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Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2020	Apr. 30, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	000-55832
Entity Registrant Name	Transphorm, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	82-1858829
Entity Address, Address Line One	75 Castilian Drive
Entity Address, City or Town	Goleta,
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	93117
City Area Code	805
Local Phone Number	456-1300
Entity Interactive Data Current	No
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		35,135,520
Entity Central Index Key	0001715768
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Amendment Flag	false

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 14,648	$ 2,875
Accounts receivable, net, including related parties	1,377	709
Inventory	1,085	990
Prepaid expenses and other current assets	1,447	783
Total current assets	18,557	5,357
Property and equipment, net	1,637	1,770
Goodwill	1,326	1,325
Intangible assets, net	1,210	1,313
Other assets	422	497
Total assets	23,152	10,262
Current liabilities:
Accounts payable and accrued expenses	2,204	2,383
Development loan	15,000	5,000
Revolving credit facility, including accrued interest	10,610	10,458
Unfunded commitment to joint venture	1,546	1,688
Accrued payroll and benefits	1,076	1,159
Total current liabilities	30,436	20,688
Development loans, net of current portion	0	10,000
Promissory note	13,885	16,169
Total liabilities	44,321	46,857
Commitments and contingencies (Note 8)
Total convertible preferred stock	0	85,658
Stockholders’ deficit:
Common stock, $0.0001 par value; 750,000,000 shares authorized and 35,135,520 shares issued and outstanding as of March 31, 2020, and 29,012,034 shares authorized and 4,220,998 shares issued and outstanding as of December 31, 2019	4	0
Additional paid-in capital	127,683	22,404
Accumulated deficit	(148,102)	(143,915)
Accumulated other comprehensive loss	(754)	(742)
Total stockholders’ deficit	(21,169)	(122,253)
Total liabilities, convertible preferred stock and stockholders’ deficit	23,152	10,262
Series 1 Preferred Stock
Current liabilities:
Total convertible preferred stock	0	39,658
Series 2 Preferred Stock
Current liabilities:
Total convertible preferred stock	0	30,000
Series 3 Preferred Stock
Current liabilities:
Total convertible preferred stock	$ 0	$ 16,000

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2020	Dec. 31, 2019
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	750,000,000	29,012,034
Common stock, shares issued (in shares)	35,135,520	4,220,998
Common stock, shares outstanding (in shares)	35,135,520	4,220,998
Series 1 Preferred Stock
Convertible preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, authorized (in shares)	0	12,438,704
Convertible preferred stock, shares issued (in shares)	0	12,433,953
Convertible preferred stock, shares outstanding (in shares)	0	12,433,953
Series 2 Preferred Stock
Convertible preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, authorized (in shares)	0	7,507,699
Convertible preferred stock, shares issued (in shares)	0	7,499,996
Convertible preferred stock, shares outstanding (in shares)	0	7,499,996
Series 3 Preferred Stock
Convertible preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Convertible preferred stock, authorized (in shares)	0	4,000,000
Convertible preferred stock, shares issued (in shares)	0	4,000,000
Convertible preferred stock, shares outstanding (in shares)	0	4,000,000

Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Revenue, net	$ 1,100	$ 529
Operating expenses:
Cost of goods sold	1,455	1,404
Research and development	1,466	2,182
Sales and marketing	518	851
General and administrative	3,092	1,251
Total operating expenses	6,531	5,688
Loss from operations	(5,431)	(5,159)
Interest expense	189	187
Loss in joint venture	1,419	1,127
Changes in fair value of promissory note	(2,321)	33
Other income, net	(531)	(136)
Loss before tax expense	(4,187)	(6,370)
Tax expense	0	0
Net loss	$ (4,187)	$ (6,370)
Net loss per share - basic and diluted (in usd per share)	$ (0.13)	$ (0.23)
Weighted average common shares outstanding - basic and diluted (in shares)	31,912,170	28,153,555

Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Comprehensive Income [Abstract]
Net loss	$ (4,187)	$ (6,370)
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(12)	(27)
Other comprehensive loss, net of tax	(12)	(27)
Comprehensive loss	$ (4,199)	$ (6,397)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Condensed Consolidated Statements of Changes in Stockholders’ Deficit (unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2018		4,219,606
Beginning balance at Dec. 31, 2018	$ (107,539)	$ 0	$ 21,833	$ (128,632)	$ (740)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	139		139
Other comprehensive income	(27)				(27)
Net loss	(6,370)			(6,370)
Ending balance (in shares) at Mar. 31, 2019		4,219,606
Ending balance at Mar. 31, 2019	$ (113,797)	$ 0	21,972	(135,002)	(767)
Beginning balance (in shares) at Dec. 31, 2019	4,220,998	4,220,998
Beginning balance at Dec. 31, 2019	$ (122,253)	$ 0	22,404	(143,915)	(742)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock options exercised (in shares)	3,346	3,346
Stock options exercised	$ 13		13
Stock-based compensation	132		132
Share conversion in connection with the Merger (in shares)		23,933,949
Conversion of shares in connection with the Reverse Merger	85,658	$ 3	85,655
Shares redeemed (in shares)		(52,773)
Shares redeemed	(211)		(211)
Shares issued in connection with the Reverse Merger (in shares)		1,650,000
Shares issued in connection with the Reverse Merger	(50)		(50)
Issuance of common stock, net (in shares)		5,380,000
Issuance of common stock, net	19,741	$ 1	19,740
Other comprehensive income	(12)				(12)
Net loss	$ (4,187)			(4,187)
Ending balance (in shares) at Mar. 31, 2020	35,135,520	35,135,520
Ending balance at Mar. 31, 2020	$ (21,169)	$ 4	$ 127,683	$ (148,102)	$ (754)
Beginning balance (in shares) at Feb. 11, 2020	50,325,662
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Shares redeemed (in shares)	(52,773)
Shares issued in connection with the Reverse Merger (in shares)	1,650,000
Ending balance (in shares) at Feb. 12, 2020	4,171,571

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cash flows from operating activities:
Net loss	$ (4,187)	$ (6,370)
Adjustments to reconcile net loss to net cash used in operating activities:
Inventory write-off	169	0
Depreciation and amortization	236	304
Stock-based compensation	132	139
Interest cost	189	187
Loss in joint venture	1,419	1,127
Changes in fair value of promissory note	(2,321)	33
Changes in operating assets and liabilities:
Accounts receivable	(668)	(407)
Inventory	(264)	70
Prepaid expenses and other current assets	(603)	164
Other assets	9	1
Accounts payable and accrued expenses	(179)	(449)
Accrued payroll and benefits	(83)	(150)
Net cash used in operating activities	(6,151)	(5,351)
Cash flows from investing activities:
Investment in joint venture	(1,548)	(189)
Net cash used in investing activities	(1,548)	(189)
Cash flows from financing activities:
Proceeds from development loans	0	5,000
Proceeds from stock option exercise	18	0
Payment for repurchase of common stock	(211)	0
Loan repayment	(50)	0
Proceeds from issuance of common stock, net of offering cost	19,741	0
Net cash provided by financing activities	19,498	5,000
Effect of foreign exchange rate changes on cash and cash equivalents	(26)	(22)
Net increase (decrease) in cash and cash equivalents	11,773	(562)
Cash and cash equivalents at beginning of period	2,875	3,069	$ 3,069
Cash and cash equivalents at end of period	14,648	2,507	$ 2,875
Supplemental disclosures of cash flow information:
Interest expense paid	$ 0	$ 346

Business and Basis of Presentation	3 Months Ended
Business and Basis of Presentation	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Basis of Presentation	Business and Basis of Presentation Transphorm, Inc. (“Parent”) develops gallium nitride (“GaN”) semiconductor components used in power conversion and is headquartered in Goleta, California. Parent’s wholly owned-subsdiary, Transphorm Technology, Inc., was incorporated in the state of Delaware on February 22, 2007. Throughout this Report, “the Company,” “Transphorm,” “we,” “us” and “our” refer to Parent and its direct and indirect wholly-owned subsidiaries. Transphorm Technology and its subsidiaries hold all material assets and conduct all business activities and operations of the Company. Transphorm Technology’s activities to date have been primarily performing research and development, establishing manufacturing infrastructure, market sampling, product launch, hiring personnel, and raising capital to support and expand these activities. Transphorm Japan, Inc. was established in Japan in February 2014 to secure Transphorm’s production capacity and establish a direct presence in Asian markets. Transphorm Aizu, Inc. was established in Japan to manage the financial transactions around Aizu Fujitsu Semiconductor Wafer Solution Limited, Transphorm’s joint venture wafer fabrication facility located in Aizu Wakamatsu, Japan (“Aizu”). Transphorm Japan Epi, Inc. was established in Japan in 2019 to enable the operational capacity of the reactors held in Aizu. In management’s opinion, the accompanying unaudited condensed consolidated financial statements of Transphorm reflect all adjustments of a normal and recurring nature that are necessary for a fair presentation of the results for the interim period ended March 31, 2020, but are not necessarily indicative of the results that will be reported for the entire year or any other interim period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with Accounting Principles Generally Accepted in the United States of America (“GAAP”) have been condensed or omitted. The aforementioned unaudited condensed consolidated financial statements are prepared in conformity with GAAP and in accordance with the instructions to Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. The interim information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Amendment No. 2 to Form 8-K filed on March 31, 2020. The consolidated balance sheet as of December 31, 2019 is derived from those audited financial statements. The preparation of interim unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Material estimates subject to change include, among other items, the determination of allowance for loan and lease losses and allowance for off-balance sheet items, other-than-temporary impairment, securities valuations, the fair value of other assets and liabilities acquired in a business combination and income taxes. Actual results could differ from those estimates. Reverse Merger On February 12, 2020, our wholly-owned subsidiary, Peninsula Acquisition Sub, Inc., a corporation formed in the State of Delaware (“Acquisition Sub”), merged with and into Transphorm Technology (formerly known as Transphorm, Inc.), the corporate existence of Acquisition Sub ceased, and Transphorm Technology became our wholly-owned subsidiary (such transaction, the “Merger”). As a result of the Merger, we acquired the business of Transphorm Technology. The Merger was effective as of February 12, 2020, upon the filing of a Certificate of Merger with the Secretary of State of the State of Delaware. Immediately after completion of the Merger, we adopted Transphorm Technology’s former company name, “Transphorm, Inc.”, as our company name. The Merger was treated as a recapitalization and reverse acquisition for financial reporting purposes, and Transphorm Technology is considered the acquirer for accounting purposes. As a result of the Merger and the change in our business and operations, a discussion of the past financial results of our predecessor, Peninsula Acquisition Corporation, is not pertinent, and under applicable accounting principles, the historical financial results of Transphorm Technology, the accounting acquirer, prior to the Merger are considered our historical financial results. At the time the certificate of merger reflecting the Merger was filed with the Secretary of State of Delaware (the “Effective Time”), (i) each share of Transphorm Technology’s common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive (a) 0.08289152527 shares of our common stock (in the case of shares held by accredited investors) or (b) $4.00 multiplied by the Common Stock Conversion Ratio (in the case of shares held by unaccredited investors), with the actual number of shares of our common stock issued to the former holders of Transphorm Technology’s common stock equal to 4,171,571, (ii) 51,680,254 shares of Transphorm Technology’s Series 1 preferred stock issued and outstanding immediately prior to the closing of the Merger were converted into 12,433,953 shares of our common stock, (iii) 38,760,190 shares of Transphorm Technology’s Series 2 preferred stock issued and outstanding immediately prior to the closing of the Merger were converted into 7,499,996 shares of our common stock, and (iv) 31,850,304 shares of Transphorm Technology’s Series 3 preferred stock issued and outstanding immediately prior to the closing of the Merger were converted into 4,000,000 shares of our common stock. As a result, 28,105,520 shares of our common stock were issued to the former holders of Transphorm Technology’s issued and outstanding capital stock after adjustments due to rounding for fractional shares. Immediately prior to the Effective Time, an aggregate of 682,699 shares of our common stock, owned by the stockholders of Peninsula Acquisition Corporation prior to the Merger, were forfeited and cancelled (the “Stock Forfeiture”). In addition, pursuant to the Merger Agreement, (i) options to purchase 29,703,285 shares of Transphorm Technology’s common stock issued and outstanding immediately prior to the closing of the Merger under Transphorm Technology’s 2007 Stock Plan (the “2007 Plan”) and 2015 Equity Incentive Plan (the “2015 Plan”) were assumed and converted into options to purchase 2,461,923 shares of our common stock, (ii) warrants to purchase 186,535 shares of Transphorm Technology’s common stock issued and outstanding immediately prior to the closing of the Merger were assumed, amended and converted into warrants to purchase 15,461 shares of our common stock, and (iii) Transphorm Technology’s outstanding convertible promissory note was amended to be convertible at the option of the holder, into shares of our common stock at a conversion price of $5.12 per share, with 3,076,171 being the maximum number of shares of our common stock issuable upon conversion of the convertible promissory note. As of March 31, 2020, there was $15.0 million of principal and $373 thousand of accrued and unpaid interest outstanding on the convertible promissory note. All per share and share amounts for the three months ended March 31, 2019 have been retroactively adjusted to reflect the effect of the Merger. Going Concern The accompanying unaudited condensed consolidated condensed financial statements have been prepared assuming that the Company will continue as a going concern. As included in the accompanying unaudited condensed consolidated financial statements, the Company has generated recurring losses from operations and has an accumulated deficit and has a working capital deficiency. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these financial statements. Management plans to raise additional working capital to fund operations through the issuance of stock to investors, license of intellectual property and/or issuance of notes payable. The Company raised $19.7 million from the sale of common stock in February 2020 as described in Note 9 - Stockholders’ Equity. However, there is no assurance that the Company will be successful in raising additional capital. The ability of the Company to continue as a going concern is dependent on its ability to raise significant additional capital to fund operating losses until it is able to generate liquidity from its business operations. To the extent sufficient financing is not available, the Company may not be able to, or may be delayed in, developing its offerings and meeting its obligations. The Company will continue to evaluate its projected expenditures relative to its available cash and to evaluate financing alternatives in order to satisfy its working capital and other cash requirements. The accompanying unaudited condensed consolidated financial statements do not reflect any adjustments that might result from the outcome of these uncertainties. Impact of COVID-19 on our Business The COVID-19 pandemic has adversely disrupted and will further disrupt the operations at certain of our customers, partners, suppliers and other third-party providers for an uncertain period of time, including as a result of travel restrictions, adverse effects on budget planning processes, business deterioration, and/or business shutdowns, all of which has impacted our business and results of operations. Some of our customers have experienced delays in their internal development programs and design cycles with our GaN products due to the effects of COVID-19, which have led to postponements of their orders of our products and postponements of determinations that our products will be used in their designs for new products under development with corresponding delays in their market introduction and our revenues. Significant Accounting Policies Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of the Parent and its wholly-owned subsidiaries, Transphorm Technology, Transphorm Japan, Inc., Transphorm Japan Epi, Inc. and Transphorm Aizu, Inc. Upon consolidation, all significant intercompany accounts and transactions have been eliminated. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates and assumptions on historical experience, knowledge of current conditions, and its belief of what could occur in the future, given available information. Actual results could differ from those estimates, and such differences could be material to the condensed consolidated financial statements. Estimates are used for, but not limited to, the determinations of fair value of stock awards and promissory notes, accrual of liabilities, revenue recognition, inventory reserve, and useful lives for property and equipment. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported condensed consolidated statements of operations. Cash and Cash Equivalents The Company considers all highly-liquid investments with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist principally of bank deposits and money market funds. Other assets in the condensed consolidated balance sheets as of March 31, 2020 and December 31, 2019 include cash of $75 thousand. Foreign Currency Risk The Company is exposed to foreign currency risk due to its operations in Japan. Assets and liabilities of the operations are re-measured into U.S. currency at exchange rates in effect at the balance sheet dates through the condensed consolidated statements of comprehensive income. Gains or losses resulting from foreign currency transactions are re-measured using the rates on the dates on which those elements are recognized during the period and are included in other income or expense in the unaudited condensed consolidated statements of operations. As of March 31, 2020 and December 31, 2019, the Company had foreign cash and cash equivalents of $31 thousand and $55 thousand, respectively, which represent 0.2 percent and 1.9 percent, respectively, of total cash and cash equivalents. Concentrations of Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company is exposed to credit risk in the event of default by the financial institution holding its cash. The Company’s investment policy restricts investments to high-quality investments and limits the amounts invested with any one issuer, industry or geographic area. Risks associated with cash holdings in excess of insured limits are mitigated by banking with high-quality institutions. To date, the Company has not experienced any significant losses on its cash and cash equivalents. The Company periodically evaluates the relative credit standing of these financial institutions. The Company is subject to risks common in the power conversion components industry, including, but not limited to, technological obsolescence, dependence on key personnel, market acceptance of its products, the successful protection of its proprietary technologies, compliance with government regulations, and the possibility of not being able to obtain additional financing when needed. Comprehensive Loss Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) includes the impact of foreign currency translation adjustments. Accounts Receivable Accounts receivable are analyzed and allowances for uncollectible accounts are recorded, as required. Provisions for uncollectible accounts, if any, are recorded as bad debt expense and included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The process for determining the appropriate level of allowances for doubtful accounts involves judgment, and the Company considers such factors as the age of the underlying receivables, historical and projected collection trends, the composition of outstanding receivables, current economic conditions and regulatory changes. An account is fully reserved when reasonable collection efforts have been unsuccessful and it is probable that the receivable will not be recovered. No significant losses on accounts receivable have been recorded as of March 31, 2020 and December 31, 2019. Inventory Inventory is stated at the lower of cost (first-in, first-out method) or net realizable value. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of slow moving or obsolete inventory. The Company maintains an inventory reserve for obsolete inventory and generally makes inventory value adjustments against the inventory reserve. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally ranging from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the related lease term. Depreciation for equipment commences once it is placed in service, and depreciation for buildings and leasehold improvements commences once they are ready for their intended use. The Company expenses maintenance and repair costs that do not extend the life of the asset as they are incurred. The Company evaluates the carrying amount of its property and equipment whenever events or changes in circumstances indicate that the assets may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of an asset or asset group and its eventual disposition are less than the carrying amount of the asset or asset group. To date, there have been no such impairment losses. Goodwill Goodwill arose for the acquisition of a business in February 2014 based in Japan and was accounted for as the purchase of a business. Goodwill generated from business combinations and deemed to have indefinite lives are not subject to amortization and instead are tested for impairment at least annually in December unless certain events occur or circumstances change. Goodwill represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. We test for goodwill impairment annually or earlier if events or changes in circumstances indicate goodwill might possibly be impaired. Impairment exists when the carrying value of the goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess as a charge to operations in the unaudited condensed consolidated statements of operations. For the three months ended March 31, 2020 and 2019, no impairment charge was recorded related to goodwill. Intangible Assets Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives, which generally range from three to ten years. Each reporting period, the Company evaluates the estimated remaining useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. If it is determined that the carrying values might not be recoverable based upon the existence of one or more indicators of impairment, the Company performs a test for recoverability using various methodologies, such as the income approach or cost approach, to determine the fair value of intangible assets depending upon the nature of the assets. If assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their respective fair values. For the three months ended March 31, 2020 and 2019, no impairment charges were recorded related to intangible assets. Revenue Recognition Revenue Recognition Policy The Company derives its revenues from sales of high-powered GaN-based products manufactured utilizing the Company’s proprietary and patented epiwafer technology and wafer fabrication and other assembly processes, and sales of GaN epiwafers for the RF and power markets, as well as sales of licenses to use such patented proprietary technology. Revenues are recognized when control of these products or licenses are transferred to the Company’s customers in an amount that reflects the consideration it expects to be entitled to in exchange for those products and licenses. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The Company does not have any significant financing components associated with its revenue contracts, as payment is received at or shortly after the point of sale. Disaggregation of Revenue from Contracts with Customers Revenue for the three months ended March 31, 2020 and 2019 consists of licensing revenue, government contract revenue from our contract with the U.S. Navy and product sales, with applicable performance obligations satisfied at a point in time. Products are sold to distributors and end-users in various sectors such as, but not limited to, the automotive, gaming, industrial, IT, and consumer products industries. As part of the Collaboration Arrangement (Note 2 - Nexperia Arrangement) executed with Nexperia on April 4, 2018, the Company agreed to grant Nexperia the perpetual exclusive right to use the Company’s existing Gen 3 manufacturing process technology. License fees are received upon satisfaction of contractual milestones and recognized upon delivery of the perpetual license or transferred technology without any remaining performance obligations. For the three months ended March 31, 2020 and 2019, no licensing revenue was recognized. Government contract revenues are principally generated under research and development contracts. Contract revenues are derived primarily from research contracts with agencies of the United States Government. We believe credit risk related to accounts receivable arising from such contracts is minimal. These contracts may include cost-plus fixed fee and fixed price terms. All payments to us for work performed on contracts with agencies of the U.S. Government are subject to adjustment upon audit by the Defense Contract Audit Agency. Performance Obligations For performance obligations related to the sale of products, control transfers to the customer at a point in time. The Company’s principal terms of sale are free on board shipping or destination and the Company transfers control and records revenue for product sales upon shipment or delivery to the customer, respectively. For performance obligations related to the licensing of patented technology in perpetuity, control also transfers to the customer at a point in time. The Company transfers control and records revenue for licensing fees once the Company has (i) provided or otherwise makes available the patented technology to the customer and (ii) the customer is able to use and benefit from the patented technology. Variable Consideration The nature of the Company’s arrangement with Nexperia gives rise to variable consideration in the form of milestone and royalty payments. The royalties qualify for the sales and usage-based royalty exception, as the license of intellectual property is the predominant item to which the royalty relates and are recognized upon the subsequent sale occurring. The variable amounts are received upon satisfaction of contractually agreed upon development targets and sales volume. Research and Development The Company is a party to research grant contracts with the U.S. federal government for which the Company is reimbursed for specified costs incurred for its research projects. These projects include energy saving initiatives for which the U.S. federal government offers reimbursement funds. Such reimbursements are recorded as an offset to research and development expenses when the related qualified research and development expenses are incurred. Reimbursable costs are recognized in the same period the costs are incurred up to the limit of approved funding amounts on qualified expenses. Grant reimbursement of $72 thousand and $0 were recorded as a offset to research and development expense for the three months ended March 31, 2020 and 2019, respectively. Stock-Based Compensation All share-based payments, including grants of stock options, are measured based on the fair value of the share-based awards at the grant date and recognized over their respective vesting periods, which is generally four years. The estimated fair value of stock options at the grant date is determined using the Black-Scholes-Merton pricing model. The Company recognizes the fair value of share-based payments as compensation expense for all expected-to-vest stock-based awards over the vesting period of the award using the straight-line attribution method provided that the amount of compensation cost recognized at any date is no less than the portion of the grant-date fair value of the award that is vested at that date. The Black-Scholes-Merton option pricing model requires inputs such as the fair value of common stock on date of grant, expected term, expected volatility, dividend yield, and risk-free interest rate. Further, the forfeiture rate also affects the amount of aggregate compensation expense. These inputs are subjective and generally require significant analysis and judgment to develop. Volatility data is obtained from a study of publicly traded industry peer companies. The forfeiture rate is derived primarily from the Company’s historical data, and the risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues commensurate with the expected term. Management generally uses the simplified method to calculate the expected term for employee grants as the Company has limited historical exercise data or alternative information to reasonably estimate an expected term assumption. The simplified method assumes that all options will be exercised midway between the weighted average vesting date and the contractual term of the option. Stock-based compensation expense recognized in the Company’s condensed consolidated financial statements is based on awards that are expected to vest. These expense amounts have been reduced by using an estimated forfeiture rate. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company evaluates the assumptions used to estimate forfeitures annually in connection of recognition of stock-based compensation expense. Loss Per Share Basic loss per share is calculated by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of stock warrants and stock options, are not reflected in diluted loss per share because such shares are anti–dilutive. Dilutive impact of potential common shares resulting from common stock equivalents is determined by applying the treasury stock method. For the three months ended March 31, 2020, there were 2,473,552 shares, consisting of 2,458,091 stock options and 15,461 stock warrants, that were not included in the computation of diluted loss per share because their effect would be anti-dilutive. For the three months ended March 31, 2019, there were 2,397,702 shares, consisting of 2,371,545 stock options and 26,157 stock warrants, that were not included in the computation of diluted loss per share because their effect would be anti-dilutive. Fair Value Measurement Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying values of the Company’s financial instruments such as cash equivalents, accounts receivable, revolving credit facility, accounts payable and accrued liabilities approximate fair values due to the short-term nature of these items. The Company has elected the fair value option for its promissory notes. See Note 3 - Fair Value Measurements. Income Taxes The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). ASC 740 prescribes the use of the liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted statutory tax rates in effect at the balance sheet date. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists. Equity Method Investments The Company uses the equity method to account for investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. The Company's proportionate share of the net income or loss of these companies is included in consolidated net earnings. Judgments regarding the level of influence over each equity method investment include consideration of key factors such as the Company's ownership interest, representation on the board of directors or other management body and participation in policy-making decisions. Segment Reporting The Company’s operations and its financial performance is evaluated on a consolidated basis by the chief operating decision maker. Accordingly, the Company considers all of its operations to be aggregated in one reportable operating segment. For the three months ended March 31, 2020, total revenue was $1.1 million, of which $1.1 million was from U.S. operations and $11 thousand was from Japan operations. For the three months ended March 31, 2019, total revenue was $529 thousand, of which $522 thousand was from U.S. operations and $7 thousand was from Japan operations. Recently Issued Accounting Standards Adopted Fair Value - In August 2018, the Financial Accounting Standard Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. ASU 2018-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company adopted this standard effective January 1, 2020. The adoption of ASU 2018-13 did not have a material effect on the condensed consolidated financial statements. Statement of Cash Flows - In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This guidance addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. ASU 2016-15 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company adopted this standard effective January 1, 2020, first day of the Company’s fiscal year using the modified retrospective approach. The adoption of ASU 2016-15 did not have a material effect on the condensed consolidated financial statements. Recently Issued Accounting Standards under Evaluation Income Tax - In December 2019, the FASB issued ASU 2019-12, which modifies ASC 740 to simplify the accounting for income taxes. The ASU’s amendments are based on changes that were suggested by stakeholders as part of the FASB’s simplification initiative (i.e., the Board’s effort to reduce the complexity of accounting standards while maintaining or enhancing the helpfulness of information provided to financial statement users). ASU 2019-12 is effective for the Company’s 2021 fiscal year. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. Financial Instruments - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU 2016-13 is effective for the Company’s 2021 fiscal year. Early adoption is permitted. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. Leases - In February 2016, the FASB issued ASU 2016-02, Leases, which, for operating leases, requires the lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The guidance also requires a lessee to recognize single lease costs, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This guidance will be effective for the Company in fiscal year 2021 and must be adopted using a modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements.

Nexperia Arrangement	3 Months Ended
Nexperia Arrangement	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nexperia Arrangement	Nexperia Arrangement Nexperia Transaction On April 4, 2018, the Company entered into a multi-element commercial arrangement with Nexperia B.V. (“Nexperia”) to obtain financing in exchange for sale of equity instruments and performing certain technology and product development activities for Nexperia (collectively, the “Collaboration Arrangement”). Nexperia specializes in designing, manufacturing and selling a broad range of small discrete semiconductor devices that utilize components such as those manufactured by the Company. Financing under the Collaboration Arrangement is comprised of the following elements: •$16 million Series 3 preferred stock issuance •$9 million license fee for transfer of the Gen 3 manufacturing process •$5 million development loan, originally maturing March 31, 2020 and subsequently extended to June 30, 2020 intended to pre-fund the Gen 4 (Tranche A) technology development (the “Tranche A Loan”) •$8 million development loan maturing March 31, 2021 intended to pre-fund the Gen 5 (Tranche B), 1200V (Tranche B1) technology development (the “Tranche B Loan”) •$2 million development loan maturing March 31, 2021 intended to pre-fund the 1200V technology development (the “Tranche B-1 Loan”) (together with the Tranche A and Tranche B Loans, the “Development Loans”) •$10 million revolving loan (the “Tranche C Loan”) The Company has to use the funds to operate the business in a manner consistent with or reasonably related to those business activities as carried out on or prior to the April 4, 2018, the effective date of Collaboration Arrangement. In addition to the multiple elements outlined above, the Company and Nexperia entered into a Supply Agreement requiring that the Company be Nexperia’s primary supplier of specified components until June 30, 2020 on a best efforts basis. By entering into this Collaboration Arrangement, Nexperia will gain access to technology that allows for production of high power semiconductors for use in electric vehicles. Further, Nexperia will obtain an exclusive license and market access to automotive customers outside of Japan and a sole license (non-exclusive of the Company), as well as market access, to customers in other parts of the power market. Nexperia has a lien on certain U.S. patents not relating to metal organic chemical vapor deposition (“MOCVD”) or epiwafer technology, per the agreement. On March 31, 2019, the Company executed Amendment No. 1 to the Loan and Security Agreement (the ”LSA”), pursuant to which the Tranche B Loan was bifurcated into the following two separate sub-tranches: •$8 million development loan intended to pre-fund the Gen 5 (Tranche B), 1200V (Tranche B1) (Ron/2) technology development (the “Tranche B Loan”) •$2 million development loan intended to pre-fund the 1200V technology development (the “Tranche B-1 Loan” and, together with the Tranche B Loan, the “Tranche B Loans”) On February 7, 2020, Amendment No. 2 to the LSA was executed to acknowledge the then-pending Merger, reaffirm the terms of the loan and confirm the waiver for the late delivery of the Company’s 2018 audited financial statements. On April 8, 2020, Amendment No. 3 to the LSA was executed to extend the maturity of the Tranche A loan to April 30, 2020 from March 31, 2020. On April 28, 2020, Amendment No. 4 to the LSA was executed to further extend the maturity of the Tranche A loan to June 30, 2020. All other terms set forth under the original LSA remained unchanged following the amendments. See Note 12 - Subsequent Events. The Tranche A and Tranche B Loans represent pre-funding for Gen 4 (Tranche A), Gen 5 (Tranche B), 1200V (Tranche B1) and 1200V technology development for Nexperia. The specific development activities and associated performance milestones are contained within a Statement of Work (“SoW”) between the Company and Nexperia. The SoW may be modified from time to time based upon mutual business interests. This promise to perform the technology development is a good/service provided to a customer in exchange for consideration in the form of the technology development license fees that offset the Tranche A and Tranche B Loans outstanding. The Development Loans are within the scope of ASC 730-20, Research & Development Arrangements, and are recognized as a liability equal to the cash proceeds received. In relation to the transfer of the Company’s Gen 3 manufacturing process to Nexperia, the Company received $3 million (the first of three tranches) in December 2018, $3 million (the second of three tranches) in April 2019, and $3 million (the third of three tranches) in October 2019. The Company recognized this revenue during 2019 upon the completion and mutual sign off between Nexperia and the Company. In January 2019, the Company received the $5 million Tranche A Loan. In June and July 2019, the Company received the $8 million Tranche B Loan. In December 2019, the Company received the $2 million Tranche B-1 Loan. The Tranche C revolving loan of the full $10 million available under this credit facility was received during the year ended December 31, 2018. See Note 6 - Debts.

Fair Value Measurements

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Fair Value Measurements

FASB ASC 820, Fair Value Measurements and Disclosures, establishes a three-tier fair value hierarchy for disclosure of fair value measurements as follows:

Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities.

Level 2 - Inputs (other than quoted prices included within Level 1) that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data of substantially the full term of the related assets or liabilities.

Level 3 - Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Inputs are unobservable for the asset or liability. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table summarizes the Company’s liabilities measured at fair value as of March 31, 2020 and December 31, 2019, by level within the fair value hierarchy (in thousands):


	Level 1		Level 2		Level 3
March 31, 2020
Promissory note	$	—	$	—	$	13,885

December 31, 2019
Promissory note	$	—	$	—	$	16,169

The following table includes the changes in fair value of the promissory note which are Level 3 on the fair value hierarchy (in thousands):


	2020
Fair value at January 1,	$	16,169
Interest expense accrued	37
Decrease in fair value	(2,321)
Fair value at March 31,	$	13,885

	2019
Fair value at January 1,	$	15,852
Interest expense accrued	150
Increase in fair value	167
Fair value at December 31,	$	16,169

There were no changes to our valuation techniques used to measure assets and liability fair values during the three months ended March 31, 2020 and 2019. The valuation techniques for the items in the table above are as follows:

Level 3 borrowings, which consist of promissory note, are measured and reported at fair value using a Monte Carlo simulation valuation model. The models can include assumptions related to the value of the notes that are based on the estimated timing and amounts of future rounds of financing, including the estimated timing of a change in control of the Company, and estimated market interest rates, which represent significant unobservable inputs. Assumptions used are (1) the Company is worth today what it can generate in future cash to the Company, (2) cash received today is more than an equal amount of cash received in the future; and (3) future cash flows can be reasonably estimated.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Concentration of Credit Risk and Significant Customers

3 Months Ended

Mar. 31, 2020

Risks and Uncertainties [Abstract]

Concentration of Credit Risk and Significant Customers

Concentration of Credit Risk and Significant Customers The Company manages its credit risk associated with exposure to distributors and direct customers on outstanding accounts receivable through the application of credit approvals and other monitoring procedures. Credit sales, which are mainly on credit terms of 30 to 60 days, are only made to customers who meet the Company's credit standards, while sales to new customers or customers with low credit ratings are usually made on an advance payment basis. The Company closely monitors the aging of accounts receivable from its distributors and direct customers, and regularly reviews their financial positions, where available.

Significant customers are those that represent 10% or more of revenue or accounts receivable and are set forth in the following table:


	Revenue for the Three Months Ended March 31,			Accounts Receivable As of
	2020	2019	March 31, 2020	December 31, 2019
Customer A	*	30.6%	*	*
Customer B	*	20.1%	*	*
Customer C	31.3%	*	53.3%	60.0%
Customer D	53.2%	32.3%	32.3%	20.4%

* Less than 10% of total

Customer B and C are related parties and Customer D is a government agency. See Note 11 - Related Party Transactions.

Inventory

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Inventory

Inventory consists of the following as of March 31, 2020 and December 31, 2019 (in thousands):


	As of
	March 31, 2020		December 31, 2019
Raw materials	$	436	$	412
Work in process	440		258
Finished goods	209		320
Total	$	1,085	$	990

For the three months ended March 31, 2020, an inventory write-off of $169 thousand was recorded and, for the three months ended March 31, 2019, no inventory write-off was recorded.

Debts

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

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 matures on the earlier of the date a specified report is required to be delivered under the DLA or March 31, 2020, subject to extension as provided in the LSA. 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. 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. See Note 2 - Nexperia Arrangement.

As of March 31, 2020 and December 31, 2019, $15.0 million aggregate principal amount of term loans were outstanding under the LSA.

Revolving Credit Facility

The LSA also provided a $10.0 million revolving loan (Tranche C Loan) maturing 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. See Note 2 - Nexperia Arrangement.

The Tranche C Loan is recorded based on principal $10.0 million and accrued interest (6% interest per annum). The Company recorded interest expense of $152 thousand and $150 thousand for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020 and December 31, 2019, the total balance of the revolving credit facility was $10.6 million and $10.5 million, respectively.

Promissory Note

The Company’s promissory note obligation at March 31, 2020 and December 31, 2019 consists of the following (in thousands):


			Stated Value at
	Interest Rate	Due Date	March 31, 2020		December 31, 2019
Yaskawa Note	1.00%	September 2022	$	15,373	$	15,336

Pursuant to ASC 825-10-15-4, the Company elected to apply the fair value option for the promissory note. As of March 31, 2020 and December 31, 2019, the Company determined the fair value for the note, as compared to the face value, including accrued interest, as follows (in thousands):


	Fair Value at
	March 31, 2020		December 31, 2019
Yaskawa Note	$	13,885	$	16,169

Fair value of promissory note decreased $2.3 million for the three months ended March 31, 2020 and increased $167 thousand for the year ended December 31, 2019.

In October 2017, the Company issued an unsecured subordinated convertible promissory note to Yaskawa Electric Corporation (the “Yaskawa Note”) for $15.0 million. The stated interest rate of the Yaskawa Note is 1.0%, and principal plus interest is 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.

In connection with its promissory note obligation, the Company recorded interest expense of $37 thousand for the three months ended March 31, 2020 and 2019. 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 condensed consolidated balance sheet. As of March 31, 2020 and December 31, 2019, accrued interest on the promissory note was $373 thousand and $336 thousand, respectively.

In February, 2020, the Company entered into a letter of intent (“LOI”) with Yaskawa that will form the basis for a mutually beneficial cooperation agreement between the Company and Yaskawa to be finalized later in 2020. Under the LOI, Yaskawa intends to enter into a long-term cooperation and development agreement with the Company to use the Company’s GaN power device products for a variety of industrial power conversion applications, which will initially focus on servo motor drive applications. Yaskawa also intends to provide at least

$4.0 million to fund the Company’s development activities, with an expected funding start date of May 2020, from which amount Yaskawa intends to provide $1.0 million in 2020 in connection with the ongoing development activities.

As of March 31, 2020, the scheduled maturity on the development loans, revolving credit facility and promissory note was as follows (in thousands):


Year Ending December 31,	Amount
2020	$	15,610
2021	10,000
2022	15,748
Total	$	41,358

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW")

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Investment in Aizu Fujitsu Semiconductor Water Solution Limited ("AFSW")

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited (“AFSW”)

The Company has 49% interest in AFSW and is a party to a joint venture agreement (the “JVA”) with Fujitsu Semiconductor Limited (“FSL”) the 51% owner of AFSW. AFSW manufactures semiconductor products exclusively for its owners under manufacturing agreements at prices estimated to cover the cost of production. AFSW was determined to be a variable interest entity (“VIE”) as the equity at risk was not believed to be sufficient. AFSW depends on its owners for any additional cash. The Company extended $1.5 million and $2.7 million to AFSW to fund AFSW’s operations for the three months ended March 31, 2020 and the year ended December 31, 2019, respectively. The Company’s known maximum exposure to loss approximated the carrying value of its investment balance, which included the financing. Potential future losses could be higher than the carrying amount of the Company’s investment, as we are liable, along with the other owner, for other future operating costs or obligations of AFSW. In addition, because Transphorm is currently committed to purchasing GaN wafers and production-related services from AFSW at pre-agreed pricing based upon the Company’s second generation products, the Company may be required to purchase products at a higher cost for its newer generation products. Unfunded commitment to AFSW was $1.5 million and $1.7 million as of March 31, 2020 and December 31, 2019, respectively.

On April 1, 2020, FSL exercised its put option under the JVA and notified the Company that FSL intended to exit the joint venture by selling its 51% interest in AFSW to us. See Note 12 - Subsequent Events.

The Company’ investment activities in AFSW for the three months ended March 31, 2020 and for the year ended December 31, 2019 are summarized below (in thousands):


	For the Three Months Ended March 31, 2020		For the Year Ended December 31, 2019
Beginning balance	$	(1,688)	$	(659)
Investment	1,548		2,698
Loss	(1,419)		(3,703)
Effect of exchange rate change	13		(24)
Ending balance	$	(1,546)	$	(1,688)

Summarized financial information (unaudited) of AFSW for the periods indicated, as provided by the controlling owner, are as follows (in thousands):


	As of
	March 31, 2020		December 31, 2019
Current assets	$	1,019	$	3,733
Long-term assets	$	5,382	$	5,101
Other current liabilities	$	1,640	$	931
Due to controlling owner	$	15,842	$	17,913
Due to Transphorm	$	7,199	$	5,349
Net deficit	$	(18,345)	$	(15,359)

	Three Months Ended March 31,
	2020		2019
Sales	$	1,248	$	3,212
Gross loss	$	(2,197)	$	(1,588)
Net loss	$	(2,895)	$	(2,300)

Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitment with a Government Agency

In connection with a contract with a government agency, the Company entered into a commitment to acquire equipment and services from vendors totaling $4.9 million, all of which is reimbursable. During February and March 2020, the Company purchased equipment for approximately $3.6 million and was reimbursed in full by the government agency. As of March 31, 2020, the remaining commitment under the contract to the vendors is approximately $1.3 million.

Operating Leases

The Company leases office and fabrication space in Goleta, California, and office spaces in San Jose, California and in Japan under noncancelable operating lease agreements. The terms of certain leases provide for escalating rental payments through the term of the lease. The Company recognizes rent expense on a straight-line basis over the lease term and accrues for rent expense incurred but not paid.

As of March 31, 2020, future minimum operating lease commitments were as follows (in thousands):


Year Ending December 31,	Amount
2020	$	552
2021	569
2022	163
Total	$	1,284

The Company recorded rent expense, net of rental income, which includes common area maintenance fees in addition to the base rent, of $233 thousand and $209 thousand for the quarters ended March 31, 2020 and 2019, respectively. Rental income from noncancelable sublease was $45 thousand for each of the quarters ended March 31, 2020 and 2019. As of March 31, 2020, the future minimum rental payments to be received under the noncancelable sublease is $171 thousand through February 2021.

Contingencies

During the ordinary course of business, the Company may become a party to legal proceedings incidental to its business. The Company accrues contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimable. Legal cost is expensed as incurred. The company is not aware of any material legal claims or assessments, although the results of litigation and claims are inherently unpredictable, management believes there was not at least a reasonable possibility that the Company had incurred a material loss with respect to such loss contingencies as of March 31, 2020 and through date of this Report.

Indemnification

The Company from time to time enters into types of contracts that contingently require the Company to indemnify parties against third-party claims. These contracts primarily relate to: (1) real estate leases, under which the Company may be required to indemnify property owners for environmental and other liabilities and for other claims arising from the Company’s use of the applicable premises; (2) agreements with the Company’s officers, directors, and employees, under which the Company may be required to indemnify such persons from liabilities arising out of their relationship; (3) indemnifying customers in the event of product failure; and (4) agreements with outside parties that use the Company’s intellectual property, under which the Company may indemnify for copyright or patent infringement related specifically to the use of such intellectual property.

Historically, the Company has not been required to make payments under these obligations, and no liabilities have been recorded for these obligations in the Company’s condensed consolidated financial statements.

Stockholders' Equity

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

On February 12, 2020, in connection with the Merger, shares of Transphorm Technology’s convertible preferred stocks and common stock issued and outstanding immediately prior to the closing of the Merger were converted into shares of the Company’s common stock as follows:

•Series 1 convertible preferred stock: 51,680,254 shares issued and outstanding were converted into 12,433,953 shares issued and outstanding;

•Series 2 convertible preferred stock: 38,760,190 shares issued and outstanding were converted into 7,499,996 shares issued and outstanding;

•Series 3 convertible preferred stock: 31,850,304 issued and outstanding were converted into 4,000,000 shares issued and outstanding; and

•Common stock: 50,325,662 shares issued and outstanding were converted into 4,171,571 shares issued and outstanding.

In addition, on February 12, 2020, the Company issued 1,650,000 shares in connection with the Merger with Peninsula Acquisition Corporation and also redeemed 52,773 shares from unaccredited investors.

All per share and share amounts for all periods presented have been retroactively adjusted to reflect the effect of the Merger.

In December 2019, the Company amended its certificate of incorporation to authorize two classes of stock, to be designated, respectively, Common Stock and Preferred Stock. The total number of shares of stock that the Company shall have authority to issue is 755,000,000 shares, of which 750,000,000 shares are common stock, $0.0001 par value per share, and 5,000,000 shares are preferred stock, $0.0001 par value per share.

As of March 31, 2020, the Company had no preferred shares issued and outstanding.

Private Placement

On February 12, 2020 and February 27, 2020, we sold an aggregate of 5,380,000 shares of common stock pursuant to closings of a private placement offering (the “Private Placement”) at a purchase price of $4.00 per share. We granted to the investors in the Private Placement registration rights requiring us to register those shares of common stock for public resale. The then existing stockholders of Transphorm Technology also became entitled to such registration rights. The aggregate gross proceeds from the closings of the Private Placement were $21.5 million (before deducting placement agent fees and expenses of such closings, which were an aggregate of $1.8 million).

The issuance of common stock in the Private Placement was not registered under the Securities Act, in

reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC. The common stock issued in the Private Placement was sold to “accredited investors,” as defined in Regulation D, and was conducted on a “reasonable best efforts” basis.

Common Stock

Common stockholders are entitled to dividends, as and when declared by the Company’s Board of Directors, subject to the priority dividend rights of the holders of other classes of stock. There have been no dividends declared to date. The holder of each share of common stock is entitled to one vote.

At March 31, 2020, the Company has reserved shares of common stock for future issuance as follows:


Stock option plans			5,050,000
Common stock warrants			15,641
Total			5,065,641

Common Stock Warrants

At March 31, 2020, the following warrants to purchase common stock were outstanding:


Number of Shares	Exercise Price	Expiration Date
6,046	$34.74	November 2020
6,046	$34.74	5 years after an initial public offering of the Company
3,369	$54.41	5 years after an initial public offering of the Company
15,461

Stock Option Plans

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Option Plans

Stock Option Plans The 2020 Equity Incentive Plan (the “2020 Plan”) was approved by Transphorm Technology’s board of directors on February 10, 2020 and Transphorm Technology’s stockholders on February 12, 2020, and became effective on the business day immediately prior to the closing of the Merger. Our stockholders approved the 2020 Plan on February 11, 2020. We assumed the 2020 Plan in connection with the Merger. As of March 31, 2020, there were 2,591,909 shares reserved for issuance and no equity awards outstanding under the 2020 Plan. The 2020 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), to our employees and our parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, stock appreciation rights, restricted stock, restricted stock units (“RSUs”), performance units, and performance shares to our employees, directors, and consultants and our parent and subsidiary corporations’ employees and consultants.

Subject to the adjustment provisions of the 2020 Plan, and the automatic increase described in the 2020 Plan, the maximum aggregate number of shares of our common stock that may be issued under the 2020 Plan is 5,050,000 shares of our common stock, which includes (i) 2,588,077 shares initially reserved for issuance, plus (ii) any shares of our common stock subject to issued and outstanding awards under Transphorm 2007 Plan or 2015 Plan that were assumed in the Merger and that, on or after the closing of the Merger, expire or otherwise terminate without having been exercised or issued in full, are tendered to or withheld by us for payment of an exercise price or for tax withholding obligations, or are forfeited to or repurchased by us due to failure to vest, with the maximum number of shares to be added to the 2020 Plan pursuant to this clause (ii) equal to 2,461,923 shares. Subject to the adjustment provisions of the 2020 Plan, the number of shares of common stock available for issuance under the 2020 Plan will also include an annual increase on the first day of each fiscal year beginning with our 2022 fiscal year and ending on (and including) our 2030 fiscal year, in an amount equal to the least of:

The following table summarizes stock option activity and related information for the three months ended March 31, 2020 and 2019:


	Number of Shares Available for Grant	Number of Options Outstanding	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Balance at January 1, 2020	1,550,628	2,473,130	$	4.67	6.84	$	—
Options authorized	1,029,588	—	$	—
Options exercised	—	(3,346)	$	3.76
Options canceled	11,693	(11,693)	$	4.37
Balance at March 31, 2020	2,591,909	2,458,091	$	4.74	6.58	$	—
Exercisable at March 31, 2020		2,160,101	$	4.86	6.44	$	—

Balance at January 1, 2019	1,648,039	2,377,180	$	4.83	7.46	$	—
Options canceled	5,635	(5,635)	$	5.29
Balance at March 31, 2019	1,653,674	2,371,545	$	4.85	7.23	$	—
Exercisable at March 31, 2019		1,834,360	$	5.00	7.09	$	—

As of March 31, 2020 and 2019, there was $339 thousand and $703 thousand, respectively, of unrecognized stock-based compensation cost related to stock options granted to employees under the 2007 Plan and the 2015 Plan. As of March 31, 2020 and 2019, the unrecognized compensation cost is expected to be recognized over an estimated weighted average amortization period of 1.0 year and 1.5 years, respectively.

The accompanying condensed consolidated statement of operations and comprehensive loss includes stock-based compensation expense as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	15	$	10
Research and development	46		43
Sales and marketing	7		9
General and administrative	64		77
Total	$	132	$	139

Related Party Transactions	3 Months Ended
Related Party Transactions	Mar. 31, 2020
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions During the three months ended March 31, 2020, the Company entered into the following related party transactions: •Recorded $111 thousand in cost of goods sold for services, recorded research and development expense of $245 thousand, of which $177 thousand was reimbursable, recorded $84 thousand in other expense for commitment for services, and received reimbursement of payroll related costs of $14 thousand from the joint venture with AFSW; •Sold $13 thousand of products to non-controlling stockholders of the Company and incurred $50 thousand of license maintenance fee from a non-controlling stockholder of the Company; and •Recorded $37 thousand in license fee income, recorded $152 thousand in interest expense, recorded $177 thousand reimbursement for research and development, and sold $344 thousand of products to a stockholder and noteholder of the Company. As of March 31, 2020, total accounts receivable due from related parties was $8.1 million, consisting of $7.2 million due from the joint venture with AFSW, $15 thousand accounts receivable from non-controlling stockholders of the Company and $733 thousand accounts receivable, $150 thousand other receivable and $113 thousand deferred revenue from a stockholder and noteholder of the Company. As of March 31, 2020, total accounts payable to related parties was $166 thousand to non-controlling stockholders of the Company. During the three months ended March 31, 2019, the Company entered into the following related party transactions: •Recorded $59 thousand in cost of goods sold for services, recorded research and development expense of $132 thousand, recorded $18 thousand in other expense for commitment for services, and incurred $5 thousand for employees and their benefits seconded from the joint venture with AFSW; •Sold $121 thousand of products to non-controlling stockholders of the Company, incurred $50 thousand of license maintenance fee to non-controlling stockholder, and incurred $20 thousand for employees and their related benefits seconded from a non-controlling stockholder of the Company; and •Recorded $38 thousand in license fee income, recorded $150 thousand in interest expense and sold $6 thousand of products to a stockholder and noteholder of the Company. See Note 2- Nexperia Arrangements. As of December 31, 2019, total accounts receivable due from related parties was $5.8 million, consisting of $5.3 million due from the joint venture with AFSW, $38 thousand accounts receivable from non-controlling stockholders of the Company and $426 thousand accounts receivable from a stockholder and noteholder of the Company. As of December 31, 2019, total accounts payable due to related parties was $272 thousand to non-controlling stockholders of the Company.

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2020
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsThe Company has evaluated subsequent events through the filing of this Form 10-Q, and determined that there have been no events that have occurred that would require adjustments to our disclosures in the condensed consolidated financial statements except for the following: Development Loan On April 8, 2020, Amendment No. 3 to the LSA was executed to extend the maturity of the Tranche A loan of $5.0 million to April 30, 2020, and on April 28, 2020, Amendment No. 4 to the LSA was executed to further extend the maturity of the Tranche A loan to June 30, 2020. All other terms set forth under the original LSA remained unchanged following the amendment. Investment in AFSW On April 1, 2020, FSL exercised its put option under the JVA and notified us that FSL intended to exit the joint venture by selling its 51% interest in AFSW to us. Under the terms of the JVA, the aggregate purchase price for FSL’s interest in AFSW is expected to be one Japanese Yen. While the agreement provides that completion of the transaction shall take place as soon as 60 days from the date of the exercise notice, we expect such transaction will be subject to regulatory and other approvals in Japan, which we believe will take six to 12 months to obtain, if such approval is received. For at least one year following the date on which we take over full ownership of AFSW, we have agreed to use our best efforts to maintain and continue the operations of AFSW, which is also synergistic with our own business for securing wafers for our products.

Business and Basis of Presentation (Policies)	3 Months Ended
Business and Basis of Presentation (Policies)	Mar. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Principles of Consolidation	The unaudited condensed consolidated financial statements include the accounts of the Parent and its wholly-owned subsidiaries, Transphorm Technology, Transphorm Japan, Inc., Transphorm Japan Epi, Inc. and Transphorm Aizu, Inc. Upon consolidation, all significant intercompany accounts and transactions have been eliminated.
Use of Estimates	The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Management bases its estimates and assumptions on historical experience, knowledge of current conditions, and its belief of what could occur in the future, given available information. Actual results could differ from those estimates, and such differences could be material to the condensed consolidated financial statements. Estimates are used for, but not limited to, the determinations of fair value of stock awards and promissory notes, accrual of liabilities, revenue recognition, inventory reserve, and useful lives for property and equipment.
Reclassification of Prior Year Presentation	Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported condensed consolidated statements of operations.
Cash and Cash Equivalents	The Company considers all highly-liquid investments with original maturities of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents consist principally of bank deposits and money market funds.
Foreign Currency Risk	The Company is exposed to foreign currency risk due to its operations in Japan. Assets and liabilities of the operations are re-measured into U.S. currency at exchange rates in effect at the balance sheet dates through the condensed consolidated statements of comprehensive income. Gains or losses resulting from foreign currency transactions are re-measured using the rates on the dates on which those elements are recognized during the period and are included in other income or expense in the unaudited condensed consolidated statements of operations.
Concentrations of Risk	Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents. The Company is exposed to credit risk in the event of default by the financial institution holding its cash. The Company’s investment policy restricts investments to high-quality investments and limits the amounts invested with any one issuer, industry or geographic area. Risks associated with cash holdings in excess of insured limits are mitigated by banking with high-quality institutions. To date, the Company has not experienced any significant losses on its cash and cash equivalents. The Company periodically evaluates the relative credit standing of these financial institutions. The Company is subject to risks common in the power conversion components industry, including, but not limited to, technological obsolescence, dependence on key personnel, market acceptance of its products, the successful protection of its proprietary technologies, compliance with government regulations, and the possibility of not being able to obtain additional financing when needed.
Comprehensive Loss	Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) includes the impact of foreign currency translation adjustments.
Accounts Receivable	Accounts receivable are analyzed and allowances for uncollectible accounts are recorded, as required. Provisions for uncollectible accounts, if any, are recorded as bad debt expense and included in general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. The process for determining the appropriate level of allowances for doubtful accounts involves judgment, and the Company considers such factors as the age of the underlying receivables, historical and projected collection trends, the composition of outstanding receivables, current economic conditions and regulatory changes. An account is fully reserved when reasonable collection efforts have been unsuccessful and it is probable that the receivable will not be recovered.
Inventory	Inventory is stated at the lower of cost (first-in, first-out method) or net realizable value. The Company periodically reviews the value of items in inventory and records write-downs or write-offs based on its assessment of slow moving or obsolete inventory. The Company maintains an inventory reserve for obsolete inventory and generally makes inventory value adjustments against the inventory reserve.
Property and Equipment	Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is determined using the straight-line method over the estimated useful lives of the respective assets, generally ranging from three to seven years. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the related lease term. Depreciation for equipment commences once it is placed in service, and depreciation for buildings and leasehold improvements commences once they are ready for their intended use. The Company expenses maintenance and repair costs that do not extend the life of the asset as they are incurred.
Property and Equipment, Impairment	The Company evaluates the carrying amount of its property and equipment whenever events or changes in circumstances indicate that the assets may not be recoverable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of an asset or asset group and its eventual disposition are less than the carrying amount of the asset or asset group.
Goodwill	Goodwill arose for the acquisition of a business in February 2014 based in Japan and was accounted for as the purchase of a business. Goodwill generated from business combinations and deemed to have indefinite lives are not subject to amortization and instead are tested for impairment at least annually in December unless certain events occur or circumstances change. Goodwill represents the excess of the purchase price over the fair value of the net assets and other identifiable intangible assets acquired. We test for goodwill impairment annually or earlier if events or changes in circumstances indicate goodwill might possibly be impaired. Impairment exists when the carrying value of the goodwill exceeds its implied fair value. An impairment loss would be recognized in an amount equal to that excess as a charge to operations in the unaudited condensed consolidated statements of operations.
Intangible Assets	Intangible assets that are not considered to have an indefinite useful life are amortized over their estimated useful lives, which generally range from three to ten years. Each reporting period, the Company evaluates the estimated remaining useful lives of intangible assets and whether events or changes in circumstances warrant a revision to the remaining periods of amortization. If it is determined that the carrying values might not be recoverable based upon the existence of one or more indicators of impairment, the Company performs a test for recoverability using various methodologies, such as the income approach or cost approach, to determine the fair value of intangible assets depending upon the nature of the assets. If assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their respective fair values.
Revenue Recognition	Revenue Recognition Policy The Company derives its revenues from sales of high-powered GaN-based products manufactured utilizing the Company’s proprietary and patented epiwafer technology and wafer fabrication and other assembly processes, and sales of GaN epiwafers for the RF and power markets, as well as sales of licenses to use such patented proprietary technology. Revenues are recognized when control of these products or licenses are transferred to the Company’s customers in an amount that reflects the consideration it expects to be entitled to in exchange for those products and licenses. Sales and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The Company does not have any significant financing components associated with its revenue contracts, as payment is received at or shortly after the point of sale. Disaggregation of Revenue from Contracts with Customers Revenue for the three months ended March 31, 2020 and 2019 consists of licensing revenue, government contract revenue from our contract with the U.S. Navy and product sales, with applicable performance obligations satisfied at a point in time. Products are sold to distributors and end-users in various sectors such as, but not limited to, the automotive, gaming, industrial, IT, and consumer products industries. As part of the Collaboration Arrangement (Note 2 - Nexperia Arrangement) executed with Nexperia on April 4, 2018, the Company agreed to grant Nexperia the perpetual exclusive right to use the Company’s existing Gen 3 manufacturing process technology. License fees are received upon satisfaction of contractual milestones and recognized upon delivery of the perpetual license or transferred technology without any remaining performance obligations. For the three months ended March 31, 2020 and 2019, no licensing revenue was recognized. Government contract revenues are principally generated under research and development contracts. Contract revenues are derived primarily from research contracts with agencies of the United States Government. We believe credit risk related to accounts receivable arising from such contracts is minimal. These contracts may include cost-plus fixed fee and fixed price terms. All payments to us for work performed on contracts with agencies of the U.S. Government are subject to adjustment upon audit by the Defense Contract Audit Agency. Performance Obligations For performance obligations related to the sale of products, control transfers to the customer at a point in time. The Company’s principal terms of sale are free on board shipping or destination and the Company transfers control and records revenue for product sales upon shipment or delivery to the customer, respectively. For performance obligations related to the licensing of patented technology in perpetuity, control also transfers to the customer at a point in time. The Company transfers control and records revenue for licensing fees once the Company has (i) provided or otherwise makes available the patented technology to the customer and (ii) the customer is able to use and benefit from the patented technology. Variable Consideration The nature of the Company’s arrangement with Nexperia gives rise to variable consideration in the form of milestone and royalty payments. The royalties qualify for the sales and usage-based royalty exception, as the license of intellectual property is the predominant item to which the royalty relates and are recognized upon the subsequent sale occurring. The variable amounts are received upon satisfaction of contractually agreed upon development targets and sales volume.
Research and Development	The Company is a party to research grant contracts with the U.S. federal government for which the Company is reimbursed for specified costs incurred for its research projects. These projects include energy saving initiatives for which the U.S. federal government offers reimbursement funds. Such reimbursements are recorded as an offset to research and development expenses when the related qualified research and development expenses are incurred. Reimbursable costs are recognized in the same period the costs are incurred up to the limit of approved funding amounts on qualified expenses.
Stock-Based Compensation	All share-based payments, including grants of stock options, are measured based on the fair value of the share-based awards at the grant date and recognized over their respective vesting periods, which is generally four years. The estimated fair value of stock options at the grant date is determined using the Black-Scholes-Merton pricing model. The Company recognizes the fair value of share-based payments as compensation expense for all expected-to-vest stock-based awards over the vesting period of the award using the straight-line attribution method provided that the amount of compensation cost recognized at any date is no less than the portion of the grant-date fair value of the award that is vested at that date. The Black-Scholes-Merton option pricing model requires inputs such as the fair value of common stock on date of grant, expected term, expected volatility, dividend yield, and risk-free interest rate. Further, the forfeiture rate also affects the amount of aggregate compensation expense. These inputs are subjective and generally require significant analysis and judgment to develop. Volatility data is obtained from a study of publicly traded industry peer companies. The forfeiture rate is derived primarily from the Company’s historical data, and the risk-free interest rate is based on the yield available on U.S. Treasury zero-coupon issues commensurate with the expected term. Management generally uses the simplified method to calculate the expected term for employee grants as the Company has limited historical exercise data or alternative information to reasonably estimate an expected term assumption. The simplified method assumes that all options will be exercised midway between the weighted average vesting date and the contractual term of the option. Stock-based compensation expense recognized in the Company’s condensed consolidated financial statements is based on awards that are expected to vest. These expense amounts have been reduced by using an estimated forfeiture rate. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company evaluates the assumptions used to estimate forfeitures annually in connection of recognition of stock-based compensation expense.
Loss Per Share	Basic loss per share is calculated by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share is calculated by dividing the net loss attributable to common stockholders by the sum of the weighted average number of common shares outstanding plus potential dilutive common shares outstanding during the period. Potential dilutive securities, comprised of stock warrants and stock options, are not reflected in diluted loss per share because such shares are anti–dilutive. Dilutive impact of potential common shares resulting from common stock equivalents is determined by applying the treasury stock method.
Fair Value Measurement	Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying values of the Company’s financial instruments such as cash equivalents, accounts receivable, revolving credit facility, accounts payable and accrued liabilities approximate fair values due to the short-term nature of these items. The Company has elected the fair value option for its promissory notes.
Income Taxes	The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) 740, Income Taxes (“ASC 740”). ASC 740 prescribes the use of the liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement carrying amounts and the tax basis of assets and liabilities and are measured using the enacted statutory tax rates in effect at the balance sheet date. The Company records a valuation allowance to reduce its deferred tax assets when uncertainty regarding their realizability exists.
Equity Method Investments	The Company uses the equity method to account for investments in entities that it does not control, but in which it has the ability to exercise significant influence over operating and financial policies. The Company's proportionate share of the net income or loss of these companies is included in consolidated net earnings. Judgments regarding the level of influence over each equity method investment include consideration of key factors such as the Company's ownership interest, representation on the board of directors or other management body and participation in policy-making decisions.
Segment Reporting	The Company’s operations and its financial performance is evaluated on a consolidated basis by the chief operating decision maker. Accordingly, the Company considers all of its operations to be aggregated in one reportable operating segment.
Recently Issued Accounting Standards Adopted and under Evaluation	Fair Value - In August 2018, the Financial Accounting Standard Boards (“FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (ASC 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. ASU 2018-13 removes certain disclosures, modifies certain disclosures and adds additional disclosures. ASU 2018-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company adopted this standard effective January 1, 2020. The adoption of ASU 2018-13 did not have a material effect on the condensed consolidated financial statements. Statement of Cash Flows - In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). This guidance addresses eight specific cash flow issues with the objective of reducing existing diversity in practice. ASU 2016-15 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The Company adopted this standard effective January 1, 2020, first day of the Company’s fiscal year using the modified retrospective approach. The adoption of ASU 2016-15 did not have a material effect on the condensed consolidated financial statements. Recently Issued Accounting Standards under Evaluation Income Tax - In December 2019, the FASB issued ASU 2019-12, which modifies ASC 740 to simplify the accounting for income taxes. The ASU’s amendments are based on changes that were suggested by stakeholders as part of the FASB’s simplification initiative (i.e., the Board’s effort to reduce the complexity of accounting standards while maintaining or enhancing the helpfulness of information provided to financial statement users). ASU 2019-12 is effective for the Company’s 2021 fiscal year. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. Financial Instruments - In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). The standard changes the methodology for measuring credit losses on financial instruments and the timing of when such losses are recorded. ASU 2016-13 is effective for the Company’s 2021 fiscal year. Early adoption is permitted. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements. Leases - In February 2016, the FASB issued ASU 2016-02, Leases, which, for operating leases, requires the lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, on its balance sheet. The guidance also requires a lessee to recognize single lease costs, calculated so that the cost of the lease is allocated over the lease term, on a generally straight-line basis. This guidance will be effective for the Company in fiscal year 2021 and must be adopted using a modified retrospective transition approach. Early adoption is permitted. The Company is currently evaluating the impact of this new standard on its condensed consolidated financial statements.

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Liabilities measured at fair value by level

The following table summarizes the Company’s liabilities measured at fair value as of March 31, 2020 and December 31, 2019, by level within the fair value hierarchy (in thousands):


	Level 1		Level 2		Level 3
March 31, 2020
Promissory note	$	—	$	—	$	13,885

December 31, 2019
Promissory note	$	—	$	—	$	16,169

Changes in fair value of promissory notes

The following table includes the changes in fair value of the promissory note which are Level 3 on the fair value hierarchy (in thousands):


	2020
Fair value at January 1,	$	16,169
Interest expense accrued	37
Decrease in fair value	(2,321)
Fair value at March 31,	$	13,885

	2019
Fair value at January 1,	$	15,852
Interest expense accrued	150
Increase in fair value	167
Fair value at December 31,	$	16,169

Concentration of Credit Risk and Significant Customers (Tables)

3 Months Ended

Mar. 31, 2020

Risks and Uncertainties [Abstract]

Schedules of concentration of risk, by risk factor

Significant customers are those that represent 10% or more of revenue or accounts receivable and are set forth in the following table:


	Revenue for the Three Months Ended March 31,			Accounts Receivable As of
	2020	2019	March 31, 2020	December 31, 2019
Customer A	*	30.6%	*	*
Customer B	*	20.1%	*	*
Customer C	31.3%	*	53.3%	60.0%
Customer D	53.2%	32.3%	32.3%	20.4%

* Less than 10% of total

Inventory (Tables)

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

Schedule of inventory

Inventory consists of the following as of March 31, 2020 and December 31, 2019 (in thousands):


	As of
	March 31, 2020		December 31, 2019
Raw materials	$	436	$	412
Work in process	440		258
Finished goods	209		320
Total	$	1,085	$	990

Debts (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of promissory note obligation

The Company’s promissory note obligation at March 31, 2020 and December 31, 2019 consists of the following (in thousands):


			Stated Value at
	Interest Rate	Due Date	March 31, 2020		December 31, 2019
Yaskawa Note	1.00%	September 2022	$	15,373	$	15,336

Schedule of fair value option

As of March 31, 2020 and December 31, 2019, the Company determined the fair value for the note, as compared to the face value, including accrued interest, as follows (in thousands):


	Fair Value at
	March 31, 2020		December 31, 2019
Yaskawa Note	$	13,885	$	16,169

Schedule of maturities of long-term debt

As of March 31, 2020, the scheduled maturity on the development loans, revolving credit facility and promissory note was as follows (in thousands):


Year Ending December 31,	Amount
2020	$	15,610
2021	10,000
2022	15,748
Total	$	41,358

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
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+ Details

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW") (Tables)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Variable Interest Entities

The Company’ investment activities in AFSW for the three months ended March 31, 2020 and for the year ended December 31, 2019 are summarized below (in thousands):


	For the Three Months Ended March 31, 2020		For the Year Ended December 31, 2019
Beginning balance	$	(1,688)	$	(659)
Investment	1,548		2,698
Loss	(1,419)		(3,703)
Effect of exchange rate change	13		(24)
Ending balance	$	(1,546)	$	(1,688)

Summarized financial information (unaudited) of AFSW for the periods indicated, as provided by the controlling owner, are as follows (in thousands):


	As of
	March 31, 2020		December 31, 2019
Current assets	$	1,019	$	3,733
Long-term assets	$	5,382	$	5,101
Other current liabilities	$	1,640	$	931
Due to controlling owner	$	15,842	$	17,913
Due to Transphorm	$	7,199	$	5,349
Net deficit	$	(18,345)	$	(15,359)

	Three Months Ended March 31,
	2020		2019
Sales	$	1,248	$	3,212
Gross loss	$	(2,197)	$	(1,588)
Net loss	$	(2,895)	$	(2,300)

- Definition

Tabular disclosure of the significant judgments and assumptions made in determining whether a variable interest (as defined) held by the entity requires the variable interest entity (VIE) (as defined) to be consolidated and (or) disclose information about its involvement with the VIE, individually or in aggregate (as applicable); the nature of restrictions, if any, on the consolidated VIE's assets and on the settlement of its liabilities reported by an entity in its statement of financial position, including the carrying amounts of such assets and liabilities; the nature of, and changes in, the risks associated with involvement in the VIE; how involvement with the VIE affects the entity's financial position, financial performance, and cash flows; the lack of recourse if creditors (or beneficial interest holders) of the consolidated VIE have no recourse to the general credit of the primary beneficiary (if applicable); the terms of arrangements, giving consideration to both explicit arrangements and implicit variable interests, if any, that could require the entity to provide financial support to the VIE, including events or circumstances that could expose the entity to a loss; the methodology used by the entity for determining whether or not it is the primary beneficiary of the variable interest entity; the significant factors considered and judgments made in determining that the power to direct the activities of a VIE that most significantly impact the VIE's economic performance are shared (as defined); the carrying amounts and classification of assets and liabilities of the VIE included in the statement of financial position; the entity's maximum exposure to loss, if any, as a result of its involvement with the VIE, including how the maximum exposure is determined and significant sources of the entity's exposure to the VIE; a comparison of the carrying amounts of the assets and liabilities and the entity's maximum exposure to loss; information about any liquidity arrangements, guarantees, and (or) other commitments by third parties that may affect the fair value or risk of the entity's variable interest in the VIE; whether or not the entity has provided financial support or other support (explicitly or implicitly) to the VIE that it was not previously contractually required to provide or whether the entity intends to provide that support, including the type and amount of the support and the primary reasons for providing the support; and supplemental information the entity determines necessary to provide.

+ References + Details

Commitment and Contingencies (Tables)

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum operating lease commitments

As of March 31, 2020, future minimum operating lease commitments were as follows (in thousands):


Year Ending December 31,	Amount
2020	$	552
2021	569
2022	163
Total	$	1,284

Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2020

Equity [Abstract]

Schedule of convertible preferred stock by class

At March 31, 2020, the Company has reserved shares of common stock for future issuance as follows:


Stock option plans			5,050,000
Common stock warrants			15,641
Total			5,065,641

Schedule of stockholders' equity note, warrants or rights

At March 31, 2020, the following warrants to purchase common stock were outstanding:


Number of Shares	Exercise Price	Expiration Date
6,046	$34.74	November 2020
6,046	$34.74	5 years after an initial public offering of the Company
3,369	$54.41	5 years after an initial public offering of the Company
15,461

- Definition

Tabular disclosure of an entity's stock, including par or stated value per share, number and dollar amount of share subscriptions, shares authorized, shares issued, shares outstanding, number and dollar amount of shares held in an employee trust, dividend per share, total dividends, share conversion features, par value plus additional paid in capital, the value of treasury stock and other information necessary to a fair presentation, and EPS information. Stock by class includes common, convertible, and preferred stocks which are not redeemable or redeemable solely at the option of the issuer. Includes preferred stock with redemption features that are solely within the control of the issuer and mandatorily redeemable stock if redemption is required to occur only upon liquidation or termination of the reporting entity. If more than one issue is outstanding, state the title of each issue and the corresponding dollar amount; dollar amount of any shares subscribed but unissued and the deduction of subscriptions receivable there from; number of shares authorized, issued, and outstanding.

+ References

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+ Details

Stock Option Plans (Tables)

3 Months Ended

Mar. 31, 2020

Share-based Payment Arrangement [Abstract]

Schedule of stock option activity

The following table summarizes stock option activity and related information for the three months ended March 31, 2020 and 2019:


	Number of Shares Available for Grant	Number of Options Outstanding	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (in Years)	Aggregate Intrinsic Value
Balance at January 1, 2020	1,550,628	2,473,130	$	4.67	6.84	$	—
Options authorized	1,029,588	—	$	—
Options exercised	—	(3,346)	$	3.76
Options canceled	11,693	(11,693)	$	4.37
Balance at March 31, 2020	2,591,909	2,458,091	$	4.74	6.58	$	—
Exercisable at March 31, 2020		2,160,101	$	4.86	6.44	$	—

Balance at January 1, 2019	1,648,039	2,377,180	$	4.83	7.46	$	—
Options canceled	5,635	(5,635)	$	5.29
Balance at March 31, 2019	1,653,674	2,371,545	$	4.85	7.23	$	—
Exercisable at March 31, 2019		1,834,360	$	5.00	7.09	$	—

Stock-based compensation expense

The accompanying condensed consolidated statement of operations and comprehensive loss includes stock-based compensation expense as follows (in thousands):


	Three Months Ended March 31,
	2020		2019
Cost of revenue	$	15	$	10
Research and development	46		43
Sales and marketing	7		9
General and administrative	64		77
Total	$	132	$	139

Business and Basis of Presentation (Details)			1 Months Ended	3 Months Ended
Business and Basis of Presentation (Details)	Feb. 12, 2020 shares $ / shares	Feb. 11, 2020 shares	Feb. 29, 2020 USD ($)	Mar. 31, 2020 USD ($) segment shares	Mar. 31, 2019 USD ($) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2018 shares
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Merger conversion rate (in shares)	0.08289152527
Common stock, shares issued (in shares)	4,171,571	50,325,662		35,135,520		4,220,998
Common stock, forfeited and cancelled (in shares)		682,699
Shares issued under company plans (in shares)	2,461,923			2,458,091	2,371,545	2,473,130	2,377,180
Number of shares (in shares)	15,461	186,535		15,461
Conversion price per share on convertible note payable (in dollars per share) \| $ / shares	$ 5.12
Maximum number of shares of common stock issuable (in shares)	3,076,171
Proceeds from issuance of common stock, net of offering cost \| $			$ 19,700,000	$ 19,741,000	$ 0
Goodwill impairment charges \| $				0	0
Impairment of intangible assets \| $				0	0
Grant reimbursement \| $				$ 72,000	$ 0
Award vesting period				4 years
Number of anti-dilutive shares (in shares)				2,473,552	2,397,702
Number of reportable segments \| segment				1
Revenue from product and license fees \| $				$ 1,100,000	$ 529,000
Cash and cash equivalents \| $				$ 14,648,000		$ 2,875,000
Stock options
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of anti-dilutive shares (in shares)				2,458,091	2,371,545
Warrant
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Number of anti-dilutive shares (in shares)				15,461	26,157
Minimum
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Property and equipment, estimated useful life				3 years
Intangible assets, estimated useful life				3 years	10 years
Maximum
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Property and equipment, estimated useful life				7 years
JAPAN
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Percentage of cash and cash equivalents in foreign subsidiary				0.20%		1.90%
Revenue from product and license fees \| $				$ 11,000	$ 7,000
Cash and cash equivalents \| $				31,000		$ 55,000
UNITED STATES
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Revenue from product and license fees \| $				1,100,000	$ 522,000
Other Assets
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Cash included in other assets \| $				75,000		75,000
Yaskawa Note
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Maximum number of shares of common stock issuable (in shares)	3,076,171
Long-term loan facility \| $				15,000,000.0
Accrued interest on promissory note \| $				$ 373,000		$ 336,000
Transphorm Technology 2007 Stock Plan and 2015 Equity Incentive Plan
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Shares issued under company plans (in shares)		29,703,285
The 2020 Equity Incentive Plan
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Shares issued under company plans (in shares)				0
Series 1 Preferred Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Convertible preferred stock, shares issued (in shares)		51,680,254
Convertible preferred stock, shares outstanding (in shares)		51,680,254
Share conversion in connection with the Merger (in shares)	12,433,953
Series 2 Preferred Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Convertible preferred stock, shares issued (in shares)		38,760,190
Convertible preferred stock, shares outstanding (in shares)		38,760,190
Conversion of stock (in shares)	7,499,996
Series 3 Preferred Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Convertible preferred stock, shares issued (in shares)		31,850,304
Convertible preferred stock, shares outstanding (in shares)		31,850,304
Conversion of stock (in shares)	4,000,000
Common Stock
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Price per share (in dollars per share) \| $ / shares	$ 4.00
Share conversion in connection with the Merger (in shares)				23,933,949
Transphorm Technology
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items]
Share conversion in connection with the Merger (in shares)	28,105,520

Nexperia Arrangement (Details) - USD ($)		1 Months Ended					2 Months Ended	12 Months Ended
Nexperia Arrangement (Details) - USD ($)	Apr. 04, 2018	Dec. 31, 2019	Oct. 31, 2019	Apr. 30, 2019	Jan. 31, 2019	Dec. 31, 2018	Jul. 31, 2019	Dec. 31, 2018	Mar. 31, 2020	Mar. 31, 2019
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License fees	$ 9,000,000		$ 3,000,000	$ 3,000,000		$ 3,000,000
Revolving loan	10,000,000
Series 3 Preferred Stock
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Issuance of preferred stock	16,000,000
Tranche A Loan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Long-term loan facility	5,000,000
Proceeds from Issuance of debt					$ 5,000,000
Tranche B Loan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Long-term loan facility	8,000,000								$ 8,000,000.0	$ 8,000,000
Proceeds from Issuance of debt							$ 8,000,000
Tranche B-1 Loan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Long-term loan facility	$ 2,000,000								$ 2,000,000.0	$ 2,000,000
Proceeds from Issuance of debt		$ 2,000,000
Tranche C Loan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from Issuance of debt								$ 10,000,000

Fair Value Measurements - Fair Value Hierarchy (Details) - Fair Value, Recurring - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019
Level 1
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Promissory note	$ 0	$ 0
Level 2
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Promissory note	0	0
Level 3
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Promissory note	$ 13,885	$ 16,169

Fair Value Measurements - Changes in Level 3 inputs (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Defined Benefit Plan, Change in Fair Value of Plan Assets, Level 3 Reconciliation [Roll Forward]
Fair value at January 1,	$ 16,169	$ 15,852
Interest expense accrued	37	150
Decrease in fair value	(2,321)	167
Fair value at March 31,	$ 13,885	$ 16,169

Concentration of Credit Risk and Significant Customers (Details) - Customer Concentration Risk	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenue \| Customer A
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable		30.60%
Revenue \| Customer B
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable		20.10%
Revenue \| Customer C
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable	31.30%
Revenue \| Customer D
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable	53.20%	32.30%
Accounts Receivable \| Customer C
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable	53.30%	60.00%
Accounts Receivable \| Customer D
Concentration Risk [Line Items]
Percentage of revenue or accounts receivable	32.30%	20.40%

Inventory (Details) - USD ($) $ in Thousands	3 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 436		$ 412
Work in process	440		258
Finished goods	209		320
Total	1,085		$ 990
Inventory write-off	$ 169	$ 0

Debts - Additional Information (Details)		1 Months Ended	3 Months Ended		8 Months Ended	12 Months Ended
Debts - Additional Information (Details)	Feb. 12, 2020 shares $ / shares	Feb. 29, 2020 USD ($)	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Apr. 04, 2018 USD ($)	Apr. 02, 2018 USD ($)	Oct. 31, 2017 USD ($)
Line of Credit Facility [Line Items]
Aggregate principal amount of loans outstanding			$ 41,358,000
Revolving loan							$ 10,000,000
Outstanding balance on line of credit facility			10,600,000	$ 10,500,000
Changes in fair value of promissory note			2,321,000	(33,000)
Interest expense			189,000	187,000
Conversion price per share on convertible note payable (in dollars per share) \| $ / shares	$ 5.12
Maximum number of shares of common stock issuable (in shares) \| shares	3,076,171
Yaskawa
Line of Credit Facility [Line Items]
Letter of intent for development activities		$ 4,000,000.0
Yaskawa \| Forecast
Line of Credit Facility [Line Items]
Proceeds from Collaborators					$ 1,000,000.0
Loan and Security Agreement (LSA)
Line of Credit Facility [Line Items]
Long-term loan facility							15,000,000.0
Aggregate principal amount of loans outstanding			15,000,000.0
Tranche A Loan
Line of Credit Facility [Line Items]
Long-term loan facility							5,000,000
Tranche B Loan
Line of Credit Facility [Line Items]
Long-term loan facility			8,000,000.0	8,000,000			8,000,000
Tranche B-1 Loan
Line of Credit Facility [Line Items]
Long-term loan facility			2,000,000.0	2,000,000			$ 2,000,000
Tranche C Note
Line of Credit Facility [Line Items]
Long-term loan facility			$ 10,000,000.0
Revolving loan								$ 10,000,000.0
Interest rate per annum			6.00%					6.00%
Accrued interest on promissory note			$ 152,000	$ 150,000
Yaskawa Note
Line of Credit Facility [Line Items]
Long-term loan facility			$ 15,000,000.0
Interest rate per annum			1.00%						1.00%
Changes in fair value of promissory note			$ 2,300,000			$ 167,000
Unsecured subordinated convertible promissory note			15,373,000			15,336,000			$ 15,000,000.0
Interest expense			37,000
Accrued interest on promissory note			$ 373,000			$ 336,000
Maximum number of shares of common stock issuable (in shares) \| shares	3,076,171

Debts - Notes Payable (Details) - Yaskawa Note - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Oct. 31, 2017
Line of Credit Facility [Line Items]
Interest rate per annum	1.00%		1.00%
Unsecured subordinated convertible promissory note	$ 15,373	$ 15,336	$ 15,000
Promissory note	$ 13,885	$ 16,169

Debts - Maturities Schedule (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Debt Disclosure [Abstract]
2020	$ 15,610
2021	10,000
2022	15,748
Total	$ 41,358

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW") - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Apr. 01, 2020
Variable Interest Entity [Line Items]
Unfunded commitment	$ 1,300
Aizu Fajitsu Semiconductor Wafer Solution Limited
Variable Interest Entity [Line Items]
Ownership percentage in entity	49.00%
Additional financial support provided to investment	$ 1,548	$ 2,698	$ 2,700
Unfunded commitment	$ 1,500		$ 1,700
Fujitsu Semiconductor Limited \| Aizu Fajitsu Semiconductor Wafer Solution Limited
Variable Interest Entity [Line Items]
Ownership percentage in entity	51.00%
Fujitsu Semiconductor Limited \| Aizu Fajitsu Semiconductor Wafer Solution Limited \| Subsequent Event
Variable Interest Entity [Line Items]
Purchase of additional interest				51.00%

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW") - Income Statement Information (Details) - Aizu Fajitsu Semiconductor Wafer Solution Limited - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Summary of Variable Interest Entities [Roll Forward]
Beginning balance	$ (1,688)	$ (659)	$ (659)
Investment	1,548	2,698	2,700
Loss	(1,419)	(3,703)
Effect of exchange rate change	13	$ (24)
Ending balance	$ (1,546)		$ (1,688)

Investment in Aizu Fujitsu Semiconductor Wafer Solution Limited ("AFSW") - Summarized Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Variable Interest Entity [Line Items]
Current assets	$ 18,557		$ 5,357
Other current liabilities	1,546		1,688
Aizu Fajitsu Semiconductor Wafer Solution Limited
Variable Interest Entity [Line Items]
Current assets	1,019		3,733
Long-term assets	5,382		5,101
Other current liabilities	1,640		931
Net deficit	(18,345)		(15,359)
Variable Interest Entity, Measure of Activity [Abstract]
Sales	1,248	$ 3,212
Gross loss	(2,197)	(1,588)
Net loss	(2,895)	$ (2,300)
Aizu Fajitsu Semiconductor Wafer Solution Limited \| Fujitsu Semiconductor Limited
Variable Interest Entity [Line Items]
Accounts payable due to related parties	15,842		17,913
Aizu Fajitsu Semiconductor Wafer Solution Limited \| Transphorm, Inc.
Variable Interest Entity [Line Items]
Accounts payable due to related parties	$ 7,199		$ 5,349

Commitment and Contingencies - Operating Lease Maturity Schedule (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Leases [Abstract]
2020	$ 552
2021	569
2022	163
Total	$ 1,284

Commitment and Contingencies - Narrative (Details) - USD ($) $ in Thousands	2 Months Ended	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2020	Mar. 31, 2019
Commitments and Contingencies Disclosure [Abstract]
Rent expense		$ 233	$ 209
Rental income from noncancelable sublease		45
Future minimum rental payments to be received under sublease	$ 171	171
Purchase Commitment, Commitment To Acquire Equipment And Services	4,900	4,900
Purchase Commitment, Equipment Purchased	3,600
Unfunded commitment	$ 1,300	$ 1,300

Stockholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended	3 Months Ended
	Feb. 12, 2020	Feb. 27, 2020	Mar. 31, 2020	Feb. 29, 2020	Feb. 11, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Class of Stock [Line Items]
Common stock, shares issued (in shares)	4,171,571		35,135,520		50,325,662	4,220,998
Common stock, shares outstanding (in shares)	4,171,571		35,135,520		50,325,662	4,220,998
Shares issued in connection with the Reverse Merger (in shares)	1,650,000
Shares redeemed (in shares)	52,773
Total common and preferred stock authorized for issuance (in shares)				755,000,000
Common stock, shares authorized (in shares)			750,000,000	750,000,000		29,012,034
Common stock, par value (in usd per share)			$ 0.0001	$ 0.0001		$ 0.0001
Preferred stock, shares authorized (in shares)				5,000,000
Par value of preferred stock (in usd per share)				$ 0.0001
Preferred stock, shares issued (in shares)			0
Preferred Stock, Shares Outstanding (in shares)			0
Common Stock
Class of Stock [Line Items]
Common stock, shares outstanding (in shares)			35,135,520			4,220,998	4,219,606	4,219,606
Shares issued in connection with the Reverse Merger (in shares)			1,650,000
Shares redeemed (in shares)			52,773
Price per share (in dollars per share)	$ 4.00
Private Placement
Class of Stock [Line Items]
Placement agent fees and closing expenses		$ 1.8
Private Placement \| Common Stock
Class of Stock [Line Items]
Number of shares sold in private placement offering (in shares)		5,380,000
Price per share (in dollars per share)		$ 4.00
Aggregate gross proceeds from closing of offering		$ 21.5
Series 1 Preferred Stock
Class of Stock [Line Items]
Convertible preferred stock, shares issued (in shares)			0		51,680,254	12,433,953
Convertible preferred stock, shares outstanding (in shares)			0		51,680,254	12,433,953
Common stock, shares issued (in shares)	12,433,953
Common stock, shares outstanding (in shares)	12,433,953
Series 2 Preferred Stock
Class of Stock [Line Items]
Convertible preferred stock, shares issued (in shares)			0		38,760,190	7,499,996
Convertible preferred stock, shares outstanding (in shares)			0		38,760,190	7,499,996
Common stock, shares issued (in shares)	7,499,996
Common stock, shares outstanding (in shares)	7,499,996
Series 3 Preferred Stock
Class of Stock [Line Items]
Convertible preferred stock, shares issued (in shares)			0		31,850,304	4,000,000
Convertible preferred stock, shares outstanding (in shares)			0		31,850,304	4,000,000
Common stock, shares issued (in shares)	4,000,000
Common stock, shares outstanding (in shares)	4,000,000

Stockholders' Equity - Reserved Common Stock (Details)	Mar. 31, 2020 shares
Class of Stock [Line Items]
Common stock reserved for issuance (in shares)	5,065,641
Stock options
Class of Stock [Line Items]
Common stock reserved for issuance (in shares)	5,050,000
Warrant
Class of Stock [Line Items]
Common stock reserved for issuance (in shares)	15,641

Stockholders' Equity - Warrants (Details) - $ / shares	Mar. 31, 2020	Feb. 12, 2020	Feb. 11, 2020
Class of Stock [Line Items]
Number of shares (in shares)	15,461	15,461	186,535
November 2020
Class of Stock [Line Items]
Number of shares (in shares)	6,046
Exercise price (in usd per share)	$ 34.74
February 2025
Class of Stock [Line Items]
Number of shares (in shares)	6,046
Exercise price (in usd per share)	$ 34.74
February 2025
Class of Stock [Line Items]
Number of shares (in shares)	3,369
Exercise price (in usd per share)	$ 54.41

Stock Option Plans (Details) - USD ($) $ in Thousands	3 Months Ended
Stock Option Plans (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Mar. 31, 2019	Feb. 12, 2020	Feb. 11, 2020	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	5,065,641
Options outstanding under The 2020 Plan (in shares)	2,458,091	2,371,545	2,461,923		2,473,130	2,377,180
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	5,050,000
Options authorized (in shares)	1,029,588
Unrecognized stock-based compensation	$ 339	$ 703
Estimated weighted average amortization period (in years)	1 year	1 year 6 months
The 2020 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance (in shares)	2,591,909
Options outstanding under The 2020 Plan (in shares)	0
Equity Awards outstanding under The 2020 Plan (in shares)	0
Number of shares authorized by 2020 plan (in shares)	5,050,000
The 2020 Equity Incentive Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options authorized (in shares)	2,461,923
Transphorm Technology 2007 Stock Plan and 2015 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding under The 2020 Plan (in shares)				29,703,285
Number of shares authorized by 2020 plan (in shares)	2,588,077

Stock Option Plans - Schedule of Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Beginning balance, available for grant	1,550,628	1,648,039	1,648,039
Beginning balance, Options outstanding (in shares)	2,473,130	2,377,180	2,377,180
Options exercised (in shares)	(3,346)
Options cancelled (in shares)	(11,693)	(5,635)
Ending balance, available for grant (in shares)	2,591,909	1,653,674	1,550,628	1,648,039
Ending balance, Options outstanding (in shares)	2,458,091	2,371,545	2,473,130	2,377,180
Exercisable at period end (in shares)	2,160,101	1,834,360
Weighted Average Exercise Price per Share
Beginning of period (in usd per share)	$ 4.67	$ 4.83	$ 4.83
Options exercised (in dollars per share)	3.76
Options cancelled (in usd per share)	4.37	5.29
End of period (in usd per share)	4.74	4.85	$ 4.67	$ 4.83
Exercisable at end of period (in usd per share)	$ 4.86	$ 5.00
Weighted Average Remaining Contractual Term (in Years)
Options outstanding, weighted average remaining contractual term (in years)	6 years 6 months 29 days	7 years 2 months 23 days	6 years 10 months 2 days	7 years 5 months 15 days
Options exercisable, weighted average remaining contractual term (in years)	6 years 5 months 8 days	7 years 1 month 2 days
Aggregate Intrinsic Value
Options outstanding, aggregate intrinsic value	$ 0	$ 0	$ 0	$ 0
Options exercisable, aggregate intrinsic value	$ 0	$ 0
Stock options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options authorized (in shares)	1,029,588

Stock Option Plans - Share-based Payment Agreement, Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	$ 132	$ 139
Cost of revenue
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	15	10
Research and development
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	46	43
Sales and marketing
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	7	9
General and administrative
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Stock based compensation expense	$ 64	$ 77

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2018
Related Party Transaction
Accounts receivable due from related party	$ 8,100		$ 5,800
Noncontrolling Common Stockholder
Related Party Transaction
Accounts receivable due from related party	15		38
Accounts payable to related party	166		272
Noncontrolling Common Stockholder \| Research and development
Related Party Transaction
Related party transaction expenses		$ 20
Noncontrolling Common Stockholder \| Sale of Products
Related Party Transaction
Products sold to related party	13	121
Noncontrolling Common Stockholder \| License Maintenance Fee
Related Party Transaction
Related party transaction expenses	50	50
Common Stockholder
Related Party Transaction
Accounts receivable due from related party	733
Common Stockholder \| Reimbursement for research and development
Related Party Transaction
Products sold to related party	177
Common Stockholder \| Sale of Products
Related Party Transaction
Products sold to related party	344
Common Stockholder \| License Fee Income
Related Party Transaction
Products sold to related party	37
Common Stockholder \| Interest Expense
Related Party Transaction
Related party transaction expenses	152
Common Stockholder \| Deferred Revenue
Related Party Transaction
Accounts receivable due from related party	113
Common Stockholder \| Other Receivable
Related Party Transaction
Accounts receivable due from related party	150
Convertible Preferred Stockholder
Related Party Transaction
Products sold to related party		6
Accounts receivable due from related party			426
Convertible Preferred Stockholder \| License Fee Income
Related Party Transaction
Products sold to related party		38
Convertible Preferred Stockholder \| Interest Expense
Related Party Transaction
Related party transaction expenses		150
Corporate Joint Venture
Related Party Transaction
Accounts receivable due from related party	7,200		$ 5,300
Corporate Joint Venture \| Related Party Services
Related Party Transaction
Related party transaction expenses	111	59
Corporate Joint Venture \| Research and development
Related Party Transaction
Related party transaction expenses	245	132
Corporate Joint Venture \| Reimbursement for research and development
Related Party Transaction
Related party transaction expenses	177
Corporate Joint Venture \| Commitment For Services
Related Party Transaction
Related party transaction expenses	84	18
Corporate Joint Venture \| Reimbursement from payroll related costs
Related Party Transaction
Related party transaction expenses	$ 14	$ 5

Subsequent Events (Details) - USD ($)	9 Months Ended
Subsequent Events (Details) - USD ($)	Dec. 31, 2020	Apr. 04, 2018
Tranche A Loan
Subsequent Event [Line Items]
Long-term loan facility		$ 5,000,000
Subsequent Event \| Forecast
Subsequent Event [Line Items]
Expected exercise price under certain conditions	$ 1
Minimum number of days before closing	60 days
Estimated Time Of Regulatory Approval, Minimum	6 months
Estimated Time Of Regulatory Approval, Maximum	12 months
Agreement To Maintain And Continue AFSW, Term	1 year
Subsequent Event \| Forecast \| Fujitsu Semiconductor Limited
Subsequent Event [Line Items]
Purchase of additional interest	51.00%