SemiLEDs Corp

Previous wording

Our ability to continue or grow with buy-sell revenue.

Current wording

Our ability to continue or grow buy-sell revenue.

Previous wording

Our ability to remain in compliance with the continued listing requirements to avoid our stock being delisted from the Nasdaq Capital Market.

Current wording

Our ability to regain and maintain compliance with the continued listing requirements to avoid our stock being delisted from the Nasdaq Capital Market.

Previous wording

Adverse macroeconomic developments in those selected markets, including India, Japan, the Netherlands and the United States, where our revenues are concentrated, including supply chain delays and the impact of inflation on customer demand.

Current wording

Adverse macroeconomic developments in those selected markets, including India, Japan, the United States and the Netherlands, where our revenues are concentrated, including supply chain delays and the impact of inflation on customer demand.

Previous wording

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. We sell our LED chips to packagers or to distributors, who in turn sell to packagers. Our lighting products customers are primarily original design manufacturers, or ODMs, of lighting products and the end‑users of lighting devices. 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. In addition, beginning in fiscal year 2025, we have entered into number buy-sell orders for equipment that we purchased and then sold to our customer.

Current wording

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 United States and the Netherlands. We also sell our “Enhanced Vertical,” or EV, LED product series in blue, white, green and UV in selected markets. We sell our LED chips to packagers or to distributors, who in turn sell to packagers. Our lighting products customers are primarily original design manufacturers, or ODMs, of lighting products and the end‑users of lighting devices. 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. In addition, beginning in fiscal year 2025, we have entered into number buy-sell orders for equipment that we purchased and then sold to our customer.

Previous wording

In the first quarter of fiscal 2026, we entered into buy-sell purchase orders pursuant to which we purchased equipment and then resold the goods to our customer. The revenue relating to these purchase orders was $1.3 million in the first quarter of fiscal 2026, and the associated cost of revenue was $1.2 million.

Current wording

In the first quarter of fiscal 2026, we entered into buy-sell purchase orders pursuant to which we purchased equipment and then resold the goods to our customer. The revenue relating to these purchase orders was $1.3 million in the first quarter of fiscal 2026, and the associated cost of revenue was $1.2 million. We did not have any buy-sell purchase orders during the second quarter of fiscal 2026.

Previous wording

We anticipate buy-sell purchase orders in the second quarter of fiscal 2026. As a result of these purchase orders and associated uncertainty of the business, our revenue, cost of revenues, receivables, inventories and customer deposits over future quarters may vary significantly. In addition, if our shipments are delayed, revenue recognition may be delayed into future quarters. We cannot assure you when, or if, the revenue will be recognized, when payments will be received, or if we will receive further orders in the future.

Current wording

We anticipate buy-sell purchase orders in the third quarter of fiscal 2026. As a result of these purchase orders and associated uncertainty of the business, our revenue, cost of revenues, receivables, inventories and customer deposits over future quarters may vary significantly. In addition, if our shipments are delayed, revenue recognition may be delayed into future quarters. We cannot assure you when, or if, the revenue will be recognized, when payments will be received, or if we will receive further orders in the future.

Previous wording

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. We anticipate our buy-sell purchase orders will continue from period to period. However, if orders diminish or cease altogether, our gross margin, operating results, and cash flows could be adversely affected.

Current wording

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. We anticipate our buy-sell purchase orders will fluctuate from period to period. However, if orders diminish or cease altogether, our gross margin, operating results, and cash flows could be adversely affected.

Previous wording

General economic conditions and geographic concentration. Many countries including the United States and the European Union (the “E.U.”) members have instituted, or have announced plans to institute, government regulations and programs designed to encourage or mandate increased energy efficiency in lighting. These actions include in certain cases banning the sale after specified dates of certain forms of incandescent lighting, which are advancing the adoption of more energy efficient lighting solutions such as LEDs. 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. Given that we are operating in a rapidly changing industry, our sales in specific markets may fluctuate from quarter to quarter. Therefore, our financial results will be impacted by general economic and political conditions in such markets. For example, the aggressive support by the Chinese government for the LED industry through significant government incentives and subsidies to encourage the use of LED lighting and to establish the LED‑sector companies has resulted in production overcapacity in the market and intense competition. Furthermore, due to Chinese package manufacturers increasing usage of domestic LED chips, prices are increasingly competitive, leading to Chinese manufacturers growing market share in the global LED industry. In addition, we have historically derived a significant portion of our revenues from a limited number of customers. Some of our largest customers and what we produce 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. For the three months ended November 30, 2025 and 2024, sales to our three largest customers, in the aggregate, accounted for 69% and 78% of our revenues, respectively.

Current wording

General economic conditions and geographic concentration. Many countries including the United States and the European Union (the “E.U.”) members have instituted, or have announced plans to institute, government regulations and programs designed to encourage or mandate increased energy efficiency in lighting. These actions include in certain cases banning the sale after specified dates of certain forms of incandescent lighting, which are advancing the adoption of more energy efficient lighting solutions such as LEDs. 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 United States and the Netherlands. Given that we are operating in a rapidly changing industry, our sales in specific markets may fluctuate from quarter to quarter. Therefore, our financial results will be impacted by general economic and political conditions in such markets. For example, the aggressive support by the Chinese government for the LED industry through significant government incentives and subsidies to encourage the use of LED lighting and to establish the LED‑sector companies has resulted in production overcapacity in the market and intense competition. Furthermore, due to Chinese package manufacturers increasing usage of domestic LED chips, prices are increasingly competitive, leading to Chinese manufacturers growing market share in the global LED industry. In addition, we have historically derived a significant portion of our revenues from a limited number of customers. Some of our largest customers and what we produce 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. For the three and six months ended February 28, 2026, sales to our three largest customers, in the aggregate, accounted for 59% of our revenues.

Previous wording

Cash position. Our cash and cash equivalents increased to $2.9 million as of November 30, 2025 from $1.2 million as of November 30, 2024. We have implemented actions to accelerate operating cost reductions and improve operational efficiencies. The plan is further enhanced through the fabless business model in which we implemented certain workforce reductions and are exploring the opportunities to sell certain equipment related to the manufacturing of vertical LED chips, in order to reduce the idle capacity charges and minimize our research and development activities associated with chips manufacturing operation. Based on our current financial projections and assuming our outstanding notes are converted or extended, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months.

Current wording

Cash position. Our cash and cash equivalents increased to $4.0 million as of February 28, 2026 from $2.4 million as of February 28, 2025. We have implemented actions to accelerate operating cost reductions and improve operational efficiencies. The plan is further enhanced through the fabless business model in which we implemented certain workforce reductions and are exploring the opportunities to sell certain equipment related to the manufacturing of vertical LED chips, in order to reduce the idle capacity charges and minimize our research and development activities associated with chips manufacturing operation. Based on our current financial projections and assuming our outstanding notes are converted or extended, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months.

Previous wording

ASC 606 provides guidance on proper recognition of principal versus agent considerations which is used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controls the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

Current wording

ASC 606 provides guidance on proper recognition of principal versus agent considerations which are used to determine gross versus net revenue recognition. Under ASC 606, the core objective of the guidance on gross versus net revenue recognition is to help determine whether an entity is a principal or an agent in a transaction. In general, the primary difference between these two is the performance obligation being satisfied. The principal has a performance obligation to provide the desired goods or services to the end customer, whereas the agent arranges for the principal to provide the desired goods or services. Additionally, a fundamental characteristic of a principal in a transaction is control. A principal substantively controls the goods and services before they are transferred to the customer as well as controls the price of the good or service being provided. An agent normally receives a commission or fee for these activities. In addition to control, the level at which an entity controls the price of the good or service being transferred determines principal versus agent status. The more discretion over setting price a company has in providing the good or service, the more likely they are considered a principal rather than an agent. Under the guidance when another party is involved in providing a good or service to a customer, an entity is a principal if the entity obtains control of the asset or right to a service performed by the other party.

Previous wording

The Company’s revenues were substantially derived from buy-sell purchase orders of equipment.

Current wording

The Company’s revenues for the six months ended February 28, 2026 were significantly derived from buy-sell purchase orders of equipment.

Previous wording

The allowance for doubtful accounts is based on management’s assessment of the collectability of 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. No bad debt expenses were recognized during the three months ended November 30, 2025 and 2024.

Current wording

The allowance for doubtful accounts is based on management’s assessment of the collectability of 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. No bad debt expenses were recognized during the three and six months ended February 28, 2026 and 2025.

Previous wording

The Company writes down excess and obsolete inventory to its estimated net realizable value. The net realized value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realized value is based on current market conditions and historical experience with product sales of similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value. For finished goods and work in process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write downs are included in cost of revenues in the consolidated statements of operations. Once written down, inventories are carried at this lower cost basis until sold or scrapped. Inventory write‑downs to estimated net realizable values were $152 thousand and $96 thousand for the three months ended November 30, 2025 and 2024, respectively.

Current wording

The Company writes down excess and obsolete inventory to its estimated net realizable value. The net realized value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realized value is based on current market conditions and historical experience with product sales of similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value. For finished goods and work in process, if the estimated net realizable value for an inventory item, which is the estimated selling price in the ordinary course of business, less reasonably predicable costs to completion and disposal, is lower than its cost, the specific inventory item is written down to its estimated net realizable value. Net realizable value for raw materials is based on replacement cost. Provisions for inventory write downs are included in cost of revenues in the consolidated statements of operations. Once written down, inventories are carried at this lower cost basis until sold or scrapped. Inventory write‑downs to estimated net realizable values were $126 thousand and $50 thousand for the three months ended February 28, 2026 and 2025, respectively.

Previous wording

The translations from NT dollars to U.S. dollars were made at the exchange rates set forth in the statistical release of the Bank of Taiwan. On November 30, 2025, the exchange rate was 31.4 NT dollars to one U.S. dollar. On January 6, 2026, the exchange rate was 31.52 NT dollars to one U.S. dollar.

Current wording

The translations from NT dollars to U.S. dollars were made at the exchange rates set forth in the statistical release of the Bank of Taiwan. On February 28, 2026, the exchange rate was 31.23 NT dollars to one U.S. dollar. On April 6, 2026, the exchange rate was 31.52 NT dollars to one U.S. dollar.

Previous wording

(1) Other revenues for the three months ended November 30, 2025 primarily represent revenues attributable to buy-sell purchase orders of equipment, and other revenues for the three months ended November 30, 2024 primarily include revenues attributable to the sale of epitaxial wafers, scraps and raw materials and the provision of services and a joint development project with CrayoNano AS.

Current wording

(1) Other revenues for the three months ended February 28, 2026 primarily include revenues attributable to the sale of epitaxial wafers, scraps and raw materials and the provision of services and a joint development project with CrayoNano AS, and other revenues for the three months ended February 28, 2025 primarily represent revenues attributable to buy-sell purchase orders of equipment.

Previous wording

Revenues attributable to the sales of our LED chips were $5 thousand and $65 thousand of our revenues for the three months ended November 30, 2025 and 2024, respectively. The decrease in sales of LED chips was primarily due to varying volumes sold for the LED chips.

Current wording

Revenues attributable to the sales of our LED chips were $26 thousand and $29 thousand of our revenues for the three months ended February 28, 2026 and 2025, respectively. The decrease in sales of LED chips was primarily due to varying volumes sold for the LED chips.

Previous wording

Revenues attributable to the sales of our LED components were $692 thousand and $561 thousand for the three months ended November 30, 2025 and 2024, respectively. The increase in sales of LED components was primarily due to varying volumes sold for the LED components.

Current wording

Revenues attributable to the sales of our LED components were $423 thousand and $682 thousand for the three months ended February 28, 2026 and 2025, respectively. The decrease in sales of LED components was primarily due to varying volumes sold for the LED components.

Previous wording

Revenues attributable to the sales of our lighting products were $47 thousand and $59 thousand for the three months ended November 30, 2025 and 2024, respectively. The decrease in sales of lighting products was primarily due to varying volumes sold for lighting products.

Current wording

Revenues attributable to the sales of our lighting products were $69 thousand and $58 thousand for the three months ended February 28, 2026 and 2025, respectively. The increase in sales of lighting products was primarily due to varying volumes sold for lighting products.

Previous wording

Our cost of revenues increased by 155% from $1.0 million for the three months ended November 30, 2024 to $2.5 million for the three months ended November 30, 2025. The increase in cost of revenues was due to the cost of equipment relating to buy-sell purchase orders of equipment.

Current wording

Our cost of revenues decreased by 89% from $10 million for the three months ended February 28, 2025 to $1.1 million for the three months ended February 28, 2026. The decrease in cost of revenues was due to the absence of cost of equipment relating to buy-sell purchase orders of equipment.

Previous wording

Our gross profit represented 1% and 21% of our revenues for the three months ended November 30, 2025 and 2024, respectively. The decrease in gross margin for the three months ended November 30, 2025 was primarily due to the buy-sell purchase orders of equipment, which have lower margins compared to sales of our products.

Current wording

Our gross profit represented 1% and 9% of our revenues for the three months ended February 28, 2026 and 2025, respectively. The decrease in gross margin for the three months ended February 28, 2026 was primarily due to the absence of buy-sell purchase orders of equipment.

Previous wording

Our research and development expenses increased from $221 thousand for the three months ended November 30, 2024 to $356 thousand for the three months ended November 30, 2025. The increase was primarily due to a $77 thousand increase in payroll expense and a $49 thousand increase in materials and supplies used in research and development.

Current wording

Our research and development expenses decreased from $279 thousand for the three months ended February 28, 2025 to $276 thousand for the three months ended February 28, 2026. The decrease was primarily due to a $55 thousand increase in payroll expense offset by a $60 thousand decrease in materials and supplies used in research and development.

Previous wording

Our selling, general and administrative expenses increased from $696 thousand for the three months ended November 30, 2024 to $703 thousand for the three months ended November 30, 2025. The increase was mainly attributable to a $28 thousand increase in shipping expense and a $22 thousand increase in cleaning expense, partially offset by a $48 thousand decrease in payroll expense.

Current wording

Our selling, general and administrative expenses decreased from $614 thousand for the three months ended February 28, 2025 to $575 thousand for the three months ended February 28, 2026. The decrease was mainly attributable to a $37 thousand decrease in shipping expense, a $27 thousand decrease in payroll expense and a $23 thousand decrease in professional service expense, partially offset by a $31 thousand increase in utilities expense and a $31 thousand increase in travel expense.

Previous wording

Interest expenses, 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 $67 thousand for three months ended November 30, 2024 to $12 thousand for three months ended November 30, 2025. The decrease in interest expense, net was primarily due to the repayment $1.6 million of loan principal in fiscal year 2025.

Current wording

Interest expenses, 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 $42 thousand for the three months ended February 28, 2025 to $22 thousand for the three months ended February 28, 2026. The decrease in interest expense, net was primarily due to the repayment of $1.6 million of loan principal in fiscal year 2025.

Previous wording

Our revenues increased by 104% from $1.3 million for the three months ended November 30, 2024 to $2.6 million for the three months ended November 30, 2025. The increase in revenues was driven almost entirely by the $1.3 million increase in sales of other revenues as a result of buy-sell purchase orders of equipment.

Current wording

Our revenues decreased by 70% from $12.1 million for the six months ended February 28, 2025 to $3.6 million for the six months ended February 28, 2026. The decrease in revenues was driven almost entirely by the $8.7 million decrease in sales of other revenues as a result of a reduction in buy-sell purchase orders of equipment.

Previous wording

Revenues attributable to our other revenues were $1.8 million and $576 thousand of our revenues for the three months ended November 30, 2025 and 2024, respectively. The increase in other revenues was primarily due to buy-sell purchase orders of equipment.

Current wording

Revenues attributable to our other revenues were $2.4 million and $10.7 million of our revenues for the six months ended February 28, 2026 and 2025, respectively. The decrease in other revenues was primarily due to a reduction in buy-sell purchase orders of equipment.

Previous wording

Investment loss from unconsolidated entities Investment loss from unconsolidated entities increased from $3 thousand for the three months ended November 30, 2024 to $9 thousand for the three months ended November 30, 2025, primarily due to the decrease in the fair value of equity method investments.

Current wording

Investment loss from unconsolidated entities Investment loss from unconsolidated entities increased from $13 thousand for the three months ended February 28, 2025 to $15 thousand for the six months ended February 28, 2026, primarily due to the decrease in the fair value of equity method investments.

Previous wording

Other income, net Other income, net decreased from $282 thousand for three months ended November 30, 2024 to $269 thousand for three months ended November 30, 2025, primarily due to reduced rental income.

Current wording

Other income, net Other income, net decreased from $547 thousand for three months ended February 28, 2025 to $544 thousand for six months ended February 28, 2026, primarily due to reduced rental income.

Previous wording

Foreign currency transaction gain (loss), net We recognized a net foreign currency transaction gain of $21 thousand and a net foreign currency transaction loss of $102 thousand for three months ended November 30, 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.

Current wording

Foreign currency transaction gain (loss), net We recognized a net foreign currency transaction gain of $16 thousand and a net foreign currency transaction loss of $37 thousand for three months ended February 28, 2026 and 2025, 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.

Previous wording

As of November 30, 2025 and August 31, 2025, we had cash and cash equivalents of $2.9 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.

Current wording

As of February 28, 2026 and August 31, 2025, we had cash and cash equivalents of $4.0 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.

Previous wording

Our long-term debt, which consisted of NT dollar denominated long-term notes and loans from our Chairman and our largest shareholder, totaled $1.6 million and $1.7 million as of November 30, 2025 and August 31, 2025, respectively.

Current wording

Our long-term debt, which consisted of NT dollar denominated long-term notes and loans from our Chairman and our largest shareholder, totaled $1.5 million and $1.7 million as of February 28, 2026 and August 31, 2025, respectively.

Previous wording

Our NT dollar denominated long-term notes totaled $769 thousand and $908 thousand as of November 30, 2025 and August 31, 2025, respectively. 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. The second loan originally for $1.2 million (NT$38 million) has an annual floating interest rate equal to the NTD base lending rate plus 1.02% (or 2.795% currently) and is available for operating capital. These loans are secured by an $80 thousand (NT$2.5 million) security deposit and a first priority security interest on the Company’s headquarters building.

Current wording

Our NT dollar denominated long-term notes totaled $658 thousand and $908 thousand as of February 28, 2026 and August 31, 2025, respectively. 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. The second loan originally for $1.2 million (NT$38 million) has an annual floating interest rate equal to the NTD base lending rate plus 1.02% (or 2.795% currently) and is available for operating capital. These loans are secured by an $80 thousand (NT$2.5 million) security deposit and a first priority security interest on the Company’s headquarters building.

Previous wording

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 November 30, 2025, our outstanding balance on this note payable was approximately $477 thousand.

Current wording

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 February 28, 2026, our outstanding balance on this note payable was approximately $408 thousand.

Previous wording

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 November 30, 2025, our outstanding balance on this note payable was approximately $292 thousand.

Current wording

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 February 28, 2026, our outstanding balance on this note payable was approximately $250 thousand.

Previous wording

Property, plant and equipment pledged as collateral for our notes payable were $1.6 million and $1.7 million as of November 30, 2025 and August 31, 2025, respectively.

Current wording

Property, plant and equipment pledged as collateral for our notes payable were $1.5 million and $1.7 million as of February 28, 2026 and August 31, 2025, respectively.

Previous wording

As of November 30, 2025 and August 31, 2025, these loans totaled $800 thousand.

Current wording

As of February 28, 2026 and August 31, 2025, these loans totaled $1.2 million and $800 thousand, respectively.

Previous wording

We have incurred significant losses since inception, including net loss attributable to SemiLEDs stockholders of $742 thousand and $547 thousand during the three months ended November 30, 2025 and 2024, respectively. Net cash provided by operating activities for the three months ended November 30, 2025 was $361 thousand. As of November 30, 2025, we had cash and cash equivalents of $2.9 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. In addition, we are planning to issue additional equity to our stockholders.

Current wording

We have incurred significant losses since inception, including net loss attributable to SemiLEDs stockholders of $603 thousand and net income attributable to SemiLEDs stockholders of $388 thousand during the three months ended February 28, 2026 and 2025, respectively. Net cash provided by operating activities for the six months ended February 28, 2026 was $1.6 million. As of February 28, 2026, we had cash and cash equivalents of $4.0 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. In addition, we are planning to issue additional equity to our stockholders.

Previous wording

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. Based on our current financial projections and assuming the successful implementation of our liquidity plans, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months and beyond. 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. If we are not able to generate positive cash flows from operations, we may need to consider alternative financing sources and seek additional funds through public or private equity financings or from other sources, or refinance our indebtedness, to support our working capital requirements or for other purposes. There can be no assurance that additional debt or equity financing will be available to us or that, if available, such financing will be available on terms favorable to us.

Current wording

We estimate that our cash requirements to service debt and contractual obligations in fiscal 2026 is approximately $2.0 million, which we expect to fund through the issuance of additional equity to repay principal and accrued interest and through loan extensions. Based on our current financial projections and assuming the successful implementation of our liquidity plans, we believe that we will have sufficient sources of liquidity to fund our operations and capital expenditure plans for the next 12 months and beyond. 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. If we are not able to generate positive cash flows from operations, we may need to consider alternative financing sources and seek additional funds through public or private equity financings or from other sources, or refinance our indebtedness, to support our working capital requirements or for other purposes. There can be no assurance that additional debt or equity financing will be available to us or that, if available, such financing will be available on terms favorable to us.

Previous wording

Cash Flows Provided by (Used In) Operating Activities

Current wording

Cash Flows Provided by Operating Activities

Previous wording

Net cash provided by operating activities for the three months ended November 30, 2025 was $361 thousand, and net cash used in operating activities for the three months ended November 30, 2024 was $158 thousand. The increase in cash flows provided by operating activities was primary attributable to a $2.9 million increase of accrued expenses, a $1.5 million decrease of accounts receivables, a $883 thousand decrease of inventory and a $56 thousand increase of inventory write downs, partially offset by a $3.4 million decrease of accounts payable, a $1.2 million increase of prepaid expenses and other current assets and a $195 thousand increase in net loss.

Current wording

Net cash provided by operating activities for the six months ended February 28, 2026 and 2025 was $1.6 million and $1.2 million, respectively. The increase in cash flows provided by operating activities was primary attributable to a $9.7 million decrease of inventory, a $1.7 million decrease of accounts receivables, a $192 thousand decrease of prepaid expenses and other current assets and a $132 thousand increase of inventory write downs, partially offset by a $7.2 million decrease of accrued expenses, a $3.1 million decrease of accounts payable and a $1.2 million increase in net loss.

Previous wording

Net cash used in investing activities for the three months ended November 30, 2025 and 2024 was $1 thousand and $122 thousand, respectively, primarily for the purchases of property, plant and equipment during each period.

Current wording

Net cash used in investing activities for the six months ended February 28, 2026 and 2025 was $16 thousand and $258 thousand, respectively, primarily for the purchases of property, plant and equipment during each period.