Item 1.01. Entry into a Material Definitive Agreement.
As previously reported on July 6, 2016, SemiLEDs Corporation (the “Company”) entered into a definitive purchase agreement effective July 6, 2016 (the “Agreement”) with Dr. Peter Chiou. Pursuant to the terms of the Agreement, Dr. Chiou would purchase 577,000 shares of the Company’s common stock at $5.00 per share (the “Shares”). This represents approximately 19.6% of the outstanding shares of the Company. Dr. Chiou would also subscribe to a $1,615,000 SemiLEDs Corporation’s 0% interest convertible note (the “Note”) with a September 29, 2017 maturity date. Subject to shareholder approval at the Company’s next shareholders meeting, the Note will be convertible, at the Company’s option, into a number of shares of the Company’s common stock equal to the quotient obtained by dividing (x) $1,615,000 by (y) the conversion price, which is equal to the lesser of $3.40 or the 5-trading day volume weighted average price of the common stock on the NASDAQ Stock Market ending on the maturity date.
On August 4, 2016, Dr. Chiou and Well Thrive Limited, a Samoa international company (“Well Thrive”) entered into an assignment and assumption of purchase agreement (the “Assignment”) pursuant to which Dr. Chiou assigned his right, title and interest in the Agreement to Well Thrive. In connection with the Assignment, Dr. Chiou agreed to guarantee Well Thrive’s obligations under the Agreement. The Company consented to the Assignment on August 23, 2016.
On August 23, 2016 and in response to comments from The Nasdaq Stock Market, the parties entered into an amendment to the Agreement (the “Amendment”) to confirm that the Shares issued pursuant to the Agreement may not be counted for purposes of determining whether the shareholders approve the conversion feature of the Note.
On August 23, 2016, after receipt of the second installment of $1,885,000 and approval of the listing of the Shares on the The Nasdaq Stock Market, the Company issued the Shares to Well Thrive.
The foregoing description of the Assignment and Amendment are qualified by reference to the full text of the Assignment, which is filed as Exhibit 10.2 hereto, and the Amendment, which is filed as Exhibit 10.3 hereto, and which are incorporated by reference herein.