What changed in this filing

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Item 9A. Controls and Procedures

2021-11-29 compared with 2020-11-17 · 44 added, 43 removed, 415 unchanged (17% of the section changed)

27 unchanged sentences

Edward Kuan Hsiung Hsieh , 69, has served as a director since February 2012.

Hsieh has been Chairman, Chief Executive Officer and a director of Eton Intelligent Technologies, a media and publications company, since April 2000 and Chairman, Chief Executive Officer and a director of VR Networks, a VoIP and Internet networks company, since January 2000.

He has also served as an Adjunct Professor at National Taiwan University since February 2009.

1 unchanged sentence

Hsieh was Chief Executive Officer of Asia Pacific Telecom, a 3G mobile , and fixed line telecommunications company, as well as Executive Director of APOL, an Internet service provider.

He also served as Chairman of International Christian Goodwill within the past five years.

Hsieh holds a bachelor of science degree in electrical engineering from National Taiwan University, a master of science degree in electrical engineering from the University of California, Santa Barbara and a doctor of philosophy degree in electrical engineering from Cornell University.

He also served as Chairman of Good Neighbors Taiwan since 2019.

Hsieh holds a bachelor of science degree in electrical engineering from National Taiwan University, a master of science degree in electrical engineering from the University of California, Santa Barbara, and a doctor of philosophy degree in electrical engineering and applied physics from Cornell University.

He also studied accounting at the University of California, Los Angeles.

13 unchanged sentences

He is also a tenured faculty member in Accounting and Business at DeAnza College in Cupertino, California where he has taught since 1985.

From June 2000 to June 2004, he was Chief Financial Officer and Financial Consultant at Nu Tool Inc., a semiconductor equipment manufacturer.

From June 2000 to June 2004, he was Chief Financial Officer and Financial Consultant at NuTool Inc., a semiconductor equipment manufacturer.

From 1995 through 1999, he was a founding member and Chief Financial Officer of Invest In Yourself, LLC;

21 unchanged sentences

Our Board has determined that Mr.

Lee should serve on our Board based on his experience with technology companies and other organizations in both the United States and China.

Lee should serve on our Board based on his experience with technology companies and other organizations in the United States , Germany and China.

Executive Officers

8 unchanged sentences

Lee was a partner of KEDP CPA Group from August 2009 to June 2011 and a self-employed accountant from July 2011 to August 2014.

Lee holds a BS degree in accounting from Ohio State University and a MS degree in business taxation from Golden Gate University and is licensed as a Certified Public Accountant (CPA) in the United States.

Lee holds a BS degree in accounting from The Ohio State University and a MS degree in business taxation from Golden Gate University and is licensed as a Certified Public Accountant (CPA) in the United States.

CORPORATE GOVERNANCE

3 unchanged sentences

We seek a Board that collectively has a range and diversity of skills, experience, age, industry knowledge and other factors in the context of the needs of the Board.

The biographies of each of the directors above contains information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee to determine that the person should serve as a director of our Company.

In addition to the information presented above regarding each director’s specific experience, qualifications, attributes and skills that led our Nominating and Corporate Governance Committee and Board to the conclusion that he should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards.

The biographies of each of the nominees below contains information regarding the person’s service as a director, business experience, director positions held currently or at any time during the last five years and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee to determine that the person should serve as a director of our Company.

In addition to the information presented below regarding each director’s specific experience, qualifications, attributes and skills that led our Nominating and Corporate Governance Committee and Board to the conclusion that he should serve as a director, we also believe that each of our directors has a reputation for integrity, honesty and adherence to high ethical standards.

Each of our directors has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to our Company and our Board.

Each of our director nominees is currently serving on the Board.

Board Responsibilities and Structure

58 unchanged sentences

Attendance at Board, Committee and Annual Stockholders’ Meetings

The Board held four meetings in fiscal year 2020.

The Board held four meetings in fiscal 2021.

We expect each director to attend every meeting of the Board and the committees on which he serves, and encourage them to attend the annual stockholders’ meeting.

All directors attended at least 75% of the aggregate meetings of the Board and the committees on which they served in fiscal year 2020 and all continuing directors attended the 2020 annual meeting of stockholders.

All directors attended at least 75% of the aggregate meetings of the Board and the committees on which they served in fiscal 2021 and all continuing directors attended the 2021 annual meeting of stockholders.

Risk Management

18 unchanged sentences

Based solely on a review of the copies of such forms in our possession and on written representations from reporting persons, we believe that during fiscal year 2021all of our executive officers, directors and 10% beneficial owners filed the required reports on a timely basis under Section 16(a).

Executi ve Compensation

Executive Compensation

COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AND DIRECTORS

1 unchanged sentence

This executive compensation section discloses the compensation awarded to or earned by our “named executive officers” during fiscal years 2021 and 2020.

We held our last non‑binding advisory vote regarding compensation of our named executive officers at 2018 Annual Meeting of Stockholders and expect to hold our next vote at our 2021 Annual Meeting of Stockholders.

We held our last non‑binding advisory vote regarding compensation of our named executive officers at the 2021 Annual Meeting of Stockholders and expect to hold our next vote at our 2024 Annual Meeting of Stockholders.

Summary Compensation Table

The following table sets forth all of the compensation earned by named executive officers (1) during the relevant fiscal years.

The following table sets forth all of the compensation earned by our named executive officers (1) during the relevant fiscal years.

Name and Principal Position

Chief Executive Officer

Christopher Lee’s compensation did not exceed $100 thousand for the fiscal years ended August 31, 2020 and 2019.

Christopher Lee

Christopher Lee’s compensation did not exceed $100 thousand for the fiscal year ended August 31, 2020.

Outstanding Equity Awards at Fiscal Year ‑ End

There was no outstanding equity award held by Mr.

There were no outstanding equity awards held by Mr.

Doan as of the fiscal year ended August 31, 2021.

22 unchanged sentences

Director Compensation

Our Board has adopted a director compensation policy pursuant to which non‑employee members of the Board will receive the following compensation for their board and committee services:

an annual cash retainer for general Board service of $25,000 paid in quarterly installments;

Our Board amended our director compensation policy on November 11, 2020 to replace the annual cash retainers for board and committee service with additional restricted stock units, as a result of which non-employee members of the Board now receive the following compensation for their board and committee services:

no annual cash retainer for general Board or committee service;

no cash payments for attendance at general Board meetings;

an annual cash retainer of $15,000 for serving as chairman of the Audit Committee, $9,000 for serving as the chairman of the Compensation Committee and $6,000 for serving as the chairman of the Nominating and Governance Committee, with each retainer paid in quarterly installments;

an annual cash retainer of $8,000 per non‑chairman member serving on the Audit Committee, $5,000 per non‑chairman member serving on the Compensation Committee and $3,000 per non‑chairman member serving on the Nominating and Corporate Governance Committee;

each year shortly following the annual stockholder meeting an annual grant of 2,500 shares of RSUs, which fully vests on the earlier of the next annual meeting or the one‑year anniversary of the grant date, subject to continued service through the vesting date, provided that the RSUs will fully vest if we are subject to a change in control during their service.

The director compensation policy requires directors to attend at least 75% of the meetings each year in order to be renominated.

each year shortly following the annual stockholder meeting an annual grant of 5,000 shares of restricted stock units, which fully vests on the earlier of the next annual meeting or the one-year anniversary of the grant date, whichever is earlier, subject to continued service through the vesting date, provided that the restricted stock units will fully vest if we are subject to a change in control during their service.

The director compensation policy requires directors to attend at least 75% of the meetings each year in order to be re-nominated.

The policy also includes an equity ownership guideline whereby our directors will be expected to own and hold shares of our common stock until retirement from their Board service.

6 unchanged sentences

Simplot waived any right to compensation.

Security Ownership of Certain Beneficial O wners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

PRINCIPAL STOCKHOLDERS

33 unchanged sentences

Includes 66,667 shares issuable upon exercise of outstanding convertible promissory notes.

Includes 1,250 restricted stock units that will vest within 60 days.

Includes 31,036 shares held by JRS Properties III L.P.

8 unchanged sentences

Simplot disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein.

Includes 2,500 RSUs that vested on September 5, 2020.

Includes 2,000 RSUs that will vest within 60 days.

Includes 6,450 restricted stock units that will vest within 60 days.

Equity Compensation Plan Information

26 unchanged sentences

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

Since September 1, 2019, there has not been any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors or executive officers, any holder of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than the transactions described below, some of which represent continuing transactions from prior periods.

On January 8, 2019, the Company entered into loan agreements with each of Mr.

Doan, its Chairman and Chief Executive Officer, and Simplot Taiwan, Inc., its largest shareholder, with aggregate amounts of $3.2 million, 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 cancelled sale of the Company’s headquarters building pursuant to the agreement dated December 15, 2015.

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.

In February 2021, the loan agreements were extended with the same principal amount and interest rate for one year and are now due on January 15, 2022, unless the loans are sooner accelerated pursuant to the loan agreements.

As of August 31, 2021, these loans totalled $3.2 million.

The loans are secured by a second priority security interest on our headquarters building.

On December 6, 2019 and on December 10, 2019, the Company issued convertible unsecured promissory notes (the “Notes”) to each of J.R.

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%.

Simplot Company and Mr.

Doan (together, the “Holders”), with a principal sum of $1.5 million and $500 thousand, respectively, and an annual interest rate of 3.5%.

Principal and accrued interest shall be due on demand by the Holders on and at any time after May 30, 2021.

1 unchanged sentence

On May 25, 2020, each of the Holders converted$300,000of the Notes into 100,000 shares of the Company’s common stock.

On January 8, 2019, the Company entered into loan agreements with each of its Chairman and Chief Executive Officer and its largest shareholder, with aggregate amounts of $1.7 million and 1.5 million, respectively, and an annual interest rate of both 8%.

As of August 31, 2019, these loans totaled $3.2 million.

For more detail information, see Note3 to Consolidated Financial Statements in “Part II Item 8.

Financial Statements and Supplementary Data”.

Except for the above, since September 1, 2017, there has not been any transaction or series of similar transactions to which we were or are a party in which the amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years, and in which any of our directors or executive officers, any holder of more than 5% of any class of our voting securities or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than the transactions described below, some of which represent continuing transactions from prior periods.

Employment Agreements

See “Compensation of the Named Executive Officers and Directors—Employment Agreements.”

On May 26, 2021, the Notes were extended with the same terms and interest rate for one year and are now due on demand by the Holders on and at any time after May 30, 2022.

Policies and Procedures for Related Party Transactions

21 unchanged sentences

All identified transactions that appeared to relate to the Company and a family member of, or entity with a known connection to, a director were presented to the Board for consideration.

None of the non ‑ employee directors was disqualified from “independent” status under the objective tests.

None of the non ‑ employee directors w ere disqualified from “independent” status under the objective tests.

In making its subjective determination that each of our Company’s non ‑ employee director is independent, the Board reviewed and discussed additional information provided by the directors and the Company with regard to each director’s business and personal activities as they may relate to the Company and the Company’s management.

The Board consid ered the transactions in the context of the NASDAQ objective standards, the special standards established by the SEC for members of audit committees, and the SEC and U.S.

The Board considered the transactions in the context of the NASDAQ objective standards, the special standards established by the SEC for members of audit committees, and the SEC and U.S.

Internal Revenue Service (“IRS”) standards for compensation committee members.

Based on all of the foregoing, as required by the NASDAQ rules, the Board made a subjective determination that, because of the nature of the director’s relationship with the entity and/or the amount involved, no relationships exist that, in the opinion of the Bo ard, would impair the director’s independence.

Principal Accountant Fees and Services

14 unchanged sentences

Exhibit Title

Amended and Restated Certification of Incorporation of Registrant, and amendments thereto

Amended and Restated Certification of Incorporation of Registrant

November 22, 2010

8 unchanged sentences

November 20, 2019

2005 Equity Incentive Plan (amended March 1, 2010)

August 6, 2010

2010 Equity Incentive Plan, as amended September 25, 2020

November 17, 2020

Amended and Restated Employment Agreement with Trung T.

24 unchanged sentences

November 20, 2019

Letter from BF Borgers CPA PC to the SEC dated September 2, 2019

September 3, 2019

List of Subsidiaries

Consent of KCCW Accountancy Corp, Independent Registered Public Accounting Firm

Amendment to Convertible Unsecured Promissory Note dated May 26, 2021 to Trung Doan

Exhibit Title

Amendment to Convertible Unsecured Promissory Note dated May 26,2021 to Simplot Taiwan Inc.

Consent of KCCW Accountancy Corp, Independent Registered Public Accounting Firm

Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a‑14(a)/15d‑14(a)

7 unchanged sentences

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Management contract or compensatory arrangement

43 unchanged sentences

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.

What changed 10-K

Item 9A. Controls and Procedures