Financial Performance - Revenues for the three months ended November 30, 2023, were $1,650,000, a decrease of 2.7% compared to $1,695,000 for the same period in 2022[17] - Gross profit for the same period was $245,000, down 47.1% from $463,000 year-over-year[17] - The net loss attributable to SemiLEDs stockholders for the three months ended November 30, 2023, was $598,000, compared to a net loss of $512,000 in the prior year, representing an increase of 16.8%[17] - Basic and diluted net loss per share attributable to SemiLEDs stockholders was $(0.12) for the three months ended November 30, 2023, compared to $(0.11) for the same period in 2022[17] - For the three months ended November 30, 2023, the net loss was $596 thousand compared to a net loss of $509 thousand for the same period in 2022[27] - The company reported a gross profit of $1.0 million for the year ended August 31, 2023, down from $1.4 million in 2022[37] - The company incurred losses from operations of $3.4 million for the year ended August 31, 2023, compared to $3.2 million in 2022[37] - The company reported a loss before income taxes of $596 thousand for the three months ended November 30, 2023, compared to a loss of $509 thousand in the same period of 2022[89] Cash and Liquidity - Cash and cash equivalents decreased to $2,322,000 as of November 30, 2023, from $2,572,000 as of August 31, 2023, a decrease of 9.7%[16] - Cash used in operating activities was $(79) thousand, a significant decrease from $396 thousand provided in the same period last year[27] - As of November 30, 2023, cash and cash equivalents decreased to $2.5 million from $4.7 million a year earlier[27] - The liquidity plan includes raising additional cash through equity offerings and asset sales, with no assurance of successful implementation[39] - Management believes that the liquidity plan will be adequate to meet obligations for the next twelve months, but risks remain[39] - The estimated cash requirements to service debt and contractual obligations in fiscal 2024 are approximately $5.1 million, expected to be funded through equity issuance and loan extensions[144] - The company is currently evaluating its liquidity plans to ensure sufficient sources of liquidity for operations and capital expenditures for the next 12 months[144] Assets and Liabilities - Total current assets decreased to $7,339,000 as of November 30, 2023, from $7,594,000 as of August 31, 2023, a decline of 3.4%[16] - Total liabilities increased to $12,410,000 as of November 30, 2023, compared to $12,261,000 as of August 31, 2023, an increase of 1.2%[16] - The accumulated deficit increased to $(187,243,000) as of November 30, 2023, from $(186,645,000) as of August 31, 2023[16] - Total equity decreased to $750,000 as of November 30, 2023, from $1,194,000 as of August 31, 2023, a decline of 37.2%[16] - Long-term debt totaled $6.3 million as of November 30, 2023, down from $6.4 million as of August 31, 2023[136] Inventory and Cost Management - Total cash and cash equivalents decreased from $2,572,000 on August 31, 2023 to $2,322,000 on November 30, 2023[52] - Inventory write-downs were $104,000 and $178,000 for the three months ended November 30, 2023 and 2022, respectively[59] - The company has implemented actions to accelerate operating cost reductions and improve operational efficiencies[114] - Cost of revenues increased by 14% to $1.41 million for the three months ended November 30, 2023, compared to $1.23 million in 2022[123] - Capital expenditures for the three months ended November 30, 2023, were $50 thousand, down from $63 thousand in 2022, focusing on machinery, equipment, and construction[151] Market and Customer Concentration - Net revenues from the top ten customers accounted for 96% and 93% of total net revenues for the three months ended November 30, 2023 and 2022, respectively[53] - Revenues from the United States, Japan, Taiwan, and Netherlands collectively represented 92% and 89% of total net revenues for the three months ended November 30, 2023 and 2022, respectively[53] - Sales to the three largest customers accounted for 72% of total revenues for the three months ended November 30, 2023, compared to 65% in 2022[114] - Revenues from LED components represented 65% of total revenues for the three months ended November 30, 2023, up from 49% in the same period in 2022[124] - Revenues from lighting products decreased from 9% in Q3 2022 to 3% in Q3 2023, attributed to lower demand[125] Risks and Compliance - The company faces risks related to liquidity, potential delisting from NASDAQ, and the ability to introduce new products successfully[98] - The company is at risk of failing to qualify for continued listing on Nasdaq due to not meeting the minimum stockholders' equity requirement of $2.5 million[158] - The company submitted a plan to regain compliance with Nasdaq listing requirements, which was accepted, granting an extension until January 8, 2024[160] - If the common stock is delisted by Nasdaq, it may become more difficult for investors to sell shares, impacting market value[161] Product Development and Strategy - The company is focused on product enhancement and developing its LED products for various applications[38] - The company focuses on developing LED products for various applications, including UV curing, medical light therapy, and architectural lighting[105] - The company has advanced capabilities in optimizing epitaxial growth processes and developing low-cost Chip Scaled Packaging (CSP) technology[108] - The company has a significant reliance on its subsidiary, Taiwan SemiLEDs, for research, development, and manufacturing activities[110]

Financial Performance - Revenues for the year ended August 31, 2023, were $5,979 million, a decrease of 15.2% from $7,051 million in 2022[247]. - Gross profit for the year ended August 31, 2023, was $1,007 million, down from $1,397 million in 2022, reflecting a gross margin decline[247]. - Net loss attributable to SemiLEDs stockholders for the year ended August 31, 2023, was $2,690 million, compared to a net loss of $2,744 million in 2022[247]. - Basic and diluted net loss per share attributable to SemiLEDs stockholders was $(0.55) for 2023, an improvement from $(0.61) in 2022[247]. - The company reported operational losses of $3.4 million for the year ended August 31, 2023, compared to $3.2 million for 2022, with net cash used in operating activities of $984 thousand and $1.5 million respectively[262]. Cash and Liquidity - The company reported cash and cash equivalents of $2.6 million and $4.3 million for August 31, 2023, and 2022, respectively, indicating a decrease in liquidity[151]. - As of August 31, 2023, cash and cash equivalents totaled $2.6 million, down from $4.3 million in the previous year[164]. - The company incurred net losses attributable to stockholders of $2.7 million for both fiscal years 2023 and 2022, with net cash used in operating activities of $984 thousand in 2023[214]. - The company plans to issue additional equity to stockholders to address cash requirements estimated at approximately $5.1 million for fiscal 2024[217]. - The liquidity plan includes potential equity offerings, asset sales, and debt issuance to raise additional cash as necessary[262]. Customer and Revenue Concentration - Sales to the three largest customers accounted for 53% and 59% of total revenues for the years ended August 31, 2023, and 2022, respectively, highlighting customer concentration risk[151]. - Revenues from the Netherlands, Taiwan, the United States, and Japan accounted for 89% and 83% of net revenues for the years ended August 31, 2023, and 2022, respectively, showing geographic concentration[156]. - Major customers accounted for significant portions of revenue, with Customer A contributing 20% in 2023, down from 28% in 2022, while Customer B accounted for 17% in 2023[278]. Operating Expenses and Cost Management - Total operating expenses decreased to $4,411 million in 2023 from $4,597 million in 2022, primarily due to lower research and development costs[247]. - Selling, general and administrative expenses decreased from $3.3 million in 2022 to $3.1 million in 2023, driven by lower bad debt and other expenses[197]. - The company has implemented actions to accelerate operating cost reductions and improve operational efficiencies, including workforce reductions and exploring the sale of manufacturing equipment[151]. - The company plans to adjust its product mix by exiting low-margin product lines to focus on more profitable offerings[193]. Inventory and Asset Management - Inventory write-downs totaled $627 thousand for the year ended August 31, 2023, down from $807 thousand in the previous year, primarily due to obsolescence[174]. - As of August 31, 2023, total inventories amounted to $4,022 thousand, an increase from $3,784 thousand in 2022, with inventory write-downs of $627 thousand in 2023 compared to $807 thousand in 2022[304]. - The company has purchase commitments for inventory and property, plant, and equipment totaling $116 thousand as of August 31, 2023, compared to $121 thousand in 2022[332]. Research and Development - Research and development expenses primarily consist of employee-related costs and engineering charges, with a focus on product design[160]. - Research and development expenses decreased from $1.5 million in 2022 to $1.4 million in 2023, mainly due to reduced materials and payroll expenses[196]. Foreign Currency and Taxation - The company incurred a foreign currency transaction loss of $52 thousand in the current year, compared to a loss of $642 thousand in the previous year[165]. - The corporate income tax rate in Taiwan is 20%, with an alternative minimum tax rate of 12% applicable[170]. - Total foreign net operating loss carryforwards amounted to $72 million as of August 31, 2023, with expiration in various future years[172]. Debt and Financing - As of August 31, 2023, the company's long-term debt totaled $6.4 million, a decrease from $6.9 million in 2022, primarily consisting of NT dollar denominated long-term notes and loans from the Chairman[210]. - Net cash used in financing activities was $456 thousand in 2023, primarily for the repayment of long-term debt[219]. - Scheduled principal payments for long-term debt total $5.0 million for the year ending August 31, 2024[325]. Stock and Equity - The company established an at-the-market equity program allowing the sale of up to $20 million in shares, with net proceeds of $964,473 from 286,328 shares sold in fiscal year 2022[147]. - The company did not sell any shares of its common stock under its ATM program during the year ended August 31, 2023, after selling 286,328 shares for gross proceeds of $995 thousand in 2022[335]. - Stock-based compensation expense for the year ended August 31, 2023, totaled $518 thousand, an increase from $459 thousand in 2022, representing a growth of approximately 12.9%[341].

Financial Performance - The company reported a net loss of $964,473 from the sale of 286,328 shares under its at-the-market equity program during fiscal 2022[101]. - Total revenues decreased by 6% to $1.679 million for the three months ended May 31, 2023, compared to $1.784 million for the same period in 2022[116]. - Total revenues for the nine months ended May 31, 2023, decreased by 17% to $4.526 million from $5.425 million in the same period of 2022[128]. - Revenues from LED components were $1.080 million, representing 64% of total revenues, down from $1.205 million and 68% in the prior year[117]. - Gross profit decreased from $336 thousand (19% gross margin) for the three months ended May 31, 2022, to $241 thousand (14% gross margin) for the same period in 2023[119]. - Gross profit for the nine months ended May 31, 2023, was $966 thousand, with a gross margin of 21%, compared to $1.062 million and 20% in the prior year[132]. - Operating expenses increased to $1.222 million (73% of revenues) for the three months ended May 31, 2023, from $1.110 million (62% of revenues) in the prior year[120]. - Other revenues increased by 29% to $468 thousand, representing 28% of total revenues for the three months ended May 31, 2023[116]. - Total other income decreased from $1.2 million for the nine months ended May 31, 2022, to $766 thousand for the same period in 2023, primarily due to reduced rental income[138]. Liquidity and Funding - The company is focused on improving liquidity and accessing alternative funding sources, with a goal to raise up to $20 million through its equity program[101]. - The company plans to issue additional equity to stockholders as part of its strategy to reduce losses and improve liquidity[149]. - The company estimates cash requirements to service debt and contractual obligations in fiscal 2023 at approximately $5.1 million, expected to be funded through equity issuance and loan extensions[151]. - The company had no available credit facility as of June 30, 2023[142]. - Net cash used in operating activities for the nine months ended May 31, 2023, was $645 thousand, a decrease from $1.9 million in the same period of 2022[155]. - Net cash used in investing activities for the nine months ended May 31, 2023, was $228 thousand, primarily for the purchase of property, plant, and equipment[156]. - Net cash used in financing activities for the nine months ended May 31, 2023, was $354 thousand, mainly for repayments on long-term debt[157]. - Long-term debt decreased to $6.6 million as of May 31, 2023, from $6.9 million as of August 31, 2022[143]. Market and Operational Strategy - The company is working on a new strategy to exploit market opportunities in China and India[91]. - The company’s operations are heavily concentrated in the United States, Japan, Netherlands, and Taiwan, which are key markets for revenue generation[97]. - The company is targeting key markets for system design, including UV LED industrial printers and medical applications[104]. - The company plans to focus on developing high-quality, flexible LED system solutions to improve gross margins and operating results[103]. - The company has developed advanced capabilities in LED manufacturing, including optimizing epitaxial growth processes and utilizing nanoscale surface engineering[98]. - The company’s LED products are used in various applications, including general lighting, UV curing, and architectural lighting[95]. Risks and Challenges - The company faces risks related to the potential loss of key suppliers and the impact of inflation on customer demand[91]. - The company faces significant risks related to reliance on chip suppliers, which could adversely affect business and reputation if supply issues arise[103]. - The company’s ability to maintain compliance with NASDAQ listing requirements is critical to avoid delisting risks[89]. - The average selling prices for LED products have typically decreased over product life cycles, impacting revenues and gross margins[103]. - The company anticipates fluctuations in gross margins due to changes in product mix and manufacturing capacity utilization[103]. Cost Management - The company has implemented actions to accelerate operating cost reductions and improve operational efficiencies, including workforce reductions and exploring the sale of certain manufacturing equipment[106]. - Research and development expenses decreased to $1.0 million for the nine months ended May 31, 2023, from $1.1 million in the same period of 2022, primarily due to reductions in payroll and compensation, professional service fees, and depreciation[133]. - Selling, general and administrative expenses remained stable at $2.3 million for both nine months ended May 31, 2023, and 2022, with a slight decrease attributed to lower other expenses[134]. - The increase in accounts receivable by $649 thousand contributed to the decrease in cash flows from operating activities[155]. - Management is monitoring prices and may decrease capital expenditures to maintain financial flexibility[158]. - Capital expenditures for the nine months ended May 31, 2023, were $212 thousand, an increase from $69 thousand in the same period of 2022[158].

Financial Performance - The total revenues for the three months ended February 28, 2023, were $1.152 million, a decrease of 47% compared to $2.176 million for the same period in 2022 [111]. - Revenues decreased by 47% to $1.2 million for the three months ended February 28, 2023, from $2.2 million for the same period in 2022, primarily due to a $1.2 million decrease in LED component sales [112]. - Revenues for the six months ended February 28, 2023, decreased by 22% to $2.8 million from $3.6 million in the same period of 2022, driven by a $1.5 million decrease in LED component sales [129]. - Sales of LED chips decreased by 72% to $22 thousand, while LED components sales dropped by 76% to $380 thousand, and lighting products sales fell by 61% to $56 thousand [111]. - Gross profit for the three months ended February 28, 2023, was $262 thousand, down 50% from $523 thousand in the same period last year, resulting in a gross margin of 23% [111]. - Gross profit decreased by 50% to $262 thousand for the three months ended February 28, 2023, from $523 thousand in the same period of 2022, reflecting a decrease in product sales [116]. - Gross margin percentage improved to 25% for the six months ended February 28, 2023, compared to 20% for the same period in 2022, due to an increase in higher-margin product sales [133]. - Other revenues increased to $694 thousand, representing 60% of total revenues for the three months ended February 28, 2023, compared to 18% or $387 thousand in the same period of 2022 [114]. Cash and Liquidity - The company is focused on improving liquidity and accessing alternative funding sources, as declining cash position poses a significant risk [90]. - The company had cash and cash equivalents of $3.9 million as of February 28, 2023, down from $4.3 million as of August 31, 2022 [145]. - The company’s cash and cash equivalents increased to $3.9 million as of February 28, 2023, from $3.7 million a year earlier, primarily due to the collection of accounts receivable [101]. - The company plans to issue additional equity to meet cash requirements estimated at approximately $5.1 million for fiscal 2023 [152]. - Net cash used in operating activities for the six months ended February 28, 2023 was $85 thousand, a decrease from $1.0 million for the same period in 2022 [153]. Operational Strategy - The company is developing new products and technologies, including advanced capabilities in LED manufacturing and low-cost Chip Scaled Packaging (CSP) technology [95]. - The company plans to focus on profitable growth in LED module solutions and has adjusted its product mix to emphasize higher-margin products [111]. - The company is exploring opportunities in the China and India markets as part of its new strategy [89]. - The company is concentrating its sales efforts in key markets, including the United States, Japan, Netherlands, and Taiwan, where revenues are heavily concentrated [94]. - The company is exploring opportunities to sell certain manufacturing equipment to reduce idle capacity charges and improve operational efficiencies [101]. Cost Management - The company is implementing cost reduction programs and restructuring plans to improve financial performance [90]. - Total operating expenses increased by 7% to $964 thousand for the three months ended February 28, 2023, compared to $902 thousand in the same period of 2022 [117]. - Selling, general and administrative expenses decreased by 10% to $669 thousand for the three months ended February 28, 2023, from $746 thousand in the same period of 2022 [119]. - Research and development expenses remained constant at $295 thousand for both the three months ended February 28, 2023, and 2022 [118]. Market Risks - The company relies on chip suppliers, which exposes it to risks related to delivery schedules, quality assurance, and production costs, potentially harming its business and reputation [98]. - The company faces competitive pressures from existing and new companies in the LED market, impacting revenue growth [90]. - The average selling prices of products are expected to decline due to competitive pressures, impacting gross margins and revenues [111]. - The company is subject to risks from potential delisting from the NASDAQ Stock Market if it fails to maintain compliance with listing requirements [90]. Debt and Expenses - Long-term debt totaled $6.7 million as of February 28, 2023, down from $6.9 million as of August 31, 2022 [146]. - Interest expenses, net decreased to $(152) thousand for the six months ended February 28, 2023, from $(183) thousand for the same period in 2022 [139]. - Capital expenditures were $83 thousand for the six months ended February 28, 2023, compared to $49 thousand for the same period in 2022 [158]. - The company recognized a net foreign currency transaction loss of $17 thousand for the six months ended February 28, 2023, compared to a loss of $88 thousand for the same period in 2022 [140]. Non-controlling Interests - Net loss attributable to non-controlling interests was $4 thousand for the three months ended February 28, 2023, compared to a net income of $20 thousand in the same period of 2022 [126]. - The net loss attributable to non-controlling interests was $1 thousand for the six months ended February 28, 2023, compared to a gain of $13 thousand for the same period in 2022 [142].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Emerging growth company ☐ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2022 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 ...

Financial Performance - For the three months ended May 31, 2022, SemiLEDs Corporation reported net revenues of $1,784,000, a 24% increase compared to $1,439,000 for the same period in 2021[21]. - The gross profit for the three months ended May 31, 2022, was $336,000, representing a gross margin of approximately 18.8%, compared to a gross profit of $664,000 for the same period in 2021[21]. - The net loss attributable to SemiLEDs stockholders for the three months ended May 31, 2022, was $916,000, compared to a net loss of $64,000 for the same period in 2021, reflecting a significant increase in losses[21]. - The company reported a basic net loss per share of $0.20 for the three months ended May 31, 2022, compared to a loss of $0.02 per share for the same period in 2021[21]. - SemiLEDs reported a net loss of $1,588,000 for the nine months ended May 31, 2022, compared to a net loss of $1,018,000 for the same period in 2021, indicating a year-over-year increase in losses of approximately 56%[31]. - Revenues increased by 61% from $3.4 million for the nine months ended May 31, 2021 to $5.4 million for the nine months ended May 31, 2022, driven by a $1.6 million increase in sales of LED components[141]. Operating Expenses - Total operating expenses for the three months ended May 31, 2022, were $1,110,000, a decrease from $1,256,000 in the same period of 2021, indicating a 12% reduction in operating expenses[21]. - Total operating expenses increased by 8% to $3.2 million for the nine months ended May 31, 2022, compared to $2.95 million in the same period of 2021[146]. - Selling, general and administrative expenses increased to $2.3 million for the nine months ended May 31, 2022, from $2.1 million in 2021, mainly due to higher insurance and patent fees[147]. Cash Flow and Liquidity - Cash and cash equivalents decreased to $3,023,000 as of May 31, 2022, from $4,833,000 as of August 31, 2021, a decline of approximately 37.4%[18]. - The company experienced a cash outflow of $1,863,000 from operating activities for the nine months ended May 31, 2022, compared to an outflow of $826,000 for the same period in 2021, reflecting a significant increase in cash used in operations[31]. - The company reported a decline in cash position, which poses risks to liquidity and operational funding[104]. - The company expects cash requirements to service debt and contractual obligations in fiscal 2022 to be approximately $5.1 million[162]. Assets and Liabilities - As of May 31, 2022, total assets were $16,434,000, down from $18,239,000 as of August 31, 2021, indicating a decrease of approximately 9.9%[18]. - Total liabilities as of May 31, 2022, were $12,940,000, a decrease from $13,613,000 as of August 31, 2021, representing a reduction of about 4.9%[18]. - SemiLEDs Corporation's total equity decreased to $3,494,000 as of May 31, 2022, from $4,626,000 as of August 31, 2021, reflecting a decline of approximately 24.4%[18]. Inventory and Cost of Revenues - Total inventories amounted to $4,095 thousand as of May 31, 2022, an increase from $3,937 thousand as of August 31, 2021[62]. - Cost of revenues increased by 87% from $775 thousand in Q2 2021 to $1.4 million in Q2 2022, primarily due to increased product volumes sold[132]. - Inventory write-down provisions amounted to $592,000 for the nine months ended May 31, 2022, compared to $555,000 for the same period in 2021, indicating a slight increase in inventory losses[31]. Market and Competitive Environment - The company is targeting niche markets and focusing on product enhancement to improve future gross margins and cash flows[40]. - The average selling price of the company's products is expected to decline due to competitive pressures and market conditions, impacting revenue and gross margins[115]. - The company faces competitive pricing pressures and must manage costs effectively to maintain profitability[1]. - The potential market for LED lighting is expected to expand, particularly in applications such as UV curing and medical uses, which could drive demand for the company's products[115]. Strategic Initiatives - The company plans to raise additional cash through potential equity offerings and asset sales to support its liquidity needs[40]. - The company is implementing a restructuring plan aimed at improving gross margins and restoring profitability[104]. - The company is exploring opportunities in the China and India markets as part of its new strategic initiatives[102]. Risks and Uncertainties - The company is subject to significant risks, including the inability to compete effectively and fluctuations in revenues, which could adversely affect its financial position[49]. - The ongoing COVID-19 pandemic has adversely affected customer purchasing behavior and operational capabilities, leading to potential future sales declines[113]. - The company cannot assure that future equity issuance will not experience significant fluctuations or declines, which could lead to investor losses[179].