UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______________ to ________________
Commission File No.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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Registrant’s telephone number, including area code |
Securities registered pursuant to Section 12(b) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerate filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No
There was a total of
TABLE OF CONTENTS
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Page No. |
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Item 1. |
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Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021 |
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Condensed Consolidated Statements of Cash Flows for nine months ended September 30, 2022 and 2021 |
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9 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
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Item 4. |
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Item 1. |
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Item 1A. |
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Item 2. |
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Item 3. |
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Item 4. |
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Item 5. |
36 |
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Item 6. |
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38 |
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2
FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve a number of risks and uncertainties. Words such as “anticipates,” "expects,” "intends,” “goals,” “plans,” “believes,” “seeks,” “estimates,” "continues,” “may,” “will,” “should,” “could,” and variations of such words and similar expressions are intended to identify forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our businesses, uncertain events or assumptions, our liquidity and other characterization of future events or circumstances are forward-looking statements. Such statements are based on management’s expectations as of the date of this filing and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Such risks and uncertainties include our ability to close one or more financings in order to meet our working capital needs and those described throughout this report and our Annual Report on Form 10-K for the year ended March 26, 2022 and our Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 on Schedule 14A filed on August 2, 2022, particularly the “Risk Factors” sections of such reports. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Readers are urged to carefully review and consider the various disclosures made in this Form 10-Q and in other documents we file from time to time with the Securities and Exchange Commission that disclose risks and uncertainties that may affect our business. In addition, the forward-looking statements in this Form 10-Q are made as of the date of this filing, and we do not undertake, and expressly disclaim any duty to update such statements, whether as a result of new information, new developments or otherwise, except to the extent that disclosure may be required by law.
3
PART I – FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
GIGA-TRONICS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands except share data)
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September 30, 2022 |
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December 31, 2021 |
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ASSETS |
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CURRENT ASSETS |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Accrued revenue |
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Inventories, net |
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Prepaid expenses and other current assets |
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TOTAL CURRENT ASSETS |
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Intangible assets, net |
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Goodwill |
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Property and equipment, net |
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Right-of-use assets |
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Other assets |
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TOTAL ASSETS |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES |
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Accounts payable and accrued expenses |
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$ |
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$ |
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Accounts payable and accrued expenses, related party |
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Notes payable |
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Notes payable, related parties, net |
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Short-term advances, related party |
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Operating lease liability, current |
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Other current liabilities |
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TOTAL CURRENT LIABILITIES |
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LONG TERM LIABILITIES |
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Operating lease liability, non-current |
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Notes payable |
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Other liabilities |
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TOTAL LIABILITIES |
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STOCKHOLDERS' EQUITY |
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Preferred stock; |
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Series F Preferred Stock, |
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Common Stock; |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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TOTAL STOCKHOLDERS' EQUITY |
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Non-controlling interest |
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TOTAL STOCKHOLDERS' EQUITY |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
4
GIGA-TRONICS INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(In thousands except per share data)
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For the Three Months Ended September 30, |
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For the Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Revenues |
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$ |
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$ |
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$ |
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$ |
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Cost of revenues |
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Gross profit |
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Operating expenses |
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Research and development |
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Selling and marketing |
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General and administrative |
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Total operating expenses |
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(Loss) income from continuing operations |
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( |
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Other (expense) income |
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Interest expense, related party |
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Interest expense |
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( |
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( |
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( |
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( |
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Change in fair value of marketable equity securities |
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( |
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Foreign currency exchange adjustment |
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( |
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Realized gain on marketable equity securities |
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Gain on extinguishment of debt |
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Interest and other income |
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Other income (expense) |
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Total other (expense) income, net |
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( | ) |
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( | ) |
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( | ) |
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Loss from continuing operations before income taxes |
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( |
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( |
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( |
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( |
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Income tax benefit (provision) |
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( |
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Net loss |
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( |
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( |
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( |
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Net loss (gain) attributable to non-controlling interest |
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( |
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Net loss attributable to common stockholders |
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( |
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Net loss per common share, basic and diluted |
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Weighted average common shares outstanding, basic and diluted |
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Comprehensive (loss) income |
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Loss available to common stockholders |
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( |
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( |
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( |
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Foreign currency translation adjustments |
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Total comprehensive (loss) income |
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$ |
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$ |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
5
GIGA-TRONICS INCORPORATED AND SUBSIDIARIES
(Unaudited)
Three and Nine Months Ended September 30, 2022
(In thousands except share data)
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Accumulated Other |
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Non- |
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Total |
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Preferred Stock |
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Common Stock |
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Accumulated |
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Comprehensive |
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Controlling |
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Stockholder's |
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Shares |
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Amount |
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Shares |
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Amount |
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Deficit |
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Loss |
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Interest |
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Equity |
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Balance at January 1, 2022 |
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$ |
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$ |
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$ |
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$ |
( | ) |
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$ |
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$ |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Capital contribution from parent |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss attributable to non-controlling interest |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance at March 31, 2022 |
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( |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Capital contribution from parent |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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( |
) |
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— |
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( |
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Net loss attributable to non-controlling interest |
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— |
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— |
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— |
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— |
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— |
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— |
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( |
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( |
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Balance at June 30, 2022 |
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( |
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( |
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Stock-based compensation |
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— |
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— |
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— |
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— |
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— |
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— |
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Capital contribution from parent |
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— |
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— |
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— |
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— |
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— |
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— |
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Shares acquired in reverse capitalization |
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— |
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— |
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— |
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— |
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— |
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Fair value of convertible note, related party, in excess of cash received |
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— |
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— |
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— |
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( |
) |
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— |
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— |
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— |
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( |
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Common stock issued on warrant exercise |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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( |
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— |
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— |
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( |
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Foreign currency translation adjustments |
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— |
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— |
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— |
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— |
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— |
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( |
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— |
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( |
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Increase in Microphase ownership from |
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