SemiLEDs(LEDS) - 2019 Q4 - Annual Report

Financial Performance - As of August 31, 2019, SemiLEDs Corporation reported total assets of $11,662,000, a decrease from $14,250,000 in 2018, reflecting a decline of approximately 18%[271] - The company generated net revenues of $5,902,000 for the year ended August 31, 2019, down from $7,495,000 in 2018, representing a decrease of about 21%[274] - SemiLEDs incurred a net loss of $3,565,000 for the year ended August 31, 2019, compared to a net loss of $2,981,000 in 2018, indicating an increase in losses of approximately 20%[274] - SemiLEDs reported a net loss of $3.565 million for the year ended August 31, 2019, compared to a net loss of $2.981 million for the previous year, indicating an increase in losses of approximately 19.6%[276] - The comprehensive loss attributable to SemiLEDs stockholders was $3.539 million for the year ended August 31, 2019, compared to $2.955 million in the prior year, reflecting a year-over-year increase of about 19.7%[276] - The total stock-based compensation expense included $44 thousand in cost of revenues, $27 thousand in research and development, and $78 thousand in selling, general, and administrative expenses for 2019[362] - The total loss before income taxes for the year ended August 31, 2019 was $3,565 thousand, compared to a loss of $2,981 thousand in 2018, indicating an increase in losses[376] Assets and Liabilities - Total current liabilities decreased to $3,920,000 in 2019 from $7,234,000 in 2018, a reduction of approximately 46%[271] - SemiLEDs' total liabilities amounted to $9,874,000 in 2019, slightly up from $9,247,000 in 2018, an increase of approximately 7%[271] - The company's accumulated deficit increased to $177,816,000 as of August 31, 2019, compared to $174,251,000 in 2018, reflecting a rise of about 2%[271] - The total equity of SemiLEDs Corporation fell to $1,788,000 in 2019 from $5,003,000 in 2018, a decrease of approximately 64%[271] - Long-term debt increased from $2,348,000 in 2018 to $6,352,000 in 2019, with total long-term debt excluding current installments at $5,954,000[343] - Total accrued expenses and other current liabilities decreased from $5,505,000 in 2018 to $2,342,000 in 2019, primarily due to the absence of advance receipts from the sale of the headquarters building[338] Cash Flow - Cash and cash equivalents decreased to $1,363,000 in 2019 from $3,421,000 in 2018, a decline of about 60%[271] - Net cash used in operating activities was $3.546 million for the year ended August 31, 2019, compared to $1.177 million for the previous year, indicating a significant increase in cash outflow[283] - Cash and cash equivalents at the end of the year were $52,000, down from $194,000 at the beginning of the year[396] - The company reported a net cash used in operating activities of $3,342,000 for 2019, compared to $449,000 in 2018[396] Research and Development - Research and development expenses rose to $1,613,000 in 2019, up from $957,000 in 2018, marking an increase of about 68%[274] - Research and development costs are expensed as incurred and presented as a separate line item in the consolidated statements of operations[318] Revenue Recognition and Accounting Policies - The company adopted ASC 606 for revenue recognition effective September 1, 2018, which impacts how revenue is recognized from contracts with customers[292] - The Company adopted ASU 2016-01, allowing equity investments without readily determinable fair values to be re-measured at fair value upon observable price changes or impairment identification[294] Inventory and Assets - Total inventories as of August 31, 2019, amounted to $2,083 thousand, an increase from $1,818 thousand in 2018[332] - Property, plant, and equipment net value as of August 31, 2019, was $5,878 thousand, down from $7,213 thousand in 2018[333] - Intangible assets as of August 31, 2019, totaled $1,026 thousand, slightly down from $1,038 thousand in 2018[335] - The estimated useful lives of property, plant, and equipment range from 1 to 20 years, depending on the asset type[310] Market and Operational Risks - Significant risks include the inability to compete in a rapidly evolving market and the potential for significant losses over the past few years[299] - The Company relies on a limited number of suppliers and contract manufacturers, which poses a concentration of supply risk[300] Tax and Deferred Assets - The company has established full valuation allowances to offset all deferred tax assets due to uncertainty in realizing future tax benefits[378] - The statutory income tax rate in Taiwan increased from 17% to 20% effective January 1, 2018, impacting the company's tax liabilities[375] - The company recorded a full valuation allowance on net deferred tax assets as of August 31, 2019, resulting in no recognized stock-based compensation tax benefit for the years ended August 31, 2019 and 2018[361] Shareholder and Equity Information - The company recognized a net loss attributable to stockholders of $3,565 thousand for fiscal 2019, compared to a net loss of $2,981 thousand in fiscal 2018[391] - As of August 31, 2019, a total of 1,021 thousand shares were reserved for issuance under the 2010 Plan, an increase from 521 thousand shares in 2018[357] - The company granted 5,000 restricted stock units to directors in September 2019, with a fair value of $2.45 per unit[398] Legal and Subsequent Events - The company paid a total of $3.35 million to settle a lawsuit regarding the return of a $3 million prepayment for the headquarters building sale[352] - There were no material subsequent events disclosed after August 31, 2019[400]