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 28, 2021

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: 4,057,823 shares of common stock, par value $0.0000056 per share, outstanding as of April 6, 2021.

 

 


Table of Contents

 

SEMILEDS CORPORATION

FORM 10-Q for the Quarter Ended February 28, 2021

INDEX

 

 

 

Page No.

 

 

 

 

Part I. Financial Information

 

 

 

 

Item 1.

Financial Statements

1

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of February 28, 2021 and August 31, 2020

1

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended February 28, 2021 and February 29, 2020

2

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended February 28, 2021 and February 29, 2020

3

 

 

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity for the three and six months ended February 28, 2021 and February 29, 2020

4

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended February 28, 2021 and February 29, 2020

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

30

 

 

 

Item 3.

Defaults Upon Senior Securities

31

 

 

 

Item 4.

Mine Safety Disclosures

31

 

 

 

Item 5.

Other Information

31

 

 

 

Item 6.

Exhibits

31

 

 

 

Signatures

32

 

 

 


Table of Contents

 

 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SEMILEDS CORPORATION AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

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

 

 

 

February 28,

 

 

August 31,

 

 

 

2021

 

 

2020

 

 

 

(Unaudited)

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,086

 

 

$

2,832

 

Restricted cash and cash equivalents

 

 

88

 

 

 

85

 

Accounts receivable (including related parties), net of allowance for doubtful accounts of $195 and $187 as of February 28, 2021 and August 31, 2020, respectively

 

 

800

 

 

 

1,331

 

Inventories

 

 

2,905

 

 

 

2,476

 

Prepaid expenses and other current assets

 

 

743

 

 

 

781

 

Total current assets

 

 

6,622

 

 

 

7,505

 

Property, plant and equipment, net

 

 

5,549

 

 

 

5,645

 

Operating lease right of use assets

 

 

1,672

 

 

 

203

 

Intangible assets, net

 

 

120

 

 

 

89

 

Investments in unconsolidated entities

 

 

992

 

 

 

952

 

Other assets

 

 

172

 

 

 

186

 

TOTAL ASSETS

 

$

15,127

 

 

$

14,580

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

Current installments of long-term debt

 

$

5,023

 

 

$

4,750

 

Accounts payable

 

 

439

 

 

 

536

 

Advance receipt toward the convertible note

 

 

500

 

 

 

500

 

Accrued expenses and other current liabilities

 

 

2,483

 

 

 

2,654

 

Other payable to related parties

 

 

611

 

 

 

460

 

Operating lease liabilities, current

 

 

126

 

 

 

97

 

Total current liabilities

 

 

9,182

 

 

 

8,997

 

Long-term debt, excluding current installments

 

 

2,777

 

 

 

2,909

 

Operating lease liabilities, less current portion

 

 

1,546

 

 

 

106

 

Total liabilities

 

 

13,505

 

 

 

12,012

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

 

 

SemiLEDs stockholders’ equity

 

 

 

 

 

 

 

 

Common stock, $0.0000056 par value—7,500 shares authorized; 4,057 shares and 4,011 shares issued and outstanding as of February 28, 2021 and August 31, 2020, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

177,313

 

 

 

177,235

 

Accumulated other comprehensive income

 

 

3,585

 

 

 

3,647

 

Accumulated deficit

 

 

(179,312

)

 

 

(178,360

)

Total SemiLEDs stockholders' equity

 

 

1,586

 

 

 

2,522

 

Noncontrolling interests

 

 

36

 

 

 

46

 

Total equity

 

 

1,622

 

 

 

2,568

 

TOTAL LIABILITIES AND EQUITY

 

$

15,127

 

 

$

14,580

 

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 28, 2021

 

 

February 29, 2020

 

 

February 28, 2021

 

 

February 29, 2020

 

Revenues, net

 

$

1,206

 

 

$

1,537

 

 

$

1,925

 

 

$

3,100

 

Cost of revenues

 

 

965

 

 

 

989

 

 

 

1,706

 

 

 

2,034

 

Gross profit

 

 

241

 

 

 

548

 

 

 

219

 

 

 

1,066

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

288

 

 

 

307

 

 

 

634

 

 

 

737

 

Selling, general and administrative

 

 

667

 

 

 

633

 

 

 

1,348

 

 

 

1,359

 

Gain on disposals of long-lived assets, net

 

 

(207

)

 

 

 

 

 

(284

)

 

 

(79

)

Total operating expenses

 

 

748

 

 

 

940

 

 

 

1,698

 

 

 

2,017

 

Loss from operations

 

 

(507

)

 

 

(392

)

 

 

(1,479

)

 

 

(951

)

Other income (expenses):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on disposal of investment

 

 

 

 

 

634

 

 

 

 

 

 

634

 

Interest expenses, net

 

 

(92

)

 

 

(100

)

 

 

(184

)

 

 

(178

)

Other income (losses), net

 

 

307

 

 

 

167

 

 

 

477

 

 

 

324

 

Foreign currency transaction gain, net

 

 

38

 

 

 

41

 

 

 

225

 

 

 

199

 

Total other income, net

 

 

253

 

 

 

742

 

 

 

518

 

 

 

979

 

Income (loss) before income taxes

 

 

(254

)

 

 

350

 

 

 

(961

)

 

 

28

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

 

(254

)

 

 

350

 

 

 

(961

)

 

 

28

 

Less: Net income (loss) attributable to noncontrolling interests

 

 

1

 

 

 

2

 

 

 

(9

)

 

 

(3

)

Net income (loss) attributable to SemiLEDs stockholders

 

$

(255

)

 

$

348

 

 

$

(952

)

 

$

31

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.06

)

 

$

0.10

 

 

$

(0.24

)

 

$

0.01

 

Diluted

 

$

(0.06

)

 

$

0.08

 

 

$

(0.24

)

 

$

0.01

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

4,033

 

 

 

3,613

 

 

 

4,023

 

 

 

3,604

 

Diluted

 

 

4,033

 

 

 

4,486

 

 

 

4,023

 

 

 

3,732

 

 

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 28, 2021

 

 

February 29, 2020

 

 

February 28, 2021

 

 

February 29, 2020

 

Net income (loss)

 

$

(254

)

 

$

350

 

 

$

(961

)

 

$

28

 

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(32

)

 

 

(52

)

 

 

(60

)

 

 

(75

)

Comprehensive income (loss)

 

$

(286

)

 

$

298

 

 

$

(1,021

)

 

$

(47

)

Comprehensive income (loss) attributable to noncontrolling interests

 

$

2

 

 

$

3

 

 

$

(7

)

 

$

(1

)

Comprehensive income (loss) attributable to SemiLEDs stockholders

 

$

(288

)

 

$

295

 

 

$

(1,014

)

 

$

(46

)

 

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, 2020

 

 

4,011

 

 

$

 

 

$

 

 

$

177,235

 

 

$

3,647

 

 

$

(178,360

)

 

$

2,522

 

 

$

46

 

 

$

2,568

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

 

 

 

21

 

 

 

 

 

 

21

 

 

Change ownership in SBDI*

 

 

 

 

 

 

 

 

 

 

 

(9

)

 

 

 

 

 

 

 

 

(9

)

 

 

(3

)

 

 

(12

)

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(29

)

 

 

 

 

 

(29

)

 

 

1

 

 

 

(28

)

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(697

)

 

 

(697

)

 

 

(10

)

 

 

(707

)

 

BALANCE—November 30, 2020

 

 

4,011

 

 

 

 

 

 

 

 

 

177,247

 

 

 

3,618

 

 

 

(179,057

)

 

 

1,808

 

 

 

34

 

 

 

1,842

 

 

Issuance of common stock under equity incentive plans

 

 

47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

 

 

 

66

 

 

 

 

 

 

66

 

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(33

)

 

 

 

 

 

(33

)

 

 

1

 

 

 

(32

)

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(255

)

 

 

(255

)

 

 

1

 

 

 

(254

)

 

BALANCE—February 28, 2021

 

 

4,058

 

 

$

 

 

$

-

 

 

$

177,313

 

 

$

3,585

 

 

$

(179,312

)

 

$

1,586

 

 

$

36

 

 

$

1,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 28, 2020

 

 

3,773

 

 

$

 

 

$

600

 

 

$

175,902

 

 

$

3,676

 

 

$

(177,785

)

 

$

2,393

 

 

$

46

 

 

$

2,439

 

 

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 28, 2021

 

 

February 29, 2020

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(961

)

 

$

28

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

443

 

 

 

412

 

Stock-based compensation expense

 

 

87

 

 

 

59

 

Provisions for inventory write-downs

 

 

396

 

 

 

320

 

Gain on disposals of long-lived assets, net

 

 

(284

)

 

 

(79

)

Gain on disposals of investment

 

 

 

 

 

(634

)

Changes in :

 

 

 

 

 

 

 

 

Accounts receivable

 

 

810

 

 

 

302

 

Inventories

 

 

(725

)

 

 

(680

)

Prepaid expenses and other

 

 

68

 

 

 

69

 

Accounts payable

 

 

(119

)

 

 

(79

)

Accrued expenses and other current liabilities

 

 

(340

)

 

 

88

 

Net cash used in operating activities

 

 

(625

)