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What changed in SemiLEDs Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of SemiLEDs Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+186 added−196 removedSource: 10-K (2025-11-28) vs 10-K (2024-11-27)

Top changes in SemiLEDs Corp's 2025 10-K

186 paragraphs added · 196 removed · 163 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

76 edited+13 added−16 removed309 unchanged
Biggest changeSuch investment could take time to become fully operational, and could otherwise increase our costs, and we may not be able to execute quickly to take advantage of market opportunities as they arise. Upgrading or expanding existing facilities could result in manufacturing problems that may reduce our yields and utilization rates below our target levels.
Biggest changeThis will mean having to continually expand our production capacity or upgrade our production facilities as we deem appropriate under future market conditions and future customer demand. Such investment could take time to become fully operational, and could otherwise increase our costs, and we may not be able to execute quickly to take advantage of market opportunities as they arise.
The market price of shares of our common stock could be subject to wide fluctuations in response to various risk factors listed in this section and others beyond our control, including: • actual or anticipated fluctuations in our key operating metrics, financial condition and operating results; • changes in the composition of and the orders received from our customers; • actual or anticipated changes in our growth rate; • issuance of new or updated research or reports by securities analysts that have a change in outlook regarding the performance of our business or the future trading price of our common stock; • our announcement of actual results for a fiscal period that are higher or lower than projected or expected results or our announcement of revenue or earnings guidance that is higher or lower than expected; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • sales or expected sales of additional common stock; • announcements from, or operating results of, our competitors; and • general economic and market conditions.
The market price of shares of our common stock could be subject to wide fluctuations in response to various risk factors listed in this section and others beyond our control, including: • actual or anticipated fluctuations in our key operating metrics, financial condition and operating results; • changes in the composition of and the orders received from our customers; 20 Table of Contents • actual or anticipated changes in our growth rate; • issuance of new or updated research or reports by securities analysts that have a change in outlook regarding the performance of our business or the future trading price of our common stock; • our announcement of actual results for a fiscal period that are higher or lower than projected or expected results or our announcement of revenue or earnings guidance that is higher or lower than expected; • fluctuations in the valuation of companies perceived by investors to be comparable to us; • share price and volume fluctuations attributable to inconsistent trading volume levels of our shares; • sales or expected sales of additional common stock; • announcements from, or operating results of, our competitors; and • general economic and market conditions.
The significance of the 19 Table of Contents impact on our operations of an epidemic, pandemic, or other outbreak depends on numerous factors that we may not be able to accurately predict or effectively respond to, including, without limitation: the duration and scope of an outbreak (including the extent of surges, mutations, or strains of the outbreak and the efficacy of vaccination and other efforts to contain the outbreak or treat its effects); actions taken by governments, businesses, and individuals in response to the outbreak; the effect on economic activity and actions taken in response; the effect on customers and their demand for our products and services; the effect on the health, wellness, and productivity of our employees; and our ability to manufacture, sell, and service its products, including without limitation as a result of supply chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and shelter‑in‑place orders.
The significance of the impact on our operations of an epidemic, pandemic, or other outbreak depends on numerous factors that we may not be able to accurately predict or effectively respond to, including, without limitation: the duration and scope of an outbreak (including the extent of surges, mutations, or strains of the outbreak and the efficacy of vaccination and other efforts to contain the outbreak or treat its effects); actions taken by governments, businesses, and individuals in response to the outbreak; the effect on economic activity and actions taken in response; the effect on customers and their demand for our products and services; the effect on the health, wellness, and productivity of our employees; and our ability to manufacture, sell, and service its products, including without limitation as a result of supply chain challenges, facility closures, social distancing, restrictions on travel, fear or anxiety by the populace, and shelter‑in‑place orders.
We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including Taiwan, the United States, the Netherlands and Japan. We also sell our “Enhanced Vertical,” or EV, LED product series in blue, white, green and UV in selected markets.
We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including India, Japan, the Netherlands and the United States. We also sell our “Enhanced Vertical,” or EV, LED product series in blue, white, green and UV in selected markets.
Our ability to successfully develop and introduce new products and product enhancements, and the revenues and costs associated with these efforts, are affected by our ability to (i) properly identify customer needs, (ii) prove the feasibility of new products, (iii) price our products competitively and profitably, (iv) accurately predict and control costs and yields associated with manufacturing the products, (v) manufacture and deliver new products timely and in sufficient volume, (vi) assist the customers in qualifying or adopting the new products in a timely manner and (vii) anticipate and compete successfully with competitors.
Our ability to successfully develop and introduce new products and product enhancements, and the revenues and costs associated with these efforts, are affected by our ability to (i) properly identify customer needs, (ii) prove the feasibility of new products, (iii) price our 11 Table of Contents products competitively and profitably, (iv) accurately predict and control costs and yields associated with manufacturing the products, (v) manufacture and deliver new products timely and in sufficient volume, (vi) assist the customers in qualifying or adopting the new products in a timely manner and (vii) anticipate and compete successfully with competitors.
The cost reduction plan is further enhanced through the fabless business model in which we implemented certain workforce reductions and have sold certain patents that we were no longer actively developing and are exploring the opportunities to consign or sell certain equipment related to the manufacturing of vertical LED chips, in order to reduce the idle capacity charges, minimize our research and development activities associated with chips manufacturing operation.
The cost reduction plan is further enhanced through the fabless business model in which we implemented certain workforce 13 Table of Contents reductions and have sold certain patents that we were no longer actively developing and are exploring the opportunities to consign or sell certain equipment related to the manufacturing of vertical LED chips, in order to reduce the idle capacity charges, minimize our research and development activities associated with chips manufacturing operation.
Foreign Corrupt Practices Act, or FCPA, which generally prohibits U.S. companies from engaging in bribery or making other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to maintain records that accurately and fairly represent our transactions and have an adequate system of internal accounting controls.
Foreign Corrupt Practices Act, or FCPA, which generally prohibits U.S. companies from engaging in bribery or making other prohibited payments to foreign officials for the purpose of obtaining or retaining business. In addition, we are required to 24 Table of Contents maintain records that accurately and fairly represent our transactions and have an adequate system of internal accounting controls.
Sales of our products are concentrated in a few select markets. Adverse developments in these markets could have a material and disproportionate impact on us. Our revenues are highly concentrated in a few select markets, including the Netherlands, Taiwan, the United States and Japan.
Sales of our products are concentrated in a few select markets. Adverse developments in these markets could have a material and disproportionate impact on us. Our revenues are highly concentrated in a few select markets, including India, Japan, the Netherlands and the United States.
There can be no assurance that our interests will not conflict with those of these stockholders, who may also take actions that are not in line, or may conflict, with our other stockholders’ best interests. Delaware law and our certificate of incorporation and bylaws will contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
There can be no assurance that our interests will not conflict with those of these stockholders, who may also take actions that are not in line, or may conflict, with our other stockholders’ best interests. 19 Table of Contents Delaware law and our certificate of incorporation and bylaws will contain anti-takeover provisions that could delay or discourage takeover attempts that stockholders may consider favorable.
There is no assurance, however, that prices of our common stock would be quoted on one of these other trading systems or that an active trading market for our common stock would thereafter exist, which would materially and adversely impact the market value of our common stock. 18 Table of Contents We may seek additional capital that may result in stockholder dilution.
There is no assurance, however, that prices of our common stock would be quoted on one of these other trading systems or that an active trading market for our common stock would thereafter exist, which would materially and adversely impact the market value of our common stock. We may seek additional capital that may result in stockholder dilution.
While we believe that these liquidity plan measures will be adequate to satisfy our liquidity requirements for the twelve months ending August 31, 2025, there is no assurance that the liquidity plan will be successfully implemented.
While we believe that these liquidity plan measures will be adequate to satisfy our liquidity requirements for the twelve months ending August 31, 2026, there is no assurance that the liquidity plan will be successfully implemented.
Despite our planning, some cost-cutting and capital expenditure reduction measures could have unexpected negative consequences. As part of our ongoing cost reduction efforts, we may reduce our work force further and experience additional attrition, which may expose us to 13 Table of Contents legal claims against us and loss of necessary human resources.
Despite our planning, some cost-cutting and capital expenditure reduction measures could have unexpected negative consequences. As part of our ongoing cost reduction efforts, we may reduce our work force further and experience additional attrition, which may expose us to legal claims against us and loss of necessary human resources.
Our introduction of new LED component products, such as the LED components that incorporate EV or UV LED chips may further reduce the selling prices of our older generation products or render them obsolete. We rely on a limited number of key suppliers for certain key raw materials and equipment.
Our introduction of new LED component products, such as the LED 14 Table of Contents components that incorporate EV or UV LED chips may further reduce the selling prices of our older generation products or render them obsolete. We rely on a limited number of key suppliers for certain key raw materials and equipment.
We cannot assure you that our belief with respect to the enforcement of rights within those markets is accurate. In addition, if the products we sell in a particular country are subsequently shipped or resold to another country, the intellectual property laws of the country of final destination may also apply to our products.
We cannot assure you that our belief with respect to the enforcement of rights within those markets is accurate. In addition, if the 22 Table of Contents products we sell in a particular country are subsequently shipped or resold to another country, the intellectual property laws of the country of final destination may also apply to our products.
We generally enter into 14 Table of Contents spot purchase orders with our suppliers and do not have long-term or guaranteed supply arrangements with any of them. For example, we purchase Red or IR LED chips, the key material used in the manufacture of our LED components, from a limited number of suppliers.
We generally enter into spot purchase orders with our suppliers and do not have long-term or guaranteed supply arrangements with any of them. For example, we purchase Red or IR LED chips, the key material used in the manufacture of our LED components, from a limited number of suppliers.
In the past, we have experienced difficulties in achieving acceptable yields when introducing new products or new manufacturing processes, which has adversely affected our operating 15 Table of Contents results. We may experience similar problems in the future, and we cannot predict when they may occur or the severity of such difficulties and the impact on our business.
In the past, we have experienced difficulties in achieving acceptable yields when introducing new products or new manufacturing processes, which has adversely affected our operating results. We may experience similar problems in the future, and we cannot predict when they may occur or the severity of such difficulties and the impact on our business.
However, such cost savings currently have a limited impact on our gross profit, as we have suffered from the underutilization of manufacturing capacity and must absorb a high level of fixed costs, such as depreciation. 12 Table of Contents We compete with many LED chip manufacturers and LED packaging manufacturers.
However, such cost savings currently have a limited impact on our gross profit, as we have suffered from the underutilization of manufacturing capacity and must absorb a high level of fixed costs, such as depreciation. We compete with many LED chip manufacturers and LED packaging manufacturers.
In addition, when we introduce new products and processes, we often use new chemical solutions and chemical compounds with which we have less experience. We must analyze how the various solutions, compounds and layers of materials interact with each other and perform as parts of the LED chip structure.
In addition, when we introduce new products and processes, we often use new chemical solutions and chemical compounds with which we 15 Table of Contents have less experience. We must analyze how the various solutions, compounds and layers of materials interact with each other and perform as parts of the LED chip structure.
Competitors may reduce average selling prices faster than our ability to reduce costs, and competitive pricing pressures may accelerate the rate of decline of our average selling prices. To address increased pricing pressure, we have improved and increased our production yields to reduce the per-unit cost of production for our products.
Competitors may reduce 12 Table of Contents average selling prices faster than our ability to reduce costs, and competitive pricing pressures may accelerate the rate of decline of our average selling prices. To address increased pricing pressure, we have improved and increased our production yields to reduce the per-unit cost of production for our products.
Our customer’s timely and successful product 16 Table of Contents development, the success of our customers’ new product introductions and market acceptance could be materially and adversely affected our operating results. Any undetected defects in our products may harm our sales and reputation and adversely affect our manufacturing yields.
Our customer’s timely and successful product development, the success of our customers’ new product introductions and market acceptance could be materially and adversely affected our operating results. Any undetected defects in our products may harm our sales and reputation and adversely affect our manufacturing yields.
We believe these equity awards create a sense of ownership for the employee and furthers employee commitment to the company’s long-term vision, while simultaneously helping to retain talented employees. As of August 31, 2024, we had approximately 116 employees. All of our employees are based in Taiwan. None of our employees are represented by a labor union.
We believe these equity awards create a sense of ownership for the employee and furthers employee commitment to the company’s long-term vision, while simultaneously helping to retain talented employees. As of August 31, 2025, we had approximately 118 employees. All of our employees are based in Taiwan. None of our employees are represented by a labor union.
Therefore, you are not likely to receive 20 Table of Contents any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon future appreciation in their value.
Therefore, you are not likely to receive any dividends on your common stock for the foreseeable future and the success of an investment in shares of our common stock will depend upon future appreciation in their value.
As we expand and diversify our product offerings and with varying average selling prices, or execute new business initiatives, a change in the mix of products that we sell in any given period may increase volatility in our revenues and gross margin from period to period.
As we expand and diversify our product offerings and with varying average selling prices, or execute new business initiatives, like buy-sell orders of equipment, a change in the mix of products that we sell in any given period may increase volatility in our revenues and gross margin from period to period.
There can be no assurance that the steps we have taken or plan to take in the future are adequate to protect our intellectual property, including our proprietary technologies and trade secrets. We expect to continue to seek patent and trademark protection for our technologies 22 Table of Contents and know-how.
There can be no assurance that the steps we have taken or plan to take in the future are adequate to protect our intellectual property, including our proprietary technologies and trade secrets. We expect to continue to seek patent and trademark protection for our technologies and know-how.
We are also exposed to liquidity risk in the event of non-performance by the counterparty to the convertible note in the purchase agreement. 21 Table of Contents Risks Related to Human Capital We rely on certain key personnel.
We are also exposed to liquidity risk in the event of non-performance by the counterparty to the convertible note in the purchase agreement. Risks Related to Human Capital We rely on certain key personnel.
Furthermore, intellectual property claims against us, including pending claims and litigation, regardless of the outcome, could be used by our competitors to damage our brand reputation and our relationships with existing and potential customers. We derive our revenues mainly from the sales of our LED components.
Furthermore, intellectual property claims against us, including pending claims and litigation, regardless of the outcome, could be used by our competitors to damage our brand reputation and our relationships with existing and potential customers. Historically, we have derived our revenues mainly from the sales of our LED components.
We incurred net losses attributable to SemiLEDs stockholders of $2.0 and $2.7 million for the years ended August 31, 2024 and 2023, respectively. We can give no assurance that we will not continue to incur net losses in future periods.
We incurred net losses attributable to SemiLEDs stockholders of $1.1 million and $2.0 million for the years ended August 31, 2025 and 2024, respectively. We can give no assurance that we will not continue to incur net losses in future periods.
For the years ended August 31, 2024 and 2023, sales to our three largest customers, in the aggregate, accounted for approximately 61% and 53% of our revenues, respectively. The sales cycle from initial contact to confirmed orders with our customers is typically long and unpredictable.
For the years ended August 31, 2025 and 2024, sales to our three largest customers, in the aggregate, accounted for approximately 94% and 61% of our revenues, respectively. The sales cycle from initial contact to confirmed orders with our customers is typically long and unpredictable.
Our revenue from sales in China (including Hong Kong) accounted for 1% and 2% of our revenues for the years ended August 31, 2024 and 2023, respectively. Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences. We are subject to the U.S.
Our revenue from sales in China (including Hong Kong) accounted for 0.3% and 1% of our revenues for the years ended August 31, 2025 and 2024, respectively. Failure to comply with the U.S. Foreign Corrupt Practices Act could subject us to penalties and other adverse consequences. We are subject to the U.S.
We are a holding company with one material asset, which is our ownership interest in Taiwan SemiLEDs. Dividends and interest on intercompany loans we receive from our subsidiaries in Taiwan, if any, will be subject to withholding tax under Taiwan law.
We are a holding company with one material asset, which is our ownership interest in Taiwan Bandaoti Zhaoming Co., Ltd. Dividends and interest on intercompany loans we receive from our subsidiaries in Taiwan, if any, will be subject to withholding tax under Taiwan law.
Most of our operations are located in Taiwan, and the operations of many of our LED manufacturing service providers, suppliers and customers are located in Taiwan and the PRC. Our revenues derived from customers located in Taiwan and China (including Hong Kong) were 14% and 21% for the years ended August 31, 2024 and 2023, respectively.
Most of our operations are located in Taiwan, and the operations of many of our LED manufacturing service providers, suppliers and customers are located in Taiwan and the PRC. Our revenues derived from customers located in Taiwan and China (including Hong Kong) were 0.5% and 14% for the years ended August 31, 2025 and 2024, respectively.
Today, the upfront cost of LED lighting exceeds the upfront cost for some traditional lighting technologies that provide similar lumen output in many applications.
Today, the upfront cost of LED lighting exceeds the 23 Table of Contents upfront cost for some traditional lighting technologies that provide similar lumen output in many applications.
These additional metal layers are collectively called the N‑Contact Metal Layer. After this process, our final LED chip structure is: (i)copper alloy metal layer; (ii)P‑GaN; (iii)MQWs; (iv)N‑GaN; and (v) N‑contact Metal layer. Our final LED chip structure is diced into individual LED chips and then separated, tested and binned according to customer specifications, such as wavelength (color) and brightness.
After this process, our final LED chip structure is: (i)copper alloy metal layer; (ii)P‑GaN; (iii)MQWs; (iv)N‑GaN; and (v) N‑contact Metal layer. Our final LED chip structure is diced into individual LED chips and then separated, tested and binned according to customer specifications, such as wavelength (color) and brightness.
If we fail to complete these registrations or obtain the approvals, our ability to capitalize Taiwan SemiLEDs may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.
If we fail to complete these registrations or obtain the approvals, our ability to capitalize Taiwan Bandaoti Zhaoming Co., Ltd. may be negatively affected, which could adversely and materially affect our liquidity and our ability to fund and expand our business.
Any resulting delays in shipments of our products could also 23 Table of Contents cause our customers to obtain products from other sources.
Any resulting delays in shipments of our products could also cause our customers to obtain products from other sources.
Sales by end-customers of our products are generally dependent on their ability to develop high quality and highly efficient lighting products and require complex designs and processes, including thermal design, optical design and power conversion.
A majority of our sales are to such end-customers in selected markets. Sales by end-customers of our products are generally dependent on their ability to develop high quality and highly efficient lighting products and require complex designs and processes, including thermal design, optical design and power conversion.
We believe these capabilities and know-how should also allow us to reduce our manufacturing costs and our dependence on sapphire, a costly raw material used in the production of sapphire-based LED devices. We were incorporated in the State of Delaware on January 4, 2005. We are a holding company for two principal owned subsidiaries.
We believe these capabilities and know-how should also allow us to reduce our manufacturing costs and our dependence on sapphire, a costly raw material used in the production of sapphire-based LED devices. We were incorporated in the State of Delaware on January 4, 2005.
The rights of stockholders may be limited as we conduct a substantial portion of our operations in Taiwan and a substantial portion of our assets and substantially all of our directors and officers reside outside the United States. Although we are incorporated in Delaware, a substantial portion of our operations are conducted in Taiwan through Taiwan SemiLEDs and its subsidiaries.
The rights of stockholders may be limited as we conduct a substantial portion of our operations in Taiwan and a substantial portion of our assets and substantially all of our directors and officers reside outside the United States. Although we are incorporated in Delaware, a substantial portion of our operations are conducted in Taiwan through Taiwan Bandaoti Zhaoming Co., Ltd.
Our inability to grow our revenues generated from the sales of LED components would have a negative impact on our financial condition and results of operation. LED components are the core products from which we derive our revenues.
Our inability to grow our revenues generated from the sales of LED components would have a negative impact on our financial condition and results of operation. Until recently, LED components were the core products from which we derived our revenues.
With our design capability and high precision packaging capabilities, Taiwan Bandaoti Zhaoming Co., Ltd., formerly known as Silicon Base Development, Inc., assisted in the design and manufacturing of transceiver modules to be used for ADAS (Advanced Driver Assistance Systems) applications.
With our design capability and high precision packaging capabilities, Taiwan Bandaoti Zhaoming Co., Ltd. assisted in the design and manufacturing of transceiver modules to be used for ADAS (Advanced Driver Assistance Systems) applications.
Our revenue and operating results may continue to decline for a variety of reasons, some of which are described elsewhere in this “Risk Factors” section and are beyond our control. As of August 31, 2024, we had an accumulated deficit of $189 million.
Our revenue and operating results may continue to decline for a variety of reasons, some of which are described elsewhere in this “Risk Factors” section and are beyond our control. As of August 31, 2025, we had an accumulated deficit of $190 million and cash and cash equivalents of $2.6 million.
However, we are dependent on Taiwan SemiLEDs’ ability to raise money through the sale of a portion of its subsidiary and the restructuring of its chip operation to pay back SemiLEDs Corporation.
However, we are dependent on Taiwan Bandaoti Zhaoming Co., Ltd.’s ability to raise money through the sale of a portion of its subsidiary and the restructuring of its chip operation to pay back SemiLEDs Corporation.
For example, as a strategic plan, we placed greater emphasis on the sales of LED components rather than the sales of LED chips where we have been forced to cut prices on older inventory. In 2023, sales and gross margin both decreased due to a decline in other revenues rather than LED components compared to 2022.
For example, as a strategic plan, we placed greater emphasis on the sales of LED components rather than the sales of LED chips where we have been forced to cut prices on older inventory. In 2024, sales decreased but gross margin increased due to higher other revenues rather than LED chips, LED components and lighting products sales compared to 2023.
OEM/ODM Services We provide design and manufacturing services at the modular and system level. Currently, most of the design projects involve high power UV LED lamps to be incorporated/retrofitted into large scale press equipment. Besides hardware, we also provide software development to lamp control and equipment-to-lamp signal communication.
Currently, most of the design projects involve high power UV LED lamps to be incorporated/retrofitted into large scale press equipment. Besides hardware, we also provide software development to lamp control and equipment-to-lamp signal communication.
Our ability to operate our holding company in the U.S. is dependent on Taiwan SemiLEDs’ ability to repay its obligations to SemiLEDs Corporation. SemiLEDs Corporation has substantial intercompany receivables from Taiwan SemiLEDs.
Our ability to operate our holding company in the U.S. is dependent on Taiwan Bandaoti Zhaoming Co., Ltd.’s ability to repay its obligations to SemiLEDs Corporation. SemiLEDs Corporation has substantial intercompany receivables from Taiwan Bandaoti Zhaoming Co., Ltd.
As of November 20, 2024, our directors and executive officers, together with their affiliates, beneficially owned, in the aggregate, approximately 53.4% of our outstanding common stock.
As of November 20, 2025, our directors and executive officers, together with their affiliates, beneficially owned, in the aggregate, approximately 58.7% of our outstanding common stock.
Net revenues generated from sales to customers in the Netherlands, Taiwan, the United States, and Japan, in the aggregate, accounted for approximately 91% and 89% of our net revenues for the years ended August 31, 2024 and 2023, respectively.
Net revenues generated from sales to customers in India, Japan, the Netherlands and the United States, in the aggregate, accounted for approximately 97% and 78% of our net revenues for the years ended August 31, 2025 and 2024, respectively.
And our cash and cash equivalents decreased to $1.7 million at August 31, 2024, these facts and conditions raise substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm has included an explanatory paragraph regarding going concern qualification in its audit report.
These facts and conditions raise substantial doubt about our ability to continue as a going concern, and our independent registered public accounting firm has included an explanatory paragraph regarding going concern qualification in its audit report.
Revenues attributable to the sales of our LED components represented approximately 51% and 56% of our revenues for the years ended August 31, 2024 and 2023, respectively. We expect to continue to generate our revenues mainly from the sales of LED components for the foreseeable future.
Revenues attributable to the sales of our LED components represented approximately 5% and 51% of our revenues for the years ended August 31, 2025 and 2024, respectively. Excluding revenues from buy-sell orders of equipment, we expect to continue to generate our revenues mainly from the sales of LED components for the foreseeable future.
As of August 31, 2024, we had 96 patents issued and 15 patents pending with the United States Patent and Trademark Office covering various aspects of our core technologies. As of August 31, 2024, we also had 96 patents issued and 14 patents pending before patent and trademark offices outside the United States.
As of August 31, 2025, we had 81 patents issued and 10 patents pending with the United States Patent and Trademark Office covering various aspects of our core technologies. As of August 31, 2025, we also had 97 patents issued and 11 patents pending before patent and trademark offices outside the United States.
Any capital contribution by us to Taiwan SemiLEDs requires the approval of the relevant Taiwan authorities, such as the Hsinchu Science Park Administration. We may not be able to obtain any such approval in the future in a timely manner, or at all.
Taiwan Bandaoti Zhaoming Co., Ltd. depends on us to meet its equity financing requirements. Any capital contribution by us to Taiwan Bandaoti Zhaoming Co., Ltd. requires the approval of the relevant Taiwan authorities, such as the Hsinchu Science Park Administration. We may not be able to obtain any such approval in the future in a timely manner, or at all.
For the years ended August 31, 2024 and 2023, our top ten customers collectively accounted for approximately 91% of our revenues. Some of our largest customers and what we produce, or have produced, for them have changed from quarter to quarter primarily as a result of the timing of discrete, large project-based purchases and broadening customer base, among other things.
Some of our largest customers and what we produce, or have produced, for them have changed from quarter to quarter primarily as a result of the timing of discrete, large project-based purchases and broadening customer base, among other things.
Additionally, on July 11, 2023, we received a notice from NASDAQ indicating that we did not meet the minimum of $2,500,000 in stockholders’ equity required by Nasdaq Listing Rule 5550(b)(1) for continued listing or the alternatives of market value of listed securities or net income from continuing operations.
On December 4, 2024, we received a notice from Nasdaq indicating that we did not meet the minimum of $2.5 million in stockholders’ equity required by Nasdaq Listing Rule 5550(b)(1) for continued listing or the alternatives of market value of listed securities or net income from continuing operations. Pursuant to the Nasdaq listing rule, we submitted a plan to Nasdaq.
If we fail to comply with current and future environmental laws and regulations, whether intentional or inadvertent, we may be required to pay fines and other liabilities to the government or third parties, suspend production or even cease operation.
If we fail to comply with current and future environmental laws and regulations, whether intentional or inadvertent, we may be required to pay fines and other liabilities to the government or third parties, suspend production or even cease operation. We may be required to delay the recognition of revenues if the shipment of equipment purchased on buy-sell orders is delayed.
Any future agreements that we may enter into also could expose us to new operational, regulatory, market, litigation and geographical risks as well as risks associated with significant capital requirements, the diversion of management and financial resources, unforeseen operating difficulties and expenditures, sharing of proprietary information, loss of control over day-to-day operations, non-performance by a counterparty and potential competition and conflicts of interest.
These activities involve challenges and risks in negotiation, execution, valuation and integration, and closing of the transactions could be delayed or prevented by regulatory approval requirements, including antitrust review, or other conditions. 21 Table of Contents Any future agreements that we may enter into also could expose us to new operational, regulatory, market, litigation and geographical risks as well as risks associated with significant capital requirements, the diversion of management and financial resources, unforeseen operating difficulties and expenditures, sharing of proprietary information, loss of control over day-to-day operations, non-performance by a counterparty and potential competition and conflicts of interest.
On July 5, 2019, Taiwan SemiLEDs entered into two new loan agreements to refinance existing real estate loans of Taiwan SemiLEDs and provide for operating capital. 17 Table of Contents Our ability to make further investments in Taiwan SemiLEDs may be dependent on regulatory approvals in Taiwan. Taiwan SemiLEDs depends on us to meet its equity financing requirements.
On July 5, 2019, Taiwan Bandaoti Zhaoming Co., Ltd. entered into two new loan agreements to refinance existing real estate loans of Taiwan Bandaoti Zhaoming Co., Ltd. and provide for operating capital. Our ability to make further investments in Taiwan Bandaoti Zhaoming Co., Ltd. may be dependent on regulatory approvals in Taiwan.
For the years ended August 31, 2024 and 2023, our top ten customers collectively accounted for approximately 91% of our revenues. Some of our largest customers and what we produce/have produced for them change from quarter to quarter, primarily as a result of the timing of discrete, large project-based purchases and broadening customer base, among other things.
Some of our largest customers and what we produce for them change from quarter to quarter, primarily as a result of the timing of discrete, large project-based purchases and broadening customer base, among other things.
The loss of, or a significant reduction in purchases by, one or more of these customers, or the failure by one of these customers to pay, could adversely affect our operating results and financial condition. We have historically derived a significant portion of our revenues from a limited number of customers, including distributor customers.
We derive substantially all of our revenues from a limited number of customers, including distributor customers, and generally do not enter into long-term customer contracts. The loss of, or a significant reduction in purchases by, one or more of these customers, or the failure by one of these customers to pay, could adversely affect our operating results and financial condition.
With respect to the sale of our LED components, a substantial portion of which is used in specialty industrial applications, such as UV curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, and architectural lighting. A majority of our sales are to such end-customers in selected markets.
If the end-customers for our products are unable to manufacture fixtures that meet these standards, our customers’ sales, and consequently our sales, will suffer. 16 Table of Contents With respect to the sale of our LED components, a substantial portion of which is used in specialty industrial applications, such as UV curing of polymers, LED light therapy in medical/cosmetic applications, counterfeit detection, LED lighting for horticulture applications, and architectural lighting.
The remaining device structure—consisting of the P‑Contact Metal Layer on top of the epitaxial layers— is then ready for further processing. To complete our LED device structure, we then deposit and define additional metal layers on top of the N‑GaN layers to achieve low resistance contact with the N‑GaN layers.
To complete our LED device structure, we then deposit and define additional metal layers on top of the N‑GaN layers to achieve low resistance contact with the N‑GaN layers. These additional metal layers are collectively called the N‑Contact Metal Layer.
In 2024, sales decreased but gross margin increased due to higher other revenues rather than LED chips, LED components and lighting products sales compared to 2023.
In 2025, sales increased but gross margin decreased due to higher other revenues, which generally have lower margins than LED chips, LED components and lighting products sales.
To maintain that listing, we must satisfy the continued listing requirements of Nasdaq for inclusion in the Nasdaq Capital Market, including among other things, a minimum stockholders’ equity of $2.5 million and a minimum bid price for our common stock of $1.00 per share, that a majority of the members of our board of directors are independent under the Nasdaq Listing Rules and that our audit committee consist of three independent directors who satisfy additional requirements under the Exchange Act.
To maintain that listing, we must satisfy the continued listing requirements of Nasdaq for continued listing on the Nasdaq Capital Market, including among other things, a minimum stockholders’ equity of $2.5 million and a minimum bid price for our common stock of $1.00 per share.
Even if we are successful, if a customer requires certain certifications for or new qualification process of our new products, the time when that customer will actually purchase our products and we will be able to receive revenue from that customer will be significantly delayed. 11 Table of Contents We derive a significant portion of our revenues from a limited number of customers, including distributor customers, and generally do not enter into long-term customer contracts.
Even if we are successful, if a customer requires certain certifications for or new qualification process of our new products, the time when that customer will actually purchase our products and we will be able to receive revenue from that customer will be significantly delayed.
For the year ended August 31, 2023, sales to INDEL Distribution B.V. and Revlon, Inc. accounted for 20% and 17% of our total revenues, respectively. Our revenues are concentrated in a few select markets. We expect that our revenues will continue to be substantially derived from these countries for the foreseeable future.
For the years ended August 31, 2025 and 2024, sales to our three largest customers, in the aggregate, accounted for 94% and 61% of our revenues, respectively. Our revenues are concentrated in a few select markets. We expect that our revenues will continue to be substantially derived from these countries for the foreseeable future.
Our Technology Our proprietary technology integrates copper alloy in a vertical LED structure. We first grow epitaxial layers on a sapphire wafer. The epitaxial layers are multiple doped GaN layers. At this point in the process, our structure has the following order: (i)sapphire; (ii)n‑doped GaN (N‑GaN); (iii)multi‑quantum well layers (MQWs); and (iv)p‑doped GaN (P‑GaN).
The epitaxial layers are multiple doped GaN layers. At this point in the process, our structure has the following order: (i)sapphire; (ii)n‑doped GaN (N‑GaN); (iii)multi‑quantum well layers (MQWs); and (iv)p‑doped GaN (P‑GaN). Next, we deposit and define (by patterning and etching) multiple metal layers on the P‑GaN layer.
Next, we deposit and define (by patterning and etching) multiple metal layers on the P‑GaN layer. These metal layers consist of several different mirror layers and copper alloy layers, which are deposited on top of the mirror layers by electroplating.
These metal layers consist of several different mirror layers and copper alloy layers, which are deposited on top of the mirror layers by electroplating. The copper alloy metal layers, which are collectively called the P‑Contact Metal Layer, create low resistance contact with the P‑GaN layer.
From time to time, we may use contract manufacturers to produce products or some parts of our products.
The inability of our contract manufacturers to produce products that satisfy our requirements may have a material adverse effect on our business. From time to time, we may use contract manufacturers to produce products or some parts of our products.
The PRC government’s control of currency conversion and changes in the exchange rate between the Renminbi and other currencies could negatively affect our financial condition and our ability to pay dividends. The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of China.
Any significant fluctuation in exchange rates may be harmful to our financial condition and results of operations. The PRC government’s control of currency conversion and changes in the exchange rate between the Renminbi and other currencies could negatively affect our financial condition and our ability to pay dividends.
Risks Relating to Our Holding Company Structure Our ability to receive dividends and other payments from Taiwan SemiLEDs may be restricted by commercial and legal restrictions, which may materially and adversely affect our ability to grow, fund investments, make acquisitions, pay dividends and otherwise fund and conduct our business.
We are unable to determine the impact that changes in tax and trade policy could have on our sales into the United States or other countries, but it could be material. 17 Table of Contents Risks Relating to Our Holding Company Structure Our ability to receive dividends and other payments from Taiwan Bandaoti Zhaoming Co., Ltd. may be restricted by commercial and legal restrictions, which may materially and adversely affect our ability to grow, fund investments, make acquisitions, pay dividends and otherwise fund and conduct our business.
The copper alloy metal layers, which are collectively called the P‑Contact Metal Layer, create low resistance contact with the P‑GaN layer. We then remove the sapphire wafer from the N‑GaN layer through laser radiation, and the sapphire wafer is removed from the production line and recycled.
We then remove the sapphire wafer from the N‑GaN layer through laser radiation, and the sapphire wafer is removed from the production line and recycled. The remaining device structure—consisting of the P‑Contact Metal Layer on top of the epitaxial layers— is then ready for further processing.
While we intend to focus on managing our costs and expenses in the short term, over the long term we expect to be required to invest substantially if we are to grow. This will mean having to continually expand our production capacity or upgrade our production facilities as we deem appropriate under future market conditions and future customer demand.
While we intend to focus on managing our costs and expenses, over the long term we expect to be required to invest substantially in LED components product development and production equipment if we are to grow.
For example, the announcement of Brexit caused severe volatility in global currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business. Any significant fluctuation in exchange rates may be harmful to our financial condition and results of operations.
For example, the recently imposed and proposed tariffs by the United States on goods imported from many countries caused severe volatility in global currency exchange rate fluctuations that resulted in the strengthening of the U.S. dollar against foreign currencies in which we conduct business.
Of these 192 issued patents, 124 expire between 2025 and 2029, 47 expire between 2030 and 2034, 18 expire between 2035 and 2041, and three expire after 2041. Thirty-four of our issued patents are design patents and one of our pending patents is a design patent.
Of these 178 issued patents, 116 expire between 2026 and 2030, 34 expire between 2031 and 2035, 26 expire between 2036 and 2042, and two expire after 2042. Thirty of our issued patents are design patents and none of our pending patents is a design patent.
However, our stockholders equity has again declined below the $2,500,000 minimum as of August 31, 2024, so we may receive another deficiency notice. There can be no assurance that we will be able to regain or maintain compliance with Nasdaq’s continued listing requirements or that our common stock will not be delisted from Nasdaq in the future.
As a result of the repayment in shares, our stockholders’ equity exceeded $2.5 million as of February 28, 2025, and Nasdaq issued a conditional compliance letter on April 17, 2025. There can be no assurance that we will be able to maintain compliance with Nasdaq’s continued listing requirements or that our common stock will not be delisted from Nasdaq.
Our lighting products consist primarily of LED luminaries and LED retrofits. Our lighting product customers are primarily ODMs of lighting products and the end-users of lighting devices. Revenues from sales of our lighting products represented 4% and 5% of our revenues for the years ended August 31, 2024 and 2023, respectively.
Our lighting products consist primarily of LED luminaries and LED retrofits. Our lighting product customers are primarily ODMs of lighting products and the end-users of lighting devices. OEM/ODM Services We provide design and manufacturing services at the modular and system level.
If we cannot generate sufficient cash or obtain additional financing, we may be required to downsize our business further or discontinue our operations altogether. We depend on contract manufacturing for portions of our supply chain. The inability of our contract manufacturers to produce products that satisfy our requirements may have a material adverse effect on our business.
If we cannot generate sufficient cash or obtain additional financing, we may be required to downsize our business further or discontinue our operations altogether. In the year ended August 31, 2025, we derived the significant majority of our revenues from the purchase and sale of equipment from vendors in China.
Removed
SemiLEDs Optoelectronics Co., Ltd., or Taiwan SemiLEDs, is our wholly owned operating subsidiary, where a substantial portion of our assets are held and located, and where a portion of our research, development, manufacturing and sales activities take place.
Added
We are a holding company for our wholly owned operating subsidiary, Taiwan Bandaoti Zhaoming Co., Ltd., which conducts our research, development, manufacturing, marketing and sale of LED components and employs the Company’s employees. Our Technology Our proprietary technology integrates copper alloy in a vertical LED structure. We first grow epitaxial layers on a sapphire wafer.
Removed
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, manufacture and a substantial portion of marketing and sale of LED products, including lighting fixtures and systems, and is where most of our employees are based.
Added
For the years ended August 31, 2025 and 2024, our top ten customers collectively accounted for 99% and 91% of our revenues, respectively.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity Risk Management and Strategy 24 Table of Contents We have dedicated to advance our cybersecurity risk management and integrated it into our overall risk management program, which program manages cybersecurity, financial, operational and compliance risks. To access, identify and manage cybersecurity threats, we implemented a cybersecurity risk management program with oversight by our Board of Directors (“Board”).
Biggest changeItem 1C. Cybersecurity Risk Management and Strategy We have dedicated to advance our cybersecurity risk management and integrated it into our overall risk management program, which program manages cybersecurity, financial, operational and compliance risks. To access, identify and manage cybersecurity threats, we implemented a cybersecurity risk management program with oversight by our Board of Directors (“Board”).

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. P roperties The following are significant manufacturing and office facilities that we own or lease as of August 31, 2024: • We own a four-story building located in Hsinchu Science Park, Taiwan. We occupy approximately 183 thousand square feet of the building, and we lease approximately 55 thousand square feet of space to a third-party tenant.
Biggest changeItem 2. P roperties The following are significant manufacturing and office facilities that we own or lease as of August 31, 2025: • We own a four-story building located in Hsinchu Science Park, Taiwan. We occupy approximately 183 thousand square feet of the building, and we lease approximately 55 thousand square feet of space to a third-party tenant.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe are directly or indirectly involved from time to time and may be named in various other claims or legal proceedings arising in the ordinary course of our business or otherwise. There were no material pending legal proceedings or claims as of August 31, 2024. Item 4. Mine Saf ety Disclosures Not applicable. 25 Table of Contents PART II.
Biggest changeWe are directly or indirectly involved from time to time and may be named in various other claims or legal proceedings arising in the ordinary course of our business or otherwise. There were no material pending legal proceedings or claims as of August 31, 2025. Item 4. Mine Saf ety Disclosures Not applicable. 25 Table of Contents PART II.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThere were 50 holders of record of our common stock as of November 20, 2024. Dividends We have never declared or paid any cash dividends on our common stock.
Biggest changeThere were 42 holders of record of our common stock as of November 20, 2025. Dividends We have never declared or paid any cash dividends on our common stock.
Issuer Purchases of Equity Securities We did not make any repurchases of our common stock, and no purchases of common stock were made on our behalf during the fourth quarter of our fiscal 2024.
Issuer Purchases of Equity Securities We did not make any repurchases of our common stock, and no purchases of common stock were made on our behalf during the fourth quarter of our fiscal 2025.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe historical results presented below are not necessarily indicative of the results that may be expected for any future period: Years Ended August 31, 2024 2023 % of % of $ Revenues $ Revenues (in thousands) Consolidated Statement of Operations Data: Revenues, net $ 5,183 100 % $ 5,979 100 % Cost of revenues 4,130 80 % 4,972 83 % Gross profit 1,053 20 % 1,007 17 % Operating expenses: Research and development 1,160 22 % 1,353 23 % Selling, general and administrative 2,891 56 % 3,058 51 % Gain on disposals of long-lived assets, net (49 ) (1 ) % - — % Total operating expenses 4,002 77 % 4,411 74 % Loss from operations (2,949 ) (57 ) % (3,404 ) (57 ) % Other income (expenses): Investments loss (3 ) — % (1 ) — % Interest expenses, net (247 ) (5 ) % (287 ) (5 ) % Other income, net 1,181 23 % 1,054 18 % Foreign currency transaction loss, net (13 ) — % (52 ) (1 ) % Total other income, net 918 18 % 714 12 % Loss before income taxes (2,031 ) (39 ) % (2,690 ) (45 ) % Income tax expense — — — — Net loss (2,031 ) (39 ) % (2,690 ) (45 ) % Less: Net income attributable to noncontrolling interests 5 — % — — % Net loss attributable to SemiLEDs stockholders $ (2,036 ) (39 ) % $ (2,690 ) (45 ) % Year Ended August 31, 2024 Compared to Year Ended August 31, 2023 Years Ended August 31, 2024 2023 % of % of Change Change $ Revenues $ Revenues $ % (in thousands) LED chips $ 93 2 % $ 111 2 % $ (18 ) (16 ) % LED components 2,656 51 % 3,345 56 % (689 ) (21 ) % Lighting products 212 4 % 321 5 % (109 ) (34 ) % Other revenues (1) 2,222 43 % 2,202 37 % 20 1 % Total revenues, net 5,183 100 % 5,979 100 % (796 ) (13 ) % Cost of revenues 4,130 80 % 4,972 83 % (842 ) (17 ) % Gross profit $ 1,053 20 % $ 1,007 17 % $ 46 5 % (1) Other includes primarily revenues attributable to the sale of epitaxial wafers, scraps and raw materials, the provision of services and the lease of manufacturing as well as research and development facilities. 35 Table of Contents Revenues, net Our revenues decreased by 13% from $6.0 million for the year ended August 31, 2023 to $5.2 million for the year ended August 31, 2024.
Biggest changeThe historical results presented below are not necessarily indicative of the results that may be expected for any future period: Years Ended August 31, 2025 2024 % of % of $ Revenues $ Revenues (in thousands) Consolidated Statement of Operations Data: Revenues, net $ 43,009 100 % $ 5,183 100 % Cost of revenues 40,578 94 % 4,130 80 % Gross profit 2,431 6 % 1,053 20 % Operating expenses: Research and development 1,154 3 % 1,160 22 % Selling, general and administrative 2,872 7 % 2,891 56 % Gain on disposals of long-lived assets, net — — % (49 ) (1 ) % Total operating expenses 4,026 10 % 4,002 77 % Loss from operations (1,595 ) (4 ) % (2,949 ) (57 ) % Other income (expenses): Investment loss from unconsolidated entities (958 ) (2 ) % (3 ) — % Interest expenses, net (141 ) — % (247 ) (5 ) % Other income, net 1,100 3 % 1,181 23 % Foreign currency transaction gain (loss), net 464 1 % (13 ) — % Total other income, net 465 2 % 918 18 % Loss before income taxes (1,130 ) (2 ) % (2,031 ) (39 ) % Income tax expense — — — — Net loss (1,130 ) (2 ) % (2,031 ) (39 ) % Less: Net income attributable to noncontrolling interests — — % 5 — % Net loss attributable to SemiLEDs stockholders $ (1,130 ) (2 ) % $ (2,036 ) (39 ) % Year Ended August 31, 2025 Compared to Year Ended August 31, 2024 Years Ended August 31, 2025 2024 % of % of Change Change $ Revenues $ Revenues $ % (in thousands) LED chips $ 149 — % $ 93 2 % $ 56 60 % LED components 2,066 5 % 2,656 51 % (590 ) (22 ) % Lighting products 228 1 % 212 4 % 16 8 % Other revenues (1) 40,566 94 % 2,222 43 % 38,344 1,726 % Total revenues, net 43,009 100 % 5,183 100 % 37,826 730 % Cost of revenues 40,578 94 % 4,130 80 % 36,448 883 % Gross profit $ 2,431 6 % $ 1,053 20 % $ 1,378 131 % (1) Other revenues for the year ended August 31, 2025 primarily represent revenues attributable to buy-sell purchase orders of equipment.
The Sixth Amendment amended the loan agreement to permit, upon the mutual agreement of we and Trung Doan, us to repay a portion of the principal amount or accrued interest under the loan agreement, by issuing shares of our common stock to Trung Doan as partial repayment of the loan agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
The Sixth Amendment to the Loan Agreement amended the Loan Agreement to permit us, upon the mutual agreement of us and Trung Doan, to repay a portion of the principal amount or accrued interest under the Loan Agreement, by issuing shares of our common stock to Trung Doan as partial repayment of the Loan Agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
Utilization of these net operating losses carryforwards may be subject to an annual limitation due to applicable provisions of the Internal Revenue Code and local tax laws if we have experienced an “ownership change” in the past, or if an ownership change occurs in the future. 37 Table of Contents As of August 31, 2024, we had total foreign net operating loss carryforwards of $37 million, arising primarily from certain of our consolidated and majority owned subsidiaries in Taiwan.
Utilization of these net operating losses carryforwards may be subject to an annual limitation due to applicable provisions of the Internal Revenue Code and local tax laws if we have experienced an “ownership change” in the past, or if an ownership change occurs in the future. 37 Table of Contents As of August 31, 2025, we had total foreign net operating loss carryforwards of $37 million, arising primarily from certain of our consolidated and majority owned subsidiaries in Taiwan.
(i) extended the maturity date of its loan agreement to January 15, 2025, and (ii) upon mutual agreement of we and Simplot Taiwan Inc., permitted us to repay any principal amount or accrued interest, in an amount not to exceed $400,000, by issuing shares of our common stock in the name of Simplot Taiwan Inc. as partial repayment of the loan agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
(i) extended the maturity date to January 15, 2025, and (ii) upon mutual agreement of us and Simplot Taiwan Inc., permitted us to repay any principal amount or accrued interest, in an amount not to exceed $400,000, by issuing shares of our common stock in the name of Simplot Taiwan Inc. as partial repayment of the Loan Agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
These long-term notes consisted of two loans which we entered into on July 5, 2019, with aggregate amounts of $3.2 million (NT$100 million). The first loan originally for $2.0 million (NT$62 million) has an annual floating interest rate equal to the NTD base lending rate plus 0.64% (or 2.415% currently), and was exclusively used to repay the existing loans.
These long-term notes consist of two loans which we entered into on July 5, 2019, with aggregate amounts of $3.2 million (NT$100 million). The first loan originally for $2.0 million (NT$62 million) has an annual floating interest rate equal to the NTD base lending rate plus 0.64% (or 2.415% currently), and was exclusively used to repay the existing loans.
Sources and Uses of Cash As of August 31, 2024 and 2023, we had cash and cash equivalents of $1.7 million and $2.6 million, respectively, which were predominately held in U.S. dollar denominated demand deposits and/or money market funds. We require cash to fund our operating expenses, working capital requirements and service our debts, including principal and interest.
Sources and Uses of Cash As of August 31, 2025 and 2024, we had cash and cash equivalents of $2.6 million and $1.7 million, respectively, which were predominately held in U.S. dollar denominated demand deposits and/or money market funds. We require cash to fund our operating expenses, working capital requirements and service our debts, including principal and interest.
The significant assumptions used in determining the estimated undiscounted cash flows for the LED chips and components asset group were revised to reflect the new operation status. Based on the assessment, the expected undiscounted cash flows to be generated by this asset group exceeded its carrying value. Consequently, no asset impairment was recognized during the year ended August 31, 2024.
The significant assumptions used in determining the estimated undiscounted cash flows for the LED chips and components asset group were revised to reflect the new operation status. Based on the assessment, the expected undiscounted cash flows to be generated by this asset group exceeded its carrying value. Consequently, no asset impairment was recognized during the year ended August 31, 2025.
Therefore, dividends received from our subsidiaries in Taiwan, if any, will be subjected to withholding tax under Taiwan law. As of August 31, 2024, we had total foreign net operating loss carryforwards of $37 million, arising primarily from certain of our consolidated and majority owned subsidiaries in Taiwan, which will expire in various amounts in future years.
Therefore, dividends received from our subsidiaries in Taiwan, if any, will be subjected to withholding tax under Taiwan law. As of August 31, 2025, we had total foreign net operating loss carryforwards of $37 million, arising primarily from certain of our consolidated and majority owned subsidiaries in Taiwan, which will expire in various amounts in future years.
When the global economy slows or a financial crisis occurs, consumer and government confidence declines, with levels of government grants and subsidies for LED adoption and consumer spending likely to be adversely impacted. Our revenues have been concentrated in a few select markets, including the Netherlands, Taiwan, the United States, and Japan.
When the global economy slows or a financial crisis occurs, consumer and government confidence declines, with levels of government grants and subsidies for LED adoption and consumer spending likely to be adversely impacted. Our revenues have been concentrated in a few select markets, including India, Japan, the Netherlands and the United States.
A majority of our inventory write‑downs during the years ended August 31, 2024 and 2023 was related to finished goods and work in process, primarily as a result of obsolescence. 32 Table of Contents Useful Life of Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization.
A majority of our inventory write‑downs during the years ended August 31, 2025 and 2024 was related to finished goods and work in process, primarily as a result of obsolescence. 32 Table of Contents Useful Life of Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and amortization.
As of August 31, 2024, we had U.S. federal net operating loss (“NOLs”) carryforwards of $4.3 million, which will expire in various amounts beginning in our fiscal 2025. NOLs generated in tax years prior to August 31, 2018 can be carried forward for twenty years, whereas NOLs generated after August 31, 2018 can be carried forward indefinitely.
As of August 31, 2025, we had U.S. federal net operating loss (“NOLs”) carryforwards of $4.3 million, which will expire in various amounts beginning in our fiscal 2026. NOLs generated in tax years prior to August 31, 2018 can be carried forward for twenty years, whereas NOLs generated after August 31, 2018 can be carried forward indefinitely.
We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including Netherlands, Taiwan, the United States, and Japan. We also sell our “Enhanced Vertical,” or EV, LED product series in blue, white, green and UV in selected markets.
We package our LED chips into LED components, which we sell to distributors and a customer base that is heavily concentrated in a few select markets, including India, Japan, the Netherlands and the United States. We also sell our “Enhanced Vertical,” or EV, LED product series in blue, white, green and UV in selected markets.
In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the following consolidated statement of operations data for the years ended August 31, 2024 and 2023 has been derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10‑K.
In the table below and throughout this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” the following consolidated statement of operations data for the years ended August 31, 2025 and 2024 has been derived from our audited consolidated financial statements included elsewhere in this Annual Report on Form 10‑K.
Therefore, our ability to continue to innovate and offer competitive products that meet our customers’ specifications and pricing requirements, such as higher efficacy 27 Table of Contents LED products at lower costs, will have a material influence on our ability to improve our revenues and product margins, although in the near term the introduction of such higher performance LED products may further reduce the selling prices of our existing products or render them obsolete. • Changes in our product mix.
Therefore, our ability to continue to innovate and offer competitive products that meet our customers’ specifications and pricing requirements, such as higher efficacy LED products at lower costs, will have a material influence on our ability to improve our revenues and product margins, although in the near term the introduction of such higher performance LED products may further reduce the selling prices of our existing products or render them obsolete. • Changes in our product mix.
The corporate income tax rate in Taiwan is 20% for the year ended August 31, 2024 and 2023. Corporate income taxes payable, however, are subject to an alternative minimum tax. The Taiwan government enacted the Taiwan Alternative Minimum Tax Act, or the AMT Act, on January 1, 2006.
The corporate income tax rate in Taiwan is 20% for the year ended August 31, 2025 and 2024. Corporate income taxes payable, however, are subject to an alternative minimum tax. The Taiwan government enacted the Taiwan Alternative Minimum Tax Act, or the AMT Act, on January 1, 2006.
We considered both positive and negative evidence, including forecasts of future taxable income and our cumulative loss position, and continued to report a full valuation allowance against our deferred tax assets as of both August 31, 2024 and 2023.
We considered both positive and negative evidence, including forecasts of future taxable income and our cumulative loss position, and continued to report a full valuation allowance against our deferred tax assets as of both August 31, 2025 and 2024.
As of August 31, 2024 and 2023, we had cash and cash equivalents of $1.7 million and $2.6 million, respectively, which consisted of time deposits with initial maturity of greater than three months but less than one year.
As of August 31, 2025 and 2024, we had cash and cash equivalents of $2.6 million and $1.7 million, respectively, which consisted of time deposits with initial maturity of greater than three months but less than one year.
For the year ended August 31, 2024, lower than projected sales of our LED products and lower market capitalization compared to our consolidated net book values again indicated potential impairment of our long‑lived assets.
For the year ended August 31, 2025, lower than projected sales of our LED products and lower market capitalization compared to our consolidated net book values again indicated potential impairment of our long‑lived assets.
Contingencies We have several operating leases with third parties, primarily for land, plant and office spaces in Taiwan, including cancellable and noncancelable leases that expire at various dates between December 2024 and December 2040. See Note 6, "Commitments and Contingencies" in the notes to our audited consolidated financial statements in this Form 10-K.
Contingencies We have several operating leases with third parties, primarily for land, plant and office spaces in Taiwan, including cancellable and noncancelable leases that expire at various dates between August 2026 and December 2040. See Note 6, "Commitments and Contingencies" in the notes to our audited consolidated financial statements in this Form 10-K.
Because most of our subsidiaries in Taiwan incurred losses before income tax for both our fiscal year 2024 and 2023, we do not expect to pay such taxes on undistributed earnings.
Because most of our subsidiaries in Taiwan incurred losses before income tax for both our fiscal year 2025 and 2024, we do not expect to pay such taxes on undistributed earnings.
Our cash and cash equivalents were $1.7 million and $2.6 million as of August 31, 2024 and 2023, respectively. We have implemented actions to accelerate operating cost reductions and improve operational efficiencies.
Our cash and cash equivalents were $2.6 million and $1.7 million as of August 31, 2025 and 2024, respectively. We have implemented actions to accelerate operating cost reductions and improve operational efficiencies.
Other income for the years ended August 31, 2024 and 2023 primarily consists of rental income from the lease of spare space in our Hsinchu building. Foreign currency transaction gain (loss), net.
Other income for the years ended August 31, 2025 and 2024 primarily consists of rental income from the lease of spare space in our Hsinchu building. Foreign currency transaction gain (loss), net.
The remaining loans with each of our Chairman and Chief Executive Officer and our largest shareholder are expected to be extended upon maturity. However, there can be no assurances that our planned activities will be successful in raising additional capital, reducing losses and preserving cash.
The remaining loans with each of our Chairman and Chief Executive Officer and our largest shareholder are expected to be extended upon maturity or repaid with equity. However, there can be no assurances that our planned activities will be successful in raising additional capital, reducing losses and preserving cash.
Net Income Attributable to Noncontrolling Interests Years Ended August 31, 2024 2023 % of % of $ Revenues $ Revenues (in thousands) Net Income attributable to noncontrolling interests $ 5 — % $ — — % We recognized $5 thousand net income attributable to non-controlling interests and zero net loss attributable to non-controlling interests for the year ended August 31, 2024 and 2023, respectively, which was attributable to the share of the net income of Taiwan Bandaoti Zhaoming Co., Ltd. held by the non-controlling holders.
Net Income Attributable to Noncontrolling Interests Years Ended August 31, 2025 2024 % of % of $ Revenues $ Revenues (in thousands) Net Income attributable to noncontrolling interests $ — — % $ 5 — % We recognized zero and $5 thousand net income attributable to non-controlling interests for the year ended August 31, 2025 and 2024, respectively, which was attributable to the share of the net income of Taiwan Bandaoti Zhaoming Co., Ltd. held by the non-controlling holders.
When average selling prices drop, as they did in recent years, inventory write‑downs to net realizable values may also result. Our customers consist primarily of packagers, ODMs and end‑customers. Our revenues attributable to our ten largest customers accounted for 91% of our revenues for the years ended August 31, 2024 and 2023.
When average selling prices drop, as they did in recent years, inventory write‑downs to net realizable values may also result. Our customers consist primarily of packagers, ODMs and end‑customers. Our revenues attributable to our ten largest customers accounted for 99% and 91% of our revenues for the years ended August 31, 2025 and 2024, respectively.
We expect to continue investing in capital expenditures in the future as we expand our business operations and invest in such expansion of our production capacity as we deem appropriate under market conditions and customer demand.
We expect to continue investing in capital expenditures in the future as we expand our business operations and invest in such expansion of our production capacity as we deem appropriate under market conditions 40 Table of Contents and customer demand.
As of August 31, 2024 and 2023, we recognized full valuation allowances of $13.6 million and $23.8 million, respectively, on our net deferred tax assets to reflect uncertainties related to our ability to utilize these deferred tax assets, which consist primarily of certain net operating loss carryforwards and foreign investment loss.
As of August 31, 2025 and 2024, we recognized full valuation allowances of $10.8 million and $13.6 million, respectively, on our net deferred tax assets to reflect uncertainties related to our ability to utilize these deferred tax assets, which consist primarily of certain net operating loss carryforwards and foreign investment loss.
Interest expense consists primarily of interest on our convertible notes and long‑term borrowings and/or short‑term lines of credit with certain banks in Taiwan as well as with our Chairman and largest stockholder. We had long‑term debt totaling $3.7 million and $6.4 million as of August 31, 2024 and 2023, respectively. Other income, net.
Interest expense consists primarily of interest on our convertible notes and long‑term borrowings and/or short‑term lines of credit with certain banks in Taiwan as well as with our Chairman and largest stockholder. We had long‑term debt totaling $1.7 million and $3.7 million as of August 31, 2025 and 2024, respectively. Other income, net.
On July 3, 2024, we and Trung Doan entered into the Sixth Amendment to the loan agreement (the “Sixth Amendment”).
On July 3, 2024, we and Trung Doan entered into the Sixth Amendment to the Loan Agreement.
These loans are secured by an $78 thousand (NT$2.5 million) security deposit and a first priority security interest on the Company’s headquarters building. • Starting from May 2021, the first note payable requires monthly payments of principal in the amount of $25 thousand plus interest over the 74-month term of the note with final payment to occur in July 2027 and, as of August 31, 2024, our outstanding balance on this note payable was approximately $820 thousand. 38 Table of Contents • Starting from May 2021, the second note payable requires monthly payments of principal in the amount of $15 thousand plus interest over the 74-month term of the note with final payment to occur in July 2027 and, as of August 31, 2024, our outstanding balance on this note payable was approximately $503 thousand .
These loans are secured by an $82 thousand (NT$2.5 million) security deposit and a first priority security interest on the Company’s headquarters building. • Starting from May 2021, the first note payable requires monthly payments of principal in the amount of $25 thousand plus interest over the 74-month term of the note with final payment to occur in July 2027 and, as of August 31, 2025, our outstanding balance on this note payable was approximately $563 thousand. 38 Table of Contents • Starting from May 2021, the second note payable requires monthly payments of principal in the amount of $15 thousand plus interest over the 74-month term of the note with final payment to occur in July 2027 and, as of August 31, 2025, our outstanding balance on this note payable was approximately $345 thousand .
Because Taiwan SemiLEDs conducts its manufacturing activities in Taiwan, the income or loss of Taiwan SemiLEDs is included in our consolidated financial statements, but is not considered taxable income for United States taxation purposes pursuant to Section 954(d)(1)(A) of the United States Internal Revenue Code.
Because Taiwan Bandaoti Zhaoming Co., Ltd. conducts its manufacturing activities in Taiwan, the income or loss of Taiwan Bandaoti Zhaoming Co., Ltd. is included in our consolidated financial statements, but is not considered taxable income for United States taxation purposes pursuant to Section 954(d)(1)(A) of the United States Internal Revenue Code.
For example, the functional currency for Taiwan SemiLEDs is the NT dollar. The assets and liabilities of the subsidiaries are, therefore, translated into U.S. dollars at exchange rates in effect at each balance sheet date, and income and expense accounts are translated at average exchange rates during the period.
For example, the functional currency for Taiwan Bandaoti Zhaoming Co., Ltd. is the NT dollar. The assets and liabilities of the subsidiaries are, therefore, translated into U.S. dollars at exchange rates in effect at each balance sheet date, and income and expense accounts are translated at average exchange rates during the period.
We recognized a gain of $49 thousand and zero on the disposal of long-lived assets for the years ended August 31, 2024 and 2023, respectively.
We recognized zero and $49 thousand of gain on the disposal of long-lived assets for the years ended August 31, 2025 and 2024, respectively.
We recognized a gain of $49 thousand and zero on the disposal of long-lived assets for the years ended August 31, 2024 and 2023, respectively.
We recognized zero and $49 thousand of gain on the disposal of long-lived assets for the years ended August 31, 2025 and 2024, respectively.
Capital Expenditures We had capital expenditures of $123 thousand and $200 thousand for the years ended August 31, 2024 and 2023, respectively. Our capital expenditures consisted primarily of the purchases of machinery and equipment, construction in progress, prepayments for our manufacturing facilities and prepayments for equipment purchases.
Capital Expenditures We had capital expenditures of $569 thousand and $123 thousand for the years ended August 31, 2025 and 2024, respectively. Our capital expenditures consisted primarily of the purchases of machinery and equipment, construction in progress, prepayments for our manufacturing facilities and prepayments for equipment purchases.
On January 16, 2021, the maturity date of these loans was extended with same terms and interest rate for one year to January 15, 2022, and on January 14, 2022, the maturity date of these loans was extended again with same terms and interest rate for one more year to January 15, 2023.
On January 16, 2021, the maturity date of the Loan Agreements was extended with same terms and interest rate for one year to January 15, 2022, and on January 14, 2022, the maturity date of the Loan Agreements was extended again with same terms and interest rate for one more year to January 15, 2023.
Income Tax Expense (Benefit) Our effective tax rate is expected to be approximately zero for both fiscal year 2024 and 2023, since Taiwan SemiLEDs incurred losses, and because we provided a full valuation allowance on all deferred tax assets, which consisted primarily of net operating loss carryforwards and foreign investment loss.
Income Tax Expense (Benefit) Our effective tax rate is expected to be approximately zero for both fiscal year 2025 and 2024, since Taiwan Bandaoti Zhaoming Co., Ltd. incurred losses, and because we provided a full valuation allowance on all deferred tax assets, which consisted primarily of net operating loss carryforwards and foreign investment loss.
In addition, we are planning to issue additional equity to our stockholders. We estimate that our cash requirements to service debt and contractual obligations in fiscal 2025 is approximately $3.4 million, which we expect to fund through the issuance of additional equity to repay principal and accrued interest and through loan extensions.
In addition, we are planning to issue additional equity to our stockholders. We estimate that our cash requirements to service debt and contractual obligations in fiscal 2026 is approximately $1.9 million, which we expect to fund through the issuance of additional equity to repay principal and accrued interest and through loan extensions.
For the years ended August 31, 2024 and 2023, sales to our three largest customers, in the aggregate, accounted for 61% and 53% of our revenues, respectively. • Intellectual property issues.
For the years ended August 31, 2025 and 2024, sales to our three largest customers, in the aggregate, accounted for 94% and 61% of our revenues, respectively. • Intellectual property issues.
Investment loss from unconsolidated entities increased from $1 thousand for the year ended August 31, 2023 to $3 thousand for the year ended August 31, 2024, primarily due to the increased losses of the unconsolidated entities. Interest expenses, net.
Investment loss from unconsolidated entities increased from $3 thousand for the year ended August 31, 2024 to $958 thousand for the year ended August 31, 2025, primarily due to the increased losses of the unconsolidated entities. Interest expenses, net.
Due to the excess capacity charges that we have suffered for many years, and considering the risk of technological obsolescence and according to the production plan built based on our sales forecast, we disposed of certain of our idle equipment.
Due to the excess capacity charges that we have suffered for many years, and considering the risk of technological obsolescence and according to the production plan built based on our sales forecast, we disposed of certain of our idle equipment in the year ended August 31, 2024.
Inventory write‑downs to estimated net realizable values for the years ended August 31, 2024 and 2023 were $411 thousand and $627 thousand, respectively.
Inventory write‑downs to estimated net realizable values for the years ended August 31, 2025 and 2024 were $323 thousand and $411 thousand, respectively.
Management regularly reviews the allowance by considering certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. No bad debt expenses were recognized during the years ended August 31, 2024 and 2023.
Management regularly reviews the allowance by considering certain factors such as historical experience, industry data, credit quality, age of accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. Bad debt expenses were $115 thousand and zero for the years ended August 31, 2025 and 2024, respectively.
Our long-term debt, which consisted of NT dollar denominated long-term notes, convertible unsecured promissory notes, and loans from our Chairman and our largest shareholder, totaled $3.7 million and $6.4 million as of August 31, 2024 and 2023, respectively. Our NT dollar denominated long-term notes, totaled $1.3 million and $1.8 million as of August 31, 2024 and 2023, respectively.
Our long-term debt, which consisted of NT dollar denominated long-term notes, convertible unsecured promissory notes, and loans from our Chairman and our largest shareholder, totaled $1.7 million and $3.7 million as of August 31, 2025 and 2024, respectively. Our NT dollar denominated long-term notes, totaled $908 thousand and $1.3 million as of August 31, 2025 and 2024, respectively.
We also contract other manufacturers to produce for our sale certain LED products, and for certain aspects of our product fabrication, assembly and packaging processes, based on our design and technology requirements and under our quality control specifications and final inspection process. We are a holding company for various wholly owned subsidiaries.
We also contract other manufacturers to produce for our sale certain LED products, and for certain aspects of our product fabrication, assembly and packaging processes, based on our design and technology requirements and under our quality control specifications and final inspection process.
Furthermore, the average selling prices for our LED products have typically decreased over product life cycles.
Furthermore, the average 27 Table of Contents selling prices for our LED products have typically decreased over product life cycles.
Our revenues have been concentrated in a few select markets, including the Netherlands, Taiwan, the United States and Japan. Net revenues generated from these countries, in the aggregate, accounted for 91% and 89% of our net revenues for the years ended August 31, 2024 and 2023, respectively.
Our revenues have been concentrated in a few select markets, including India, Japan, the Netherlands and the United States. Net revenues generated from these countries, in the aggregate, accounted for 97% and 78% of our net revenues for the years ended August 31, 2025 and 2024, respectively.
Non-controlling interests represented 2.63% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd. for both the years ended August 31, 2024 and 2023. Liquidity and Capital Resources This section includes a discussion and analysis of our cash requirements, contingencies, sources and uses of cash, operations, working capital and long-term assets and liabilities.
Non-controlling interests represented zero and 2.63% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd., as of August 31, 2025 and 2024, respectively. Liquidity and Capital Resources This section includes a discussion and analysis of our cash requirements, contingencies, sources and uses of cash, operations, working capital and long-term assets and liabilities.
Inventory write‑downs totaled $411 thousand and $627 thousand for the years ended August 31, 2024 and 2023, respectively.
Inventory write‑downs totaled $323 thousand and $411 thousand for the years ended August 31, 2025 and 2024, respectively.
We recognized foreign currency transaction loss of $13 thousand and $52 thousand for the years ended August 31, 2024 and 2023, respectively, primarily due to the appreciation of the U.S. dollar against the NT dollar from bank deposits and accounts payable held by Taiwan SemiLEDs and Taiwan Bandaoti Zhaoming Co., Ltd. in currency other than the functional currency of such subsidiaries.
We recognized a foreign currency transaction gain of $464 thousand and a foreign currency transaction loss of $13 thousand for the years ended August 31, 2025 and 2024, respectively, primarily due to the impact of fluctuations in the exchange rate of the U.S. dollar against the NT dollar from bank deposits and accounts payable held by Taiwan Bandaoti Zhaoming Co., Ltd. in currency other than the functional currency of such subsidiaries.
Cash Flows The following summary of our cash flows for the periods indicated has been derived from our consolidated financial statements, which are included elsewhere in this Annual Report on Form 10‑K (in thousands): Years Ended August 31, 2024 2023 Net cash used in operating activities $ (365 ) $ (984 ) Net cash used in investing activities $ (101 ) $ (321 ) Net cash used in financing activities $ (449 ) $ (456 ) Cash Flows Used in Operating Activities Net cash used in operating activities for the years ended August 31, 2024 and 2023 was $365 thousand and $984 thousand, respectively.
Cash Flows The following summary of our cash flows for the periods indicated has been derived from our consolidated financial statements, which are included elsewhere in this Annual Report on Form 10‑K (in thousands): Years Ended August 31, 2025 2024 Net cash provided by (used in) operating activities $ 2,212 $ (365 ) Net cash used in investing activities $ (595 ) $ (101 ) Net cash used in financing activities $ (622 ) $ (449 ) Cash Flows Provided by (Used In) Operating Activities Net cash provided by operating activities for the years ended August 31, 2025 was $2.2 million, and net cash used in operating activities for the years ended August 31, 2024 was $365 thousand.
Net cash used in operating activities for the year ended August 31, 2024 was $365 thousand. As of August 31, 2024, we had cash and cash equivalents of $1.7 million. We have undertaken actions to decrease losses incurred and implemented cost reduction programs in an effort to transform the Company into a profitable operation.
Net cash provided by operating activities for the year ended August 31, 2025 was $2.2 million. As of August 31, 2025, we had cash and cash equivalents of $2.6 million. We have undertaken actions to decrease losses incurred and implemented cost reduction programs in an effort to transform the Company into a profitable operation.
The Fifth Amendment, upon the mutual agreement of we and Trung Doan, permitted us to repay any principal amount or accrued interest, in an amount not to exceed $800,000, by issuing shares of our common stock to Trung Doan as partial repayment of the loan agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
The Amended Loan Agreement, upon the mutual agreement of us and Simplot Taiwan Inc., permits us to repay any principal amount or accrued interest, in an amount not to exceed $1,200,000, by issuing shares of our common stock to Simplot Taiwan Inc. as partial repayment of the Loan Agreement at a price per share equal to the closing price of our common stock immediately preceding the business day of the payment notice date.
Our research and development expenses were $1.2 million and $1.4 million for the year ended August 31, 2024 and 2023, respectively. The decrease was primarily due to a $124 thousand decrease in payroll expense and a $64 thousand decrease in materials and supplies. Selling, general and administrative.
Our research and development expenses were $1.2 million for both the year ended August 31, 2025 and 2024. The slight decrease was primarily due to a $64 thousand decrease in materials and supplies, partially offset by a $10 thousand increase in payroll expense. Selling, general and administrative.
All of our products are manufactured in Taiwan by Taiwan SemiLEDs, our wholly owned foreign subsidiary.
All of our products are manufactured in Taiwan by Taiwan Bandaoti Zhaoming Co., Ltd., our wholly owned foreign subsidiary.
As of August 31, 2024 and 2023, the outstanding principal of these notes totaled zero and $1.4 million, respectively. Working Capital We have incurred significant losses since inception, including net losses attributable to SemiLEDs stockholders of $2.0 million and $2.7 million during the years ended August 31, 2024 and 2023.
As of August 31, 2025 and 2024, these loans totaled $800 thousand and $2.4 million, respectively. 39 Table of Contents Working Capital We have incurred significant losses since inception, including net losses attributable to SemiLEDs stockholders of $1.1 million and $2.0 million during the years ended August 31, 2025 and 2024.
Other Income (Expenses) Years Ended August 31, 2024 2023 % of % of $ Revenues $ Revenues (in thousands) Investment loss from unconsolidated entities $ (3 ) — % $ (1 ) — % Interest expenses, net (247 ) (5 ) % (287 ) (5 ) % Other income, net 1,181 23 % 1,054 18 % Foreign currency transaction loss, net (13 ) — % (52 ) (1 ) % Total other income, net $ 918 18 % $ 714 12 % Investment loss from unconsolidated entities.
Other Income (Expenses) Years Ended August 31, 2025 2024 % of % of $ Revenues $ Revenues (in thousands) Investment loss from unconsolidated entities $ (958 ) (2 ) % $ (3 ) — % Interest expenses, net (141 ) — % (247 ) (5 ) % Other income, net 1,100 3 % 1,181 23 % Foreign currency transaction gain (loss), net 464 1 % (13 ) — % Total other income, net $ 465 2 % $ 918 18 % Investment loss from unconsolidated entities.
All other terms and conditions of the loan agreement with Simplot Taiwan Inc. remained the same. On January 7, 2024, we issued 305,343 shares of our common stock at a price of $1.31 per share to repay $400,000 of accrued interest on the Loan Agreement with Simplot Taiwan Inc.
On January 7, 2024, we issued 305,343 shares of our common stock at a price of $1.31 per share to repay $400,000 of accrued interest on the loan agreement with Simplot Taiwan Inc. On February 9, 2024, we entered into the Fifth Amendment to the Loan Agreement with Trung Doan.
On August 31, 2024 the exchange rate was 31.94 NT dollars to one U.S. dollar. On November 20, 2024, the exchange rate was 32.5 NT dollars to one U.S. dollar.
On August 31, 2025 the exchange rate was 30.59 NT dollars to one U.S. dollar. On November 20, 2025, the exchange rate was 31.29 NT dollars to one U.S. dollar.
Revenues attributable to the sales of lighting products were $212 thousand and $321 thousand, representing 4% and 5% of our revenues for the years ended August 31, 2024 and 2023, respectively. The decrease in sales of lighting products was mainly due to less demand for LED lighting products.
The decrease in sales of LED components was primarily due to less volumes sold for the LED components. Revenues attributable to the sales of lighting products were $228 thousand and $212 thousand of our revenues for the years ended August 31, 2025 and 2024, respectively.
On January 13, 2023, the maturity date of these loans was further extended with same terms and interest rate for one year to January 15, 2024. On January 7, 2024, J.R.
On January 13, 2023, the maturity date of the Loan Agreements was further extended with same terms and interest rate for one year to January 15, 2024. On January 7, 2024, J.R. Simplot Company entered into an assignment agreement (the “Assignment”) pursuant to which J.R.
Operating Expenses Years Ended August 31, 2024 2023 % of % of Change Change $ Revenues $ Revenues $ % (in thousands) Research and development $ 1,160 22 % $ 1,353 23 % $ (193 ) (14 ) % Selling, general and administrative 2,891 56 % 3,058 51 % (167 ) (5 ) % Gain on disposals of long-lived assets, net (49 ) (1 ) % — — % (49 ) — % Total operating expenses $ 4,002 77 % $ 4,411 74 % $ (409 ) (9 ) % Research and development.
Operating Expenses Years Ended August 31, 2025 2024 % of % of Change Change $ Revenues $ Revenues $ % (in thousands) Research and development $ 1,154 3 % $ 1,160 22 % $ (6 ) (1 ) % Selling, general and administrative 2,872 7 % 2,891 56 % (19 ) (1 ) % Gain on disposals of long-lived assets, net — — % (49 ) (1 ) % 49 (100 ) % Total operating expenses $ 4,026 10 % $ 4,002 77 % $ 24 1 % Research and development.
Simplot Company assigned and transferred all of its right, title and interest in and to the loan agreement to Simplot Taiwan Inc., in accordance with and subject to the terms and conditions of the loan agreement.
Simplot assigned and transferred all of its right, title and interest in and to the Loan Agreement to Simplot Taiwan Inc., in accordance with and subject to the terms and conditions of the Loan Agreement. On January 7, 2024, we entered into the Fourth Amendment to the Loan Agreements with each of Simplot Taiwan Inc. and Trung Doan.
On February 9, 2024, we repaid $800,000 of loan principal by delivering 629,921 shares of our common stock to Mr. Doan, based on the closing price of $1.27 per share on February 8, 2024. The shares of common stock were issued on February 9, 2024 in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.
All other terms and conditions of the Loan Agreement remained the same. On February 9, 2024, we repaid $800,000 of loan principal by delivering 629,921 shares of our common stock to Mr. Doan, based on the closing price of $1.27 per share on February 8, 2024.
Revenues attributable to the sales of our LED chips were $93 thousand and $111 thousand, representing 2% of our revenues for both the years ended August 31, 2024 and 2023. The slight decrease was primarily due to a lower volumes of LED chips sold in the fiscal year ended August 31, 2024.
The increase in sales of lighting products was primarily due to varying volumes sold for lighting products. Revenues attributable to the sales of our LED chips were $149 thousand and $93 thousand of our revenues for the years ended August 31, 2025 and 2024, respectively.
We recognized a net foreign currency transaction loss of $13 thousand and a net foreign currency transaction loss of $52 thousand for the years ended August 31, 2024 and 2023, respectively, primarily due to the appreciation of the U.S. dollar against the NT dollar from bank deposits and accounts payables held by Taiwan SemiLEDs and Taiwan Bandaoti Zhaoming Co., Ltd. in currency other than the functional currency of such subsidiaries.
We recognized a net foreign currency transaction gain of $464 thousand and a net foreign currency transaction loss of $13 thousand for the years ended August 31, 2025 and 2024, respectively, primarily due to the impact of fluctuations in the exchange rate of the U.S. dollar against the NT dollar from bank deposits and accounts receivable.
Revenues attributable to the sales of our LED components were $2.7 million and $3.3 million, representing 51% and 56% of our revenues for the years ended August 31, 2024 and 2023, respectively. The decrease in sales of LED components was primarily due to less volumes sold.
The increase in sales of LED chips was primarily due to varying volumes sold for LED chips. Revenues attributable to other revenues were $41 million and $2 million of our revenues for the years ended August 31, 2025 and 2024, respectively. The increase in other revenues was primarily due to buy-sell purchase orders of equipment.
All other terms and conditions of the loan agreement with Trung Doan remained the same. On February 9, 2024, we and Trung Doan entered into the Fifth Amendment to the loan agreement (the “Fifth Amendment”).
All other terms and conditions of the Loan Agreements remained the same. On February 28, 2025, we and Simplot Taiwan Inc. entered into the Sixth Amendment to the Loan Agreement (the “Amended Loan Agreement”).
Other income, net increased from $1.1 million for the year ended August 31, 2023 to $1.2 million for the year ended August 31, 2024. Foreign currency transaction loss, net.
Other income, net decreased from $1.2 million for the year ended August 31, 2024 to $1.1 million for the year ended August 31, 2025, primarily due to reduced payments received under the Patent Cross-License Agreement with CrayoNano AS. Foreign currency transaction gain (loss), net.
Cash Flows Used in Financing Activities Net cash used in financing activities for the years ended August 31, 2024 and 2023 was $449 thousand and $456 thousand, respectively. The decrease in cash flows used in financing activities was primary attributable to a decrease in cash used in repayment of long-term debt of $7 thousand.
Cash Flows Used in Financing Activities Net cash used in financing activities for the years ended August 31, 2025 and 2024 was $622 thousand and $449 thousand, respectively. The increase in cash flows used in financing activities was primarily due to an increase in acquisition of noncontrolling interest.
Cost of Revenues Our cost of revenues decreased by 17% from $5.0 million for the year ended August 31, 2023 to $4.1 million for the year ended August 31, 2024. The decrease in cost of revenues was primarily due to a decrease in the volume of products sold.
Cost of Revenues Our cost of revenues increased by 883% from $4.1 million for the year ended August 31, 2024 to $41 million for the year ended August 31, 2025. The increase in cost of revenues was due to the cost of equipment relating to buy-sell purchase orders of equipment.
Property, plant and equipment pledged as collateral for our notes payable were $2.0 million and $2.3 million as of August 31, 2024 and 2023, respectively.
Property, plant and equipment pledged as collateral for our notes payable were $1.7 million and $2.0 million as of August 31, 2025 and 2024, respectively. On January 8, 2019, we entered into secured loan agreements with Trung Doan, our Chairman and Chief Executive Officer and J.R.
On January 8, 2019, we entered into loan agreements with each of the Chairman and Chief Executive Officer and the largest shareholder of the Company, with aggregate amounts of $1.7 million and $1.5 million, respectively, and an annual interest rate of 8%.
Simplot Company, our largest shareholder, with aggregate amounts of $1.7 million and $1.5 million, respectively, and an annual interest rate of 8% (the “Loan Agreements”). The Loan Agreements are secured by a second priority security interest on our headquarters building. The maturity date of the Loan Agreements were January 14, 2021 and January 22, 2021, respectively.
Our provisional estimate is that no tax will be due under this provision.
Our provisional estimate is that no tax will be due under this provision. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S.
The shares of common stock were issued in reliance on Section 3(a)(9) of the Securities Act of 1933, as amended. The Fourth Amendment to the loan agreement with Trung Doan amends the loan agreement’s maturity date with same terms and interest rate to January 15, 2025.
All other terms and conditions of the Loan Agreement with Simplot Taiwan Inc. remained the same. The Fourth Amendment to the Loan Agreement with Trung Doan amended the loan's maturity date with same terms and interest rate to January 15, 2025. All other terms and conditions of the Loan Agreement with Trung Doan remained the same.
Key Factors Affecting Our Financial Condition, Results of Operations and Business The following are key factors that we believe affect our financial condition, results of operations and business: • Our ability to raise additional debt funding, sell additional equity securities and improve our liquidity.
Key Factors Affecting Our Financial Condition, Results of Operations and Business The following are key factors that we believe affect our financial condition, results of operations and business: • Our ability to continue or grow with buy-sell revenue. Our recent reliance on buy-sell purchase orders of equipment has improved our gross profit, operating results and cash flows.
Revenues attributable to other revenues represented 43% and 37% of our revenues for the years ended August 31, 2024 and 2023, respectively. The increase in other revenues was primarily due to the provision of services and the sale of raw materials.
Other revenues for the year ended August 31, 2024 primarily include revenues attributable to the sale of epitaxial wafers, scraps and raw materials and the provision of services. 35 Table of Contents Revenues, net Our revenues increased by 730% from $5.2 million for the year ended August 31, 2024 to $43 million for the year ended August 31, 2025.
The decrease was mainly attributable to a $116 thousand decrease in payroll expense, a $15 thousand decrease in insurance expenses, a $10 thousand decrease in repair and maintenance expense and a $8 thousand decrease in employee benefit. 36 Table of Contents Gain on disposal of long ‑ lived assets, net.
Our selling, general and administrative expenses were $2.9 million for both the years ended August 31, 2025 and 2024. The slight decrease was mainly attributable to a $134 thousand decrease in payroll expense, offset by a $115 thousand increase in bad debt expense. 36 Table of Contents Gain on disposal of long ‑ lived assets, net.
Interest expenses, net primarily consisted of accrued interest payments on convertible notes, NT dollar denominated long-term notes and $2.4 million of loans with our Chairman and Chief Executive Officer and our largest shareholder. The decrease in interest expense, net was primarily due to lower outstanding debt. Other income, net.
Interest expenses, net, which primarily consisted of accrued interest payments on loans with our Chairman and Chief Executive Officer and our largest shareholder, decreased from $247 thousand for the year ended August 31, 2024 to $140 thousand for the year ended August 31, 2025.
The decrease in cash flows used in operating activities was primary attributable to a decrease in net loss of $659 thousand and a decrease in inventory of $1.0 million, partially offset by an increase in depreciation and amortization of $396 thousand, stock-based compensation expense of $236 thousand and accounts payable of $447 thousand. 40 Table of Contents Cash Flows Used in Investing Activities Net cash used in investing activities for the years ended August 31, 2024 and 2023 was $101 thousand and $321 thousand, respectively.
The increase in cash flows used in operating activities was primary attributable to an $900 thousand decrease of net loss, an $5.3 million increase of accounts payable, an $955 thousand increase of investment loss from unconsolidated entities and an $840 thousand increase of accrued expenses and other current liabilities, partially offset by a $3.6 million increase of accounts receivable, a $1.5 million increase of inventory and a $234 thousand increase of prepaid expenses and other current assets.

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