10-Q 1 leds-20231130.htm 10-Q 10-Q
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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 November 30, 2023

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: 4,969,032 shares of common stock, par value $0.0000056 per share, outstanding as of January 4, 2024.

 

 


 

SEMILEDS CORPORATION

FORM 10-Q for the Quarter Ended November 30, 2023

INDEX

 

 

 

 

Page No

 

 

 

 

 

Part I. Financial Information

 

 

 

 

 

Item 1.

 

Financial Statements

 

1

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Balance Sheets as of November 30, 2023 and August 31, 2023

 

1

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Operations for the three months ended November 30, 2023 and 2022

 

2

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Comprehensive Loss for the three months ended November 30, 2023 and 2022

 

3

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statement of Changes in Equity for the three months ended November 30, 2023 and 2022

 

4

 

 

 

 

 

 

 

Unaudited Condensed Consolidated Statements of Cash Flows for the three months ended November 30, 2023 and 2022

 

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

 

27

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

27

 

 

 

 

 

Part II. Other Information

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

28

 

 

 

 

 

Item 1A.

 

Risk Factors

 

28

 

 

 

 

 

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

28

 

 

 

 

 

Item 3.

 

Defaults Upon Senior Securities

 

28

 

 

 

 

 

Item 4.

 

Mine Safety Disclosures

 

29

 

 

 

 

 

Item 5.

 

Other Information

 

29

 

 

 

 

 

Item 6.

 

Exhibits

 

29

 

 

 

 

 

Signatures

 

30

 

 

 

 


 

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Balance Sheets

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

 

 

November 30,

 

 

August 31,

 

 

 

2023

 

 

2023

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

2,322

 

 

$

2,572

 

Restricted cash and cash equivalents

 

 

80

 

 

 

78

 

Accounts receivable (including related parties), net of allowance for doubtful accounts of $177 and $173 as of November 30, 2023 and August 31, 2023, respectively

 

 

897

 

 

 

793

 

Inventories

 

 

3,895

 

 

 

4,022

 

Prepaid expenses and other current assets

 

 

145

 

 

 

129

 

Total current assets

 

 

7,339

 

 

 

7,594

 

Property, plant and equipment, net

 

 

3,172

 

 

 

3,233

 

Operating lease right of use assets

 

 

1,362

 

 

 

1,371

 

Intangible assets, net

 

 

100

 

 

 

97

 

Investments in unconsolidated entities

 

 

1,001

 

 

 

974

 

Other assets

 

 

186

 

 

 

186

 

TOTAL ASSETS

 

$

13,160

 

 

$

13,455

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Current installments of long-term debt

 

$

5,055

 

 

$

5,042

 

Accounts payable

 

 

409

 

 

 

436

 

Accrued expenses and other current liabilities

 

 

2,895

 

 

 

2,711

 

Other payable to related parties

 

 

1,452

 

 

 

1,374

 

Operating lease liabilities, current portion

 

 

88

 

 

 

139

 

Total current liabilities

 

 

9,899

 

 

 

9,702

 

Long-term debt, excluding current installments

 

 

1,237

 

 

 

1,327

 

Operating lease liabilities, less current portion

 

 

1,274

 

 

 

1,232

 

Total liabilities

 

 

12,410

 

 

 

12,261

 

Commitments and contingencies (Note 5)

 

 

 

 

 

 

EQUITY:

 

 

 

 

 

 

SemiLEDs stockholders’ equity

 

 

 

 

 

 

Common stock, $0.0000056 par value—7,500 shares authorized; 4,969 shares and 4,941 shares issued and outstanding as of November 30, 2023 and August 31, 2023, respectively

 

 

 

 

 

 

Additional paid-in capital

 

 

184,359

 

 

 

184,246

 

Accumulated other comprehensive income

 

 

3,588

 

 

 

3,550

 

Accumulated deficit

 

 

(187,243

)

 

 

(186,645

)

Total SemiLEDs stockholders' equity

 

 

704

 

 

 

1,151

 

Noncontrolling interests

 

 

46

 

 

 

43

 

Total equity

 

 

750

 

 

 

1,194

 

TOTAL LIABILITIES AND EQUITY

 

$

13,160

 

 

$

13,455

 

 

See notes to unaudited condensed consolidated financial statements.

1


 

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 November 30,

 

 

 

2023

 

 

2022

 

Revenues, net

 

$

1,650

 

 

$

1,695

 

Cost of revenues

 

 

1,405

 

 

 

1,232

 

Gross profit

 

 

245

 

 

 

463

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

 

372

 

 

 

365

 

Selling, general and administrative

 

 

742

 

 

 

752

 

Gain on disposals of long-lived assets

 

 

(50

)

 

 

 

Total operating expenses

 

 

1,064

 

 

 

1,117

 

Loss from operations

 

 

(819

)

 

 

(654

)

Other income (expenses):

 

 

 

 

 

 

Investment income

 

 

8

 

 

 

 

Interest expenses, net

 

 

(88

)

 

 

(87

)

Other income, net

 

 

259

 

 

 

242

 

Foreign currency transaction gain (loss), net

 

 

44

 

 

 

(10

)

Total other income, net

 

 

223

 

 

 

145

 

Loss before income taxes

 

 

(596

)

 

 

(509

)

Income tax expense

 

 

 

 

 

 

Net loss

 

 

(596

)

 

 

(509

)

Less: Net income attributable to noncontrolling interests

 

 

2

 

 

 

3

 

Net loss attributable to SemiLEDs stockholders

 

$

(598

)

 

$

(512

)

Net loss per share attributable to SemiLEDs stockholders:

 

 

 

 

 

 

Basic and diluted

 

$

(0.12

)

 

$

(0.11

)

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

 

 

 

 

 

 

Basic and diluted

 

 

4,885

 

 

 

4,836

 

 

See notes to unaudited condensed consolidated financial statements.

2


 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(In thousands of U.S. dollars)

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

Net loss

 

$

(596

)

 

$

(509

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

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

 

 

39

 

 

 

(55

)

Comprehensive loss

 

 

(557

)

 

 

(564

)

Comprehensive income attributable to noncontrolling interests

 

 

3

 

 

 

3

 

Comprehensive loss attributable to SemiLEDs stockholders

 

$

(560

)

 

$

(567

)

 

See notes to unaudited condensed consolidated financial statements.

3


 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Changes in Equity

(In thousands of U.S. dollars and shares)

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

SemiLEDs

 

 

Non-

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders'

 

 

Controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

BALANCE at September 1, 2023

 

 

4,941

 

 

$

 

 

$

184,246

 

 

$

3,550

 

 

$

(186,645

)

 

$

1,151

 

 

$

43

 

 

$

1,194

 

Stock-based compensation

 

 

28

 

 

 

 

 

 

113

 

 

 

 

 

 

 

 

 

113

 

 

 

 

 

 

113

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

38

 

 

 

 

 

 

38

 

 

 

1

 

 

 

39

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(598

)

 

 

(598

)

 

 

2

 

 

 

(596

)

BALANCE at November 30, 2023

 

 

4,969

 

 

$

 

 

$

184,359

 

 

$

3,588

 

 

$

(187,243

)

 

$

704

 

 

$

46

 

 

$

750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Other

 

 

 

 

 

SemiLEDs

 

 

Non-

 

 

 

 

 

 

Common Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders'

 

 

Controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Income

 

 

Deficit

 

 

Equity

 

 

Interests

 

 

Equity

 

BALANCE at September 1, 2022

 

 

4,832

 

 

$

 

 

$

183,711

 

 

$

3,697

 

 

$

(183,955

)

 

$

3,453

 

 

$

45

 

 

$

3,498

 

Stock-based compensation

 

 

16

 

 

 

 

 

 

125

 

 

 

 

 

 

 

 

 

125

 

 

 

 

 

 

125

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

 

(55

)

 

 

 

 

 

(55

)

 

 

 

 

 

(55

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(512

)

 

 

(512

)

 

 

3

 

 

 

(509

)

BALANCE at November 30, 2022

 

 

4,848

 

 

$

 

 

$

183,836

 

 

$

3,642

 

 

$

(184,467

)

 

$

3,011

 

 

$

48

 

 

$

3,059

 

 

See notes to unaudited condensed consolidated financial statements.

 

 

4


 

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands of U.S. dollars)

 

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net loss

 

$

(596

)

 

$

(509

)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

154

 

 

 

299

 

Stock-based compensation expense

 

 

113

 

 

 

125

 

Provisions for inventory write-downs

 

 

104

 

 

 

178

 

Gain on disposals of long-lived assets, net

 

 

(50

)

 

 

 

Investment income

 

 

(8

)

 

 

 

Changes in:

 

 

 

 

 

 

Accounts receivable

 

 

(37

)

 

 

253

 

Inventories

 

 

97

 

 

 

(122

)

Prepaid expenses and other assets

 

 

1

 

 

 

(14

)

Accounts payable

 

 

(30

)

 

 

(79

)

Accrued expenses and other current liabilities

 

 

173

 

 

 

265

 

Net cash (used in) provided by operating activities

 

 

(79

)

 

 

396

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of property, plant and equipment

 

 

(50

)

 

 

(63

)

Proceeds from sales of property, plant and equipment

 

 

50

 

 

 

 

Payments for development of intangible assets

 

(12

)

 

 

Net cash used in investing activities

 

 

(12

)

 

 

(63

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Repayments of long-term debt

 

 

(114

)

 

 

(115

)

Net cash used in financing activities

 

 

(114

)

 

 

(115

)

Effect of exchange rate changes on cash and cash equivalents and restricted cash

 

 

(41

)

 

 

16

 

NET DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

 

 

(246

)

 

 

234

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—Beginning of period

 

 

2,741

 

 

 

4,452

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—End of period

 

$

2,495

 

 

$

4,686

 

NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Accrual related to property, plant and equipment

 

$

19

 

 

$

44

 

 

See notes to unaudited condensed consolidated financial statements.

5


 

SEMILEDS CORPORATION AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

 

1. Business

SemiLEDs Corporation (“SemiLEDs” or the “parent company”) was incorporated in Delaware on January 4, 2005 and is a holding company for various wholly owned subsidiaries. SemiLEDs and its subsidiaries (collectively, the “Company”) develop, manufacture and sell high performance light emitting diodes (“LEDs”). The Company’s core products are LED components, as well as LED chips and lighting products. LED components have become the most important part of its business. A portion of the Company’s business consists of the sale of contract manufactured LED products. The Company’s customers are concentrated in a few select markets, including the United States, Japan, Taiwan and Netherlands.

As of November 30, 2023, SemiLEDs had two wholly owned subsidiaries. SemiLEDs Optoelectronics Co., Ltd., or Taiwan SemiLEDs, is the Company’s wholly owned operating subsidiary, where a substantial portion of the assets is held and located, and where a portion of our research, development, manufacturing and sales activities take place. Taiwan SemiLEDs owns a 97.37% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd., formerly known as Silicon Base Development, Inc., which is engaged in the research, development, manufacturing and a substantial portion of marketing and sale of LED components, and where most of the Company’s employees are based.

SemiLEDs’ common stock trades on the NASDAQ Capital Market under the symbol “LEDS”.

2. Summary of Significant Accounting Policies

Basis of Presentation —The Company’s unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable provisions of the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by the rules and regulations of the SEC. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on November 28, 2023. The unaudited condensed consolidated balance sheet as of August 31, 2023 included herein was derived from the audited consolidated financial statements as of that date.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s unaudited condensed consolidated balance sheet as of November 30, 2023, the unaudited condensed statements of operations and comprehensive loss for the three months ended November 30, 2023 and 2022, the statements of changes in equity for the three months ended November 30, 2023 and 2022, and the statements of cash flows for the three months ended November 30, 2023 and 2022. The results for the three months ended November 30, 2023 are not necessarily indicative of the results to be expected for the year ending August 31, 2024.

Going Concern —The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements.

6


 

The Company suffered losses from operations of $3.4 million and $3.2 million and used net cash in operating activities of $984 thousand and $1.5 million for the years ended August 31, 2023 and 2022, respectively. These facts and conditions raise substantial doubt about the Company’s ability to continue as a going concern, even though gross profit on product sales was $1.0 million for the year ended August 31, 2023 compared to $1.4 million for the year ended August 31, 2022. On November 30, 2023, the Company’s cash and cash equivalents had decreased to $2.3 million compared to $4.5 million on November 30, 2022. Further, loss from operations for the three months ended November 30, 2023 and 2022 was $819 thousand and $654 thousand, respectively. Management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business.

 

Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of new higher margin products. Steady growth of module products and the continued commercial sales of its UV LED product are expected to improve the Company’s future gross margin, operating results and cash flows. The Company is targeting niche markets and focused on product enhancement and developing its LED product into many other applications or devices.
Continuing to monitor prices, work with current and potential vendors to decrease costs and, consistent with its existing contractual commitments, may possibly decrease its activity level and capital expenditures further. This plan reflects its strategy of controlling capital costs and maintaining financial flexibility.
Raising additional cash through further equity offerings, including sales through an at-the-market, or ATM, program, sales of assets and/or issuance of debt as considered necessary and looking at other potential business opportunities.

While the Company's management believes that the measures described in the above liquidity plan will be adequate to satisfy its liquidity requirements for the twelve months after the date that the financial statements are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on its business, results of operations and financial position, and may adversely affect its ability to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern.

Restricted Cash Equivalents —Restricted cash primarily consists of cash held in reserved bank accounts in Taiwan. As of November 30, 2023 and August 31, 2023, the Company’s restricted cash equivalents at current portion were amounted $80 thousand and $78 thousand, respectively. As of November 30, 2023 and August 31, 2023, the Company’s restricted cash at noncurrent portion, which was recorded as other assets, were $93 thousand and $91 thousand, respectively.

Revenue Recognition —Effective September 1, 2018, the Company adopted ASC 606 using the modified retrospective transition method. The Company applied the following five steps to achieve the core principles of ASC 606: 1) identified the contract with a customer; 2) identified the performance obligations (promises) in the contract; 3) determined the transaction price; 4) allocated the transaction price to the performance obligations in the contract; and 5) recognized revenue when (or as) the Company satisfies a performance obligation. The Company recognizes the amount of revenue, when the Company satisfies a performance obligation, to which it expects to be entitled for the transfer of promised goods or services to customers. The Company obtains written purchase authorizations from its customers as evidence of an arrangement and these authorizations generally provide for a specified amount of product at a fixed price. Generally, the Company considers delivery to have occurred at the time of shipment as this is generally when title and risk of loss for the products will pass to the customer. The Company provides its customers with limited rights of return for non‑conforming shipments and product warranty claims. Based on historical return percentages, which have not been material to date, and other relevant factors, the Company estimates its potential future exposure on recorded product sales, which reduces product revenues in the consolidated statements of operations and reduces accounts receivable in the consolidated balance sheets. The Company also provides standard product warranties on its products, which generally range from three months to two years. Management estimates the Company’s warranty obligations as a percentage of revenues, based on historical knowledge of warranty costs and other relevant factors. To date, the related estimated warranty provisions have been insignificant.

Principles of Consolidation —The unaudited interim condensed consolidated financial statements include the accounts of SemiLEDs and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated during consolidation.

On September 1, 2018, the Company adopted ASC 825-10, “Financial Instruments- Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. This standard allows equity investments that do not have readily determinable fair values to be re-measured at fair value either upon the occurrence of an observable price change or upon identification of impairment. The standard also simplifies the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period.

Investments in which the Company has the ability to exercise significant influence over the investee but not a controlling financial interest, are accounted for using the equity method of accounting and are not consolidated. These investments are in joint ventures that

7


 

are not subject to consolidation under the variable interest model, and for which the Company: (i) does not have a majority voting interest that would allow it to control the investee, or (ii) has a majority voting interest but for which other shareholders have significant participating rights, but for which the Company has the ability to exercise significant influence over operating and financial policies. Under the equity method, investments are stated at cost after adding or removing the Company’s portion of equity in undistributed earnings or losses, respectively. The Company’s investment in these equity‑method entities is reported in the consolidated balance sheets in investments in unconsolidated entities, and the Company’s share of the income or loss of these equity‑method entities, after the elimination of unrealized intercompany profits, is reported in the consolidated statements of operations in equity in losses from unconsolidated entities. When net losses from an equity‑method investee exceed its carrying amount, the carrying amount of the investment is reduced to zero. The Company then suspends using the equity method to provide for additional losses unless the Company has guaranteed obligations or is otherwise committed to provide further financial support to the equity‑method investee. The Company resumes accounting for the investment under the equity method if the investee subsequently returns to profitability and the Company’s share of the investee’s income exceeds its share of the cumulative losses that have not been previously recognized during the period the equity method is suspended.

Investments in entities that are not consolidated or accounted for under the equity method are recorded as investments without readily determinable fair values. Investments without readily determinable fair values are reported on the consolidated balance sheets in investments in unconsolidated entities, at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Dividend income, if any, received is reported in the consolidated statements of operations in equity in losses from unconsolidated entities.

If the fair value of an equity investment declines below its respective carrying amount and the decline is determined to be other‑than‑temporary, the investment will be written down to its fair value.

Use of Estimates —The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the preparation of the Company’s consolidated financial statements on the basis that the Company will continue as a going concern, the collectability of accounts receivable, inventory net realizable values, realization of deferred tax assets, valuation of stock-based compensation expense, the useful lives of property, plant and equipment and intangible assets, the recoverability of the carrying amount of property, plant and equipment, intangible assets and investments in unconsolidated entities, the fair value of acquired tangible and intangible assets, income tax uncertainties, provision for potential litigation costs and other contingencies. Management bases its estimates on historical experience and also on assumptions that it believes are reasonable. Management assesses these estimates on a regular basis; however, actual results could differ materially from those estimates.

Certain Significant Risks and Uncertainties —The Company is subject to certain risks and uncertainties that could have a material and adverse effect on the Company’s future financial position or results of operations, which risks and uncertainties include, among others: it has incurred significant losses over the past several years, any inability of the Company to compete in a rapidly evolving market and to respond quickly and effectively to changing market requirements, any inability of the Company to grow its revenue and/or maintain or increase its margins, it may experience fluctuations in its revenues and operating results, any inability of the Company to protect its intellectual property rights, claims by others that the Company infringes their proprietary technology, and any inability of the Company to raise additional funds in the future.

Concentration of Supply Risk —Some of the components and technologies used in the Company’s products are purchased and licensed from a limited number of sources and some of the Company’s products are produced by a limited number of contract manufacturers. The loss of any of these suppliers and contract manufacturers may cause the Company to incur transition costs to another supplier or contract manufacturer, result in delays in the manufacturing and delivery of the Company’s products, or cause it to carry excess or obsolete inventory. The Company relies on a limited number of such suppliers and contract manufacturers for the fulfillment of its customer orders. Any failure of such suppliers and contract manufacturers to perform could have an adverse effect upon the Company’s reputation and its ability to distribute its products or satisfy customers’ orders, which could adversely affect the Company’s business, financial position, results of operations and cash flows.

Concentration of Credit Risk —Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable.

8


 

The Company keeps its cash and cash equivalents in demand deposits with prominent banks of high credit quality and invests only in money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. As of November 30, 2023 and August 31, 2023, cash and cash equivalents of the Company consisted of the following (in thousands):

 

 

 

November 30,

 

 

August 31,

 

Cash and Cash Equivalents by Location

 

2023

 

 

2023

 

United States;

 

 

 

 

 

 

Denominated in U.S. dollars

 

$

188

 

 

$

190

 

Taiwan;

 

 

 

 

 

 

Denominated in U.S. dollars

 

 

1,528

 

 

 

2,192

 

Denominated in New Taiwan dollars (NT$)

 

 

556

 

 

 

174

 

Denominated in other currencies

 

 

50

 

 

 

16

 

Total cash and cash equivalents

 

$

2,322

 

 

$

2,572

 

 

The Company’s revenues are substantially derived from the sales of LED products. A significant portion of the Company’s revenues are derived from a limited number of customers and sales are concentrated in a few select markets. Management performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable. Management evaluates the need to establish an allowance for doubtful accounts for estimated potential credit losses at each reporting period. The allowance for doubtful accounts is based on the management’s assessment of the collectability of its customer accounts. Management regularly reviews the allowance by considering certain factors, such as historical experience, industry data, credit quality, ages of accounts receivable balances and current economic conditions that may affect a customer’s ability to pay.

Net revenues generated from sales to the top ten customers represented 96% and 93% of the Company’s total net revenues for the three months ended November 30, 2023 and 2022, respectively.

The Company’s revenues have been concentrated in a few select markets, including the United States, Japan, Taiwan and Netherlands. Net revenues generated from sales to customers in these markets, in the aggregate, accounted for 92% and 89% of the Company’s net revenues for the three months ended November 30, 2023 and 2022, respectively.

Noncontrolling Interests —Noncontrolling interests are classified in the consolidated statements of operations as part of consolidated net income (loss) and the accumulated amount of noncontrolling interests in the consolidated balance sheets as part of equity. Changes in ownership interest in a consolidated subsidiary that do not result in a loss of control are accounted for as an equity transaction. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interests are remeasured with the gain or loss reported in net earnings. On September 1, 2018, Taiwan Bandaoti Zhaoming Co., Ltd., the Company’s wholly owned operating subsidiary, issued 414,000 common shares and amended its certificate of incorporation to increase its issued common stock from 12,087,715 to 12,501,715 shares. As of the issuance date, the increased capital of $176 thousand (NT$5.4 million) has been completely received in cash by Taiwan Bandaoti Zhaoming Co., Ltd. The Company did not subscribe for the newly issued common shares, and, as a result, the noncontrolling interest in the Company was increased from zero to 3.31%. From January 2019 to September 2020, the Company purchased an additional 33,000 common shares of SBDI from non-controlling shareholders. From March 2022 to May 2022, the Company purchased an additional 52,000 common shares of SBDI from non-controlling shareholders. The noncontrolling interest in SBDI was 2.63% as of November 30, 2023 and August 31, 2023.

Recent Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models. Upon adoption of ASU 2020-06, convertible debt, unless issued with a substantial premium or an embedded conversion feature that is not clearly and closely related to the host contract, will no longer be allocated between debt and equity components. This modification will reduce the issue discount and result in less non-cash interest expense in financial statements. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. For contracts in an entity’s own equity, the type of contracts primarily affected by ASU 2020-06 are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. ASU 2020-06 is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted, but only if adopted as of the beginning of such fiscal year. The Company is currently evaluating the impact that the standard will have on its unaudited condensed consolidated financial statements.

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own

9


 

Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 provides guidance as to how an issuer should account for a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option (i.e., a warrant) that remains classified after modification or exchange as an exchange of the original instrument for a new instrument. An issuer should measure the effect of a modification or exchange as the difference between the fair value of the modified or exchanged warrant and the fair value of that warrant immediately before modification or exchange and then apply a recognition model that comprises four categories of transactions and the corresponding accounting treatment for each category (equity issuance, debt origination, debt modification, and modifications unrelated to equity issuance and debt origination or modification). ASU 2021-04 was effective for the fiscal year beginning September 1, 2022, including interim periods within those fiscal years. An entity should apply the guidance provided in ASU 2021-04 prospectively to modifications or exchanges occurring on or after the effective date. The Company concluded that the standard has no material impact on its unaudited condensed consolidated financial statements.

3. Balance Sheet Components

Inventories

Inventories as of November 30, 2023 and August 31, 2023 consisted of the following (in thousands):

 

 

 

November 30,

 

 

August 31,

 

 

 

2023

 

 

2023

 

Raw materials

 

$

450

 

 

$

491

 

Work in process

 

 

930

 

 

 

1,216

 

Finished goods

 

 

2,515

 

 

 

2,315

 

Total

 

$

3,895

 

 

$

4,022

 

 

Inventory write-downs to estimated net realizable values were $104 thousand and $178 thousand for the three months ended November 30, 2023 and 2022, respectively.

Property, Plant and Equipment

Property, plant and equipment as of November 30, 2023 and August 31, 2023 consisted of the following (in thousands):

 

 

 

November 30,

 

 

August 31,

 

 

 

2023

 

 

2023

 

Buildings and improvements

 

$

13,385

 

 

$

13,136

 

Machinery and equipment

 

 

26,994

 

 

 

26,606

 

Leasehold improvements

 

 

157

 

 

 

154

 

Other equipment

 

 

2,298

 

 

 

2,165

 

Construction in progress

 

 

103

 

 

 

118

 

Total property, plant and equipment

 

 

42,937

 

 

 

42,179

 

Less: Accumulated depreciation

 

 

(39,765

)

 

 

(38,946

)

Property, plant and equipment, net

 

$

3,172

 

 

$

3,233

 

Intangible Assets

Intangible assets as of November 30, 2023 and August 31, 2023 consisted of the following (in thousands):

 

 

 

November 30, 2023

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Gross

 

 

 

 

 

Net

 

 

 

Amortization

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Period (Years)

 

 

Amount

 

 

Amortization

 

 

Amount

 

Patents and trademarks

 

 

15

 

 

$

582

 

 

$

482

 

 

$

100

 

Acquired technology

 

 

5

 

 

 

326

 

 

 

326

 

 

 

 

Total

 

 

 

 

$

908

 

 

$

808

 

 

$

100

 

 

10


 

 

 

 

August 31, 2023

 

 

 

Weighted

 

 

 

 

 

 

 

 

 

 

 

 

Average

 

 

Gross

 

 

 

 

 

Net

 

 

 

Amortization

 

 

Carrying

 

 

Accumulated

 

 

Carrying

 

 

 

Period (Years)

 

 

Amount

 

 

Amortization

 

 

Amount

 

Patents and trademarks

 

 

15

 

 

$

568

 

 

$

471

 

 

$

97

 

Acquired technology

 

 

5

 

 

 

320

 

 

 

320

 

 

 

 

Total

 

 

 

 

$

888

 

 

$

791

 

 

$

97

 

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities as of November 30, 2023 and August 31, 2023 consisted of the following (in thousands):

 

 

November 30,

 

 

August 31,

 

 

 

 

2023

 

 

2023

 

 

Accrued compensation and benefits

 

$

 

1,936

 

 

$

 

1,766

 

 

Advance from customers

 

 

 

368

 

 

 

 

346

 

 

Accrued business expenses

 

 

 

216

 

 

 

 

163

 

 

Accrued professional service fees

 

 

 

97

 

 

 

 

102

 

 

Other (individually less than 5% of total accrued expenses and other current liabilities)

 

 

 

278

 

 

 

 

334

 

 

Total

 

$

 

2,895

 

 

$

 

2,711

 

 

4. Investments in Unconsolidated Entities

The Company’s ownership interest and carrying amounts of investments in unconsolidated entities as of November 30, 2023 and August 31, 2023 consisted of the following (in thousands, except percentages):

 

 

 

November 30, 2023

 

 

August 31, 2023

 

 

 

Percentage

 

 

 

 

 

Percentage

 

 

 

 

 

 

Ownership

 

 

Amount

 

 

Ownership

 

 

Amount

 

Equity investment without readily determinable fair value

 

Various

 

 

 

898

 

 

Various

 

 

 

881

 

Equity method investments, net

 

 

47.62

 

 

 

103

 

 

 

47.62

 

 

 

93

 

Total investments in unconsolidated entities

 

 

 

 

$

1,001

 

 

 

 

 

$

974

 

 

There were no dividends received from unconsolidated entities through November 30, 2023.

Equity Investments without readily determinable fair value

Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the Company) which do not have readily determinable fair values are recorded as equity investment without readily determinable fair value. All equity investments without readily determinable fair value are assessed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable, and measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuers.

Equity Method Investments

In July 2023, TSLC Corporation, the Company’s subsidiary, approved board resolution to acquire an equity interest in Yi Yang Optoelectronics Co., Ltd. The company accounts for its equity interest using the equity method as prescribed in ASC 323, Investments—Equity Method and Joint Ventures (“ASC 323”). Equity method adjustments include the Company’s proportionate share of investee’s income or loss and other adjustments required by the equity method. As of November 30, 2023, the Company owns 47.62% common stock shares of Yi Yang Optoelectronics Co., Ltd.

5. Commitments and Contingencies

Operating Lease AgreementsThe Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which include cancelable and noncancelable leases and which expire at various dates between December 2024 and December 2040. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes

11


 

lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components.

Most leases do not include options to renew. The exercise of lease renewal options has to be agreed by the lessors. The depreciable life of assets and leasehold improvements are limited by the term of leases, unless there is a transfer of title or purchase option reasonably certain of exercise. Lease expense is recognized on a straight-line basis over the term of the leases. Lease expense related to these noncancelable operating leases were $40 thousand and $41 thousand for the three months ended November 30, 2023 and 2022, respectively.

Balance sheet information related to the Company’s leases is presented below:

 

 

 

November 30, 2023

 

 

August 31, 2023

 

Assets

 

 

 

 

 

 

Operating lease right of use assets

 

$

1,362

 

 

$

1,371

 

Liabilities

 

 

 

 

 

 

Operating lease liabilities, current portion

 

$

88

 

 

$

139

 

Operating lease liabilities, less current portion

 

 

1,274

 

 

 

1,232

 

Total

 

$

1,362

 

 

$

1,371

 

 

The following provides details of the Company’s lease expenses:

 

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

Operating lease expenses

 

$

40

 

 

$

41

 

 

Other information related to leases is presented below:

 

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

Cash Paid for amounts Included In Measurement of Liabilities:

 

 

 

 

 

 

Operating cash flows from operating leases

 

$

40

 

 

$

41

 

Weighted Average Remaining Lease Term:

 

 

 

 

 

 

Operating leases

 

15.84 years

 

 

16.17 years

 

Weighted Average Discount Rate

 

 

 

 

 

 

Operating leases

 

 

1.76

%

 

 

1.76

%

 

As most of the Company’s leases do not provide an implicit rate, the Company uses its average borrowing rate from non-related parties of 1.76% based on the information available at commencement date in determining the present value of lease payments.

The aggregate future noncancelable minimum rental payments for the Company’s operating leases as of November 30, 2023 consisted of the following (in thousands):

 

Years Ending August 31,

 

Operating Leases

 

Remainder of 2024

 

$

124

 

2025

 

 

125

 

2026

 

 

93

 

2027

 

 

93

 

2028

 

 

93

 

Thereafter

 

 

1,030

 

Total future minimum lease payments, undiscounted

 

$

1,558

 

Less: Imputed interest

 

 

(196

)

Present value of future minimum lease payments

 

$

1,362

 

 

Purchase Obligations —The Company had purchase commitments for inventory, property, plant and equipment in the amount of zero and $116 thousand as of November 30, 2023 and August 31, 2023, respectively.

12


 

Litigation —The Company is directly or indirectly involved from time to time in various claims or legal proceedings arising in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated.

As of November 30, 2023, there was no pending or threatened litigation that could have a material impact on the Company’s financial position, results of operations or cash flows.

6. Common Stock

On July 6, 2021, the Company entered into a Sales Agreement (the “Sales Agreement”) with Roth Capital Partners, LLC (the “Agent”). In accordance with the terms of the Sales Agreement, the Company may offer and sell, from time to time through the Agent , the Company’s common stock having an aggregate offering price of up to the greater of $20,000,000, or the aggregate market value of common stock sold by the Company in the prior 12 months which is no more than one-third of the aggregate market value of the Company's common stock held by non-affiliates (the “Placement Shares”). Sales of the Placement Shares, if any, will be made on Nasdaq at market prices by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 of the Securities Act of 1933, as amended. The Company will pay a commission to the Agent of 3.0% of the gross proceeds of the sale of the Placement Shares sold under the Agreement and reimburse the Agent for certain expenses. During the year ended August 31, 2022, the Company sold 286,328 shares of the Company's common stock for gross proceeds of $995 thousand before placement agent fees and bank fees of $31 thousand. During the three months ended November 30, 2023, the Company did not sell any shares of its common stock under its ATM program.

7. Stock-based Compensation

The Company currently has one equity incentive plan (the “2010 Plan”), which provides for awards in the form of restricted shares, stock units, stock options or stock appreciation rights to the Company’s employees, officers, directors and consultants. In April 2014, SemiLEDs’ stockholders approved an amendment to the 2010 Plan that increases the number of shares authorized for issuance under the plan by an additional 250 thousand shares. On July 31, 2019, the stockholders approved an increase in the authorized share reserve under the 2010 plan by an additional 500 thousand shares, to extend expiration of the 2010 Plan to November 3, 2023, to remove the IRS Code section 162(m) provisions, and to modify the maximum grant limit to 35 thousand shares to one person in a one year period. On September 25, 2020, the stockholders approved an amendment to the 2010 Equity Incentive Plan to increase the authorized shares reserve by an additional 400 thousand shares. On March 17, 2023, the Board approved the amendment of the 2010 Plan to extend the term to March 17, 2033, which was approved by the Company's stockholders at the annual meeting held on May 18, 2023.

A total of 1,421 thousand and 1,421 thousand shares was reserved for issuance under and 2010 Plan as of November 30, 2023 and 2022, respectively. As of November 30, 2023 and 2022, there were 513 thousand and 820 thousand shares of common stock available for future issuance under the equity incentive plans.

In July 2023, SemiLEDs granted 10 thousand restricted stock units to its employees, which will vest 25% every three months from the vesting commencement date of July 7, 2023 and will become fully vested upon a change in control. The grant-date fair value of the restricted stock units was $2.44 per unit.

In April 2023, SemiLEDs granted 110.5 thousand restricted stock units to its employees, which will vest 12.5% every three months from the vesting commencement date of April 25, 2023 and will become fully vested upon a change in control. The grant-date fair value of the restricted stock units was $1.87 per unit.

In March 2023, SemiLEDs granted 20 thousand restricted stock units to its employee, which will vest 25% every anniversary starting from the vesting commencement date of March 8, 2023 and will become fully vested upon a change in control. The grant-date fair value of the restricted stock units was $2.30 per unit.

In November 2022, SemiLEDs granted 15 thousand restricted stock units to its directors that will vest 25% every three months on February 7, 2023, May 7, 2023, August 7, 2023 and November 7, 2023. In the event that the 2023 annual meeting falls before November 7, 2023, 100% of the stock shall immediately vest on the date of the 2023 annual meeting. The grant-date fair value of the restricted stock units was $2.33 per unit.

The grant date fair value of stock options is determined using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs including the market price of SemiLEDs’ common stock on the date of grant, the term that the stock options are expected to be outstanding, the implied stock volatilities of several of the Company’s publicly-traded peers over the expected term of stock options, risk-free interest rate and expected dividend. Each of these inputs is subjective and generally requires significant

13


 

judgment to determine. The grant date fair value of stock units is based upon the market price of SemiLEDs’ common stock on the date of the grant. This fair value is amortized to compensation expense over the vesting term.

Stock-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. A forfeiture rate of zero is estimated for stock-based awards with vesting term that is less than or equal to one year from the date of grant.

A summary of the stock-based compensation expense for the three months ended November 30, 2023 and 2022 was as follows (in thousands):

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

Cost of revenues

 

$

36

 

 

$

35

 

Research and development

 

 

37

 

 

 

36

 

Selling, general and administrative

 

 

40

 

 

 

54

 

 

 

$

113

 

 

$

125

 

 

8. Net Loss Per Share of Common Stock

The following stock-based compensation plan awards were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive (in thousands of shares):

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

Stock units and stock options to purchase common stock

 

 

23

 

 

 

17

 

 

9. Income Taxes

The Company’s loss before income taxes for the three months ended November 30, 2023 and 2022 consisted of the following (in thousands):

 

 

Three Months Ended November 30,

 

 

 

2023

 

 

2022

 

U.S. operations

 

$

(153

)

 

$

(201

)

Foreign operations

 

 

(443

)

 

 

(308

)

Loss before income taxes

 

$

(596

)

 

$

(509

)

 

Unrecognized Tax Benefits

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was adopted, which among other effects, reduced the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years, makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. Provisional estimate of the Company is that no tax will be due under this provision.

As of both November 30, 2023 and August 31, 2023, the Company had no unrecognized tax benefits related to tax positions taken in prior periods. The Company files income tax returns in the United States, various U.S. states and certain foreign jurisdictions. The tax years 2019 through