including recent M&A activity in the GAN arena, we believe the time is right for this process. This review encompasses strategic and or traditional equity or debt financings, U.S. and Asia-based licensing opportunities, and potential M&A opportunities, again, all with the focused objective of maximizing shareholder value. Turning to slide four now, I will go into our key vectors and metrics for the quarter. We reported $5.9 million of revenue within our targeted range, roughly evenly split between product and government revenues, with majority contribution coming from high power, which is more than 300 watts for us, where competing GAN has not yet realized meaningful end customer product reps. For the fast chargers in the low power space, we secured more than 10 new design-ins, taking the total to more than 100 with over 30 now in production. We are gaining rapid traction with our system-in-package SIP strategy we adopted earlier this year with integrated controller and driver and strong ecosystem partners like Veltran, a leading IC provider. With the dynamic capability and superior performance advantage of our SuperGAN FETs versus typical foundry-style emote GAN. We have the versatility to use the same transform GAN chip for 65 watts or 100 watt adapter design. A crossover difficult, if not impossible, with emote GAN. We are ramping into designs for multiple Fortune 100 OEMs at leading ODMs in this area, supporting our expectations of resumed sequential product revenue growth. To the best of our knowledge, Transform is still the only GAN company with customers in the high power ramped in the market from segments 300 watts to 4 kilowatts. And we are now in the process of extending that to 7.5 kilowatts with some new design-ins. Since our last update, we had another 25% sequential increase in design-ins for high power that today stand at over 75, of which over 30 are in production. In addition to Transform being the only GaN company to have ramped in the attractive microinverter segment, we recently achieved another first by demonstrating a robust 5 microsecond short circuit withstand rating, which is a safety spec required for large market segments like motor drives and inverters. Our team recently completed a 600-watt battery charging solution for EV two-wheelers, with our super GaN FET achieving over 1% efficiency gain or 14% loss reduction in this application versus silicon super junction with 25% lower device count, making it cheaper than silicon with superior performance over silicon. We continue to expand our product offerings in what is the most diverse package portfolio for GaN power devices. High performance and industry standard compact PQFN style packaging for lower power to standard robust TO packages for higher power That, by the way, e-mode GAN today cannot do due to its inherent weakness to new robust high-power surface mount packages. These coupled with ecosystem partnerships with IC companies for transform GAN that can be used with standard controllers and drivers will also contribute to our anticipated sequential product revenue growth. Continuing with our 1,200-volt GAN progress, we now introduced a preliminary data sheet generating significant interest from EV customers who begin to see TransformGAN as future proof, 650 volts today, 1,200 volts in future, directly taking on silicon carbide. On the operations side, our focus on capacity and cost improvements has led to record productivity from our Japan IP reactors. On the packaging side, where we have completed our dual sourcing and cost down activity for high power products, we will expect margins and cost improvements. We have now started multi-sourcing and cost down activity for our low power products as we target aggressive growth over the next few quarters in this area as well. Moving on to slide five, let me now turn our attention to partnership and key initiatives. I want to highlight our Global Wafers Corporation relationship, a key partnership for MOCVD epi wafer scaling with a large international $6 billion plus market cap materials and manufacturing leader. We remain on course to qualify two reactors and release them to production by the end of the fiscal year with early samples by end of the current calendar year. As a recap, we already have six out of our eight MOCVD reactors installed with four running at various levels of production or development today. With the eight reactors we already possess, we can support $50 million of annualized product revenue. Our AFSW wafer fab continues to operate on target and has sufficient capacity in place for fiscal year 24 and plans in place for fiscal year 2025. In collaboration with Yaskawa, our customer partner and meaningful shareholder, and also a worldwide leader in motion control and robotics, We have achieved a major breakthrough with our patented technology for short-circuit rated gallium nitride, demonstrating 5 microseconds with stent time at high voltage. Previously, possible only with silicon IGBTs or silicon carbide. Simultaneously, we achieved 12 kilowatts of power from a single device in a half-bridge topology without any paralleling. This first with high-performance GAN A key safety feature for rugged applications like servo and industrial motor drives, along with the high power capability, addresses a multi-billion-dollar TAM, including servo, industrial motors, and electric vehicle powertrains, and further underscores the robustness of Transform's GaN power portfolio. With solutions from 350 watts to 2 kilowatts, We are deepening design traction with multiple solutions now in the two- and three-wheeler electric vehicle space, a focus area we have outlined previously, and now engaged in design-ins for multiple customers in Asia, including recently a more than $5 billion market cap top three EV two- and three-wheeler India-based manufacturer. We remain on track for achieving million-dollar level ramps in this EV segment, the two- and three-wheeler EV segment, next calendar year. With the automotive exclusivity with respect to the Nexperia contract behind us, we have started worldwide customer engagements with EV four-wheeler customers, with our automotive AEC-Q101 qualified 650-volt products, and we are in early discussions regarding our 1,200-volt technology that is already generating a lot of interest. We are now well underway with performing on our NST Excel EpiWafer government program that was awarded to Transform in the fiscal first quarter of 2024. Thus far, we have received $2.9 million of cash from performance under this award. We are also in discussions for potential licensing revenue with parties, some of whom are planning for GAN manufacturing under the U.S. CHIPSAT program. Moving to slide six now. Our core capabilities from low power to high power wafers and package products are well captured in our large and growing pipeline. Now, over $450 million in power products and close to $600 million including power device wafers and our government contract business. Reflecting on our recent revenue profile, 70% of our power products pipeline is also for high power about 300 watts, where Transform is superior to other GAN offerings, including e-mode and typical foundry-based offerings. Our focus will be on, one, progressing through the strategic review process, identifying the best options for enhanced shareholder value, and continuing to secure non-dilutive debt and other capital, meaningfully extending our cash runway well into fiscal year 2025. resuming sequential product revenue growth in the current fiscal Q2 and growing our worldwide sales and application footprint to enable faster conversion of growing design-ins into RAM production, all based on our superior performance, high-reliability SuperGAN products, as well as our ecosystem of strong solution partners in ICs, SIPs for lower power and system-level solutions for higher power. Third, improving margins through higher volume, lower cost packaging, and our technology roadmap, improving performance while reducing cost. And four, accessing new markets like 800-volt battery electric vehicle systems with new offerings like our 1,200-volt gallium nitride and motor drives and short-circuit-capable GaN, both first in GaN from Transform. Overall, as one of the only pure-play GaN power semiconductor companies in the world with volume production in low-power and high-power segments, we are well positioned to progress towards our long-term model in fiscal year 2024 and beyond. With that, I will hand it over to Cameron to walk you through our financials in detail. Thank you.