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 ...