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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 May 31, 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: 4,006,323 shares of common stock, par value $0.0000056 per share, outstanding as of July 7, 2020.

 


Table of Contents

 

SEMILEDS CORPORATION

FORM 10-Q for the Quarter Ended May 31, 2020

INDEX

 

 

 

Page No.

 

 

 

 

Part I. Financial Information

 

 

 

 

Item 1.

Financial Statements

1

 

 

 

 

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

1

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended May 31, 2020 and 2019

2

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended May 31, 2020 and 2019

3

 

 

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity for the three and nine months ended May 31, 2020 and 2019

4

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the three and nine months ended May 31, 2020 and 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

31

 

 

 

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)

 

 

 

May 31,

 

 

August 31,

 

 

 

2020

 

 

2019

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,476

 

 

$

1,363

 

Restricted cash and cash equivalents

 

 

85

 

 

 

19

 

Accounts receivable (including related parties), net of allowance for doubtful accounts of $184 and $195 as of May 31, 2020 and August 31, 2019, respectively

 

 

1,452

 

 

 

703

 

Inventories

 

 

2,680

 

 

 

2,083

 

Prepaid expenses and other current assets

 

 

788

 

 

 

460

 

Total current assets

 

 

7,481

 

 

 

4,628

 

Property, plant and equipment, net

 

 

5,733

 

 

 

5,878

 

Operating lease right of use assets

 

 

237

 

 

 

 

Intangible assets, net

 

 

89

 

 

 

93

 

Investments in unconsolidated entities

 

 

935

 

 

 

894

 

Other assets

 

 

193

 

 

 

169

 

TOTAL ASSETS

 

$

14,668

 

 

$

11,662

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current installments of long-term debt

 

$

3,240

 

 

$

398

 

Accounts payable

 

 

748

 

 

 

680

 

Advance receipt toward the convertible note

 

 

500

 

 

 

500

 

Accrued expenses and other current liabilities

 

 

2,950

 

 

 

2,342

 

Operating lease liabilities, current

 

 

116

 

 

 

 

Total current liabilities

 

 

7,554

 

 

 

3,920

 

Long-term debt, excluding current installments

 

 

4,361

 

 

 

5,954

 

Operating lease liabilities, less current portion

 

 

121

 

 

 

 

Total liabilities

 

 

12,036

 

 

 

9,874

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

SemiLEDs stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.0000056 par value—7,500 shares authorized; 4,006 shares and 3,594 shares issued and outstanding as of May 31, 2020 and August 31, 2019, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

177,214

 

 

 

175,804

 

Accumulated other comprehensive income

 

 

3,667

 

 

 

3,753

 

Accumulated deficit

 

 

(178,298

)

 

 

(177,816

)

Total SemiLEDs stockholders' equity

 

 

2,583

 

 

 

1,741

 

Noncontrolling interests

 

 

49

 

 

 

47

 

Total equity

 

 

2,632

 

 

 

1,788

 

TOTAL LIABILITIES AND EQUITY

 

$

14,668

 

 

$

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

 

 

Nine Months Ended

 

 

 

May 31, 2020

 

 

May 31, 2019

 

 

May 31, 2020

 

 

May 31, 2019

 

Revenues, net

 

$

1,569

 

 

$

1,745

 

 

$

4,669

 

 

$

4,347

 

Cost of revenues

 

 

1,153

 

 

 

1,405

 

 

 

3,187

 

 

 

4,224

 

Gross profit

 

 

416

 

 

 

340

 

 

 

1,482

 

 

 

123

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

375

 

 

 

444

 

 

 

1,112

 

 

 

1,076

 

Selling, general and administrative

 

 

782

 

 

 

597

 

 

 

2,141

 

 

 

1,973

 

Gain on disposals of long-lived assets, net

 

 

 

 

 

 

 

 

(79

)

 

 

(288

)

Total operating expenses

 

 

1,157

 

 

 

1,041

 

 

 

3,174

 

 

 

2,761

 

Loss from operations

 

 

(741

)

 

 

(701

)

 

 

(1,692

)

 

 

(2,638

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposal of investment

 

 

 

 

 

 

 

 

634

 

 

 

 

Interest expenses, net

 

 

(95

)

 

 

(74

)

 

 

(273

)

 

 

(115

)

Other income (losses), net

 

 

270

 

 

 

94

 

 

 

594

 

 

 

48

 

Foreign currency transaction (losses) gain, net

 

 

57

 

 

 

(177

)

 

 

256

 

 

 

20

 

Total other income (expenses), net

 

 

232

 

 

 

(157

)

 

 

1,211

 

 

 

(47

)

Loss before income taxes

 

 

(509

)

 

 

(858

)

 

 

(481

)

 

 

(2,685

)

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(509

)

 

 

(858

)

 

 

(481

)

 

 

(2,685

)

Less: Net gain (loss) attributable to noncontrolling interests

 

 

4

 

 

 

1

 

 

 

1

 

 

 

(1

)

Net loss attributable to SemiLEDs stockholders

 

$

(513

)

 

$

(859

)

 

$

(482

)

 

$

(2,684

)

Net loss per share attributable to SemiLEDs stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.14

)

 

$

(0.24

)

 

$

(0.13

)

 

$

(0.75

)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

 

3,738

 

 

 

3,589

 

 

 

3,806

 

 

 

3,576

 

 

See notes to unaudited condensed consolidated financial statements.

2


Table of Contents

 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(In thousands of U.S. dollars)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

May 31, 2020

 

 

May 31, 2019

 

 

May 31, 2020

 

 

May 31, 2019

 

Net loss

 

$

(509

)

 

$

(858

)

 

$

(481

)

 

$

(2,685

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(9

)

 

 

12

 

 

 

(84

)

 

 

(1

)

Comprehensive loss

 

$

(518

)

 

$

(846

)

 

$

(565

)

 

$

(2,686

)

Comprehensive loss attributable to noncontrolling interests

 

$

4

 

 

$

(1

)

 

$

3

 

 

$

(3

)

Comprehensive loss attributable to SemiLEDs stockholders

 

$

(522

)

 

$

(845

)

 

$

(568

)

 

$

(2,683

)

 

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, 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 loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

27

 

 

 

 

 

 

 

 

 

 

27

 

 

 

 

 

 

27

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

 

 

(2

)

 

 

12

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(859

)

 

 

(859

)

 

 

1

 

 

 

(858

)

BALANCE—May 31, 2019

 

 

3,589

 

 

$

 

 

$

 

 

$

175,772

 

 

$

3,728

 

 

$

(176,935

)

 

$

2,565

 

 

$

45

 

 

$

2,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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

 

 

 

 

 

 

 

 

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

 

 

3,623