SemiLEDs Corp 10-K

Item9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our chief executive officer, or CEO, and our chief financial officer, or CFO, has evaluated the effectiveness of our disclosure controls and procedures as defined in Rules 13a‑15(e) and 15d‑15(e) under the Exchange Act as of August 31, 2021. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. Based upon the aforementioned evaluation, our CEO and CFO have concluded that, as of August 31, 2021, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of our management, including our CEO and CFO, we assessed the effectiveness of our internal control over financial reporting as of the end of the period covered by this report based on the framework in “Internal Control— Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, our CEO and CFO concluded that our internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of the financial statements for external purposes in accordance with GAAP, as of August 31, 2021. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting that occurred during the quarter ended August 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Item9B. Other Information Not applicable. 66 Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Our Board of Directors Trung T. Doan , 63, has served as a director, Chairman of our Board and as our CEO since January 2005, and as our President since August 2012. Prior to joining us, Mr. Doan served as Corporate Vice President of Applied Global Services (AGS) Product Group at Applied Materials, Inc. and also served as President and Chief Executive Officer of Jusung Engineering, Inc., a semiconductor/LCD equipment company in Korea. In addition, Mr. Doan served as Vice President of Process Development at Micron Technology Inc. Mr. Doan previously served as a director of Advanced Energy Industries, a publicly traded manufacturer of power conversion and control systems within the past five years. Mr. Doan also previously served as a director of Dolsoft Corporation, a privately held software company, as a director of Nu Tool Inc., a semiconductor technology company, and as a director of EMCO, a publicly traded manufacturer of advanced flow control devices and systems. Mr. Doan holds a bachelor of science degree in nuclear engineering from the University of California, Santa Barbara, where he graduated with honors, and a master of science degree in chemical engineering from the University of California, Santa Barbara. Our Board has determined that Mr. Doan should serve on our Board and as our Chairman based on his in - depth knowledge of our business and industry and his experience serving on the boards of directors of several major technology companies, as well as in management roles in the technology industry. Dr. Edward Kuan Hsiung Hsieh , 69, has served as a director since February 2012. Dr. 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 VR application company, since January 2000. He has also served as an Adjunct Professor at National Taiwan University since February 2009. From February 2007 to February 2010, Dr. 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 Good Neighbors Taiwan since 2019. Dr. 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. Our Board has determined that Dr. Hsieh should serve as a director based on his experience teaching master of business administration classes at National Taiwan University, his service as an International Financial Adviser with Merrill Lynch, Pierce, Fenner & Smith and his management roles at several start-up companies. Scott R. Simplot , 75, has served as a director since March 2005. Mr. Simplot has been Chairman of the board of directors and a director of J.R. Simplot Company since May 2001 and August 1970, respectively. Mr. Simplot holds a bachelor of science degree in business from the University of Idaho and a master of business administration degree from the University of Pennsylvania. Mr. Simplot became a director on our Board as part of his duties as the Chairman of the board of J.R. Simplot Company, the 100% owner of Simplot Taiwan, Inc., which was entitled to designate two members of our board of directors in connection with J.R. Simplot Company’s investment in our Series A convertible preferred stock. Our Board has determined that Mr. Simplot should serve as a director based on the extensive knowledge and insight he brings to our Board from his experience serving as Chairman and holding a variety of management positions at a large private company and serving on the boards of directors of companies in a variety of industries. Walter Michael Gough , 67, has served as a director since April 2016. Mr. Gough has led Gough and Associates, a firm that specializes in financial consulting for domestic and international companies since 2005. 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 NuTool Inc., a semiconductor equipment manufacturer. From 1995 through 1999, he was a founding member and Chief Financial Officer of Invest In Yourself, LLC; an organization that provided consulting for professional sports franchises. Prior to teaching and consulting, Mr. Gough was a financial analyst and contracts manager at Watkins-Johnson Company, a high technology electronics firm. Before Watkins-Johnson, Mr. Gough worked for Kidder Peabody, an investment banking firm. He holds MBA and BA degrees (cum laude) from Santa Clara University, and a Masters in English from Notre Dame de Namur University. Our Board has determined that Mr. Gough should serve on our Board based on his experience as a consultant to technology companies in both the United States and Taiwan, his prior experience as a chief financial officer of several companies, and his expertise in accounting and finance. Roger Lee , 63, has served as a director since September 2019. Mr. Lee previously served as a director and an Audit Committee member of SemiLEDs from August 2017 to March 2019. Mr. Lee has more than 30 years of semiconductor experience and leadership. He has been the President and CEO of TF Semiconductor Solutions (TFSS) since August 2014. Prior to becoming the CEO of TFSS, Mr. Lee served as world-wide COO and Interim President & CEO of Telefunken Semiconductors located in Roseville, California and Heilbronn, Germany from May 2011 to July 2014. Mr. Lee began his career as an engineer for Texas Instruments. During his career, Mr. Lee has served on numerous boards and held a variety of executive and senior-level positions for several companies, including senior vice president of SMIC. Previously, he co-founded the SMIC-Toppan JV (TSES) where he served as its vice chairman of its Board of Directors, and had held several senior management positions, including senior fellow and head of flash memory at Micron Technology and was instrumental to the development of Micron’s flash memory program. More recently, he was COO and a board member of Founder Microelectronics, Inc. in Shenzhen, China where he was responsible for overall company operations, including fab manufacturing, sales and marketing, facilities, and R&D operations. Mr. Lee earned his Bachelor’s degree and Master’s degree in Electrical Engineering from Iowa State University. Our Board has determined that Mr. Lee should serve on our Board based on his experience with technology companies and other organizations in the United States , Germany and China. 67 Table of Contents Executive Officers In addition to Mr. Doan, our CEO, who also serves as a director, our executive officers as of November 22, 2021 consisted of the following: Christopher Lee, 50, has served as our Chief Financial Officer since September 2015. From November 21, 2014 until his appointment as Chief Financial Officer, Mr. Lee was the interim Chief Financial Officer of the Company. Mr. Lee joined SemiLEDs in September 2014. Mr. Lee has over 25 years of experience in accounting and finance, including US GAAP, PCAOB standards and SEC rules and regulations. Prior to joining us, Mr. 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. Mr. 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 Board Composition Our Nominating and Corporate Governance Committee is charged with identifying and evaluating individuals qualified to serve as members of the Board and recommending to the full Board nominees for election as directors. We seek directors with experience in areas relevant to the strategy and operations of the Company. 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 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 The Board oversees, counsels, and directs management in the long‑term interests of the Company and our stockholders. The Board’s responsibilities include: • selecting, evaluating the performance of, and determining the compensation of the CEO and other executive officers; • overseeing the risks that the Company faces; • reviewing and approving our major financial objectives and strategic and operating plans, and other significant actions; • overseeing the conduct of our business and the assessment of our business and other enterprise risks to evaluate whether the business is being properly managed; and • overseeing the processes for maintaining our integrity with regard to our financial statements and other public disclosures, and compliance with law and ethics. The Board and its committees met throughout the year on a set schedule, held special meetings, and acted by written consent from time to time as appropriate. During fiscal year 2021, the Board held executive sessions for the independent directors to meet without Mr. Doan present at the end of every Board meeting. Our Bylaws do not dictate a particular Board structure and the Board is free to determine whether or not to have a Chairman and, if so, to select that Chairman and our CEO in the manner it considers our best interest. Currently, the Board has selected Mr. Doan to hold the position of both Chairman of the Board and CEO. Mr. Doan’s experience at the Company has afforded him intimate knowledge of the issues, challenges and opportunities facing each of the Company’s businesses. Accordingly, he is well positioned to focus the Board’s attention on the most pressing issues facing the Company. The Board has not appointed a lead independent director. The Board believes its administration of its risk oversight function has not affected the Board’s leadership structure. 68 Table of Contents Board Committees and Charters The Board delegates various responsibilities and authority to different Board committees. Committees regularly report on their activities and actions to the full Board. The Board currently has, and appoints the members of, a standing Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee. Each of the Board committees has a written charter approved by the Board, and we post each charter on our web site at http://investors.semileds.com/governance.cfm . Each committee can engage outside experts, advisors and counsel to assist the committee in its work. The following table identifies the current committee members. Nominating and Corporate Name Audit Compensation Governance Dr. Edward Kuan Hsiung Hsieh Chair ˅ Walter Michael Gough ˅ Roger Lee ˅ Scott R. Simplot Chair Chair Number of Committee Meetings Held in Fiscal Year 2021 4 2 2 Audit Committee Our Audit Committee is responsible for, among other things: • reviewing and approving the selection of our independent auditors, and approving the audit and non‑audit services to be performed by our independent auditors; • monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters; • reviewing the adequacy and effectiveness of our internal control policies and procedures; • discussing the scope and results of the audit with the independent auditors and reviewing with management and the independent auditors our interim and year‑end operating results; and • preparing the Audit Committee Report that the SEC requires in our annual proxy statement. The Board believes that each current member of our Audit Committee is an independent director under the NASDAQ rules and meets the additional SEC independence requirements for audit committee members. It has also determined that Dr. Hsieh and Mr. Gough meet the requirements of an “audit committee financial expert,” as defined in Regulation S‑K. Compensation Committee Our Compensation Committee is responsible for, among other things: • overseeing our compensation policies, plans and benefit programs; • reviewing and approving for our executive officers: the annual base salary, the annual incentive bonus, including the specific goals and amount, equity compensation, employment agreements, severance arrangements and change in control arrangements, and any other benefits, compensation or arrangements; • reviewing and determining our equity‑based compensation plans; and • administering our equity‑based compensation plans. Although the Compensation Committee has the authority to determine the compensation paid to executive officers, other officers, employees, consultants and advisors, it can delegate its responsibility for setting compensation for individuals other than the CEO to a subcommittee, in the case of other officers, or to officers, in the case of employees and consultants. It may also delegate to officers the authority to grant options or other equity or equity‑based awards to employees who are not executive officers or members of the Board. It may also generally take into account the recommendations of the CEO, other than with respect to his own compensation. 69 Table of Contents Nominating and Corporate Governance Committee Our Nominating and Corporate Governance Committee is responsible for, among other things: • identifying prospective director nominees and recommending nominees for each annual meeting of stockholders to the Board; • reviewing developments in corporate governance practices and developing and recommending governance principles applicable to our Board; • overseeing the evaluation of our Board and management; and • recommending members for each Board committee to our Board. Our Nominating and Corporate Governance Committee has not established any minimum qualifications for directors although in assessing the skills and characteristics of individual members, it must give due regard for independence and financial literacy considerations dictated by the NASDAQ rules. The Nominating and Corporate Governance Committee does not at this time have a policy regarding its consideration of director candidates recommended by stockholders, as it has not yet received any such recommendations. It may adopt a policy if such recommendations are received. Attendance at Board, Committee and Annual Stockholders’ Meetings 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 2021 and all continuing directors attended the 2021 annual meeting of stockholders. Risk Management The Board is involved in the oversight of risks that could affect the Company. The Board also monitors cyber threat trends, regulatory developments, and major threats to the Company, including setting expectations and accountability for management, as well as assessing the adequacy of resources, funding, and focus on cyber risk management activities. This oversight is conducted primarily through the Audit Committee which, on behalf of the Board, is charged with overseeing the principal risk exposures we face and our mitigation efforts in respect of these risks. The Audit Committee is responsible for interfacing with management and discussing with management the Company’s principal risk exposures and the steps management has taken to monitor and control risk exposures, including risk assessment and risk management policies. The Compensation Committee also plays a role in that it is charged, in overseeing the Company’s overall compensation structure, with assessing whether that compensation structure creates risks that are reasonably likely to have a material adverse effect on us. Code of Business Conduct and Ethics We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, officers and directors, including those officers responsible for financial reporting. These standards are designed to deter wrongdoing and to promote honest and ethical conduct. The Code of Business Conduct and Ethics is available at our website at http://investors.semileds.com/governance.cfm . Any amendments to the Code, or any waivers of its requirements required to be disclosed pursuant to SEC or NASDAQ requirements, will be disclosed on the website. Communications from Stockholders and Other Interested Parties to Directors The Board recommends that stockholders and other interested parties initiate communications with the Board, any committee of the Board or any individual director in writing to the attention of our Corporate Secretary at our principal executive office at 3F, No.11 Ke Jung Rd., Chu‑Nan Site, Hsinchu Science Park, Chu‑Nan 350, Miao‑Li County, Taiwan, R.O.C. This process will assist the Board in reviewing and responding to stockholder communications in an appropriate manner. The Board has instructed our Corporate Secretary to review such correspondence and, at his discretion, not to forward items if he deems them to be of a commercial or frivolous nature or otherwise inappropriate for the Board’s consideration. Section 16(a) Beneficial Ownership Reporting Compliance Section 16(a) of the Exchange Act requires our directors, executive officers and beneficial owners of more than 10% of our common stock to file with the SEC an initial report of ownership of our stock on Form 3 and reports of changes in ownership on Form 4 or Form 5. Persons subject to Section 16 are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. As a matter of practice, our administrative staff assists our executive officers and directors in preparing initial ownership reports and reporting ownership changes, and typically files those reports on their behalf. 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). 70 Table of Contents Item11. Executive Compensation COMPENSATION OF THE NAMED EXECUTIVE OFFICERS AND DIRECTORS Executive Compensation 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 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 our named executive officers (1) during the relevant fiscal years. Stock Option All Other Name and Principal Position Fiscal Year Salary ($) Bonus ($) Awards ($) (1) Awards ($) Compensation ($) Total ($) Trung T. Doan 2021 258,188 — — — — 258,188 Chief Executive Officer 2020 151,875 — — — — 151,875 Christopher Lee 2021 91,420 — 18,079 — — 109,499 (1) Mr. 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 were no outstanding equity awards held by Mr. Doan as of the fiscal year ended August 31, 2021. Pension Benefits We do not maintain any defined benefit pension plans. Nonqualified Deferred Compensation We do not maintain any nonqualified deferred compensation plans. Severance and Change in Control Benefits Mr. Doan entered into an employment agreement in 2005, which provides that if he is terminated by us without cause or resigns due to a constructive termination, he will receive as severance an amount equal to six months of his then‑current salary plus his current medical insurance for six months following his termination date. We offered such severance to motivate Mr. Doan to continue as our executive officer by providing severance protection in the event that he is terminated by us without having committed any egregious act constituting cause or if we adversely change his position such that he resigns. Cause is defined as (a) the conviction of a felony or of any criminal offense involving moral turpitude; (b) the repeated failure to satisfactorily perform duties reasonably required by us; (c) material breach of the proprietary information and invention agreement, our written policies established by our Board or any term of his employment agreement; or (d) misappropriation of our property or unlawful appropriation of our corporate opportunity or our business. If we determine cause exists, we will provide Mr. Doan with written notice alleging cause and his failure to remedy the alleged cause within 30 days may result in a termination for cause. Constructive termination is defined as one of the following events when we have not received Mr. Doan’s written consent for such event: (a) a significant reduction of his duties, position or responsibilities relative to his duties, position or responsibilities in effect immediately prior to such reduction or his removal from such position, duties and responsibilities, provided that a reduction in duties, position or responsibilities solely by virtue of us being acquired and made part of a larger entity will not constitute a constructive termination; (b) a substantial reduction, without good business reasons, of the facilities and perquisites available to him immediately prior to such reduction; (c) a reduction of his base salary unless such reduction is a part of a Company‑wide reduction for similarly situated persons; or (d)a material reduction in the kind or level of employee benefits to which he is entitled immediately prior to such reduction, with the result that his overall benefits package is significantly reduced, unless such reductions are part of a Company‑wide reduction for similarly situated persons. 71 Table of Contents Employment Agreements Mr. Doan entered into an employment agreement in 2005, which provides for the severance payments and benefits described under “Severance and Change in Control Benefits” above. Director Compensation 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; and • 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. We also reimburse non-employee directors for travel, lodging and other expenses incurred in connection with their attendance at Board or committee meetings. Director Compensation Table The following table sets forth the total compensation for our non‑employee directors for the year ended August 31, 2021: Fees Earned or All Other Name Paid in Cash ($) Stock Awards ($) Compensation ($) Total ($) Dr. Edward Kuan Hsiung Hsieh — 15,000 — 15,000 Walter Michael Gough — 15,000 — 15,000 Roger Lee — 15,000 — 15,000 Scott R. Simplot (1) — — — — (1) Mr. Simplot waived any right to compensation. 72 Table of Contents Item12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters PRINCIPAL STOCKHOLDERS The following table sets forth information regarding the beneficial ownership of our common stock as of November 22, 2021 with respect to: • each person, or group of affiliated persons, who is known by us to own beneficially 5% or more of our common stock; • each of our directors; • each of our named executive officers; and • all directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. All shares of our common stock subject to options currently exercisable or exercisable within 60days of November 22, 2021and RSUs that will vest within 60days of November 22, 2021, are deemed to be outstanding for the purpose of computing the percentage ownership of the person or group holding options and RSUs, but are not deemed to be outstanding for computing the percentage of ownership of any other person. Unless otherwise indicated by the footnotes below, we believe, based on the information furnished to us, that each stockholder named in the table has sole voting and investment power with respect to all shares beneficially owned, subject to applicable community property laws. Percentage of ownership is based on 4, 459,579shares of common stock outstanding as of November 22, 2021. Unless otherwise indicated in the footnotes to the table, the address of each individual listed in the table is c/o SemiLEDs Corporation, 3F, No.11Ke Jung Rd., Chu‑Nan Site, Hsinchu Science Park, Chu‑Nan 350, Miao‑Li County, Taiwan, R.O.C. Shares Beneficially Owned Name and Address of Beneficial Owner Number Percent 5% Stockholders: Simplot Taiwan, Inc. 1,489,934 (1) 33.3 % J.R. Simplot Company 999 Main Street, Suite 1300 Boise, ID 83702 Trung Tri Doan 536,639 (2) 12.0 % Executive Officers and Directors: Trung Tri Doan 536,639 (2) 12.0 % Walter Michael Gough 16,068 (3) * Roger Lee 7,500 (3) * Dr. Edward Kuan Hsiung Hsieh 28,571 (3) * Scott R. Simplot 1,520,970 (1)(4) 34.0 % Christopher Lee 9,800 (5) * All executive officers and directors as a group (6 persons) 2,119,548 47.4 % * Indicates beneficial ownership of less than 1%. (1) Based on a Schedule13D/A filed June 5, 2020, Simplot Taiwan, Inc., a wholly owned subsidiary of J.R. Simplot Company, and J.R. Simplot Company share voting and investment power over all such shares. Scott Simplot is the Chairman of J.R. Simplot Company. Mr. Simplot may be deemed to have shared voting and investment power over the shares held by Simplot Taiwan, Inc. Mr. Simplot disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. Includes 400,000 shares issuable upon exercise of outstanding convertible promissory notes. (2) Includes 127,141shares held by The Trung Tri Doan 2010 GRAT, of which Trung Tri Doan is the sole trustee. Includes 66,667 shares issuable upon exercise of outstanding convertible promissory notes. (3) Includes 1,250 restricted stock units that will vest within 60 days. (4) Includes 31,036 shares held by JRS Properties III L.P. JRS Management L.L.C. is the sole general partner of JRS Properties III L.P. Scott Simplot and Stephen A. Beebe are the managers of JRS Management L.L.C. As managers of JRS Management L.L.C., Mr. Simplot and Mr. Beebe share voting and investment power over the securities held by JRS Properties III L.P. Mr. Simplot may be deemed to have shared voting and investment power over the shares held by JRS Properties III L.P. Mr. Simplot disclaims beneficial ownership of such shares, except to the extent of his pecuniary interest therein. ( 5 ) Includes 6,450 restricted stock units that will vest within 60 days. 73 Table of Contents Equity Compensation Plan Information The following table summarizes information about our equity compensation plans as of August 31, 2021. All outstanding awards relate to our common stock. Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted- average exercise price of outstanding options, warrants and rights(2) (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) (in thousands) (in thousands) Equity compensation plans approved by security holders 103 (1) $ 159.00 820 Equity compensation plans not approved by security holders — — — Total 103 820 (1) Consists of stock options granted under the 2005 Equity Incentive Plan and the 2010 Equity Incentive Plan, and restricted stock units granted under the 2010 Equity Incentive Plan. No additional grants could be made under the 2005 Equity Incentive Plan after December 8, 2010. In April2014 and July 2019, SemiLEDs’ stockholders approved amendments to the 2010 Plan that increased the number of shares authorized for issuance under the plan by an additional 250 thousand shares and 500thousand shares, respectively. On September 25, 2020, stockholders of SemiLEDs approved an increase in the authorized share reserve under the 2010 plan by an additional 400 thousand shares. ( 2 ) The weighted average exercise price does not take into account the shares issuable upon vesting of outstanding restricted stock unit awards, which have no exercise price. The information required by this Item with respect to the securities ownership of directors, officers and certain beneficial owners is set forth under the heading “Principal Stockholders” above. Item 13. Certain Relationships and Related Transactions, and Director Independence 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 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. 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. On May 25, 2020, each of the Holders converted$300,000of the Notes into 100,000 shares of the Company’s common stock. 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. 74 Table of Contents Policies and Procedures for Related Party Transactions Our Board has adopted a formal, written related party transactions policy pursuant to which, our executive officers, directors, beneficial owners of more than 5% of our common stock, and any member of the immediate family of and any firm, corporation or other entity at which any of the foregoing persons is employed or is a general partner or principal or in a similar position or in which such person has a 5% or greater beneficial interest, are not permitted to enter into a related party transaction with us without prior consent and approval of our Audit Committee. This policy covers any transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships in which we are a participant, the aggregate amount involved will or may be expected to exceed $120,000 in any year and a related person has or will have a direct or indirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity), including, without limitation, purchases of goods or services by or from the related person or entities in which the related person has a material interest, indebtedness, guarantees of indebtedness or employment by us of a related person. The Audit Committee has determined that a related person does not have a direct or indirect material interest in the following categories of transactions and that each will be deemed to be preapproved: • any transaction with another company at which a related person’s only relationship is as an employee (other than an executive officer), director, or beneficial owner of less than 10% of that company’s shares, if the aggregate amount involved does not exceed the greater of $1 million or 2% of that company’s total annual revenue. Director Independence The published listing requirements of NASDAQ dictate that a majority of the Board be comprised of independent directors whom our Board has determined have no material relationship with our Company and who are otherwise “independent” directors under those listing requirements. Our current Board consists of the five persons listed above. The Board has determined that each of our current directors, other than Mr. Doan, our CEO, qualifies as an independent director, such that more than a majority of our directors are independent directors under the NASDAQ rules. The NASDAQ rules have objective tests and a subjective test for determining who is an “independent director.” Under the objective tests, a director cannot be considered independent if: • the director is, or at any time during the past three years was, an employee of the Company; • the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service); • a family member of the director is, or at any time during the past three years was, an executive officer of the Company; • the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceeded 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever was greater (subject to certain exclusions); • the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the Company served on the compensation committee of such other entity; or • the director or a family member of the director is a current partner of the Company’s outside auditor, or at any time during the past three years was a partner or employee of the Company’s outside auditor, and who worked on the company’s audit. The subjective test states that an independent director must be a person who lacks a relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board has not established categorical standards or guidelines to make these subjective determinations but considers all relevant facts and circumstances. In addition to the Board‑level standards for director independence, the NASDAQ rules provide that directors, of whom there must be three, who serve on the Audit Committee must each satisfy standards established by the SEC that require that members of audit committees must not be affiliated persons of the issuer and may not accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer other than their director compensation. Transactions Considered in Independence Determinations In making its independence determinations, the Board considered transactions that occurred since the beginning of fiscal year 2016 between the Company and entities associated with the independent directors or members of their immediate family. 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. 75 Table of Contents 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 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 Board, would impair the director’s independence. Item14. Principal Accountant Fees and Services Fees Billed by Independent Registered Public Accounting Firm The following table shows the fees and related expenses for audit and other services provided by KCCW Accountancy Corp billed for fiscal year 2021 and 2020. The services described in the following fee table were approved in conformity with the Audit Committee’s pre‑approval process. KCCW Accountancy Corp 2021 Fees 2020 Fees Audit Services $ 173,000 $ 173,000 Audit-Related Services — — Tax Services 7,000 7,000 All Other Services 17,000 — Total $ 197,000 $ 180,000 Audit Services. This category includes the audit of our annual consolidated financial statements, review of our quarterly condensed consolidated financial statements and services that are normally provided by our independent auditors in connection with statutory and regulatory filings or engagements. This category also includes statutory audits required by the Tax Bureau of Taiwan for certain of our subsidiaries in Taiwan. Tax Services. The services for the fees disclosed in this category include tax return preparation and technical tax advice. 76 Table of Contents PART IV Item15. Exhibits and Financial Statement Schedules (2) Exhibits: Exhibit Filed No Exhibit Title Form File No. Exhibit Filing Date Herewith 3.1 Amended and Restated Certification of Incorporation of Registrant S- 1 /A 333‑168624 3.1(c) November 22, 2010 3.2 Certificate of Amendment of Amended and Restated Certificate of Incorporation 8‑K 333‑168624 3.1 April 15, 2016 3.3 Certificate of Amendment of Amended and Restated Certificate of Incorporation 8-K 333‑168624 3.1 July 3, 2018 3.4 Amended and Restated Bylaws of Registrant S‑1/A 333‑168624 3.2(b) November 22, 2010 4.1 Form of Common Stock Certificate S‑1/A 333‑168624 4.1 November 22, 2010 4.2(d) Description of the Registrant’s Securities Under Section 12 of the Securities Exchange Act of 1934 10-K 001-34992 4.2(d) November 20, 2019 10.2† 2010 Equity Incentive Plan, as amended September 25, 2020 10-K 001-34992 10.2 November 17, 2020 10.3† Amended and Restated Employment Agreement with Trung T. Doan, dated March 15, 2005 S‑1 333‑168624 10.3 August 6, 2010 10.4† SemiLEDs Corporation 2010 Equity Incentive Plan, Stock Unit Grant Agreement (Director Form) 8‑K 001‑34992 99.1 February 9, 2012 10.5† SemiLEDs Corporation 2010 Equity Incentive Plan, Form of Stock Unit Agreement (Officer Form) 8‑K 001‑34992 99.1 February 24, 2012 10.6 Form of Proprietary Information and Inventions Agreement S‑1/A 333‑168624 10.8 September 14, 2010 10.7 Form of Non‑competition Agreement S‑1/A 333‑168624 10.9 September 14, 2010 10.8† Form of Option Agreement for the 2010 Equity Incentive Plan S‑1/A 333‑168624 10.10 November 16, 2010 10.9† Form of Indemnification Agreement with directors and officers S‑1/A 333‑168624 10.11 October 26, 2010 10.10 Loan Agreement dated January 8, 2019 between SemiLEDs Corporation and Trung Doan 10-Q 001-34992 10.1 January 11, 2019 10.11 Loan Agreement dated January 8, 2019 between SemiLEDs Corporation and J. R. Simplot Company 10-Q 001-34992 10.2 January 11, 2019 10.12 The First Loan Agreement between Mega International Commercial Bank and SemiLEDs Optoelectronics Co., Ltd. dated July 5, 2019 (translation) 10-K 001-34992 10.12 November 20, 2019 10.13 The Second Loan Agreement between Mega International Commercial Bank and SemiLEDs Optoelectronics Co., Ltd. dated July 5, 2019 (translation) 10-K 001-34992 10.13 November 20, 2019 10.14† Amendment to Convertible Unsecured Promissory Note dated May 26, 2021 to Trung Doan 10-K 001-34992 10.14 X 77 Table of Contents Exhibit Filed No Exhibit Title Form File No. Exhibit Filing Date Herewith 10.15† Amendment to Convertible Unsecured Promissory Note dated May 26,2021 to Simplot Taiwan Inc. 10-K 001-34992 10.15 X 23.1 Consent of KCCW Accountancy Corp, Independent Registered Public Accounting Firm X 31.1 Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a‑14(a)/15d‑14(a) X 31.2 Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a‑14(a)/15d‑14(a) X 32.1 Certification Pursuant to 18 U.S.C. Section 1350 X 32.2 Certification Pursuant to 18 U.S.C. Section 1350 X 101.INS* XBRL Instance Document X 101.SCH* XBRL Taxonomy Extension Schema Document X 101.CAL* XBRL Taxonomy Extension Calculation Linkbase Document X 101.DEF* XBRL Taxonomy Extension Definition Linkbase Document X 101.LAB* XBRL Taxonomy Extension Label Linkbase Document X 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) X † Management contract or compensatory arrangement Item 16. Form 10-K Summary None. 78 Table of Contents SIGNATURES Pursuant to the requirements of Section13 or15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: November 29, 2021 SemiLEDs Corporation By: /s/ TRUNG TRI DOAN Trung Tri Doan Chairman and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/ TRUNG TRI DOAN Chairman and Chief Executive Officer (Principal Executive Officer) November 29, 2021 Trung Tri Doan /s/ CHRISTOPHER LEE Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) November 29, 2021 Christopher Lee /s/ SCOTT R. SIMPLOT Director November 29, 2021 Scott R. Simplot /s/ DR. EDWARD KUAN HSIUNG HSIEH Director November 29, 2021 Dr. Edward Kuan Hsiung Hsieh /s/ GOUGH WALTER MICHAEL Director November 29, 2021 Gough Walter Michael /s/ ROGER LEE Director November 29, 2021 Roger Lee 79 Table of Contents SEMILEDS CORPORATION SCHEDULE II— VALUATION AND QUALIFYING ACCOUNTS Years Ended August 31, 2021 2020 (In thousands) Allowance for Doubtful Accounts (Including Related Parties): Beginning balance $ 187 $ 195 Charged to bad debt expense 540 — Write-downs charged against the allowance Effect of exchange rate changes 12 ( 8 ) Ending balance $ 739 $ 187 Years Ended August 31, 2021 2020 (In thousands) Valuation Allowance for Deferred Tax Assets: Beginning balance $ 32,254 $ 30,983 Charged to income tax expense ( 78 ) ( 285 ) Net operating loss carryforward expired ( 368 ) ( 136 ) Effect of exchange rate changes 1,973 1,692 Ending balance $ 33,781 $ 32,254 80