3 unchanged sentences
on December 8, 2010 and was transferred to the NASDAQ Capital Market effective November 5, 2015 where it continues to trade under the same symbol.
−Removed: There were 66 holders of record of our common stock as of October 31, 2022.
+Added: There were 53 holders of record of our common stock as of November 20, 2023.
We have never declared or paid any cash dividends on our common stock.
4 unchanged sentences
We did not make any repurchases of our common stock, and no purchases of common stock were made on our behalf during the fourth quarter of our fiscal 2023.
−Removed: Not applicable.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
2 unchanged sentences
Our products are used for general specialty industrial applications, including ultraviolet, or UV, curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, architectural lighting and entertainment lighting.
−Removed: We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including Netherlands, Taiwan, the United States, Germany and Japan.
+Added: We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including Netherlands, Taiwan, the United States, Norway and Japan.
We also sell our “Enhanced Vertical,”
7 unchanged sentences
The following are key factors that we believe affect our financial condition, results of operations and business:
−Removed: COVID-19 Pandemic.
−Removed: In consideration of the health and well-being of our employees, customers and communities, and in support of efforts to contain the spread of the virus, we have taken several precautionary measures and adjusted our operational needs.
−Removed: Our business, financial condition, liquidity and operating results have been, and may continue to be, adversely affected by COVID-19 and related restrictions.
−Removed: The conditions caused by the COVID-19 pandemic have adversely affected our customers’
−Removed: ability or willingness to purchase our products or services, delayed prospective customers’
−Removed: purchasing decisions, adversely impacted our ability to provide or deliver products and on-site services to our customers, delayed the provisioning of our offerings, or lengthened payment terms, which have adversely affected and could continue to adversely affect our future sales, operating results and overall financial performance.
−Removed: To avoid cash shortage due to the pandemic, we applied and received subsidies from the Taiwan government in fiscal 2021.
−Removed: Our bank granted us a deferment period for twelve months starting from May 2020 until April 2021.
−Removed: During this period, we did not need to pay the monthly payments of the principal but only the interest.
−Removed: We have also devoted ourselves to new product development and expect these new products could bring in new revenue, offsetting the losses resulted from existing customers’
−Removed: delayed purchasing.
−Removed: However, given the ongoing and evolving economic and business impact of the COVID-19 pandemic and subsequent variants, we may be required to further revise certain accounting estimates and judgments, which could have a material adverse effect on our financial position and results of operations.
Our ability to raise additional debt funding, sell additional equity securities and improve our liquidity.
−Removed: We need to improve our liquidity, access alternative sources of funding and obtain additional equity capital or credit when necessary for our operations.
+Added: We need to improve our liquidity, access alternative sources of funding and obtain additional equity capital or debt when necessary for our operations.
In July 2021, we established an at-the-market equity program (“ATM”) that allows us to sell up to $20 million of shares of our common stock from time to time.
−Removed: During fiscal 2022, we sold 286,328 shares of our common stock pursuant to the ATM program for net proceeds of $964,473.
+Added: During fiscal years 2023 and 2022, we sold zero shares and 286,328 shares of our common stock pursuant to the ATM program for net proceeds of zero and $964,473, respectively.
However, we may not be able to obtain such debt funding or sell equity securities on terms that are favorable to us, or at all.
14 unchanged sentences
Competition in the markets for LED products is intense, and we expect that competition will continue to increase, thereby creating a highly aggressive pricing environment.
−Removed: For example, some of our competitors have in the past reduced their average selling prices, and the resulting competitive pricing pressures have caused us to similarly reduce our prices, accelerating the decline in our revenues and the gross margin of our products.
+Added: For example, some of our competitors have in the past reduced their average selling prices, and the resulting competitive pricing pressures have caused us to similarly reduce our prices, accelerating the decline in our revenues and the gross
+Added: margin of our products.
When prices decline, we must also write down the value of our inventory.
37 unchanged sentences
For the years ended August 31, 2023 and 2022, sales to our three largest customers, in the aggregate, accounted for 53% and 59% of our revenues, respectively.
−Removed: Revlon, our largest customer in 2021 and 2022, filed for Chapter 11 bankruptcy in June 2022, which resulted in a write off receivables of $126 thousand.
−Removed: If Revlon is not able to reorganize its business successfully, our revenue and financial results could be adversely impacted.
Intellectual property issues.
1 unchanged sentence
Defending against any intellectual property infringement claims would likely result in costly litigation and ultimately may lead to our not being able to manufacture, use or sell products found to be infringing.
−Removed: In June 2012, we settled an intellectual property dispute involving Cree.
−Removed: We agreed to dismiss amended complaints filed against each other without prejudice.
−Removed: We agreed to the entry of a permanent injunction that was effective October 1, 2012 that precludes us from (and/or from assisting others in) making, using, importing, selling and/or offering to sell in the United States certain accused products and/or any device that includes such an accused product after that date and to payment of a settlement fee for past damages.
−Removed: All accused products sold before the date of settlement are released under this agreement and our customers and distributors are specifically released.
−Removed: All remaining claims between Cree and us were withdrawn without prejudice, with each retaining the right to assert them in the future.
However, other third parties may also assert infringement claims against our customers with respect to our products, or our customers’
4 unchanged sentences
Cash position.
−Removed: Our cash and cash equivalents decreased to $4.3 million as of August 31, 2022 primarily due to the operating loss in fiscal year of 2022.
+Added: Our cash and cash equivalents were $2.6 million and $4.3 million for August 31, 2023 and 2022, respectively.
We have implemented actions to accelerate operating cost reductions and improve operational efficiencies.
The plan is further enhanced through the fabless business model in which we implemented certain workforce reductions and are exploring the opportunities to sell certain equipment related to the manufacturing of vertical LED chips, in order to reduce the idle capacity charges and minimize our research and development activities associated with chips manufacturing operation.
−Removed: In December 2019, we issued convertible unsecured promissory notes with a principal sum of $2 million, of which, $600 thousand convertible notes were converted into 200 thousand shares of common stock in May 2020.
−Removed: On May 26, 2021 the Notes were extended with the same terms and interest rate for one year and mature on May 30, 2022, and on May 26, 2022, the Notes were further extended with the same terms and interest rate for one year and now mature on May 30, 2023.
−Removed: As of August 31, 2022 and 2021, the outstanding principal of these notes totaled $1.4 million.
−Removed: Based on our current financial projections, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months.
+Added: Based on our current financial projections and assuming our outstanding notes are converted or extended, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months.
Components of Consolidated Statements of Operations
15 unchanged sentences
Our revenues attributable to our ten largest customers accounted for 91% and 88% of our revenues for the years ended August 31, 2023 and 2022, respectively.
−Removed: Our revenues have been concentrated in a few select markets, including the Netherlands, Taiwan, the United States, Germany and Japan.
+Added: Our revenues have been concentrated in a few select markets, including the Netherlands, Taiwan, the United States and Japan.
Net revenues generated from these countries, in the aggregate, accounted for 89% and 83% of our net revenues for the years ended August 31, 2023 and 2022, respectively.
21 unchanged sentences
Selling, general and administrative.
−Removed: Selling, general and administrative expenses consist primarily of salaries, bonuses and other benefits (including stock‑based compensation expenses) for our administrative, sales and marketing personnel, expenses for professional services, which include fees and expenses for accounting, legal, tax and valuation services, amortization and depreciation related expenses, marketing related travel, lease expenses, entertainment expenses, allowance for doubtful accounts and general office related expenses, as well
−Removed: as compensation to our directors.
+Added: Selling, general and administrative expenses consist primarily of salaries, bonuses and other benefits (including stock‑based compensation expenses) for our administrative, sales and marketing personnel, expenses for professional services, which include fees and expenses for accounting, legal, tax and valuation services, amortization and depreciation related expenses, marketing related travel, lease expenses, entertainment expenses, allowance for doubtful accounts and general office related expenses, as well as compensation to our directors.
We expect our selling, general and administrative expenses to decrease as we continue to implement cost reduction initiatives, such as spending controls, and as we continue to streamline our operations.
1 unchanged sentence
lived assets, net.
−Removed: We recognized a gain of $196 thousand and $286 thousand on the disposal of long-lived assets for the years ended August 31, 2022 and 2021, respectively.
+Added: We recognized a gain of $0 and $196 thousand on the disposal of long-lived assets for the years ended August 31, 2023 and 2022, respectively.
Due to the excess capacity charges that we have suffered for a few years, considering the risk of technological obsolescence and according to the production plan built based on our sales forecast, we disposed of a certain level of our idle equipment.
7 unchanged sentences
Other income, net.
−Removed: Other income for the years ended August 31, 2022 and 2021 primarily consists of rental income from the lease of spare space in our Hsinchu building and a government subsidy for the COVID-19 pandemic impact.
+Added: Other income for the years ended August 31, 2023 and 2022 primarily consists of rental income from the lease of spare space in our Hsinchu building.
Foreign currency transaction gain (loss), net.
−Removed: We recognized a net foreign currency transaction loss of $642 thousand and a net gain of $342 thousand for the years ended August 31, 2022 and 2021, respectively, primarily due to the appreciation of the U.S.
+Added: We recognized foreign currency transaction loss of $52 thousand and $642 thousand for the years ended August 31, 2023 and 2022, respectively, primarily due to the appreciation of the U.S.
dollar against the NT dollar from bank deposits and accounts payable held by Taiwan SemiLEDs and Taiwan Bandaoti Zhaoming Co., Ltd.
65 unchanged sentences
There is significant judgment involved with the estimates of excess and obsolescence and if our estimates regarding customer demand or other factors are inaccurate or actual market conditions or technological changes are less favorable than those estimated by management, additional future inventory write‑downs may be required that could adversely affect our operating results.
−Removed: Inventory write‑downs totaled $807 thousand and $659 thousand for the years ended
−Removed: August 31, 2022 and 2021, respectively.
+Added: Inventory write‑downs totaled $627 thousand and $807 thousand for the years ended August 31, 2023 and 2022, respectively.
A majority of our inventory write‑downs during the years ended August 31, 2023 and 2022 was related to finished goods and work in process, primarily as a result of obsolescence.
29 unchanged sentences
Generally, the Company considers delivery to have occurred at the time of shipment as this is generally when title and risk of loss for the products will pass to the customer.
−Removed: The Company provides its customers with limited rights of return for non-conforming shipments and product warranty
+Added: The Company provides its customers with limited rights of return for non-conforming shipments and product warranty claims.
Based on historical return percentages, which have not been material to date, and other relevant factors, the Company estimates its potential future exposure on recorded product sales, which reduces product revenues in the consolidated statements of operations and reduces accounts receivable in the consolidated balance sheets.
The Company also provides standard product warranties on its products, which generally range from three months to two years.
−Removed: Management estimates the Company’s warranty obligations as a percentage of revenues, based on historical knowledge of warranty costs and other relevant factors.
+Added: Management estimates the Company’s warranty obligations as a percentage of revenues,
+Added: based on historical knowledge of warranty costs and other relevant factors.
To date, the related estimated warranty provisions have been insignificant.
26 unchanged sentences
On August 31, 2023 the exchange rate was 31.86 NT dollars to one U.S.
−Removed: On October 31, 2022, the exchange rate was 32.22 NT dollars to one U.S.
+Added: On November 20, 2023, the exchange rate was 31.64 NT dollars to one U.S.
No representation is made that the NT dollar or U.S.
19 unchanged sentences
Other income (expenses):
+Added: Investments loss
Interest expenses, net
16 unchanged sentences
Revenues, net
−Removed: Our revenues increased by 49% from $4.7 million for the year ended August 31, 2021 to $7.1 million for the year ended August 31, 2022.
−Removed: The increase in revenues was driven primarily by a $1.6 million increase in revenues attributable to sales of LED components and a $905 thousand increase in other revenues, offset in part by a $202 thousand decrease in revenues attributable to the sales of LED chips and lighting products.
−Removed: Revenues attributable to the sales of our LED components increased by 49% from $3.3 million for the year ended August 31, 2021 to $4.9 million for the year ended August 31, 2022.
−Removed: The increase in revenues attributable to sales of LED components was primarily due to a result of higher volume of sales of LED components products.
−Removed: We have adopted a strategy to adjust our product mix by exiting certain high volume but low unit selling price product lines in response to the general trend of lower average selling prices for products that have been available in the market for some time and to focus on the profitable products.
+Added: Our revenues decreased by 15% from $7.1 million for the year ended August 31, 2022 to $6.0 million for the year ended August 31, 2023.
+Added: The decrease in revenues was driven primarily by a $1.5 million decrease in revenues attributable to sales of LED components and a $259 thousand decrease in revenues attributable to the sales of LED chips and lighting products, offset by a $706 thousand increase in other revenues.
+Added: Revenues attributable to the sales of our LED components decreased by 31% from $4.9 million for the year ended August 31, 2022 to $3.3 million for the year ended August 31, 2023.
+Added: The decrease in revenues attributable to sales of LED components was primarily due to an unfavorable product mix, hence with lower volume of sales of LED components products.
Revenues attributable to the sales of lighting products represented 5% and 8% of our revenues for the years ended August 31, 2023 and 2022, respectively.
−Removed: The decrease in revenues attributable to the sales of lighting products was mainly due to a lower in demand on LED luminaries and retrofits and fewer non-recurring project-based orders for LED lighting products.
−Removed: Revenues attributable to the sales of our LED chips represented 2% and 4%, respectively, of our revenues for the years ended August 31, 2022 and 2021, respectively, and the slight decrease was primarily due to a lower volumes of LED chips sold in the fiscal year ended August 31, 2022.
+Added: The decrease in revenues attributable to the sales of lighting products was mainly due to lower demand for LED luminaries and retrofits and fewer non-recurring project-based orders for LED lighting products.
+Added: Revenues attributable to the sales of our LED chips represented 2% of our revenues for both the years ended August 31, 2023 and 2022, and the slight decrease was primarily due to a lower volumes of LED chips sold in the fiscal year ended August 31, 2023.
Revenues attributable to other revenues represented 37% and 21% of our revenues for the years ended August 31, 2023 and 2022, respectively.
−Removed: The increase in revenues attributable to other revenues was primarily due to the provision of services and the sale of raw materials.
+Added: The increase in other revenues was primarily due to the provision of services and the sale of raw materials.
+Added: We have adopted a strategy to adjust our product mix by exiting certain high volume but low unit selling price product lines in response to the general trend of lower average selling prices for products that have been available in the market for some time and to focus on the profitable products.
Cost of Revenues
−Removed: Our cost of revenues increased by 53% from $3.7 million for the year ended August 31, 2021 to $5.7 million for the year ended August 31, 2022.
−Removed: The increase in cost of revenues was primarily due to the increase of volumes sold in LED components and lighting products.
+Added: Our cost of revenues decreased by 12% from $5.7 million for the year ended August 31, 2022 to $5.0 million for the year ended August 31, 2023.
+Added: The decrease in cost of revenues was primarily due to the decrease of volumes sold in LED components and lighting products.
Inventory write‑downs totaled $627 thousand and $807 thousand for the years ended August 31, 2023 and 2022, respectively.
A majority of our inventory write-downs during the years ended August 31, 2023 and 2022 was related to finished goods and work in process, primarily as a result of obsolescence.
−Removed: Our gross profit increased from $1.0 million for the year ended August 31, 2021 to $1.4 million for the year ended August 31, 2022.
−Removed: Our gross margin percentage was 20% for the year ended August 31, 2022, as compared to 22% for the year ended August 31, 2021 as a result of an increase in the sales of products with lower margin.
+Added: Our gross profit decreased from $1.4 million for the year ended August 31, 2022 to $1.0 million for the year ended August 31, 2023.
+Added: Our gross margin percentage was 17% for the year ended August 31, 2023, as compared to 20% for the year ended August 31, 2022 as a result of a decrease in sales of products with higher margin.
Operating Expenses
7 unchanged sentences
Our research and development expenses decreased from $1.5 million for the year ended August 31, 2022 to $1.4 million for the year ended August 31, 2023.
−Removed: The slight decrease was primarily due to a $173 thousand decrease in materials and supplies used in research and development, offset partially by an increase in payroll expense and other operating expenses.
+Added: The slight decrease was primarily due to a $30 thousand decrease in materials and supplies used in research and development, and a $52 thousand decrease in payroll expense.
Selling, general and administrative.
Our selling, general and administrative expenses decreased from $3.3 million for the year ended August 31, 2022 to $3.1 million for the year ended August 31, 2023.
−Removed: The decrease was mainly attributable to a $497 thousand decrease in bad debt expense, offset partially by an increase in payroll expense, shipping and freight fees, and other various expenses.
+Added: The decrease was mainly attributable to a $136 thousand decrease in bad debt expense and a $202 thousand decrease in other expenses, offset partially by an increase in payroll expense.
Gain on disposal of long ‑
2 unchanged sentences
The decrease in the fiscal year ended August 31, 2023 was primarily due to excess capacity charges that we have suffered for several years.
−Removed: In light of the risk of technological obsolescence and according to the production plan built based on our sales forecast, we disposed of certain of our idle equipment.
Other Income (Expenses)
9 unchanged sentences
Other income, net.
−Removed: Other income, net increase from $1 million for the years ended August 31, 2021 to $1.5 million for the year ended August 31, 2022, primarily due to higher rental income and payments received under the new Patent Cross-License Agreement with CrayoNano AS.
+Added: Other income, net decreased from $1.5 million for the years ended August 31, 2021 to $1.1 million for the year ended August 31, 2023, primarily due to the decrease of payments received under the Patent Cross-License Agreement with CrayoNano AS.
Foreign currency transaction gain (loss), net.
−Removed: We recognized a net foreign currency transaction loss of $642 thousand and a net gain of $342 thousand for the years ended August 31, 2022 and 2021, respectively, primarily due to the appreciation of the U.S.
+Added: We recognized a net foreign currency transaction loss of $52 thousand and a net foreign currency transaction loss of $642 thousand for the years ended August 31, 2023 and 2022, respectively, primarily due to the appreciation of the U.S.
dollar against the NT dollar from bank deposits and accounts payables held by Taiwan SemiLEDs and Taiwan Bandaoti Zhaoming Co., Ltd.
1 unchanged sentence
Income Tax Expense (Benefit)
−Removed: Our effective tax rate is expected to be approximately zero for both fiscal 2022 and 2021, since Taiwan SemiLEDs incurred losses, and because we provided a full valuation allowance on all deferred tax assets, which consisted primarily of net operating loss carryforwards and foreign investment loss.
+Added: Our effective tax rate is expected to be approximately zero for both fiscal year 2023 and 2022, since Taiwan SemiLEDs incurred losses, and because we provided a full valuation allowance on all deferred tax assets, which consisted primarily of net operating loss carryforwards and foreign investment loss.
As of August 31, 2023 and 2022, we recognized full valuation allowances of $23.8 million and $22.5 million, respectively, on our net deferred tax assets to reflect uncertainties related to our ability to utilize these deferred tax assets, which consist primarily of certain net operating loss carryforwards and foreign investment loss.
13 unchanged sentences
Net Income (Loss) attributable to noncontrolling interests
−Removed: We recognized net income attributable to non-controlling interests of $18 thousand and a net loss attributable to non-controlling interests of $6 thousand for the year ended August 31, 2022 and 2021, respectively, which was attributable to the share of the net losses of Taiwan Bandaoti Zhaoming Co., Ltd.
+Added: We recognized zero net income attributable to non-controlling interests and a net loss attributable to non-controlling interests of $18 thousand for the year ended August 31, 2023 and 2022, respectively, which was attributable to the share of the net losses of Taiwan Bandaoti Zhaoming Co., Ltd.
held by the non-controlling holders.
−Removed: Non-controlling interests represented 2.63% and 3.05% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd.
−Removed: as of August 31, 2022 and 2021, respectively.
+Added: Non-controlling interests represented 2.63% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd.
+Added: for both the years ended August 31, 2023 and 2022.
Liquidity and Capital Resources
19 unchanged sentences
These loans are secured by an $82 thousand (NT$2.5 million) security deposit and a first priority security interest on the Company’s headquarters building.
−Removed: Due to the impact of the COVID-19 pandemic, the bank agreed to give us a deferment period for twelve months starting from May 2020 until April 2021.
−Removed: During this period, we did not need to pay the monthly payments of the principal but only the interest.
Starting from May 2021, the first note payable requires monthly payments of principal in the amount of $25 thousand plus interest over the 74-month term of the note with final payment to occur in July 2027 and, as of August 31, 2023, our outstanding balance on this note payable was approximately $1.1 million.
1 unchanged sentence
Property, plant and equipment pledged as collateral for our notes payable were $2.3 million and $2.8 million as of August 31, 2023 and 2022, respectively.
−Removed: On January 8, 2019, we entered into loan agreements with each of our Chairman and Chief Executive Officer and our largest shareholder, with aggregate amounts of $3.2 million, and an annual interest rate of 8%.
+Added: On January 8, 2019, we entered into loan agreements with each of our Chairman and Chief Executive Officer and our largest shareholder, with aggregate amounts of $1.7 million and $1.5 million, respectively, and an annual interest rate of 8%.
All proceeds of the loans were exclusively used to return the deposit to Formosa Epitaxy Incorporation in connection with the proposed sale of our headquarters building pursuant to the agreement dated December 15, 2015.
We were initially required to repay the loans of $1.5 million on January 14, 2021 and $1.7 million on January 22, 2021, respectively.
−Removed: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022, and on January 14, 2022, the maturity date of these loans was further extended with same terms and interest rate for one more year to January 15, 2023.
+Added: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022, and on January 14, 2022, the maturity date of these loans was extended again with same terms and interest rate for one more year to January 15, 2023.
+Added: On January 13, 2023, the maturity date of these loans was further extended with same terms and interest rate for one year to January 15, 2024.
As of August 31, 2023 and 2022, these loans totaled $3.2 million, respectively.
The loans are secured by a second priority security interest on the Company's headquarters building.
−Removed: On November 25, 2019 and on December 10, 2019, we issued convertible unsecured promissory notes to each of our Chairman and Chief Executive Officer and our largest shareholder (the “Holders”), with a principal sum of $2 million and an annual interest rate of 3.5%.
−Removed: Principal and accrued interest was due on demand by the Holders on and at any time after May 30, 2021 (the “Maturity Date”).
−Removed: The outstanding principal and unpaid accrued interest of the Notes may be converted into our Common Stock based on a conversion price of $3 dollars per share, at the option of the Holders any time from the date of the Notes.
−Removed: On May 25, 2020, the Holders each converted $300 thousand of notes into 100,000 shares of our common stock.
−Removed: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and were scheduled to mature on May 30, 2022, and on May 26, 2022, the Notes were further extended with the same terms and interest rate for one year and now mature on May 30, 2023.
−Removed: As of August 31, 2022 and 2021, the outstanding principal of these notes totaled $1.4 million.
+Added: On November 25, 2019 and on December 10, 2019, we issued the Notes to J.R.
+Added: Simplot Company, our largest shareholder, and Trung Doan, our Chairman and Chief Executive Officer, (together, the “Holders”) with a principal sum of $1.5 million and $500 thousand, respectively, and an annual interest rate of 3.5%.
+Added: Principal and accrued interest is due on demand by the Holders on and at any time after May 30, 2021.
+Added: On February 7, 2020, J.R.
+Added: Simplot Company assigned all of its right, title and interest in the Notes to Simplot Taiwan Inc.
+Added: The outstanding principal and unpaid accrued interest of the Notes may be converted into shares of our common stock at a conversion price of $3.00 per share, at the option of the Holders any time from the date of the Notes.
+Added: On May 25, 2020, each of the Holders converted $300,000 of the Notes into 100,000 shares of our common stock.
+Added: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and a maturity date of May 30, 2022.
+Added: On May 26, 2022, the Notes were second extended with the same terms and interest rate for one year and a maturity date of May 30, 2023.
+Added: On June 6, 2023, we entered into the Third Amendment to the Convertible Unsecured Promissory Notes ("Third Amendments") to amend the Notes to (i) extend the maturity date from May 30, 2023 to May 30, 2024, and (ii) change the conversion price from $3.00 to $2.046 per share.
+Added: All other terms and conditions of the Notes remain the same.
+Added: As of August 31, 2023 and August 31, 2022, the outstanding principal of these notes totaled $1.4 million.
Working Capital
−Removed: We have incurred significant losses since inception, including net losses attributable to SemiLEDs stockholders of $2.7 million and $2.9 million during the years ended August 31, 2022 and 2021, respectively.
−Removed: Net cash used in operating activities for the year ended August 31, 2022 was $1.5 million.
+Added: We have incurred significant losses since inception, including net losses attributable to SemiLEDs stockholders of $2.7 million both during the years ended August 31, 2023 and 2022.
+Added: Net cash used in operating activities for the year ended August 31, 2023 was $984 thousand.
As of August 31, 2023, we had cash and cash equivalents of $2.6 million.
6 unchanged sentences
We will pay a commission to the Agent of 3.0% of the gross proceeds of the sale of the Placement Shares sold under the Agreement and reimburse the Agent for certain expenses.
−Removed: In the fourth quarter of fiscal 2021, we sold 344,391 shares of common stock for gross proceeds of $4.2 million with $125 thousand paid as placement agent fees under our ATM program.
−Removed: During the year ended August 31, 2022, we sold 286,328 shares of common stocks for gross proceeds of $995 thousand with $31 thousand paid as placement agent fees under our ATM program.
−Removed: We estimate that our cash requirements to service debt and contractual obligations in fiscal 2023 is approximately $5.1 million, which we expect to fund through the issuance of additional equity under the ATM program.
+Added: During the year ended August 31, 2022, we sold 286,328 shares of common stock for gross proceeds of $995 thousand with $31 thousand paid as placement agent fees under our ATM program.
+Added: During the year ended August 31, 2023, we did not sell any shares of common stock under our ATM program.
+Added: We estimate that our cash requirements to service debt and contractual obligations in fiscal 2024 is approximately $5.1 million, which we expect to fund through the issuance of additional equity under the ATM program, and other sources such as private equity funding.
Based on our current financial projections and assuming the successful implementation of our liquidity plans, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months and beyond.
However, there can be no assurances that our planned activities will be successful in raising additional capital, reducing losses and preserving cash.
−Removed: If we are not able to generate positive cash flows from operations, we may need to consider alternative financing sources and seek additional funds through public or private equity financings or from other sources, or refinance our indebtedness, to support our working capital requirements or for other purposes.
+Added: If we are not able to generate positive cash flows from operations, we may need to consider alternative financing sources and seek additional funds through public or private equity financings or from other sources, or refinance or extend the maturity of our indebtedness, to support our working capital requirements or for other purposes.
There can be no assurance that additional debt or equity financing will be available to us or that, if available, such financing will be available on terms favorable to us.
3 unchanged sentences
Net cash used in operating activities
−Removed: Net cash (used in) provided by investing activities
−Removed: Net cash provided by financing activities
+Added: Net cash used in investing activities
+Added: Net cash (used in) provided by financing activities
Cash Flows Used in Operating Activities
+Added: Net cash used in operating activities was $984 thousand for the year ended August 31, 2023, consisting primarily of a net loss of $2.7 million and a decrease in inventory of $1.0 million, partially offset by depreciation and amortization of $1.0 million and stock-based compensation expense of $518 thousand and provision for inventory write-down of $627 thousand and accrued liabilities of $398 thousand.
Net cash used in operating activities was $1.5 million for the year ended August 31, 2022, consisting primarily of a net loss of $2.7 million and a decrease in inventory of $940 thousand and accounts payable of $388 thousand, partially offset by depreciation and amortization of $938 thousand and stock-based compensation expense of $459 thousand and provision for inventory write-down of $807 thousand.
−Removed: Net cash used in operating activities was $1.7 million for the year ended August 31, 2021, consisting primarily of a net loss of $2.9 million and a decrease in inventory of $2 million and gain on disposal of long-live assets of $286 thousand, partially offset by depreciation and amortization of $897 thousand and stock based compensation expense of $186, bad debt expense of $540 thousand and provision for inventory write-downs of $659 thousand and decreased in accrued expenses and other current liabilities of $578 thousand.
−Removed: Cash Flows (Used in) Provided by Investing Activities
+Added: Cash Flows Used in Investing Activities
+Added: Net cash used in investing activities was $321 thousand for the year ended August 31, 2023, consisting primarily of a $200 thousand in cash used in the purchase of machinery and equipment, $28 thousand for development of intangible assets and $93 thousand for equity method investment.
Net cash used in investing activities was $113 thousand for the year ended August 31, 2022, consisting primarily of the proceeds from the sales of property, plant and equipment of $196 thousand as a result of the disposal of idle machinery, partially offset by a $280 thousand in cash used in the purchase of machinery and equipment and a $13 thousand for development of intangible assets.
−Removed: Net cash provided by investing activities was $159 thousand for the year ended August 31, 2021, consisting primarily of the proceeds from the sales of property, plant and equipment of $291 thousand as a result of the disposal of idle machinery, partially offset by a $118 thousand in cash used in the purchase of machinery and equipment and a $14 thousand for development of intangible assets.
−Removed: Cash Flows Provided by Financing Activities
+Added: Cash Flows (Used in) Provided by Financing Activities
+Added: Net cash used in financing activities was $456 thousand for the year ended August 31, 2023, consisting primarily of $456 thousand in repayment of long-term debt.
Net cash provided by financing activities was $490 thousand for the year ended August 31, 2022, consisting primarily of $995 thousand from the issuance of common stock under the ATM program, partially offset by $482 thousand in repayment of long-term debt.
−Removed: Net cash provided by financing activities was $4.0 million for the year ended August 31, 2021, consisting primarily of $4.2 million from the issuance of common stock in our ATM program.
Capital Expenditures
79 unchanged sentences
of $ 173 and $ 181 as of August 31, 2023 and August 31, 2022, respectively
+Added: Inventories, net
Prepaid expenses and other current assets
41 unchanged sentences
Other income (expenses):
+Added: Investments loss
Interest expenses, net
32 unchanged sentences
Issuance of convertible notes
−Removed: Conversion of notes into common stocks
Change ownership in SBDI*
4 unchanged sentences
Stock-based compensation
−Removed: Issuance of common stock for public placement
−Removed: Issuance of convertible notes
−Removed: Change ownership in SBDI*
+Added: Convertible notes equity component
Comprehensive income (loss)
15 unchanged sentences
Gain on disposals of long-lived assets, net
−Removed: Other non-cash expenses
Accounts receivable
6 unchanged sentences
Proceeds from sales of property, plant and equipment
+Added: Payments to acquire equity method investments
Payments for development of intangible assets
Placement of refundable deposits
−Removed: Net cash (used in) provided by investing activities
+Added: Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES:
2 unchanged sentences
Acquisition of noncontrolling interests
−Removed: Net cash provided by financing activities
+Added: Net cash (used in) provided by financing activities
Changes in cash balance included in deconsolidated subsidiaries
Effect of exchange rate changes on cash and cash equivalents
−Removed: NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
+Added: NET DECREASE IN CASH AND CASH EQUIVALENTS
CASH, AND CASH EQUIVALENTS, AND RESTRICTED CASH—Beginning of year
3 unchanged sentences
Cash paid for income taxes
−Removed: NONCASH INVESTING AND FINANCING ACTIVITIES:
−Removed: Accrual related to property, plant and equipment
See notes to consolidated financial statements.
6 unchanged sentences
LED components, modules and systems have become the most important part of its business.
−Removed: A portion of the Company’s business consists of the sale of contract manufactured LED products.
−Removed: The Company’s customers are concentrated in a few select markets, including the United States, Japan, Germany, Taiwan and Netherlands.
+Added: A portion of the Company’s business c onsists of the sale of contract manufactured LED products.
+Added: The Company’s customers are concentrated in a few select markets, including the United States, Japan, Norway, Taiwan and Netherlands.
As of August 31, 2023, SemiLEDs had two wholly owned subsidiaries.
12 unchanged sentences
The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.
−Removed: The Company has suffered losses from operations of $ 3.2 million and $ 3.9 million, and used net cash in operating activities of $ 1.5 million and $ 1.7 million for the years ended August 31, 2022 and 2021, respectively.
+Added: The Company has suffered losses from operations of $ 3.4 million and $ 3.2 million, and used net cash in operating activities of $ 984 thousand and $ 1.5 million for the years ended August 31, 2023 and 2022, respectively.
These facts and conditions have raised substantial doubt about the Company’s ability to continue as a going concern, even though gross profit on product sales was $ 1.0 million for the year ended August 31, 2023 compared to $ 1.4 million for the year ended August 31, 2022.
On August 31, 2023, the Company’s cash and cash equivalents decreased to $ 2.6 million mainly due to operating losses.
−Removed: Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business.
+Added: Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s o bligations as they become due for a reasonable period of time, and allow the development of its core business.
The plan includes:
72 unchanged sentences
Denominated in other currencies
−Removed: China (including Hong Kong);
−Removed: Denominated in Renminbi
−Removed: Denominated in H.K.
Total cash and cash equivalents
13 unchanged sentences
Cash and demand deposits
−Removed: Cash equivalents;
−Removed: Money market funds
Total cash and cash equivalents
5 unchanged sentences
The Company’s subsidiaries use the local currency as their functional currency.
−Removed: The assets and liabilities of the subsidiaries are, therefore, translated into the U.S.
+Added: The asset s and liabilities of the subsidiaries are, therefore, translated into the U.S.
dollars at exchange rates in effect at each balance sheet date, with the resulting translation adjustments recorded to a separate component of accumulated other comprehensive income (loss) within equity.
3 unchanged sentences
Accounts receivable (including related parties with zero net book value as of August 31, 2023 and 2022, respectively) are recorded at invoiced amounts, net of allowances for doubtful accounts, and do not bear interest.
−Removed: The allowance for doubtful accounts is based on management’s assessment of the collectability of customer accounts.
+Added: The allowance for doubtful accounts is based on management’s assessment of the collectability of customer acc ounts.
Management regularly reviews the allowance by considering certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances and current economic conditions that may affect a customer’s ability to pay.
−Removed: Bad debt expenses were recognized $ 126 thousand and $ 540 thousand during the years ended August 31, 2022 and 2021, respectively.
+Added: Bad debt expenses were recognized $ 0 and $ 126 thousand during the years ended August 31, 2023 and 2022, respectively.
Inventories —
59 unchanged sentences
Research and development costs are expensed as incurred.
−Removed: Research and development costs are presented as a separate line item in the consolidated statements of operations.
+Added: Research and development costs are presented as a separate line item in the consolidated statements of operatio ns.
Advertising Costs —
4 unchanged sentences
The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions, allocating resources and assessing performance as the source for determining the Company’s reportable segments.
−Removed: During the years ended August 31, 2022 and 2021, the Chief Executive Officer has been identified as the chief operating decision maker.
+Added: During the years ended August 31, 2023 and 2022, the Chief Executive Officer has been identified as the chief operating de cision maker.
The Company’s chief operating decision maker regularly reviews consolidated assets and consolidated operating results prepared under U.S.
19 unchanged sentences
From April 2022 to May 2022, the Company purchased additional 52,000 common shares of SBDI from non-controlling shareholders.
−Removed: Therefore, noncontrolling interest in SBDI declined to 2.63 % as of August 31, 2022.
+Added: Therefore, noncontrolling interest in SBDI declined to 2.63 % as of August 31, 2022, and as of August 31, 2023.
Commitments and Contingencies —
20 unchanged sentences
ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares.
−Removed: For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights.
+Added: For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and e mbedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights.
ASU 2020-06 is effective for fiscal years beginning after December 15, 2023.
2 unchanged sentences
In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt —
−Removed: Modifications and Extinguishments (Subtopic 470-50), Compensation —
+Added: Modifications and Extinguishme nts (Subtopic 470-50), Compensation —
Stock Compensation (Topic 718), and Derivatives and Hedging —
25 unchanged sentences
Depreciation expense was $ 991 thousand and $ 915 thousand for the years ended August 31, 2023 and 2022, respectively.
−Removed: Property, plant and equipment pledged as collateral for the Company’s notes payable were $ 2.8 million and $ 3.5 million as of August 31, 2022 and 2021, respectively.
+Added: Property, plant and equipment pledged as collateral for the Company’s notes payable were $ 2.3 million and $ 2.8 millio n as of August 31, 2023 and 2022, respectively.
Intangible Assets
8 unchanged sentences
Acquired technology
−Removed: Amortization expense was $ 23 thousand and $ 18 thousand for the years ended August 31, 2022 and 2021, respectively.
+Added: Amortization expense was $ 12 tho usand and $ 23 thousand for the years ended August 31, 2023 and 2022, respectively.
No impairment charge was recognized in the year ended August 31, 2023 and 2022.
13 unchanged sentences
Equity investment without readily determinable fair value
+Added: Equity method investments, net
Total investments in unconsolidated entities
5 unchanged sentences
During the year ended August 31, 2023 and 2022, no impairment losses were recognized for the equity investments without readily determinable fair value.
+Added: Equity Method Investments
+Added: In July 2023, TSLC Corporation, the Company’s subsidiary, had a board resolution to hold an equity interest in Yi Yang Optoelectronics Co., Ltd., accounting for its equity interest using the equity method to accounts for its equity investment as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”).
+Added: Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method.
+Added: As of August 31, 2023, the Company owns 47.62 % common stock shares of Yi Yang Optoelectronics Co., Ltd.
Long ‑
7 unchanged sentences
Total long-term debt, excluding current installments
−Removed: Our long-term debt, which consisted of New Taiwan dollar (“NTD”) denominated long-term notes, convertible unsecured promissory notes and loans from the Chairman and the largest shareholder of the Company, totaled $ 6.9 million and $ 7.7 million as of August 31, 2022 and 2021, respectively.
+Added: Our long-term debt, which consisted of New Taiwan dollar (“NTD”) denominated long-term notes, convertible unsecured promissory notes and loans from the Chairman and the largest shareholder of the Company, total ed $ 6.4 million and $ 6.9 million as of August 31, 2023 and 2022, respectively.
On July 5, 2019, the Company and Mega International Commercial Bank (“Mega Bank”) entered into two NTD denominated loan agreements in an aggregate amount of $ 3.2 million (NT$ 100 million).
7 unchanged sentences
Starting from May 2021, the two notes payables to Mega Bank require monthly payments of principal in the amount of $ 24 thousand plus interest and $ 14 thousand plus interest, respectively, over the 74 -month term of the notes with final payment to occur in July 2027 .
−Removed: On January 8, 2019, the Company entered into loan agreements with each of its Chairman and Chief Executive Officer and our largest shareholder, with aggregate amounts of $ 3.2 million, and an annual interest rate of 8 %.
−Removed: All proceeds of the loans were exclusively used to return the deposit to Formosa Epitaxy Incorporation in connection with the proposed sale of our headquarters building pursuant to the agreement dated December 15, 2015.
−Removed: The Company was initially required to repay the loans of $ 1.5 million on January 14, 2021 and $ 1.7 million on January 22, 2021, respectively.
−Removed: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022 , and on January 14, 2022, the maturity date of these loans was further extended with same terms and interest rate for one more year to January 15, 2023 .
+Added: On January 8, 2019, the Company entered into loan agreements with each of the Chairman and Chief Executive Officer and the largest shareholder of the Company, with aggregate amounts of $ 1.7 million and $ 1.5 million, respectively, and an annual interest rate of 8 %.
+Added: All proceeds of the loans were exclusively used to return the deposit to Formosa Epitaxy Incorporation in connection with the proposed sale of the Company's headquarters building pursuant to the agreement dated December 15, 2015.
+Added: The Company were initially required to repay the loans of $ 1.5 million on January 14, 2021 and $ 1.7 million on January 22, 2021, respectively.
+Added: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022 , and on January 14, 2022, the maturity date of these loans was extended again with same terms and interest rate for one more year to January 15, 2023 .
+Added: On January 13, 2023, the maturity date of these loans was further extended with same terms and interest rate for one year to January 15, 2024 .
As of August 31, 2023 and 2022, these loans totaled $ 3.2 million, respectively.
The loans are secured by a second priority security interest on the Company's headquarters building.
−Removed: On November 25, 2019 and on December 10, 2019, the Company issued convertible unsecured promissory notes to each of its Chairman and Chief Executive Officer and largest shareholder (the “Holders”), with a principal sum of $ 2 million and an annual interest rate of 3.5 %.
−Removed: Principal and accrued interest was due on demand by the Holders on and at any time after May 30, 2021 (the “Maturity Date”).
−Removed: The outstanding principal and unpaid accrued interest of the Notes may be converted into our Common Stock based on a conversion price of $ 3 dollars per share, at the option of the Holders any time from the date of the Notes.
−Removed: On May 25, 2020, the Holders each converted $ 300 thousand of notes into 100,000 shares of our common stock.
−Removed: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and were scheduled to mature on May 30, 2022 , and on May 26, 2022, the Notes were further extended with the same terms and interest rate for one year and now mature on May 30, 2023 .
+Added: On November 25, 2019 and on December 10, 2019, the Company issued the Notes to J.R.
+Added: Simplot Company, its largest shareholder, and Trung Doan, our Chairman and Chief Executive Officer, (together, the “Holders”) with a principal sum of $ 1.5 million and $ 500 thousand, respectively, and an annual interest rate of 3.5 %.
+Added: Principal and accrued interest is due on demand by the Holders on and at any time after May 30, 2021 .
+Added: On February 7, 2020, J.R.
+Added: Simplot Company assigned all of its right, title and interest in the Notes to Simplot Taiwan Inc.
+Added: The outstanding principal and unpaid accrued interest of the Notes may be converted into shares of the Company’s common stock at a conversion price of $ 3.00 per share, at the option of the Holders any time from the date of the Notes.
+Added: On May 25, 2020, each of the Holders converted $ 300,000 of the Notes into 100,000 shares of the Company’s common stock.
+Added: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and a maturity date of May 30, 2022 .
+Added: On May 26, 2022, the Notes were second extended with the same terms and interest rate for one year and a maturity date of May 30, 2023 .
+Added: On June 6, 2023, the Company entered into the Third Amendment to the Convertible Unsecured Promissory Notes ("Third Amendments") to amend the Notes to (i) extend the maturity date from May 30, 2023 to May 30, 2024 , and (ii) change the conversion price from $ 3.00 to $ 2.046 per share.
+Added: All other terms and conditions of the Notes remain the same.
As of August 31, 2023 and 2022, the outstanding principal of these notes totaled $ 1.4 million.
11 unchanged sentences
Lease expense is recognized on a straight-line basis over the term of the lease.
−Removed: Lease expense related to these noncancelable operating leases were $ 166 thousand and $ 164 thousand for the years ended August 31, 2022 and 2021, respectively.
+Added: Lease expense related to these noncancelable operating leases were $ 166 t housand for both the years ended August 31, 2023 and 2022.
Balance sheet information related to the Company’s leases is presented below:
11 unchanged sentences
Operating leases
−Removed: As most of the Company’s leases do not provide an implicit rate, the Company uses its average borrowing rate from non-related parties of 1.76 % based on the information available at commencement date in determining the present value of lease payments.
+Added: As most of the Company’s leases do not provide an implicit rate, the Company uses its average borrowing rate from non-related parties of 1.76 % bas ed on the information available at commencement date in determining the present value of lease payments.
The aggregate future noncancelable minimum rental payments for the Company’s operating leases as of August 31, 2023 consist of the following (in thousands):
4 unchanged sentences
Purchase Obligations —
−Removed: The Company had purchase commitments for inventory, property, plant and equipment in the amount of $ 121 thousand and $ 101 thousand as of August 31, 2022 and 2021, respectively.
+Added: The Company had purchase commitments for inventory, property, plant and equipment in the amount of $ 116 th ousand and $ 121 thousand as of August 31, 2023 and 2022, respectively.
Litigation —
2 unchanged sentences
There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated.
−Removed: On June 21, 2017, Well Thrive Ltd.
−Removed: (“Well Thrive”) filed a complaint against the Company in the United States District Court for the District of Delaware.
−Removed: The complaint alleged that Well Thrive was entitled to return of $ 500 thousand paid toward a note purchase pursuant to a purchase agreement (the “Purchase Agreement”) effective July 6, 2016 with Dr.
−Removed: Peter Chiou, which was assigned to Well Thrive on August 4, 2016.
−Removed: Pursuant to the terms of the Purchase Agreement, the Company retained the $ 500 thousand payment as liquidated damages.
−Removed: Well Thrive alleged that the liquidated damages provision was unenforceable as an illegal penalty and did not reflect the amount of purported damages.
−Removed: On March 13, 2018, the Company filed a motion to enforce a settlement agreement between the parties to dismiss the lawsuit with prejudice.
−Removed: On March 27, 2018, Well Thrive filed an answering brief in opposition to the Company’s motion on the basis that Well Thrive never consented to dismiss the case.
−Removed: On January 2, 2019, the judge denied without prejudice the motion filed by the Company, because there remained some question as to whether Well Thrive’s former lawyers and Dr.
−Removed: Chiou had authority from Well Thrive to settle this case.
−Removed: The Court held a trial on March 2, 2020.
−Removed: After the trial, the judge ordered both sides to prepare post-trial briefs and proposed findings of fact for the Court to be submitted before end of April 2020.
−Removed: Both sides submitted post-trial briefs and proposed findings of fact on April 30, 2020.
−Removed: On December 21, 2020, the judge, following a hearing, issued her judgment, which ordered the Company to return the $ 500 thousand to Well Thrive, and required both parties, on or before January 6, 2021, to submit information on the appropriate amount of interest to be added.
−Removed: On January 6, 2021, the Company filed a brief arguing that there should not be an award of prejudgment interest and Well Thrive was arguing for the amount of $ 135,774 in pre-judgement interest.
−Removed: On April 8, 2021, the judge issued a ruling requiring the Company to pay pre-judgment interest in the amount of $ 123,000 to Well Thrive.
−Removed: On May 7, 2021, the Court of Appeal issued an order requiring the parties to mediate on June 28, 2021.
−Removed: The Company and Well Thrive Ltd.
−Removed: entered into an Agreement Regarding Satisfaction of Judgment dated June 14, 2021, as amended on June 16, 2021 and June 21, 2021 (collectively, the “Settlement Agreement”), pursuant to which the Company issued 35,365 shares (the “
−Removed: Settlement Shares”) of its common stock to Well Thrive Ltd.
−Removed: The Settlement Shares were issued to satisfy the amount payable under the Settlement Agreement and, accordingly, no cash proceeds were received by the Company from the issuance of the Settlement Shares.
As of August 31, 2023, there was no pending litigation that could have a material impact on the Company’s financial position, results of operations or cash flows.
−Removed: On May 25, 2020, J.R.
−Removed: Simplot Company, the largest shareholder of the Company, and Trung Doan, the Chairman and Chief Executive Officer of the Company, each converted $ 300,000 of convertible unsecured promissory notes into 100,000 shares of the Company’s common stock (see Note 5).
−Removed: In June 2021, the Company and Well Thrive Ltd., entered into the Settlement Agreement pursuant to which the Company issued 35,365 Settlement Shares to Well Thrive Ltd., valued at $ 650,000 .
−Removed: The Settlement Shares were issued to satisfy the amount payable under the Settlement Agreement and, accordingly, no cash proceeds were received by the Company from the issuance of the Settlement Shares (see Note 6).
On July 6, 2021, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”).
3 unchanged sentences
The Company will pay a commission to the Agent of 3.0 % of the gross proceeds of the sale of the Placement Shares sold under the Agreement and reimburse the Agent for certain expenses.
−Removed: In July 2021, 344,391 shares of the Company’s common stock were issued for gross proceeds of $ 4,175,225 , before placement agent fees and legal fees of $ 126,576 .
−Removed: During the year ended August 31, 2022, the Company sold 286,328 shares of the Company's common stock for gross proceeds of $ 995,099 before placement agent fees and bank fees of $ 30,626 .
+Added: During the year ended August 31, 2022, the Company sold 286,328 shares of common stock for gross proceeds of $ 995 thousand with $ 31 thousand paid as placement agent fees under our ATM program.
+Added: During the year ended August 31, 2023, the C ompany did no t sell any shares of its common stock under its ATM program.
STOCK ‑
4 unchanged sentences
On July 31, 2019, the stockholders approved an increase in the authorized share reserve under the 2010 plan by an additional 500 thousand shares, to extend expiration of the 2010 Plan to November 3, 2023 , to remove the IRS Code section 162(m) provisions, and to modify the maximum grant limit to 35 thousand shares to one person in a one year period.
−Removed: On September 25, 2020,
−Removed: the stockholders approved an amendment to the 2010 Equity Incentive Plan to increase the authorized shares reserve by an additional 400 thousand shares.
−Removed: Prior to SemiLEDs’
−Removed: initial public offering, the Company had another stock‑based compensation plan (the “2005 Plan”), but awards are made from the 2010 Plan after the initial public offering.
−Removed: Options outstanding under the 2005 Plan continue to be governed by its existing terms.
−Removed: A total of 1,421 thousand and 1,421 thousand shares were reserved for issuance under the 2010 Plan of August 31, 2022 and 2021, respectively.
−Removed: As of August 31, 2022 and 2021, there were 820 thousand and 1,026 thousand shares of common stock available for future issuance under the 2010 Plan, respectively.
+Added: On September 25, 2020, the stockholders approved an amendment to the 2010 Equity Incentive Plan to increase the authorized shares reserve by an additional 400 thousand shares.
+Added: On March 17, 2023, the Board approved the amendment of the 2010 Plan to extend the term to March 17, 2033 , which was approved by the Company's stockholders at the annual meeting held on May 18, 2023.
+Added: A total of 1,421 and 1,421 thousand shares were reserved for issuance under the 2010 Plan of August 31, 2023 and 2022, respectively.
+Added: As of August 31, 2023 and 2022, there were 541 tho usand and 820 thousand shares of common stock available for future issuance under the 2010 Plan, respectively.
+Added: In July 2023, SemiLEDs granted 10 thousand restricted stock units to its employees, which will vest 25 % every three months from the vesting commencement date of July 7, 2023 and will become fully vested upon a change in control.
+Added: The grant-date fair value of the restricted stock units was $ 2.44 per unit.
+Added: In April 2023, SemiLEDs granted 110.5 thousand restricted stock units to its employees, which will vest 12.5 % every three months from the vesting commencement date of April 25, 2023 and will become fully vested upon a change in control.
+Added: The grant-date fair value of the restricted stock units was $ 1.87 per unit.
+Added: In March 2023, SemiLEDs granted 20 thousand restricted stock units to its employee, which will vest 25 % every anniversary starting from the vesting commencement date of March 8, 2023 and will become fully vested upon a change in control.
+Added: The grant-date fair value of the restricted stock units was $ 2.30 per unit.
+Added: In November 2022, SemiLEDs granted 15 thousand restricted stock units to its directors that vest 25 % every three months on February 7, 2023, May 7, 2023, August 7, 2023 and November 7, 2023.
+Added: 100% of the unvested stock units was immediately vested on May 18, 2023, the date of the 2023 annual meeting.
+Added: The grant-date fair value of the restricted stock units was $ 2.33 per unit.
In November 2021, SemiLEDs granted 15 thousand restricted stock units to its directors that vest in quarterly installments on February 12, 2022, May 12, 2022, August 12, 2022 and November 12, 2022.
4 unchanged sentences
In November 2020, SemiLEDs granted 15 thousand restricted stock units to its directors, which vested in quarterly installments on each of February 12, 2021, May 12, 2021, August 12, 2021 and November 12, 2021.
−Removed: Because the 2021 annual meeting was held on September 24 , 2021, 100% of the stock units immediately vested on the date of the 2021 annual meeting.
+Added: Because the 2021 annual meeting was held on September 24 ,
+Added: 2021, 100% of the stock units immediately vested on the date of the 2021 annual meeting.
The grant-date fair value of the restricted stock units was $ 3.00 per unit.
21 unchanged sentences
The expected term is derived from historical data on employee exercises and post‑vesting employment termination behavior after taking into account the contractual life of the award.
−Removed: The risk‑free interest rate is
−Removed: based on the U.S.
+Added: The risk‑free interest rate is based on the U.S.
Treasury yield curve in effect at the time of grant for zero coupon U.S.
2 unchanged sentences
Each of these inputs is subjective and generally requires significant judgment to determine.
−Removed: A summary of the option activity and changes for the years ended August 31, 2022 and 2021 is presented below:
−Removed: Stock Options
−Removed: (In thousands)
−Removed: (In thousands)
−Removed: Outstanding—September 1, 2020
−Removed: Outstanding—August 31, 2021
−Removed: Outstanding—August 31, 2022
−Removed: Vested and expected to vest—August 31, 2022
−Removed: Exercisable—August 31, 2022
−Removed: As of August 31, 2022 and 2021, unrecognized compensation costs related to unvested stock options were nil .
+Added: During the years ended August 31, 2023 and 2022, the Company has no op tions granted, forfeited, or exercised.
+Added: As of August 31, 2023 and 2022, the Company has no unvested stock options and the unrecognized compensation costs related to unvested stock options were nil .
Restricted Stock Units Awards
7 unchanged sentences
Outstanding—August 31, 2023
−Removed: As of August 31, 2022 and 2021, unrecognized compensation cost related to unvested restricted stock unit awards o f $ 532 thousand and $ 205 thousand, respectively, is expected to be recognized over a weighted average period of 1.19 years and 2.09 years, respectively, and will be adjusted for subsequent changes in estimated forfeitures .
+Added: As of August 31, 2023 and 2022, unrecognized compensation cost related to unvested restricted stock unit awards o f $ 325 thousand and $ 532 thousand, respectively, is expected to be recognized over a weighted average period of 0 .19 years and 1.19 years, respectiv ely, and will be adjusted for subsequent changes in estimated forfeitures .
NET LOSS PER SHARE OF COMMON STOCK
19 unchanged sentences
However, the Company has considered the potential impact of GILTI and BEAT on its U.S.
−Removed: federal net operating loss (“NOL”) carryforward and determined that the projected tax benefit to be received from its NOL carryforward may be reduced due to these provisions.
+Added: federal net operating
+Added: loss (“NOL”) carryforward and determined that the projected tax benefit to be received from its NOL carryforward may be reduced due to these provisions.
The changes included in the Tax Act are broad and complex.
12 unchanged sentences
As a result, the statutory income tax rate in Taiwan is 20 % for the years ended August 31, 2023 and 2022.
−Removed: An additional surtax, of which rate was reduced from 10 % to 5 % being applied to the Company starting from September 1, 2018, is assessed on undistributed income for the entities in Taiwan, but only to the extent such income is not distributed or set aside as a legal reserve before the end of the
−Removed: following year.
+Added: An additional surtax, of which rate was reduced from 10 % to 5 % being applied to the Company starting from September 1, 2018, is assessed on undistributed income for the entities in Taiwan, but only to the extent such income is not distributed or set aside as a legal reserve before the end of the following year.
The 5 % surtax is recorded in the period the income is earned, and the reduction in the surtax liability is recognized in the period the distribution to stockholders or the setting aside of legal reserve is finalized in the following year.
32 unchanged sentences
The unused net operating loss carryforwards were as follows (in thousands):
−Removed: federal net operating loss carryforwards (prior to August 31, 2018)
federal net operating loss carryforwards (after August 31, 2018)
27 unchanged sentences
Lighting products
−Removed: (1) Other includes primarily revenues attributable to the sale of epitaxial wafers, scraps and raw materials and the provision of services.
+Added: (1) Other includes primarily revenues attributable to the sale of epitaxial wafers, scraps and raw materials, the provision of services and the lease of manufacturing as well as research and development facilities.
Revenues by geography are based on the billing address of the customer.
64 unchanged sentences
RELATED PARTY TRANSACTIONS
−Removed: On November 25, 2019 and on December 10, 2019, the Company issued convertible unsecured promissory notes (the “Notes”) to J.R.
−Removed: Simplot Company, its largest shareholder, and Trung Doan, its Chairman and Chief Executive Officer, (together, the “Holders”) with a principal sum of $ 1.5 million and $ 500 thousand, respectively, and an annual interest rate of 3.5 %.
−Removed: Principal and accrued interest shall be due on demand by the Holders on and at any time after May 30, 2021 .
+Added: On January 8, 2019, the Company entered into loan agreements with each of the Chairman and Chief Executive Officer and the largest shareholder of the Company, with aggregate amounts of $ 1.7 million and $ 1.5 million, respectively , and an annual interest rate of 8 %.
+Added: All proceeds of the loans were exclusively used to return the deposit to Formosa Epitaxy Incorporation in connection with the proposed sale of the Company's headquarters building pursuant to the agreement dated December 15, 2015.
+Added: The Company were initially required to repay the loans of $ 1.5 million on January 14, 2021 and $ 1.7 million on January 22, 2021 , respectively.
+Added: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022 , and on January 14, 2022, the maturity date of these loans was extended again with same terms and interest rate for one more year to January 15, 2023 .
+Added: On January 13, 2023, the maturity date of these loans was further extended with same terms and interest rate for one year to January 15, 2024 .
+Added: As of August 31, 2023 and 2022, these loans totaled $ 3.2 million, respectively.
+Added: The loans are secured by a second priority security interest on the Company's headquarters building.
+Added: On November 25, 2019 and on December 10, 2019, the Company issued the Notes to J.R.
+Added: Simplot Company, its largest shareholder, and Trung Doan, our Chairman and Chief Executive Officer, (together, the “Holders”) with a principal sum of $ 1.5 million and $ 500 thousand, respectively, and an annual interest rate of 3.5 %.
+Added: Principal and accrued interest is due on demand by the Holders on and at any time after May 30, 2021 .
On February 7, 2020, J.R.
−Removed: Simplot Company assigned all of its right, title and interest in and to Simplot Taiwan Inc.
−Removed: The outstanding principal and unpaid accrued interest of the Notes may be converted into the Company’s common stock based on a conversion price of $ 3.00 per share, at the option of the Holders any time from the date of the Notes.
+Added: Simplot Company assigned all of its right, title and interest in the Notes to Simplot Taiwan Inc.
+Added: The outstanding principal and unpaid accrued interest of the Notes may be converted into shares of the Company’s common stock at a conversion price of $ 3.00 per share, at the option of the Holders any time from the date of the Notes.
On May 25, 2020, each of the Holders converted $ 300,000 of the Notes into 100,000 shares of the Company’s common stock.
−Removed: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and were scheduled to mature on May 30, 2022 , and on May 26, 2022, the Notes were further extended with the same terms and interest rate for one year and now mature on May 30, 2023 .
+Added: On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and a maturity date of May 30, 2022 .
+Added: On May 26, 2022, the Notes were second extended with the same terms and interest rate for one year and a maturity date of May 30, 2023 .
+Added: On June 6, 2023, the Company entered into the Third Amendment to the Convertible Unsecured Promissory Notes ("Third Amendments") to amend the Notes to (i) extend the maturity date from May 30, 2023 to May 30, 2024 , and (ii) change the conversion price from $ 3.00 to $ 2.046 per share.
+Added: All other terms and conditions of the Notes remain the same.
As of August 31, 2023 and 2022, the outstanding principal of these notes totaled $ 1.4 million.
−Removed: On January 8, 2019, the Company entered into loan agreements with each of the Chairman and Chief Executive Officer and the largest shareholder of the Company, with aggregate amounts of $ 1.7 million and $ 1.5 million, respectively, and an annual interest rate of both 8 %.
−Removed: All proceeds of the loans were exclusively used to return the deposit to Formosa Epitaxy Incorporation in connection with the cancelled proposed sale of the Company’s headquarters building pursuant to the agreement dated December 15, 2015.
−Removed: The Company was required to repay the loans of $ 1.5 million on January 14, 2021 and $ 1.7 million on January 22, 2021 , respectively, unless the loans were sooner accelerated pursuant to the loan agreements.
−Removed: On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022 , and on January 14, 2022, the maturity date of these loans was further extended with same terms and interest rate for one more year to January 15, 2023 .
−Removed: As of August 31, 2022 and 2021, these loans totaled $ 3.2 million.
−Removed: The loans are secured by a second priority security interest on the Company's headquarters building.
SUBSEQUENT EVENTS
−Removed: The Company has analyzed its operations subsequent to August 31, 2022 to the date these consolidated financial statements were issued, finding that the impact of COVID-19 and subsequent variants on the Company is unknown and the financial consequences of this situation cause uncertainty as to the future and its effects on the economy and the Company.
−Removed: Except for the above, the Company has determined that it does not have any other material subsequent events to disclose in these consolidated financial statements.
+Added: The Company follows the guidance in FASB ASC 855-10 for the disclosure of subsequent events.
+Added: The Company has analyzed its operations subsequent to August 31, 2023 to the date these audited consolidated financial statements were issued, finding that no material subsequent events need to be disclosed.
Changes in and Disagreements with Acco untants on Accounting and Financial Disclosure
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.