Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
May 31, 2018 | Jul. 06, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | SemiLEDs Corp | |
Entity Central Index Key | 1,333,822 | |
Trading Symbol | LEDS | |
Document Type | 10-Q | |
Document Period End Date | May 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --08-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 3,556,790 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 3,739 | $ 3,582 |
Accounts receivable (including related parties), net of allowance for doubtful accounts of $501 and $815 as of May 31, 2018 and August 31, 2017, respectively | 310 | 1,111 |
Inventories | 2,290 | 2,946 |
Prepaid expenses and other current assets | 286 | 405 |
Total current assets | 6,625 | 8,044 |
Property, plant and equipment, net | 7,629 | 8,275 |
Intangible assets, net | 103 | 104 |
Investments in unconsolidated entities | 999 | 992 |
Other assets | 246 | 255 |
TOTAL ASSETS | 15,602 | 17,670 |
CURRENT LIABILITIES: | ||
Current installments of long-term debt | 342 | 335 |
Accounts payable | 807 | 1,145 |
Advance receipt toward the convertible note | 500 | 500 |
Accrued expenses and other current liabilities | 5,676 | 5,482 |
Total current liabilities | 7,325 | 7,462 |
Long-term debt, excluding current installments | 2,151 | 2,391 |
Total liabilities | 9,476 | 9,853 |
Commitments and contingencies (Note 5) | ||
SemiLEDs stockholders’ equity | ||
Common stock, $0.0000056 par value—7,500 shares authorized; 3,557 shares and 3,544 shares issued and outstanding as of May 31, 2018 and August 31, 2017, respectively | ||
Additional paid-in capital | 175,487 | 175,386 |
Accumulated other comprehensive income | 3,759 | 3,701 |
Accumulated deficit | (173,120) | (171,270) |
Total equity | 6,126 | 7,817 |
TOTAL LIABILITIES AND EQUITY | $ 15,602 | $ 17,670 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | May 31, 2018 | Aug. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 501 | $ 815 |
Common stock, par value (in dollars per share) | $ 0.0000056 | $ 0.0000056 |
Common stock, shares authorized | 7,500,000 | 7,500,000 |
Common stock, shares issued | 3,557,000 | 3,544,000 |
Common stock, shares outstanding | 3,557,000 | 3,544,000 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Income Statement [Abstract] | ||||
Revenues, net | $ 1,999 | $ 2,111 | $ 5,545 | $ 6,643 |
Cost of revenues | 1,837 | 2,297 | 5,775 | 6,706 |
Gross profit (loss) | 162 | (186) | (230) | (63) |
Operating expenses: | ||||
Research and development | 296 | 257 | 703 | 651 |
Selling, general and administrative | 799 | 879 | 2,313 | 2,920 |
Gain on disposals of long-lived assets, net | (581) | (33) | (790) | (113) |
Total operating expenses | 514 | 1,103 | 2,226 | 3,458 |
Loss from operations | (352) | (1,289) | (2,456) | (3,521) |
Other income (expenses): | ||||
Impairment loss on investment | (352) | (352) | ||
Equity in loss from unconsolidated entities, net | (11) | |||
Interest expenses, net | (7) | (9) | (22) | (26) |
Other income, net | 78 | 29 | 625 | 525 |
Foreign currency transaction gain (loss), net | (45) | 35 | 3 | (46) |
Total other income (expenses), net | 26 | (297) | 606 | 90 |
Loss before income taxes | (326) | (1,586) | (1,850) | (3,431) |
Net loss | (326) | (1,586) | (1,850) | (3,431) |
Less: Net loss attributable to noncontrolling interests | (13) | |||
Net loss attributable to SemiLEDs stockholders | $ (326) | $ (1,586) | $ (1,850) | $ (3,418) |
Net loss per share attributable to SemiLEDs stockholders: | ||||
Basic and diluted | $ (0.09) | $ (0.45) | $ (0.52) | $ (0.97) |
Shares used in computing net loss per share attributable to SemiLEDs stockholders: | ||||
Basic and diluted | 3,550 | 3,544 | 3,546 | 3,544 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net loss | $ (326) | $ (1,586) | $ (1,850) | $ (3,431) |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments, net of tax of $0 for all periods presented | (77) | 99 | 58 | 332 |
Comprehensive loss | (403) | (1,487) | (1,792) | (3,099) |
Comprehensive loss attributable to noncontrolling interests | (16) | |||
Comprehensive loss attributable to SemiLEDs stockholders | $ (403) | $ (1,487) | $ (1,792) | $ (3,083) |
Unaudited Condensed Consolidat6
Unaudited Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Foreign currency translation adjustments tax | $ 0 | $ 0 | $ 0 | $ 0 |
Unaudited Condensed Consolidat7
Unaudited Condensed Consolidated Statement of Changes in Equity - 9 months ended May 31, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit |
BALANCE at Aug. 31, 2017 | $ 7,817 | $ 175,386 | $ 3,701 | $ (171,270) | |
BALANCE (in shares) at Aug. 31, 2017 | 3,544 | ||||
Issuance of common stock under equity incentive plans (in shares) | 13 | ||||
Stock-based compensation | 101 | 101 | |||
Comprehensive loss: | |||||
Other comprehensive income (loss) | 58 | 58 | |||
Net loss | (1,850) | (1,850) | |||
BALANCE at May. 31, 2018 | $ 6,126 | $ 175,487 | $ 3,759 | $ (173,120) | |
BALANCE (in shares) at May. 31, 2018 | 3,557 |
Unaudited Condensed Consolidat8
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
May 31, 2018 | May 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (1,850) | $ (3,431) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 766 | 849 |
Impairment loss on investment | 352 | |
Stock-based compensation expense | 101 | 207 |
Bad debt expense | 10 | |
Provisions for inventory write-downs | 487 | 1,119 |
Equity in loss from unconsolidated entities, net | 11 | |
Gain on disposals of long-lived assets, net | (790) | (113) |
Changes in : | ||
Accounts receivable, net | 802 | (316) |
Inventories | 201 | (238) |
Prepaid expenses and other | 119 | 141 |
Accounts payable | (269) | (498) |
Accrued expenses and other current liabilities | 150 | (700) |
Net cash used in operating activities | (273) | (2,617) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property, plant and equipment | (247) | (149) |
Proceeds from sales of property, plant and equipment | 913 | 113 |
Payments for development of intangible assets | (4) | (11) |
Proceeds from patents assignment | 1 | |
Proceeds from sale of investment | 59 | |
Other investing activities | (1) | |
Net cash provided by investing activities | 663 | 11 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Repayments of long-term debt | (255) | (240) |
Acquisition of noncontrolling interests | (46) | |
Net cash provided used in financing activities | (255) | (286) |
Effect of exchange rate changes on cash and cash equivalents | 22 | (1) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 157 | (2,893) |
CASH AND CASH EQUIVALENTS—Beginning of period | 3,582 | 6,030 |
CASH AND CASH EQUIVALENTS—End of period | 3,739 | 3,137 |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Accrual related to property, plant and equipment | $ 140 | $ 225 |
Business
Business | 9 Months Ended |
May 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business | 1. Business SemiLEDs Corporation (“SemiLEDs” or the “parent company”) was incorporated in Delaware on January 4, 2005 and is a holding company for various wholly owned subsidiaries. SemiLEDs and its subsidiaries (collectively, the “Company”) develop, manufacture and sell high performance light emitting diodes (“LEDs”). The Company’s core products are LED components, as well as LED chips and lighting products. LED components have become the most important part of its business. A portion of the Company’s business consists of the sale of contract manufactured LED products. The Company’s customers are concentrated in a few select markets, including Taiwan, the United States and China. As of May 31, 2018, SemiLEDs had five wholly owned subsidiaries. SemiLEDs Optoelectronics Co., Ltd., or Taiwan SemiLEDs, is the Company’s wholly owned operating subsidiary, where a substantial portion of the assets is held and located, and where a portion of research, development, manufacturing and sales activities take place. Taiwan SemiLEDs owns a 100% equity interest in Taiwan Bandaoti Zhaoming Co., Ltd., formerly known as Silicon Base Development, Inc., which is engaged in the research, development, manufacturing and a substantial portion of marketing and sale of LED components, and where most of the Company’s employees are based. SemiLEDs’ common stock began trading on the NASDAQ Global Select Market under the symbol “LEDS” on December 8, 2010 and was transferred to the NASDAQ Capital Market effective November 5, 2015 where it continues to trade under the same symbol. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation —The Company’s unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable provisions of the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by the rules and regulations of the SEC. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2017. The unaudited condensed consolidated balance sheet as of August 31, 2017 included herein was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated balance sheet as of May 31, 2018, the statements of operations and comprehensive loss for the three and nine months ended May 31, 2018 and 2017, the statement of changes in equity for the nine months ended May 31, 2018, and the statements of cash flows for the nine months ended May 31, 2018 and 2017. The results for the three or nine months ended May 31, 2018 are not necessarily indicative of the results to be expected for the year ending August 31, 2018. The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements. The Company suffered losses from operations of $4.3 million and $20.6 million, and net cash used in operating activities of $2.1 million and $3.4 million for the years ended August 31, 2017 and 2016, respectively. Gross profit on product sales was $82 thousand for the year ended August 31, 2017 and gross loss was $4.9 million for the year ended August 31, 2016. Loss from operations for the three and nine months ended May 31, 2018 were $352 thousand and $2.5 million, respectively. Net cash used in operating activities for the nine months ended May 31, 2018 was $273 thousand. Although, at May 31, 2018, the Company’s cash and cash equivalents was slightly increased to $3.7 million, these facts and conditions raise substantial doubt about the Company’s ability to continue as a going concern. However, management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business. • The Company is suppressing the gross loss from chip sales by moving toward a fabless business model through an agreement with an ODM partner entered into on December 31, 2015. The Company is continuously restructuring its chips manufacturing operation. The Company expects to purchase chips from the strategic partner and follow the best process to combine the Company’s technology with the strategic partner’s production process. • Continuing to further reduce idle capacity charges. This partnership should help the Company obtain a steady source of LED chips with competitive and favorable price for its packaging business, expand the production capacity for LED components, and strengthen its product portfolio and technology. • Increasing sales of automotive products in both China and India by cultivating relationships with automotive lighting developers that are outside the Company’s historical distribution channels . • Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of new higher margin products. Steady growth of module products and the continued commercial sales of its UV LED product are expected to improve the Company’s future gross margin, operating results and cash flows. The Company is targeting niche markets and focusing on product enhancement and developing its LED product into many other applications or devices. • Continuing to monitor prices, work with current and potential vendors to decrease costs and, consistent with its existing contractual commitments, may possibly decrease its activity level and capital expenditures further. This plan reflects its strategy of controlling capital costs and maintaining financial flexibility. • Raising additional cash through further equity offerings, sales of assets and/or issuance of debt as considered necessary and looking at other potential business opportunities. While the Company’s management believes that the measures described in the above liquidity plan should be adequate to satisfy its liquidity requirements for the twelve months after the date that the financial statement are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on its business, results of operations and financial position, and may adversely affect its ability to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern. Principles of Consolidation —The unaudited interim condensed consolidated financial statements include the accounts of SemiLEDs and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated during consolidation. Investments in which the Company has the ability to exercise significant influence over the investee but not a controlling financial interest, are accounted for using the equity method of accounting and are not consolidated. These investments are in joint ventures that are not subject to consolidation under the variable interest model, and for which the Company: (i) does not have a majority voting interest that would allow it to control the investee, or (ii) has a majority voting interest but for which other shareholders have significant participating rights, but for which the Company has the ability to exercise significant influence over operating and financial policies. Under the equity method, investments are stated at cost after adding or removing the Company’s portion of equity in undistributed earnings or losses, respectively. The Company’s investment in these equity ‑ ‑ ‑ ‑ Investments in entities that are not consolidated or accounted for under the equity method are accounted for using the cost method. Under the cost method, investments are reported at cost on the consolidated balance sheets in investments in unconsolidated entities, and dividend income, if any, received is reported in the consolidated statements of operations in equity in losses from unconsolidated entities. If the fair value of an equity ‑ ‑ ‑ ‑ Use of Estimates —The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the preparation of the Company’s consolidated financial statements on the basis that the Company will continue as a going concern, the collectibility of accounts receivable, inventory net realizable values, realization of deferred tax assets, valuation of stock-based compensation expense, the useful lives of property, plant and equipment and intangible assets, the recoverability of the carrying amount of property, plant and equipment, intangible assets and investments in unconsolidated entities, the fair value of acquired tangible and intangible assets, income tax uncertainties, provision for potential litigation costs and other contingencies. Management bases its estimates on historical experience and also on assumptions that it believes are reasonable. Management assesses these estimates on a regular basis; however, actual results could differ materially from those estimates. Certain Significant Risks and Uncertainties —The Company is subject to certain risks and uncertainties that could have a material and adverse effect on the Company’s future financial position or results of operations, which risks and uncertainties include, among others: it has incurred significant losses over the past few years, any inability of the Company to compete in a rapidly evolving market and to respond quickly and effectively to changing market requirements, any inability of the Company to grow its revenue and/or maintain or increase its margins, it may experience fluctuations in its revenues and operating results, any inability of the Company to protect its intellectual property rights, claims by others that the Company infringes their proprietary technology, and any inability of the Company to raise additional funds in the future. Concentration of Supply Risk —Some of the components and technologies used in the Company’s products are purchased and licensed from a limited number of sources and some of the Company’s products are produced by a limited number of contract manufacturers. The loss of any of these suppliers and contract manufacturers may cause the Company to incur transition costs to another supplier or contract manufacturer, result in delays in the manufacturing and delivery of the Company’s products, or cause it to carry excess or obsolete inventory. The Company relies on a limited number of such suppliers and contract manufacturers for the fulfillment of its customer orders. Any failure of such suppliers and contract manufacturers to perform could have an adverse effect upon the Company’s reputation and its ability to distribute its products or satisfy customers’ orders, which could adversely affect the Company’s business, financial position, results of operations and cash flows. Concentration of Credit Risk —Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable. The Company keeps its cash and cash equivalents in demand deposits with prominent banks of high credit quality and invests only in money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. As of May 31, 2018 and August 31, 2017, cash and cash equivalents of the Company consisted of the following (in thousands): May 31, August 31, Cash and Cash Equivalents by Location 2018 2017 United States; Denominated in U.S. dollars $ 256 $ 109 Taiwan; Denominated in U.S. dollars 2,434 2,350 Denominated in New Taiwan dollars 143 81 Denominated in other currencies 870 646 China (including Hong Kong); Denominated in U.S. dollars 7 7 Denominated in Renminbi 23 389 Denominated in H.K. dollars 6 — Total cash and cash equivalents $ 3,739 $ 3,582 The Company’s revenues are substantially derived from the sales of LED products. A significant portion of the Company’s revenues are derived from a limited number of customers and sales are concentrated in a few select markets. Management performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable. Management evaluates the need to establish an allowance for doubtful accounts for estimated potential credit losses at each reporting period. The allowance for doubtful accounts is based on the management’s assessment of the collectibility of its customer accounts. 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. Net revenues generated from sales to the top ten customers represented 69% and 62% of the Company’s total net revenues for the three and nine months ended May 31, 2018, respectively, and 81% and 67% of the Company’s net revenues for the three and nine months ended May 31, 2017, respectively. The Company’s revenues have been concentrated in a few select markets, including Taiwan, the United States, and China (including Hong Kong). Net revenues generated from sales to customers in these markets, in the aggregate, accounted for 54% and 57% of the Company’s net revenues for the three and nine months ended May 31, 2018, respectively, and 76% and 75% of the Company’s net revenues for the three and nine months ended May 31, 2017, respectively. Noncontrolling Interests —Noncontrolling interests are classified in the consolidated statements of operations as part of consolidated net income (loss) and the accumulated amount of noncontrolling interests in the consolidated balance sheets as part of equity. Changes in ownership interest in a consolidated subsidiary that do not result in a loss of control are accounted for as an equity transaction. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interests are remeasured with the gain or loss reported in net earnings. On March 1, 2017, the 93% equity interest subsidiary, Ning Xiang was dissolved. The assets, liability and certain employees of Ning Xiang were merged into its holding company, Taiwan Bandaoti Zhaoming Co., Ltd. An amount of $46 thousand was paid for the acquisition of the Ning Xiang non-controlling interests. As a result of this payment, non-controlling interest in the Company was reduced to zero. Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The guidance provides clarity and reduces diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on September 1, 2020. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which is intended to improve financial reporting on leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. This standard will be effective for the Company on September 1, 2019. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments- Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments in this Update also simplify the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The FASB has subsequently issued multiple ASUs which amend and clarify the guidance. This standard will be effective for the Company on September 1, 2018. The standard permits the use of either the retrospective or modified retrospective transition method. The Company will adopt the new standard using the modified retrospective transition method. Although the Company’s analysis of the impact of the new revenue recognition guidance is not fully complete, the Company does not currently expect that such guidance will have a material impact on its consolidated financial position, results of operations or cash flows. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
May 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Balance Sheet Components | 3. Balance Sheet Components Inventories Inventories as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, August 31, 2018 2017 Raw materials $ 734 $ 885 Work in process 457 758 Finished goods 1,099 1,303 Total $ 2,290 $ 2,946 Inventory write-downs to estimated net realizable values were $74 thousand and $487 thousand for the three and nine months ended May 31, 2018, respectively, and $589 thousand and $1,119 thousand for the three and nine months ended May 31, 2017, respectively. Property, Plant and Equipment Property, plant and equipment as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, August 31, 2018 2017 Buildings and improvements $ 14,007 $ 13,891 Machinery and equipment 39,072 42,562 Leasehold improvements 336 238 Other equipment 2,370 2,311 Construction in progress 308 321 Total property, plant and equipment 56,093 59,323 Less: Accumulated depreciation and amortization (48,464 ) (51,048 ) Property, plant and equipment, net $ 7,629 $ 8,275 The Company sold property, plant and equipment with net carrying value of $123 thousand and $0 for a total of $913 thousand and $113 thousand for the nine months ended May 31, 2018 and 2017, respectively. Intangible Assets Intangible assets as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, 2018 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period (Years) Amount Amortization Amount Patents and trademarks 15 $ 557 $ 454 $ 103 Acquired technology 5 507 507 — Total $ 1,064 $ 961 $ 103 August 31, 2017 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period (Years) Amount Amortization Amount Patents and trademarks 15 $ 574 $ 470 $ 104 Acquired technology 5 503 503 — Total $ 1,077 $ 973 $ 104 The Company sold 4 patents on October 25, 2017 for a total of $500 thousand. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 9 Months Ended |
May 31, 2018 | |
Investments In Unconsolidated Entities Disclosure [Abstract] | |
Investments in Unconsolidated Entities | 4. Investments in Unconsolidated Entities The Company’s ownership interest and carrying amounts of investments in unconsolidated entities as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands, except percentages): May 31, 2018 August 31, 2017 Percentage Percentage Ownership Amount Ownership Amount Equity method investments: Xurui Guangdian Co., Ltd. (“China SemiLEDs”) 49 % $ — 49 % $ — Cost method investments Various 999 Various 992 Total investments in unconsolidated entities $ 999 $ 992 There were no dividends received from unconsolidated entities through May 31, 2018. Equity Method Investments The Company still owns a 49% equity interest in China SemiLEDs. However, this investment has a carrying amount of zero as a result of a previously recognized impairment. Cost Method Investments The fair values of the Company’s cost method investments are not readily available. All cost method investments are assessed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable. In February 2017, the Company sold all Nanoteco shares owned to the other investor for a cash consideration of $18 thousand and recognized a loss on sale of investment of $2 thousand. F |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
May 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Operating Lease Agreements —The Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which are including cancellable and noncancellable and which expire at various dates between October 2018 and December 2020. Lease expense related to these noncancellable operating leases was $101 thousand and $348 thousand for the three and nine months ended May 31, 2018, respectively, and $111 thousand and $334 thousand for the three and nine months ended May 31, 2017, respectively. Lease expense is recognized on a straight-line basis over the term of the lease. The aggregate future noncancellable minimum rental payments for the Company’s operating leases as of May 31, 2018 consisted of the following (in thousands): Operating Years Ending August 31, Leases Remainder of 2018 $ 40 2019 97 2020 97 2021 32 2022 — Thereafter — Total $ 266 Purchase Obligations —The Company had purchase commitments for inventory, property, plant and equipment in the amount of $1.8 million and $1.5 million as of May 31, 2018 and August 31, 2017, respectively. Litigation —The Company is directly or indirectly involved from time to time in various claims or legal proceedings arising in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated. On June 21, 2017, Well Thrive Ltd. (“Well Thrive”) filed a complaint against SemiLEDs Corporation in the United States District Court for the District of Delaware. The complaint alleges that Well Thrive is entitled to return of $500 thousand paid toward a note purchase pursuant to a purchase agreement (the “Purchase Agreement”) effective July 6, 2016 with Dr. Peter Chiou, which was assigned to Well Thrive on August 4, 2016. Pursuant to the terms of the Purchase Agreement, the Company has retained the $500 thousand payment as liquidated damages. Well Thrive alleges that the liquidated damages provision is unenforceable as an illegal penalty and does not reflect the amount of purported damages. On March 13, 2018, the Company filed a motion to enforce a settlement agreement between the parties to dismiss the lawsuit with prejudice. On March 27, 2018, Well Thrive filed an answering brief in opposition to the Company’s motion on the basis that Well Thrive never consented to dismiss the case. The judge has not ruled on the Company’s motion. If the Company’s motion for specific enforcement is not granted, the Company intends to defend this case vigorously. Except as described above, as of May 31, 2018, there was no pending litigation that could have a material impact on the Company’s financial position, results of operations or cash flows. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
May 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based Compensation | 6. Stock-based Compensation The Company currently has one equity incentive plan (the “2010 Plan”), which provides for awards in the form of restricted shares, stock units, stock options or stock appreciation rights to the Company’s employees, officers, directors and consultants. In April 2014, SemiLEDs’ stockholders approved an amendment to the 2010 Plan that increased the number of shares authorized for issuance under the plan by an additional 250 thousand shares. Prior to SemiLEDs’ initial public offering, the Company had another stock-based compensation plan (the “2005 Plan”), but awards are made from the 2010 Plan after the initial public offering. Options outstanding under the 2005 Plan continue to be governed by its existing terms. A total of 521 thousand shares was reserved for issuance under the 2010 Plan as of both May 31, 2018 and 2017. T In January 2018, SemiLEDs granted 56.7 thousand restricted stock units to its employees among which 50% will be vested each year on January 1 of 2019 and 2020 and will become fully vested upon a change in control. The grant-date fair value of the restricted stock units was $4.10 per unit. In March and November 2017, SemiLEDs granted 5 thousand and 2.5 thousand restricted stock units to its directors, that vested 100% on March 31, 2018 and June 29, 2018, respectively. The grant-date fair value of the restricted stock units was $3.18 and $4.15 per unit, respectively. The grant date fair value of stock options is determined using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires inputs including the market price of SemiLEDs’ common stock on the date of grant, the term that the stock options are expected to be outstanding, the implied stock volatilities of several of the Company’s publicly-traded peers over the expected term of stock options, risk-free interest rate and expected dividend. Each of these inputs is subjective and generally requires significant judgment to determine. The grant date fair value of stock units is based upon the market price of SemiLEDs’ common stock on the date of the grant. This fair value is amortized to compensation expense over the vesting term. Stock-based compensation expense is recorded net of estimated forfeitures such that expense is recorded only for those stock-based awards that are expected to vest. A forfeiture rate is estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from initial estimates. A forfeiture rate of zero is estimated for stock-based awards with vesting term that is less than or equal to one year from the date of grant. A summary of the stock-based compensation expense for the three and nine months ended May 31, 2018 and 2017 was as follows (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Cost of revenues $ 19 $ 9 $ 33 $ 42 Research and development 10 4 16 9 Selling, general and administrative 23 30 52 156 $ 52 $ 43 $ 101 $ 207 |
Net Loss Per Share of Common St
Net Loss Per Share of Common Stock | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share of Common Stock | 7. Net Loss Per Share of Common Stock The following stock-based compensation plan awards were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive (in thousands of shares): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Stock units and stock options to purchase common stock 11 10 63 10 |
Income Taxes
Income Taxes | 9 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The Company’s income (loss) before income taxes for the three and nine months ended May 31, 2018 and 2017 consisted of the following (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 U.S. operations $ (179 ) $ (487 ) $ (86 ) $ (448 ) Foreign operations (147 ) (1,099 ) (1,764 ) (2,983 ) Loss before income taxes $ (326 ) $ (1,586 ) $ (1,850 ) $ (3,431 ) Unrecognized Tax Benefits On December 22, 2017, the U.S. Tax Cuts and Jobs Act was adopted, which among other effects, reduced the U.S. federal corporate income tax rate to 21% from 34% (or 35% in certain cases) beginning in 2018, requires companies to pay a one-time transition tax on certain unrepatriated earnings from non-U.S. subsidiaries that is payable over eight years, makes the receipt of future non-U.S. sourced income of non-U.S. subsidiaries tax-free to U.S. companies and creates a new minimum tax on the earnings of non-U.S. subsidiaries relating to the parent’s deductions for payments to the subsidiaries. Provisional estimate of the Company is that no tax will be due under this provision. The Company will continue gather information relating to this estimate. As of both May 31, 2018 and August 31, 2017, the Company had no unrecognized tax benefits related to tax positions taken in prior periods. The Company files income tax returns in the United States, various U.S. states and certain foreign jurisdictions. The tax years 2005 through 2017 remain open in most jurisdictions. The Company is not currently under examination by income tax authorities in federal, state or foreign jurisdictions. |
Significant Subsequent Event
Significant Subsequent Event | 9 Months Ended |
May 31, 2018 | |
Subsequent Events [Abstract] | |
Significant Subsequent Event | 9. Significant Subsequent Event At its Annual Meeting held on J |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation —The Company’s unaudited interim condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable provisions of the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted as permitted by the rules and regulations of the SEC. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the SEC on November 29, 2017. The unaudited condensed consolidated balance sheet as of August 31, 2017 included herein was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s consolidated balance sheet as of May 31, 2018, the statements of operations and comprehensive loss for the three and nine months ended May 31, 2018 and 2017, the statement of changes in equity for the nine months ended May 31, 2018, and the statements of cash flows for the nine months ended May 31, 2018 and 2017. The results for the three or nine months ended May 31, 2018 are not necessarily indicative of the results to be expected for the year ending August 31, 2018. The accompanying unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The realization of assets and the satisfaction of liabilities in the normal course of business are dependent on, among other things, the Company’s ability to operate profitably, to generate cash flows from operations, and to pursue financing arrangements to support its working capital requirements. The Company suffered losses from operations of $4.3 million and $20.6 million, and net cash used in operating activities of $2.1 million and $3.4 million for the years ended August 31, 2017 and 2016, respectively. Gross profit on product sales was $82 thousand for the year ended August 31, 2017 and gross loss was $4.9 million for the year ended August 31, 2016. Loss from operations for the three and nine months ended May 31, 2018 were $352 thousand and $2.5 million, respectively. Net cash used in operating activities for the nine months ended May 31, 2018 was $273 thousand. Although, at May 31, 2018, the Company’s cash and cash equivalents was slightly increased to $3.7 million, these facts and conditions raise substantial doubt about the Company’s ability to continue as a going concern. However, management believes that it has developed a liquidity plan, as summarized below, that, if executed successfully, should provide sufficient liquidity to meet the Company’s obligations as they become due for a reasonable period of time, and allow the development of its core business. • The Company is suppressing the gross loss from chip sales by moving toward a fabless business model through an agreement with an ODM partner entered into on December 31, 2015. The Company is continuously restructuring its chips manufacturing operation. The Company expects to purchase chips from the strategic partner and follow the best process to combine the Company’s technology with the strategic partner’s production process. • Continuing to further reduce idle capacity charges. This partnership should help the Company obtain a steady source of LED chips with competitive and favorable price for its packaging business, expand the production capacity for LED components, and strengthen its product portfolio and technology. • Increasing sales of automotive products in both China and India by cultivating relationships with automotive lighting developers that are outside the Company’s historical distribution channels . • Gaining positive cash-inflow from operating activities through continuous cost reductions and the sales of new higher margin products. Steady growth of module products and the continued commercial sales of its UV LED product are expected to improve the Company’s future gross margin, operating results and cash flows. The Company is targeting niche markets and focusing on product enhancement and developing its LED product into many other applications or devices. • Continuing to monitor prices, work with current and potential vendors to decrease costs and, consistent with its existing contractual commitments, may possibly decrease its activity level and capital expenditures further. This plan reflects its strategy of controlling capital costs and maintaining financial flexibility. • Raising additional cash through further equity offerings, sales of assets and/or issuance of debt as considered necessary and looking at other potential business opportunities. While the Company’s management believes that the measures described in the above liquidity plan should be adequate to satisfy its liquidity requirements for the twelve months after the date that the financial statement are issued, there is no assurance that the liquidity plan will be successfully implemented. Failure to successfully implement the liquidity plan may have a material adverse effect on its business, results of operations and financial position, and may adversely affect its ability to continue as a going concern. These unaudited interim condensed consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded assets or the amounts and classification of liabilities or any other adjustments that might be necessary should the Company be unable to continue as a going concern. |
Principles of Consolidation | Principles of Consolidation —The unaudited interim condensed consolidated financial statements include the accounts of SemiLEDs and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated during consolidation. Investments in which the Company has the ability to exercise significant influence over the investee but not a controlling financial interest, are accounted for using the equity method of accounting and are not consolidated. These investments are in joint ventures that are not subject to consolidation under the variable interest model, and for which the Company: (i) does not have a majority voting interest that would allow it to control the investee, or (ii) has a majority voting interest but for which other shareholders have significant participating rights, but for which the Company has the ability to exercise significant influence over operating and financial policies. Under the equity method, investments are stated at cost after adding or removing the Company’s portion of equity in undistributed earnings or losses, respectively. The Company’s investment in these equity ‑ ‑ ‑ ‑ Investments in entities that are not consolidated or accounted for under the equity method are accounted for using the cost method. Under the cost method, investments are reported at cost on the consolidated balance sheets in investments in unconsolidated entities, and dividend income, if any, received is reported in the consolidated statements of operations in equity in losses from unconsolidated entities. If the fair value of an equity ‑ ‑ ‑ ‑ |
Use of Estimates | Use of Estimates —The preparation of unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited interim condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the preparation of the Company’s consolidated financial statements on the basis that the Company will continue as a going concern, the collectibility of accounts receivable, inventory net realizable values, realization of deferred tax assets, valuation of stock-based compensation expense, the useful lives of property, plant and equipment and intangible assets, the recoverability of the carrying amount of property, plant and equipment, intangible assets and investments in unconsolidated entities, the fair value of acquired tangible and intangible assets, income tax uncertainties, provision for potential litigation costs and other contingencies. Management bases its estimates on historical experience and also on assumptions that it believes are reasonable. Management assesses these estimates on a regular basis; however, actual results could differ materially from those estimates. |
Certain Significant Risks and Uncertainties | Certain Significant Risks and Uncertainties —The Company is subject to certain risks and uncertainties that could have a material and adverse effect on the Company’s future financial position or results of operations, which risks and uncertainties include, among others: it has incurred significant losses over the past few years, any inability of the Company to compete in a rapidly evolving market and to respond quickly and effectively to changing market requirements, any inability of the Company to grow its revenue and/or maintain or increase its margins, it may experience fluctuations in its revenues and operating results, any inability of the Company to protect its intellectual property rights, claims by others that the Company infringes their proprietary technology, and any inability of the Company to raise additional funds in the future. |
Concentration of Supply Risk | Concentration of Supply Risk —Some of the components and technologies used in the Company’s products are purchased and licensed from a limited number of sources and some of the Company’s products are produced by a limited number of contract manufacturers. The loss of any of these suppliers and contract manufacturers may cause the Company to incur transition costs to another supplier or contract manufacturer, result in delays in the manufacturing and delivery of the Company’s products, or cause it to carry excess or obsolete inventory. The Company relies on a limited number of such suppliers and contract manufacturers for the fulfillment of its customer orders. Any failure of such suppliers and contract manufacturers to perform could have an adverse effect upon the Company’s reputation and its ability to distribute its products or satisfy customers’ orders, which could adversely affect the Company’s business, financial position, results of operations and cash flows. |
Concentration of Credit Risk | Concentration of Credit Risk —Financial instruments that subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable. The Company keeps its cash and cash equivalents in demand deposits with prominent banks of high credit quality and invests only in money market funds. Deposits held with banks may exceed the amount of insurance provided on such deposits. As of May 31, 2018 and August 31, 2017, cash and cash equivalents of the Company consisted of the following (in thousands): May 31, August 31, Cash and Cash Equivalents by Location 2018 2017 United States; Denominated in U.S. dollars $ 256 $ 109 Taiwan; Denominated in U.S. dollars 2,434 2,350 Denominated in New Taiwan dollars 143 81 Denominated in other currencies 870 646 China (including Hong Kong); Denominated in U.S. dollars 7 7 Denominated in Renminbi 23 389 Denominated in H.K. dollars 6 — Total cash and cash equivalents $ 3,739 $ 3,582 The Company’s revenues are substantially derived from the sales of LED products. A significant portion of the Company’s revenues are derived from a limited number of customers and sales are concentrated in a few select markets. Management performs ongoing credit evaluations of its customers and generally does not require collateral on accounts receivable. Management evaluates the need to establish an allowance for doubtful accounts for estimated potential credit losses at each reporting period. The allowance for doubtful accounts is based on the management’s assessment of the collectibility of its customer accounts. 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. Net revenues generated from sales to the top ten customers represented 69% and 62% of the Company’s total net revenues for the three and nine months ended May 31, 2018, respectively, and 81% and 67% of the Company’s net revenues for the three and nine months ended May 31, 2017, respectively. The Company’s revenues have been concentrated in a few select markets, including Taiwan, the United States, and China (including Hong Kong). Net revenues generated from sales to customers in these markets, in the aggregate, accounted for 54% and 57% of the Company’s net revenues for the three and nine months ended May 31, 2018, respectively, and 76% and 75% of the Company’s net revenues for the three and nine months ended May 31, 2017, respectively. |
Noncontrolling Interests | Noncontrolling Interests —Noncontrolling interests are classified in the consolidated statements of operations as part of consolidated net income (loss) and the accumulated amount of noncontrolling interests in the consolidated balance sheets as part of equity. Changes in ownership interest in a consolidated subsidiary that do not result in a loss of control are accounted for as an equity transaction. If a change in ownership of a consolidated subsidiary results in loss of control and deconsolidation, any retained ownership interests are remeasured with the gain or loss reported in net earnings. On March 1, 2017, the 93% equity interest subsidiary, Ning Xiang was dissolved. The assets, liability and certain employees of Ning Xiang were merged into its holding company, Taiwan Bandaoti Zhaoming Co., Ltd. An amount of $46 thousand was paid for the acquisition of the Ning Xiang non-controlling interests. As a result of this payment, non-controlling interest in the Company was reduced to zero. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220) Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The amendments allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting. The guidance provides clarity and reduces diversity in practice and cost and complexity when accounting for a change to the terms or conditions of a share-based payment award. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This standard requires a financial asset (or group of financial assets) measured at amortized cost basis to be presented at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset(s) to present the net carrying value at the amount expected to be collected on the financial asset. This standard will be effective for the Company on September 1, 2020. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases, which is intended to improve financial reporting on leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by lease terms of more than 12 months. This standard will be effective for the Company on September 1, 2019. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments- Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”. The amendments allow equity investments that do not have readily determinable fair values to be remeasured at fair value either upon the occurrence of an observable price change or upon identification of an impairment. The amendments in this Update also simplify the impairment assessment of equity investments without readily determinable fair values by requiring assessment for impairment qualitatively at each reporting period. This standard will be effective for the Company on September 1, 2018. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial position, results of operations or cash flows. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers,” which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The FASB has subsequently issued multiple ASUs which amend and clarify the guidance. This standard will be effective for the Company on September 1, 2018. The standard permits the use of either the retrospective or modified retrospective transition method. The Company will adopt the new standard using the modified retrospective transition method. Although the Company’s analysis of the impact of the new revenue recognition guidance is not fully complete, the Company does not currently expect that such guidance will have a material impact on its consolidated financial position, results of operations or cash flows. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
May 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of cash and cash equivalents by location | As of May 31, 2018 and August 31, 2017, cash and cash equivalents of the Company consisted of the following (in thousands): May 31, August 31, Cash and Cash Equivalents by Location 2018 2017 United States; Denominated in U.S. dollars $ 256 $ 109 Taiwan; Denominated in U.S. dollars 2,434 2,350 Denominated in New Taiwan dollars 143 81 Denominated in other currencies 870 646 China (including Hong Kong); Denominated in U.S. dollars 7 7 Denominated in Renminbi 23 389 Denominated in H.K. dollars 6 — Total cash and cash equivalents $ 3,739 $ 3,582 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
May 31, 2018 | |
Disclosure Text Block Supplement [Abstract] | |
Schedule of inventories | Inventories as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, August 31, 2018 2017 Raw materials $ 734 $ 885 Work in process 457 758 Finished goods 1,099 1,303 Total $ 2,290 $ 2,946 |
Schedule of property, plant and equipment | Property, plant and equipment as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, August 31, 2018 2017 Buildings and improvements $ 14,007 $ 13,891 Machinery and equipment 39,072 42,562 Leasehold improvements 336 238 Other equipment 2,370 2,311 Construction in progress 308 321 Total property, plant and equipment 56,093 59,323 Less: Accumulated depreciation and amortization (48,464 ) (51,048 ) Property, plant and equipment, net $ 7,629 $ 8,275 |
Schedule of intangible assets | Intangible assets as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands): May 31, 2018 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period (Years) Amount Amortization Amount Patents and trademarks 15 $ 557 $ 454 $ 103 Acquired technology 5 507 507 — Total $ 1,064 $ 961 $ 103 August 31, 2017 Weighted Average Gross Net Amortization Carrying Accumulated Carrying Period (Years) Amount Amortization Amount Patents and trademarks 15 $ 574 $ 470 $ 104 Acquired technology 5 503 503 — Total $ 1,077 $ 973 $ 104 |
Investments in Unconsolidated21
Investments in Unconsolidated Entities (Tables) | 9 Months Ended |
May 31, 2018 | |
Investments In Unconsolidated Entities Disclosure [Abstract] | |
Schedule of ownership interest and carrying amounts of investments in unconsolidated entities | The Company’s ownership interest and carrying amounts of investments in unconsolidated entities as of May 31, 2018 and August 31, 2017 consisted of the following (in thousands, except percentages): May 31, 2018 August 31, 2017 Percentage Percentage Ownership Amount Ownership Amount Equity method investments: Xurui Guangdian Co., Ltd. (“China SemiLEDs”) 49 % $ — 49 % $ — Cost method investments Various 999 Various 992 Total investments in unconsolidated entities $ 999 $ 992 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
May 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of aggregate future noncancellable minimum rental payments for the operating leases | The aggregate future noncancellable minimum rental payments for the Company’s operating leases as of May 31, 2018 consisted of the following (in thousands): Operating Years Ending August 31, Leases Remainder of 2018 $ 40 2019 97 2020 97 2021 32 2022 — Thereafter — Total $ 266 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
May 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of the stock-based compensation expense | A summary of the stock-based compensation expense for the three and nine months ended May 31, 2018 and 2017 was as follows (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Cost of revenues $ 19 $ 9 $ 33 $ 42 Research and development 10 4 16 9 Selling, general and administrative 23 30 52 156 $ 52 $ 43 $ 101 $ 207 |
Net Loss Per Share of Common 24
Net Loss Per Share of Common Stock (Tables) | 9 Months Ended |
May 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of stock-based compensation plan awards were excluded from the computation of diluted net loss per share of common stock | The following stock-based compensation plan awards were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive (in thousands of shares): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 Stock units and stock options to purchase common stock 11 10 63 10 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
May 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (loss) before income taxes | The Company’s income (loss) before income taxes for the three and nine months ended May 31, 2018 and 2017 consisted of the following (in thousands): Three Months Ended May 31, Nine Months Ended May 31, 2018 2017 2018 2017 U.S. operations $ (179 ) $ (487 ) $ (86 ) $ (448 ) Foreign operations (147 ) (1,099 ) (1,764 ) (2,983 ) Loss before income taxes $ (326 ) $ (1,586 ) $ (1,850 ) $ (3,431 ) |
Business (Details)
Business (Details) | 9 Months Ended |
May 31, 2018subsidiary | |
Business | |
State of entity incorporated | Delaware |
Date of entity incorporation | Jan. 4, 2005 |
Number of wholly owned subsidiaries | 5 |
Taiwan SemiLEDs | Taiwan Bandaoti Zhaoming Co., Ltd. | |
Business | |
Ownership interest (as a percent) | 100.00% |
Summary of Significant Accoun27
Summary of Significant Accounting Policies - Basis of Presentation and Use of Estimates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Accounting Policies [Abstract] | ||||||
Losses from operations | $ 352 | $ 1,289 | $ 2,456 | $ 3,521 | $ 4,300 | $ 20,600 |
Gross profits (losses) on product sales | 162 | (186) | (230) | (63) | 82 | (4,900) |
Net cash used in operating activities | 273 | 2,617 | 2,100 | 3,400 | ||
Cash and cash equivalents | $ 3,739 | $ 3,137 | $ 3,739 | $ 3,137 | $ 3,582 | $ 6,030 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | Aug. 31, 2016 | |
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | $ 3,739 | $ 3,137 | $ 3,739 | $ 3,137 | $ 3,582 | $ 6,030 |
Net revenues | Customer concentration | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (as a percent) | 69.00% | 81.00% | 62.00% | 67.00% | ||
Net revenues | Geographic concentration | ||||||
Concentration Risk [Line Items] | ||||||
Concentration risk (as a percent) | 54.00% | 76.00% | 57.00% | 75.00% | ||
United States | U.S. Dollars | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | $ 256 | $ 256 | 109 | |||
Taiwan | U.S. Dollars | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | 2,434 | 2,434 | 2,350 | |||
Taiwan | New Taiwan Dollars | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | 143 | 143 | 81 | |||
Taiwan | Other currencies | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | 870 | 870 | 646 | |||
China (including Hong Kong) | U.S. Dollars | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | 7 | 7 | 7 | |||
China (including Hong Kong) | Renminbi | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | 23 | 23 | $ 389 | |||
China (including Hong Kong) | H.K. dollars | ||||||
Concentration Risk [Line Items] | ||||||
Cash and cash equivalents | $ 6 | $ 6 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Noncontrolling Interests (Details) - USD ($) $ in Thousands | Mar. 01, 2017 | May 31, 2017 |
Minority Interest [Line Items] | ||
Payments to acquire non-controlling interests | $ 46 | |
Ning Xiang | ||
Minority Interest [Line Items] | ||
Equity interest ownership percentage, dissolved | 93.00% | |
Payments to acquire non-controlling interests | $ 46 | |
Non-controlling interest | $ 0 |
Balance Sheet Components - Inve
Balance Sheet Components - Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Disclosure Text Block Supplement [Abstract] | |||||
Raw materials | $ 734 | $ 734 | $ 885 | ||
Work in process | 457 | 457 | 758 | ||
Finished goods | 1,099 | 1,099 | 1,303 | ||
Total | 2,290 | 2,290 | $ 2,946 | ||
Inventory write-downs | $ 74 | $ 589 | $ 487 | $ 1,119 |
Balance Sheet Components - Prop
Balance Sheet Components - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | $ 56,093 | $ 59,323 | |
Less: Accumulated depreciation and amortization | (48,464) | (51,048) | |
Property, plant and equipment, net | 7,629 | 8,275 | |
Sale of property, plant and equipment net carrying value | 123 | $ 0 | |
Proceeds from sales of property, plant and equipment | 913 | $ 113 | |
Buildings and improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | 14,007 | 13,891 | |
Machinery and equipment | |||
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | 39,072 | 42,562 | |
Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | 336 | 238 | |
Other equipment | |||
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | 2,370 | 2,311 | |
Construction in progress | |||
Property Plant And Equipment [Line Items] | |||
Total property, plant and equipment | $ 308 | $ 321 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible Assets (Details) $ in Thousands | Oct. 25, 2017USD ($)Patent | May 31, 2018USD ($) | Aug. 31, 2017USD ($) |
Finite Lived Intangible Assets [Line Items] | |||
Gross Carrying Amount | $ 1,064 | $ 1,077 | |
Accumulated Amortization | 961 | 973 | |
Net Carrying Amount | 103 | $ 104 | |
Number of patents sold | Patent | 4 | ||
Proceeds from sale of intangible assets | $ 1 | ||
Patents and trademarks | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (Years) | 15 years | 15 years | |
Gross Carrying Amount | $ 557 | $ 574 | |
Accumulated Amortization | 454 | 470 | |
Net Carrying Amount | $ 103 | $ 104 | |
Acquired technology | |||
Finite Lived Intangible Assets [Line Items] | |||
Weighted Average Amortization Period (Years) | 5 years | 5 years | |
Gross Carrying Amount | $ 507 | $ 503 | |
Accumulated Amortization | $ 507 | $ 503 | |
Patents | |||
Finite Lived Intangible Assets [Line Items] | |||
Proceeds from sale of intangible assets | $ 500 |
Investments in Unconsolidated33
Investments in Unconsolidated Entities (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2017 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Investments in unconsolidated entities | |||||
Cost method investments | $ 999 | $ 992 | |||
Total investments in unconsolidated entities | $ 999 | $ 992 | |||
Cash consideration from sale of the investment | $ 18 | ||||
Loss on sale of investment | $ 2 | $ 11 | |||
Impairment loss on investment | $ 352 | 352 | |||
Xurui Guangdian Co., Ltd. ("China SemiLEDs") | |||||
Investments in unconsolidated entities | |||||
Percentage Ownership | 49.00% | 49.00% | |||
Equity method investments | $ 0 | $ 0 | |||
Unconsolidated Entities | |||||
Investments in unconsolidated entities | |||||
Dividend received from unconsolidated entities | $ 0 | ||||
Intematix | |||||
Investments in unconsolidated entities | |||||
Impairment loss on investment | $ 352 |
Commitments and Contingencies34
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Commitments and Contingencies | |||||
Lease expense related to operating leases | $ 101 | $ 111 | $ 348 | $ 334 | |
Operating lease agreements, description | The Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which are including cancellable and noncancellable and which expire at various dates between October 2018 and December 2020. | ||||
Future noncancellable minimum rental payments | |||||
Remainder of 2018 | 40 | $ 40 | |||
2,019 | 97 | 97 | |||
2,020 | 97 | 97 | |||
2,021 | 32 | 32 | |||
Total | 266 | 266 | |||
Purchase Obligations | |||||
Purchase commitments for inventory, property, plant and equipment | 1,800 | 1,800 | $ 1,500 | ||
Litigation | |||||
Litigation settlement amount to be received | 500 | 500 | $ 500 | ||
Claims From Well Thrive Ltd. | |||||
Litigation | |||||
Litigation settlement amount to be received | $ 500 | $ 500 | |||
Minimum | |||||
Commitments and Contingencies | |||||
Cancellable and noncancellable operating lease expiration | 2018-10 | ||||
Maximum | |||||
Commitments and Contingencies | |||||
Cancellable and noncancellable operating lease expiration | 2020-12 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) $ / shares in Units, $ in Thousands | Jun. 29, 2018 | Mar. 31, 2018 | Jan. 31, 2018$ / sharesshares | Nov. 30, 2017$ / sharesshares | Mar. 31, 2017$ / sharesshares | Apr. 30, 2014shares | May 31, 2018USD ($)itemshares | May 31, 2017USD ($)shares | May 31, 2018USD ($)itemshares | May 31, 2017USD ($)shares |
Stock-based Compensation | ||||||||||
Number of share-based compensation plans | item | 1 | 1 | ||||||||
Additional number of shares authorized for issuance | 250,000 | |||||||||
Shares of common stock reserved for issuance | 521,000 | 521,000 | 521,000 | 521,000 | ||||||
Common stock available for future issuance (in shares) | 196,000 | 252,000 | 196,000 | 252,000 | ||||||
Share-based Compensation, Forfeiture Method [Fixed List] | Estimating expected forfeitures | |||||||||
Estimated forfeiture rate (as a percent) | 0.00% | 0.00% | ||||||||
Stock-based compensation expense | $ | $ 52 | $ 43 | $ 101 | $ 207 | ||||||
Cost of revenues | ||||||||||
Stock-based Compensation | ||||||||||
Stock-based compensation expense | $ | 19 | 9 | 33 | 42 | ||||||
Research and development | ||||||||||
Stock-based Compensation | ||||||||||
Stock-based compensation expense | $ | 10 | 4 | 16 | 9 | ||||||
Selling, general and administrative | ||||||||||
Stock-based Compensation | ||||||||||
Stock-based compensation expense | $ | $ 23 | $ 30 | $ 52 | $ 156 | ||||||
Officer and Employees | Restricted stock unit | ||||||||||
Stock-based Compensation | ||||||||||
Stock units granted (in shares) | 56,700 | |||||||||
Vesting percentage per anniversary of the vesting start date | 50.00% | |||||||||
Grant-date fair value (in dollars per share) | $ / shares | $ 4.10 | |||||||||
Directors | Restricted stock unit | ||||||||||
Stock-based Compensation | ||||||||||
Stock units granted (in shares) | 2,500 | 5,000 | ||||||||
Grant-date fair value (in dollars per share) | $ / shares | $ 4.15 | $ 3.18 | ||||||||
Vesting percentage | 100.00% | |||||||||
Directors | Restricted stock unit | Subsequent Event | ||||||||||
Stock-based Compensation | ||||||||||
Vesting percentage | 100.00% |
Net Loss Per Share of Common 36
Net Loss Per Share of Common Stock (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
May 31, 2018 | May 31, 2017 | May 31, 2018 | May 31, 2017 | |
Stock units and stock options to purchase common stock | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 11 | 10 | 63 | 10 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 8 Months Ended | 9 Months Ended | 12 Months Ended | ||
May 31, 2018 | May 31, 2017 | Aug. 31, 2018 | May 31, 2018 | May 31, 2017 | Aug. 31, 2017 | |
Income Taxes [Line Items] | ||||||
U.S. operations | $ (179,000) | $ (487,000) | $ (86,000) | $ (448,000) | ||
Foreign operations | (147,000) | (1,099,000) | (1,764,000) | (2,983,000) | ||
Loss before income taxes | (326,000) | $ (1,586,000) | $ (1,850,000) | $ (3,431,000) | ||
U.S. federal corporate income tax rate | 34.00% | |||||
One-time transition tax payable period on certain unrepatriated earnings from non-U.S. subsidiaries | 8 years | |||||
Unrecognized tax benefits | $ 0 | $ 0 | $ 0 | |||
Scenario, Plan | ||||||
Income Taxes [Line Items] | ||||||
U.S. federal corporate income tax rate | 21.00% |
Significant Subsequent Event (D
Significant Subsequent Event (Details) - shares | May 31, 2018 | Feb. 28, 2018 | Aug. 31, 2017 |
Subsequent Events [Abstract] | |||
Reduction in the number of authorized common stock | 7,500,000 | 75,000,000 | 7,500,000 |