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Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended February 29, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 001-34992

SemiLEDs Corporation

(Exact name of registrant as specified in its charter)

 

Delaware

 

20-2735523

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification Number)

 

3F, No. 11 Ke Jung Rd., Chu-Nan Site,

 

 

Hsinchu Science Park, Chu-Nan 350,

 

 

Miao-Li County, Taiwan, R.O.C.

 

350

(Address of principal executive offices)

 

(Zip Code)

+886-37-586788
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbol(s)

 

Name of each exchange on which registered

Common Stock, par value $0.0000056

 

LEDs

 

The Nasdaq Stock Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    No 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

 

 

 

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 3,772,990 shares of common stock, par value $0.0000056 per share, outstanding as of April 6, 2020.

 

 


Table of Contents

 

SEMILEDS CORPORATION

FORM 10-Q for the Quarter Ended February 29, 2020

INDEX

 

 

 

Page No.

 

 

 

 

Part I. Financial Information

 

 

 

 

Item 1.

Financial Statements

1

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of February 29, 2020 and August 31, 2019

1

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended February 29, 2020 and February 28, 2019

2

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended February 29, 2020 and February 28, 2019

3

 

 

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity for the three and six months ended February 29, 2020 and February 28, 2019

4

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended February 29, 2020 and February 28, 2019

5

 

 

 

 

Notes to Unaudited Condensed Consolidated Financial Statements

6

 

 

 

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

16

 

 

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

29

 

 

 

Item 4.

Controls and Procedures

29

 

 

 

 

Part II. Other Information

 

 

 

 

Item 1.

Legal Proceedings

30

 

 

 

Item 1A.

Risk Factors

30

 

 

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

31

 

 

 

Item 3.

Defaults Upon Senior Securities

31

 

 

 

Item 4.

Mine Safety Disclosures

31

 

 

 

Item 5.

Other Information

32

 

 

 

Item 6.

Exhibits

32

 

 

 

Signatures

33

 

 

 


Table of Contents

 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

(In thousands of U.S. dollars and shares, except par value)

 

 

 

February 29,

 

 

August 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

3,157

 

 

$

1,363

 

Restricted cash and cash equivalents

 

 

83

 

 

 

19

 

Accounts receivable (including related parties), net of allowance for doubtful accounts of $182 and $195 as of February 29, 2020 and August 31, 2019, respectively

 

 

1,011

 

 

 

703

 

Inventories

 

 

2,513

 

 

 

2,083

 

Prepaid expenses and other current assets

 

 

808

 

 

 

460

 

Total current assets

 

 

7,572

 

 

 

4,628

 

Property, plant and equipment, net

 

 

5,842

 

 

 

5,878

 

Operating lease right of use assets

 

 

273

 

 

 

 

Intangible assets, net

 

 

91

 

 

 

93

 

Investments in unconsolidated entities

 

 

928

 

 

 

894

 

Other assets

 

 

186

 

 

 

169

 

TOTAL ASSETS

 

$

14,892

 

 

$

11,662

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current installments of long-term debt

 

$

3,613

 

 

$

398

 

Accounts payable

 

 

618

 

 

 

680

 

Advance receipt toward the convertible note

 

 

500

 

 

 

500

 

Accrued expenses and other current liabilities

 

 

2,829

 

 

 

2,342

 

Operating lease liabilities, current

 

 

136

 

 

 

 

Total current liabilities

 

 

7,696

 

 

 

3,920

 

Long-term debt, excluding current installments

 

 

4,620

 

 

 

5,954

 

Operating lease liabilities, less current portion

 

 

137

 

 

 

 

Total liabilities

 

 

12,453

 

 

 

9,874

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

SemiLEDs stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.0000056 par value—7,500 shares authorized; 3,623 shares and 3,594 shares issued and outstanding as of February 29, 2020 and August 31, 2019, respectively

 

 

 

 

 

 

Subscribed stock

 

 

600

 

 

 

 

Additional paid-in capital

 

 

175,902

 

 

 

175,804

 

Accumulated other comprehensive income

 

 

3,676

 

 

 

3,753

 

Accumulated deficit

 

 

(177,785

)

 

 

(177,816

)

Total SemiLEDs stockholders' equity

 

 

2,393

 

 

 

1,741

 

Noncontrolling interests

 

 

46

 

 

 

47

 

Total equity

 

 

2,439

 

 

 

1,788

 

TOTAL LIABILITIES AND EQUITY

 

$

14,892

 

 

$

11,662

 

See notes to unaudited condensed consolidated financial statements.

1


Table of Contents

 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(In thousands of U.S. dollars and shares, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

February 29, 2020

 

 

February 28, 2019

 

 

February 29, 2020

 

 

February 28, 2019

 

Revenues, net

 

$

1,537

 

 

$

1,630

 

 

$

3,100

 

 

$

2,602

 

Cost of revenues

 

 

989

 

 

 

1,628

 

 

 

2,034

 

 

 

2,819

 

Gross profit (loss)

 

 

548

 

 

 

2

 

 

 

1,066

 

 

 

(217

)

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

307

 

 

 

298

 

 

 

737

 

 

 

632

 

Selling, general and administrative

 

 

633

 

 

 

619

 

 

 

1,359

 

 

 

1,376

 

Gain on disposals of long-lived assets, net

 

 

 

 

 

 

 

 

(79

)

 

 

(288

)

Total operating expenses

 

 

940

 

 

 

917

 

 

 

2,017

 

 

 

1,720

 

Loss from operations

 

 

(392

)

 

 

(915

)

 

 

(951

)

 

 

(1,937

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposal of investment

 

 

634

 

 

 

 

 

 

634

 

 

 

 

Interest expenses, net

 

 

(100

)

 

 

(36

)

 

 

(178

)

 

 

(41

)

Other income (losses), net

 

 

167

 

 

 

(126

)

 

 

324

 

 

 

(46

)

Foreign currency transaction gain, net

 

 

41

 

 

 

233

 

 

 

199

 

 

 

197

 

Total other income, net

 

 

742

 

 

 

71

 

 

 

979

 

 

 

110

 

Income (loss) before income taxes

 

 

350

 

 

 

(844

)

 

 

28

 

 

 

(1,827

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

350

 

 

 

(844

)

 

 

28

 

 

 

(1,827

)

Less: Net income (loss) attributable to noncontrolling interests

 

 

2

 

 

 

3

 

 

 

(3

)

 

 

(2

)

Net income (loss) attributable to SemiLEDs stockholders

 

$

348

 

 

$

(847

)

 

$

31

 

 

$

(1,825

)

Net income (loss) per share attributable to SemiLEDs stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.10

 

 

$

(0.24

)

 

$

0.01

 

 

$

(0.51

)

Diluted

 

$

0.08

 

 

$

(0.24

)

 

$

0.01

 

 

$

(0.51

)

Shares used in computing net income (loss) per share attributable to SemiLEDs stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

3,613

 

 

 

3,579

 

 

 

3,604

 

 

 

3,569

 

Diluted

 

 

4,486

 

 

 

3,579

 

 

 

3,732

 

 

 

3,569

 

 

See notes to unaudited condensed consolidated financial statements.

2


Table of Contents

 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands of U.S. dollars)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

February 29, 2020

 

 

February 28, 2019

 

 

February 29, 2020

 

 

February 28, 2019

 

Net income (loss)

 

$

350

 

 

$

(844

)

 

$

28

 

 

$

(1,827

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments, net of tax of $0 for all periods presented

 

$

(52

)

 

 

(17

)

 

 

(75

)

 

 

(13

)

Comprehensive income (loss)

 

$

298

 

 

$

(861

)

 

$

(47

)

 

$

(1,840

)

Comprehensive income (loss) attributable to noncontrolling interests

 

$

3

 

 

$

4

 

 

$

(1

)

 

$

(2

)

Comprehensive income (loss) attributable to SemiLEDs stockholders

 

$

295

 

 

$

(865

)

 

$

(46

)

 

$

(1,838

)

 

See notes to unaudited condensed consolidated financial statements.

3


Table of Contents

 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statement of Changes in Equity

(In thousands of U.S. dollars and shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

SemiLEDs

 

 

Non-

 

 

 

 

 

 

 

Common Stock

 

 

Subscribed

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders'

 

 

Controlling

 

 

Total

 

 

 

 

Shares

 

 

Amount

 

 

stock

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

 

BALANCE—September 1, 2019

 

 

3,594

 

 

$

 

 

$

 

 

$

175,804

 

 

$

3,753

 

 

$

(177,816

)

 

$

1,741

 

 

$

47

 

 

$

1,788

 

 

Issuance of common stock under equity incentive plans

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

 

 

 

35

 

 

 

 

 

 

35

 

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(24

)

 

 

 

 

 

(24

)

 

 

1

 

 

 

(23

)

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(317

)

 

 

(317

)

 

 

(5

)

 

 

(322

)

 

BALANCE—November 30, 2019

 

 

3,595

 

 

 

 

 

 

 

 

 

175,839

 

 

 

3,729

 

 

 

(178,133

)

 

 

1,435

 

 

 

43

 

 

 

1,478

 

 

Issuance of common stock under equity incentive plans

 

 

28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

 

24

 

 

Issuance of common stock for private placement

 

 

150

 

 

 

 

 

 

600

 

 

 

 

 

 

 

 

 

 

 

 

600

 

 

 

 

 

 

600

 

 

Issuance of convertible notes

 

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

 

 

 

 

 

 

 

 

39

 

 

 

 

 

 

 

39

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(53

)

 

 

 

 

 

(53

)

 

 

1

 

 

 

(52

)

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

348

 

 

 

348

 

 

 

2

 

 

 

350

 

 

BALANCE—February 29, 2020

 

 

3,773

 

 

$

 

 

$

600

 

 

$

175,902

 

 

$

3,676

 

 

$

(177,785

)

 

$

2,393

 

 

$

46

 

 

$

2,439

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

 

SemiLEDs

 

 

Non-

 

 

 

 

 

 

Common Stock

 

 

Subscribed

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders'

 

 

Controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

stock

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

BALANCE—September 1, 2018

 

 

3,559

 

 

$

 

 

$

 

 

$

175,527

 

 

$

3,727

 

 

$

(174,251

)

 

$

5,003

 

 

$

 

 

$

5,003

 

Issuance of common stock under equity incentive plans

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

43

 

 

 

 

 

 

 

 

 

43

 

 

 

 

 

 

43

 

Common stock issued by SBDI*

 

 

 

 

 

 

 

 

 

 

 

128

 

 

 

 

 

 

 

 

 

128

 

 

 

48

 

 

 

176

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

5

 

 

 

(1

)

 

 

4

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(978

)

 

 

(978

)

 

 

(5

)

 

 

(983

)

BALANCE—November 30, 2018

 

 

3,560

 

 

 

 

 

 

 

 

 

175,698

 

 

 

3,732

 

 

 

(175,229

)

 

 

4,201

 

 

 

42

 

 

 

4,243

 

Issuance of common stock under equity incentive plans

 

 

29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

 

 

 

47

 

 

 

 

 

 

47

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(18

)

 

 

 

 

 

(18

)

 

 

1

 

 

 

(17

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(847

)

 

 

(847

)

 

 

3

 

 

 

(844

)

BALANCE—February 28, 2019

 

 

3,589

 

 

$

 

 

$

 

 

$

175,745

 

 

$

3,714

 

 

$

(176,076

)

 

$

3,383

 

 

$

46

 

 

$

3,429

 

 

See notes to unaudited condensed consolidated financial statements.

*

SBDI (Taiwan Bandaoti Zhaoming Co., Ltd.) is one of the Company’s subsidiaries.

4


Table of Contents

 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands of U.S. dollars)

 

 

 

Six Months Ended

 

 

 

February 29, 2020

 

 

February 28, 2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

28

 

 

$

(1,827

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

412

 

 

 

545

 

Stock-based compensation expense

 

 

59

 

 

 

90

 

Provisions for inventory write-downs

 

 

320

 

 

 

312

 

Gain on disposals of long-lived assets, net

 

 

(79

)

 

 

(288

)

Gain on disposals of investment

 

 

(634

)

 

 

 

Changes in :

 

 

 

 

 

 

 

 

Accounts receivable

 

 

302

 

 

 

(455

)

Inventories

 

 

(680

)

 

 

(559

)