Semileds Corporation (NASDAQ:LEDS)

HSINCHU, Taiwan, Nov. 14, 2019 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (NASDAQ: LEDS), “SemiLEDs” or the “Company,” a developer and manufacturer of LED chips and LED components, today announced its financial results for the fourth quarter and full year of fiscal year 2019, ended August 31, 2019.

Revenues for the fourth quarter of fiscal 2019 were $1.6 million, a 11% decrease compared to $1.7 million in the third quarter of fiscal 2019. GAAP net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2019 was $881 thousand, compared to a loss of $859 thousand in the third quarter of 2019, or a net loss of $0.25 per diluted share, compared to a net loss of $0.24 per diluted share for the third quarter of fiscal 2019.

GAAP gross margin for the fourth quarter of fiscal 2019 was 21%, compared with gross margin for the third quarter of fiscal 2019 of 19%. Operating margin for the fourth quarter of fiscal 2019 was negative 66%, compared with negative 40% in the third quarter of fiscal 2019. The Company’s cash and cash equivalents, excluding restricted cash, was $1.4 million as of August 31, 2019, compared to $1.1 million at the end of the third quarter of fiscal 2019.

We expect revenues for the first quarter ending November 30, 2019 to be $1.6 million +/- 10%.

Revenues for the fiscal year 2019 were $5.9 million, a 21% decrease compared to $7.5 million in the fiscal year 2018. GAAP net loss attributable to SemiLEDs stockholders for the fiscal year 2019 was $3.6 million, compared to a loss of $3.0 million in the fiscal year 2018 or a net loss of $1.00 per diluted share, compared to a net loss of $0.84 per diluted share for the fiscal year 2018. Due to the excess capacity charges that we had experienced for the last few years, considering the risk of technological obsolescence and according to the sales forecast production, we disposed of certain of our idle equipment during the third quarter of fiscal 2018, which reduced our net loss in fiscal 2018.

GAAP gross margin for the fiscal year 2019 was 8%, compared with gross margin for the fiscal year 2018 of negative 6%. Operating margin for the fiscal year 2019 was negative 62%, compared with negative 49% in the fiscal year 2018. The Company’s cash and cash equivalents, excluding restricted cash, was $1.4 million as of August 31, 2019, compared to $3.4 million as of August 31, 2018.

HSINCHU, Taiwan, April 10, 2019 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (NASDAQ: LEDS), “SemiLEDs” or the “Company,” a developer and manufacturer of LED chips and LED components, today announced its financial results for the second quarter of fiscal year 2019, ended February 28, 2019.

Revenue for the second quarter of fiscal 2019 was $1.6 million, a 68% increase compared to $972 thousand in the first quarter of fiscal 2019. GAAP net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2019 was $847 thousand, compared to a loss of $978 thousand in the first quarter of fiscal 2019, or a net loss of $0.24 per diluted share, compared to a net loss of $0.27 per diluted share for the first quarter of fiscal 2019. In the second quarter, we shut down our manufacturing production for two weeks due to the Chinese New Year holiday.

GAAP gross margin for the second quarter of fiscal 2019 was break even, compared with gross margin for the first quarter of fiscal 2019 of negative 23%. Operating margin for the second quarter of fiscal 2019 was negative 56%, compared with negative 105% in the first quarter of fiscal 2019. The Company’s cash and cash equivalents was $1.6 million at February 28, 2019, compared to $2.6 million at the end of the first quarter of fiscal 2019.

We expect revenue for the third quarter ending May 31, 2019 to be about $1.6 million +/- 10%.

 First Quarter 2019 Financial Results

• Revenue for the first quarter of fiscal 2019 was $972 thousand, a 50% decrease compared to $2.0 million in the fourth quarter of fiscal 2018.
• GAAP net loss for the first quarter of fiscal 2019 was $983 thousand, compared to a loss of $1.1 million in the fourth quarter of fiscal 2018, or a net loss of $0.27 per diluted share, compared to a net loss of $0.32 per diluted share for the fourth quarter of fiscal 2018.

Fourth Quarter 2018 Financial Results

• Revenues for the fourth quarter and for the third quarter of fiscal 2018 were both approximately $2.0 million.
• GAAP net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2018 was $1.1 million, compared to a loss of $326 thousand in the third quarter of 2018, or a net loss of $0.32 per diluted share, compared to a net loss of $0.09 per diluted share for the third quarter of fiscal 2018.

Third Quarter 2018 Financial Results

• Revenue for the third quarter of fiscal 2018 was $2.0 million, a 30% increase compared to $1.5 million in the second quarter of fiscal 2018.
• GAAP net loss for the third quarter of fiscal 2018 was $326 thousand, compared to a loss of $1.1 million in the second quarter of fiscal 2018, or a net loss of $0.09 per diluted share, compared to a net loss of $0.32 per diluted share for the second quarter of fiscal 2018.

We expect revenue for the fourth quarter ending August 31, 2018 to be about $1.9 million +/- 10%.

Second Quarter 2018 Financial Results

• Revenue for the second quarter of fiscal 2018 was $1.5 million, a 23% decrease compared to $2.0 million in the first quarter of fiscal 2018.
• GAAP net loss for the second quarter of fiscal 2018 was $1.1 million, compared to a loss of $0.4 million in the first quarter of fiscal 2018, or a net loss of $0.32 per diluted share, compared to a net loss of $0.11 per diluted share for the first quarter of fiscal 2018.

First Quarter Fiscal Year 2018 Financial Results

• Revenue for the first quarter of fiscal 2018 was $2.0 million, a 22% decrease compared to $2.6 million in the fourth quarter of fiscal 2017.
• GAAP net loss for the first quarter of fiscal 2018 was $0.4 million, compared to a loss of $0.7 million in the fourth quarter of 2017, or a net loss of $0.11 per diluted share, compared to a net loss of $0.19 per diluted share for the fourth quarter of fiscal 2017.

Fourth Quarter 2017 Financial Results

• Revenue for the fourth quarter of fiscal 2017 was $2.6 million, a 22% increase compared to $2.1 million in the third quarter of fiscal 2017.
• GAAP net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2017 was $0.7 million, compared to a loss of $1.6 million in the third quarter of 2017, or a net loss of $0.19 per diluted share, compared to a net loss of $0.45 per diluted share for the third quarter of fiscal 2017.

Third Quarter 2017 Financial Results

• Revenue for the third quarter of fiscal 2017 was $2.1 million, a 15% increase compared to $1.8 million in the second quarter of fiscal 2017.
• GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2017 was $1.6 million, or a net loss of $0.45 per diluted share, compared to a loss of $1.1 million, or a net loss of $0.32 per diluted share for the second quarter of fiscal 2017.

Second Quarter 2017 Financial Results

• Revenue for the second quarter of fiscal 2017 was $1.8 million, a 32% decrease compared to $2.7 million in the first quarter of fiscal 2017.
• On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2017 was $1.1 million, or a net loss of $0.30 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $0.6 million, or a loss of $0.17 in the first quarter of 2017.

We expect revenue for the third quarter ending May 31, 2017 to be approximately $2.0 million +/- 10%.

First Quarter 2017 Financial Results

• Revenue for the first quarter of fiscal 2017 was $2.7 million, a 43% increase compared to $1.9 million in the fourth quarter of fiscal 2016.
• Non-GAAP basis, net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2017 was $0.6 million, or a net loss of $0.17 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $2.8 million, or a loss of $0.94 in the fourth quarter of 2016.

Fourth Quarter 2016 Financial Results

• Revenue for the fourth quarter of fiscal 2016 was $1.9 million, a 21% decrease compared to $2.4 million in the third quarter of fiscal 2016.
• On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2016 was $2.8 million, or a net loss of $0.94 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $3.1 million, or a loss of $1.06 in the third quarter of 2016.

Third Quarter 2016 Financial Results

• Revenue for the third quarter of fiscal 2016 was $2.4 million, an 18% decrease compared to $2.9 million in the second quarter of fiscal 2016.
• GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2016 was $3.3 million, compared to a loss of $2.5 million in the second quarter of 2016, or a net loss of $1.11 per diluted share, compared to a net loss of $0.87 per diluted share for the second quarter of fiscal 2016.

“The transition toward the fabless business model has taken longer than we anticipated; however, we still believe it is the right model,” said Trung Doan, Chairman, President and CEO. “This should help us to lower our cash needs while evaluating other potential business opportunities,” concluded Doan.

Item 1.01. Entry into a Material Definitive Agreement.

 

On July 6, 2016, SemiLEDs Corporation (the “Company”) entered into a definitive purchase agreement effective July 6, 2016 (the “Agreement”) with Dr. Peter Chiou. Pursuant to the terms of the Agreement, Dr. Peter Chiou will purchase 577,000 shares of the Company’s common stock at $5.00 per share. This represents approximately 19.6% of the outstanding shares of the Company. Dr. Chiou also intends to subscribe to a $1,615,000 SemiLEDs Corporation’s 0% interest convertible note (the “Note”) with a September 29, 2017 maturity date. Subject to shareholder approval at the Company’s next shareholders meeting, the Note will be convertible into a number of shares of the Company’s common stock equal to the quotient obtained by dividing (x) $1,615,000 by (y) the conversion price, which is equal to the lesser of $3.40 or the 5-trading day volume weighted average price of the common stock on the NASDAQ Stock Market ending on the maturity date.

 

These investments are expected to be funded to SemiLEDs Corporation in three installments as follows:

 

 1. 1st installment of $1,000,000, which has been wired to the Company’s bank account.
 

 2. 2nd installment of $1,885,000 will be wired to the Company on or before August 15, 2016. Upon completion of the share purchase, Dr. Chiou will be appointed a member of SemiLEDs Corporations’ Board of Directors; Dr. Chiou has agreed to waive any compensation for his services on the Board.
 

 3. 3rd installment of $1,615,000 will be wired to the Company on or before September 29, 2016.
 

 

There is no assurance that the Company can successfully close the financing or if Dr. Chiou is able to meet the funding requirements of the purchase agreement.

 

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

 

As previously announced on June 28, 2016, Arthur H. del Prado resigned from the Board of Director s of SemiLEDs Corporation (the “Company”) effective June 22, 2016. On June 30, 2016, the Company received a notice from The NASDAQ Stock Market indicating that the Company no longer complies with the audit committee requirements as set forth in Listing Rule 5605 and confirming the Company’s opportunity to regain compliance within the cure period provided in Listing Rule 5605(c)(4) which is the earlier of the Company’s next annual meeting of stockholders or June 22, 2017, or if the next annual stockholders’ meeting is held before December 19, 2016, then the Company must evidence compliance no later than December 19, 2016.

HSINCHU, Taiwan, April 15, 2016 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (NASDAQ:LEDS), “SemiLEDs” or the “Company,” a developer and manufacturer of LED chips and LED components, today announced that effective at 5:00 pm, Eastern Time, on April 15, 2016 (“Effective Date”), the Company will effect a one-for-ten reverse stock split (the “Reverse Stock Split”) of its outstanding common stock. The Company's common stock will open for trading on the NASDAQ Capital Market on April 18, 2016 on a post-split basis.

The Reverse Stock Split is intended to increase the per share trading price of the Company's common stock to satisfy the $1.00 minimum bid price requirement for continued listing on the NASDAQ Capital Market. As a result of the Reverse Stock Split, every ten shares of the Company's common stock issued and outstanding on the Effective Date will be combined into one issued and outstanding share. The Company will pay cash in lieu of any fractional shares resulting from the Reverse Stock Split. In connection with the Reverse Stock Split, there will be no change in the par value per share of $0.0000056. The Reverse Stock Split will not reduce the number of authorized shares of common stock.

Trading of the Company's common stock on the NASDAQ Capital Market will continue, on a split-adjusted basis, with the opening of the markets on Monday, April 18, 2016, under the existing trading symbol "LEDS" and under a new CUSIP number 816645204. The reverse stock split reduces the number of shares of the Company's common stock outstanding from approximately 29.1 million pre-reverse split shares to approximately 2.9 million post-reverse split shares.

The Company has retained its transfer agent, American Stock Transfer & Trust Company, LLC ("AST"), to act as its exchange agent for the Reverse Stock Split. AST will provide shareholders of record as of the Effective Date instructions for the exchange of their holdings. Shareholders owning shares via a broker or other nominee will have their positions adjusted to reflect the Reverse Stock Split, without being required to take any action in connection with the reverse stock split.

The Reverse Stock Split was approved by the Company's Board of Directors on January 7, 2016 and by the Company’s shareholders on April 12, 2016. The final ratio of the Reverse Stock Split was approved by the Company’s board of directors on April 12, 2016, and did not require the separate approval of the Company’s shareholders as it was within the range previously approved.

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On April 15, 2016, SemiLEDs Corporation (the “Company”) amended its articles of incorporation to effect a one-for-ten reverse stock split (the “Reverse Stock Split”) of its shares of common stock. The Reverse Stock Split was approved by the Company’s board of directors on January 7, 2016 and by the Company’s shareholders on April 12, 2016. The final ratio of the Reverse Stock Split included in the amendment was approved by the Company’s board of directors on April 12, 2016, and did not require the separate approval of the Company’s shareholders as it was within the range previously approved.

As a result of the Reverse Stock Split, every ten shares of the Company’s common stock will be combined into one share of its common stock. The Company will pay cash in lieu of any fractional shares resulting from the Reverse Stock Split.

The Reverse Stock Split will become effective at 5:00 pm, Eastern Time, on April 15, 2016 and the Company’s common stock will trade on the NASDAQ Capital Market on a post-split basis at the open of business on April 18, 2016. The Company’s post-split common stock will have a new CUSIP number (816645204), but the par value and other terms of its common stock will not be affected by the Reverse Stock Split. In addition, the Reverse Stock Split will not reduce the number of authorized shares of common stock. Proportionate voting rights and other rights of shareholders will not be affected by the Reverse Stock Split, other than as a result of the fractional shares.

The Company’s transfer agent, American Stock Transfer & Trust Company, LLC, is acting as exchange agent for the Reverse Stock Split and will send instructions to shareholders of record regarding the exchange of their existing holdings.

The description of the amendment set forth above is qualified by reference to the full text of the Company’s Certificate of Amendment to the Amended and Restated Certificate of Incorporation, a copy of which is being filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Second Quarter 2016 Financial Results

• Revenue for the second quarter of fiscal 2016 was $2.9 million, a 2% decrease compared to $3.0 million in the first quarter of fiscal 2016.
• GAAP net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2016 was $2.5 million, or a net loss of $0.09 per diluted share, compared to a loss of $3.3 million, or a net loss of $0.11 per diluted share for the first quarter of fiscal 2016.

“We have made good progress toward restructuring our business and focus,” said Trung Doan, Chairman, President and CEO. “Compared with the first quarter of fiscal year 2016, cash position and gross margin have improved and our capital spending has reduced in the second quarter of fiscal year 2016,” concluded Doan.

HSINCHU, Taiwan--(BUSINESS WIRE)--

SemiLEDs Corporation (LEDS), SemiLEDs or the Company, a developer and manufacturer of LED chips and LED components, today announced its financial results for the first quarter of fiscal year 2016, ended November 30, 2015.

Revenue for the first quarter of fiscal 2016 was $3.0 million, a 5% decrease compared to $3.1 million in the fourth quarter of fiscal 2015. GAAP net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2016 was $3.3 million, compared to a loss of $3.0 million in the fourth quarter of 2015, or a net loss of $0.11 per diluted share, compared to a net loss of $0.10 per diluted share for the fourth quarter of fiscal 2015.

"We are moving toward a fabless business model to focus on the less capital intensive component business," said Trung Doan, Chairman, President and CEO. "This should help us to improve gross margin and lower capital spending and R&D expenses," concluded Doan.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2016 was $3.3 million, or a net loss of $0.11 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $2.8 million, or a loss of $0.10 in the fourth quarter of 2015.

GAAP gross margin for the first quarter of fiscal 2016 was negative 49%, compared with gross margin for the fourth quarter of fiscal 2015 of negative 33%. Operating margin for the first quarter of fiscal 2016 was negative 106%, compared with negative 94% in the fourth quarter of fiscal 2015. The Company�s cash and cash equivalents were $3.5 million at November 30, 2015, compared to $4.8 million at the end of fiscal 2015. Cash used in operating activities was $0.6 million in the first quarter of fiscal 2016, which was the same as the previous quarter.

On December 10, 2015, we entered into a Building Purchase Agreement to sell our headquarters building for $5.2 million. The sale is scheduled to close on December 31, 2017. We received the cash down payment of $3.0 million in December 2015. This cash injection has provided us additional working capital to execute our fabless strategy. We also entered into a Foundry Services and Licensing Agreement effective December 31, 2015, with an ODM partner to assist us with the restructuring of our EPI and Fab at our Chu-Nan chips manufacturing operations. The ODM partner will work with us to ODM vertical chips for us using our vertical technology beginning in March 2016. We expect to consign certain equipment and transfer a significant number of our employees related to the manufacturing of vertical LED chips to our ODM partner. This partnership is expected to allow us have a steady source of LED chips with competitive and favorable price for our packaging business, expand our production capacity for LED components, and strengthen our product portfolio and technology.

HSINCHU, Taiwan--(BUSINESS WIRE)--

SemiLEDs Corporation (LEDS), SemiLEDs or the Company, a developer and manufacturer of LED chips and LED components, today announced its financial results for the fourth quarter and full year of fiscal year 2015, ended August 31, 2015.

Revenue for the fourth quarter of fiscal 2015 was $3.1 million, an 11% decrease compared to $3.5 million in the third quarter of fiscal 2015. GAAP net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2015 was $3.0 million, which is the same as the third quarter of fiscal 2015, or a net loss of $0.10 per diluted share, compared to a net loss of $0.11 per diluted share for the third quarter of fiscal 2015.

"We are restructuring to move toward a fabless business model in which we will utilize Foundry Fabs to ODM our chips using our developed technology,� said Trung Doan, Chairman, President and CEO. �This will enable us to focus on our higher margin and less capital intensive Component business," concluded Doan.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2015 was $2.8 million, or a net loss of $0.10 per diluted share, which is the same as the third quarter of fiscal 2015.

Revenue for fiscal 2015 was $14.1 million, a 2% decrease compared to $14.5 million for fiscal 2014. GAAP net loss attributable to SemiLEDs stockholders for fiscal 2015 was $13.3 million, or a net loss of $0.46 per diluted share, compared to GAAP net loss attributable to SemiLEDs stockholders of $24.5 million, or a net loss of $0.87 per diluted share, for fiscal 2014.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for fiscal 2015 was $12.0 million, or a net loss of $0.42 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $22.5 million, or a net loss of $0.80 per diluted share, for fiscal 2014.

GAAP gross margin for the fourth quarter of fiscal 2015 was negative 33%, compared with gross margin for the third quarter of fiscal 2015 of negative 24%. Operating margin for the fourth quarter of fiscal 2015 was negative 94%, compared with negative 88% in the third quarter of fiscal 2015. The Company�s cash and cash equivalents were $4.8 million at the end of fiscal 2015, compared to $6.0 million at the end of the third quarter of fiscal 2015. Cash used in operating activities was $0.6 million in the fourth quarter of fiscal 2015, compared to cash provided by operating activities of $0.1 million in the third quarter of fiscal 2015.

Item 1.01. Entry into a Material Definitive Agreement.

On December 10, 2015, SemiLEDs Corporation (the “Company”) entered into a Building Purchase Agreement (the “Agreement”) with a third party (“Buyer”). Pursuant to the Agreement, the Buyer will purchase the Company’s headquarter building located at 3F, No.11 Ke Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Miao-Li County, Taiwan, R.O.C, for a purchase price of US$5.2 million. The purchase price will be paid in three installments: US$3 million at signing and after the Company creates a second mortgage on the property; US$1 million on December 31, 2016; and the final US$1.2 million on December 31, 2017. Until the expected closing on December 31, 2017, the Company will have the option (i) to repurchase the building at any time or (ii) to sell the building to another party, provided, that Buyer’s prior consent shall be obtained if the selling price is less than US$5.2 million. In either case, the Company would be required to pay Buyer the amount that it has paid the Company to date under the Agreement, plus interest at a rate of Libor plus 2.25%. Title to the property will not transfer to Buyer until the last payment is received.

Buyer may terminate the Agreement if (i) the Company reconstructs, dissolves or merges, (ii) the parties fail to reach a mutual agreement relating to ODM, technology transfer and licensing of LED EPI and LED chips, or (iii) there is a change of control of the Company. In such termination, the Company shall return to Buyer all of the payments received plus interest.

The above description is qualified in its entirety by reference to the actual Agreement, which will be filed as an exhibit to the Company’s Form 10-Q for the quarter ended February 29, 2016.

Item 3.01   Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On November 2, 2015, SemiLEDs Corporation (the “Company”) received approval from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) to transfer the listing of the Company’s common stock from the Nasdaq Global Select Market to the Nasdaq Capital Market. This transfer will be effective at the opening of business on November 5, 2015. The Nasdaq Capital Market is a continuous trading market that operates in substantially the same manner as the Nasdaq Global Select Market and listed companies must meet certain financial requirements and comply with Nasdaq’s corporate governance requirements. The Company’s common stock will continue to trade under the symbol “LEDS.”

As previously reported on a Current Report on Form 8-K filed with the Securities and Exchange Commission on May 6, 2015, the Company received a letter from Nasdaq on April 30, 2015 notifying the Company that the Company did not meet the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Select Market. Following the transfer of its listing, the Company has been granted an additional 180-day grace period to regain compliance with the Nasdaq’s $1.00 minimum bid price requirement. To regain compliance and qualify for continued listing on the Nasdaq Capital Market, the minimum bid price per share of the Company’s common stock must be at least $1.00 for at least ten consecutive business days during the additional 180-day grace period, which will end on April 25, 2016. If the Company fails to regain compliance during this grace period, its common stock will be subject to delisting by Nasdaq. The Company has provided written notice of its intention to cure the minimum bid price deficiency during the second grace period by carrying out a reverse stock split, if necessary.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On August 22, 2015, the Board of Directors of the Company appointed Christopher Lee as Chief Financial Officer, effective September 1, 2015. From November 21, 2014 until his appointment as Chief Financial Officer, Mr. Lee was the interim Chief Financial Officer of the Company. In connection with Mr. Lee’s appointment, his new annual salary will increase to 3,311,000 New Taiwan dollars. Mr. Lee will also receive a restricted stock unit award for 25,000 shares of LEDS common stock upon vesting, 25% of the restricted stock units will vest on September 1 in each of 2016, 2017, 2018 and 2019, and will become fully vested upon a change in control.

SEMILEDS CORPORATION AND SUBSIDIARIES

Unaudited Condensed Consolidated Statements of Operations

(In thousands of U.S. dollars and shares, except per share data)

 

		Three Months Ended May 31,						Nine Months Ended May 31,
		2015			2014			2015			2014
Revenues, net		$	3,508		$	4,615		$	11,002		$	12,203
Cost of revenues		4,367			7,408			14,055			20,470
Gross loss		(859		)	(2,793		)	(3,053		)	(8,267		)
Operating expenses:
Research and development		594			1,025			1,954			3,370
Selling, general and administrative		1,621			2,530			5,648			7,437
Gain on disposal of long-lived assets, net		—			—			(287		)	—
Total operating expenses		2,215			3,555			7,315			10,807
Loss from operations		(3,074		)	(6,348		)	(10,368		)	(19,074		)
Other income (expenses):
Equity in income (loss) from unconsolidated entities, net		40			(22		)	(16		)	(152		)
Interest expenses, net		(26		)	(23		)	(74		)	(61		)
Other income, net		29			53			88			159
Foreign currency transaction gain (loss), net		(15		)	(81		)	49			(71		)
Total other income (expenses), net		28			(73		)	47			(125		)
Loss before income taxes		(3,046		)	(6,421		)	(10,321		)	(19,199		)
Income tax expense		—			—			1			—
Net loss		(3,046		)	(6,421		)	(10,322		)	(19,199		)
Less: Net loss attributable to noncontrolling interests		(5		)	(16		)	(48		)	(93		)
Net loss attributable to SemiLEDs stockholders		$	(3,041	)	$	(6,405	)	$	(10,274	)	$	(19,106	)
Net loss per share attributable to SemiLEDs stockholders:
Basic and diluted		$	(0.11	)	$	(0.23	)	$	(0.36	)	$	(0.68	)
Shares used in computing net loss per share attributable to SemiLEDs stockholders:
Basic and diluted		28,567			28,441			28,594			28,039

Management Discussion and Analysis

Revenues, net

Our revenues decreased by approximately 24% to $3.5 million for the three months ended May 31, 2015 from $4.6 million for the three months ended May 31, 2014. The $1.1 million decrease in revenues reflects a $0.4 million decrease in revenues attributable to sales of LED chips, a $0.5 million decrease in revenues attributable to sales of lighting products, and a $0.3 million decrease in revenues attributable to other revenues, offset by a $0.2 million increase in sales of LED components.

Revenues attributable to the sales of our LED chips represented 22% and 26% of our revenues for the three months ended May 31, 2015 and 2014, respectively. The decrease of 35% in revenues attributable to sales of LED chips was the result of a 29% decrease in the volume of LED chips sold, primarily due to a slowdown in demand and our strategic plan to place greater emphasis on the sales of LED components rather than the sales of LED chips, and a 18% decrease in the average selling price of LED chips because of continued market downward pricing pressure. We continued to sell lower-priced LED chips primarily due to our decision to phase out and clear a significant volume of older generation inventory in our LED chips portfolio at discounted prices.

Revenues attributable to the sales of our LED components represented 58% and 40% of our revenues for the three months ended May 31, 2015 and 2014, respectively. The increase in revenues attributable to sales of LED components was mainly due to the sales from our new UV LED components product and an 8% increase in the average selling price, offset in part by a 35% decrease in the volume of LED components sold. Our strategic decision to focus on the profitable segments within the niche LED markets, particularly the UV LED product positively improved our revenues generated from the sales of new LED components products for the three months ended May 31, 2015. Furthermore, several new LED components products launched in the first quarter of fiscal 2015 enabled us to expand our sales and distribution channels in a timely manner. The volume of LED components sold decreased primarily because of a smaller volume demand in niche LED markets and a continued slowdown in demand for a category of older generation products in our LED components portfolio and a decline in sales of a category of lower-priced LED components that we sell particularly to distributor customers.

Revenues attributable to the sales of lighting products represented 15% and 23% of our revenues for the three months ended May 31, 2015 and 2014, respectively. The decrease of the revenues attributable to the sales of lighting products was primarily due to an overall decrease in the number of units sold and a reduction in selling prices.

The decrease in other revenues, consisting primarily of revenues attributable to the sales of scrap and raw materials, and the provision of services was driven by less scrap sold for the three months ended May 31, 2015.

We recognized net losses attributable to noncontrolling interests of $5 thousand and $16 thousand for the three months ended May 31, 2015 and 2014, respectively, which was attributable to the share of the net losses of Ning Xiang held by the remaining noncontrolling holders. Noncontrolling interests represented a 49% of equity interest in Ning Xiang since the date of acquisition, reduced to 34% beginning in April 2013, reduced to 13% beginning in November 2013, and further reduced to 7% beginning in December 2014.

 

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

Listing Rule 5605(c)(2)(A) of The NASDAQ Stock Market requires that each listed company must have an audit committee of at least three members, each of whom, among other requirements, must be an “Independent Director” and meet the criteria for independence set forth in Rule 10A-3(b) under the Securities Exchange Act of 1934, as amended. One of the Company’s then-current Audit Committee members, Jack Lau, did not stand for re-election at the Annual Meeting. Following the elections of the four directors at the Annual Meeting, the Board appointed Arthur H. del Prado and Dr. Edward Hsieh to the Company’s Audit Committee, such Audit Committee now consists of two members, one less than required. On May 7, 2015, the Company notified The NASDAQ Stock Market that, as a result of having one vacancy on the Audit Committee, the Company is not in current compliance with Listing Rule 5605(c)(2)(A). The Company intends to fill the vacancy on the Audit Committee within the cure period provided for in Listing Rule 5605(c)(4)(B) of The NASDAQ Stock Market.

Item 3.01  Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On April 30, 2015, SemiLEDs Corporation (the “Company”) received a letter from The NASDAQ Stock Market notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Select Market. The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based on the closing bid price for the last 30 consecutive business days, the Company no longer meets that requirement. The notification letter does not impact the Company’s listing on the Nasdaq Global Select Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until October 27, 2015, to regain compliance with Nasdaq Listing Rule 5450(a)(1). To regain compliance, the Company’s common stock must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days. In the event the Company does not regain compliance by October 27, 2015, the Company may be eligible for additional time.

Second Quarter 2015 Financial Result

• Revenue for the second quarter of fiscal 2015 was $4.6 million, a 56% increase compared to $2.9 million in the first quarter of fiscal 2015
• Non-GAAP basis, net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2015 was $2.5 million, or a net loss of $0.09 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $3.9 million, or a net loss of $0.14 per diluted share for the first quarter of fiscal 2015.

"As expected, new design wins and improved operating efficiency have given us better than forecasted second quarter results," said Trung Doan, Chairman, President and CEO. "We are looking forward to new design wins and developing key customers to bring us closer to profitability," concluded Doan.

First Quarter Fiscal Year 2015 Financial Results

• Revenue for the first quarter of fiscal 2015 was $2.9 million, a 29% increase compared to $2.3 million in the fourth quarter of fiscal 2014.
• Net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2015 was $3.9 million, or a net loss of $0.14 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $5.0 million, or a net loss of $0.17 per diluted share for the fourth quarter of fiscal 2014.

"Results during the first quarter were in line with our guidance," said Trung Doan, Chairman, President and CEO. "With our facility consolidation now concluded and new design wins in our target markets, we look forward to realizing further benefits from these efforts in the second fiscal quarter," concluded Doan.

HSINCHU, Taiwan--(BUSINESS WIRE)--SemiLEDs Corporation (NASDAQ: LEDS), SemiLEDs or then Company, a developer and manufacturer of LED chips and LED components, today announced it has entered into a definitive common stock purchase agreement with Mr. XiaoQing Han, Chairman and CEO of Beijing XiaoQing Environmental Protection Group. Under the terms of this agreement, Mr. Han will acquire a 15% interest in SemiLEDs common stock at a purchase price of $1.00 per share for a total consideration of $5.0 million and will join the SemiLEDs Board of Directors upon closing of the transaction.

Mr. XiaoQing Han is a veteran in the national environmental protection industry within China, having studied water supply and drainage at TsingHua University and Beijing University of Civil Engineering and Architecture and having recently spent the past 20 years focused on the water treatment sector. In 1988, Mr. Han founded Beijing XiaoQing Environmental Protection Group which contracts construction projects such as municipal water treatment, industrial wastewater treatment, garbage disposal, recycling, sludge treatment, sewage, and rural biogas. Beijing XiaoQing Environmental Protection Group�s customers span numerous industries including pharmaceutical, chemical, industrial, and consumer foods and products across more than 14 provinces and regions throughout China.

By aligning the interests of both SemiLEDs Corporation and Beijing XiaoQing Environmental Protection Group, both companies expect to benefit from operating synergies generated through the potential formation of several joint projects including utilizing LED technology into the waste water treatment plants, and, packaging LED luminaries in Provinces and Regions throughout China. This unique combination of environmental protection and energy saving technology is expected to generate significant growth opportunities for both companies in the years ahead.

"We are excited to bring Mr. XiaoQing Han onboard, and we look forward to a very productive fiscal 2015,� said Trung Doan, CEO of SemiLEDs. �We expect the joint opportunities ahead will enable our two firms to grow our business units and revenue while satisfying both our customers and shareholders alike," concluded Doan.

Item 1.01. Entry into a Material Definitive Agreement.

Following the announcement on December 5, 2014 regarding the acceptance of an offer, SemiLEDs Corporation (the “Company”) entered into a definitive common stock purchase agreement effective December 18, 2014 (the “Agreement”) with Mr. Xiaoqing Han, the Chairman and CEO of Beijing Xiaoqing Environmental Protection Group. Pursuant to the terms of the Agreement, Mr. Han will purchase 5,016,087 shares of the Company’s common stock at $1.00 per share, representing approximately 15% of the Company’s outstanding shares before the purchase. The Agreement provides that if the Company fails to sell the shares to Mr. Han then the Company is required to pay Mr. Han $3 million plus the legal fees incurred by him relating to the sale. Similarly, if Mr. Han does not purchase the shares before February 25, 2015, then he is required to pay the Company $3 million plus the legal fees incurred by the Company relating to the sale.

SEMILEDS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands of U.S. dollars and shares, except per share data)

Management Discussion and Analysis

Our core products are LED chips and LED components, but lighting products have also become an increasingly important part of our business.

Our revenues are affected by sales volumes of our LED chips, LED components and lighting products and our average selling prices for such products. In addition, as we expand and diversify our product offerings and with varying average selling prices, any change in the mix of products that we sell in any given period may affect our total revenues. For example, average selling prices for our LED components are generally higher than for LED chips and the average selling prices for our lighting products are higher than for our LED chips and LED components.

We recognize revenue on sales of our products when persuasive evidence of an arrangement exists, the price is fixed or determinable, ownership and risk of loss has transferred and collection of the sales proceeds is probable. We obtain written purchase authorizations from our customers as evidence of an arrangement and these authorizations generally provide for a specified amount of product at a fixed price. We typically consider delivery to have occurred at the time of shipment, unless otherwise agreed in the applicable sales terms, as this is generally when title and risk of loss for the product passes to the customer.

Our larger customers typically provide us with non-binding rolling forecasts of their requirements for the coming one to three months; however, recent global economic uncertainty and weakness has led to reduced spending in our target markets and made it difficult for our customers and us to accurately forecast and plan future business activities. Our customers may increase, decrease, cancel or delay purchase orders already in place, with no material consequences to the customer. As a result, we may face increased inventories and our backlog may decline as a result of any economic downturn or material change in market conditions or economic outlook. We price our products in accordance with prevailing market conditions, taking into account the technical specifications of the product being sold, the order volume, the strength and history of our relationship with the customer, our inventory levels and our capacity utilization. When average selling prices drop, as they did in the years ended August 31, 2014 and 2013, inventory write-downs to net realizable values may also result.

Our customers for LED chips consist of both packagers and distributors who sell our LED chips to their packaging customers. Packagers in turn sell their packaged LED components to end-users of lighting devices. Our customers for LED components consist primarily of distributors and end-customers in selected markets. Our lighting product customers consist primarily of ODMs of lighting products and the end-users of these lighting devices. Distributors accounted for 17% and 20% of our revenues for the years ended August 31, 2014 and 2013, respectively. Our revenues attributable to our ten largest customers accounted for 45% and 35% of our revenues for the years ended August 31, 2014 and 2013, respectively.

Our revenues have been concentrated in a few select markets, including Taiwan, the United States and China (including Hong Kong). Net revenues generated from these countries, in the aggregate, accounted for 61% and 54% of our net revenues for the years ended August 31, 2014 and 2013, respectively. We expect that our revenues will continue to be substantially derived from these countries for the foreseeable future. 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.

Our revenues are presented net of estimated sales returns and discounts. We estimate sales returns and discounts based on our historical discounts and return rates and our assessment of future conditions.

Item 8.01. Other Events.

On December 3, 2014, SemiLEDs Corporation (the “Company”) accepted an Offer dated November 25, 2014 from Xiaoqing Han to purchase 5,016,087 shares of the Company’s common stock at $1.00 per share. This represents approximately 15% of the outstanding shares of the Company. The sale of the shares is subject to the negotiation and execution of a purchase agreement. Upon the closing of the sale, the Board of Directors expects to nominate Mr. Han to the Company’s Board of Directors. Mr. Han is the Chairman and CEO of Beijing Xiaoqing Environmental Protection Group.

The Offer provides that if the Company’s Board decides not to sell the shares to the Investor then the Company is required to pay Mr. Han $3 million plus the legal fees incurred by him relating to the sale. Similarly, if Mr. Han decides not to execute the purchase agreement or does not purchase the shares within 8 to 12 weeks from December 3, 2014, then he is required to pay the Company $3 million plus the legal fees incurred by the Company relating to the sale.

Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On August 26, 2014, SemiLEDs Corporation (the “Company”) received a letter from The NASDAQ Stock Market notifying the Company that it is not in compliance with the minimum bid price requirement set forth in Nasdaq Listing Rule 5450(a)(1) for continued listing on the Nasdaq Global Select Market. The Nasdaq Listing Rules require listed securities to maintain a minimum bid price of $1.00 per share and, based on the closing bid price for the last 30 consecutive business days, the Company no longer meets that requirement. The notification letter does not impact the Company’s listing on the Nasdaq Global Select Market at this time. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company has been provided 180 calendar days, or until February 23, 2015, to regain compliance with Nasdaq Listing Rule 5450(a)(1). To regain compliance, the Company’s common stock must have a closing bid price of at least $1.00 for a minimum of 10 consecutive business days. In the event the Company does not regain compliance by February 23, 2015, the Company may be eligible for additional time.

CHUNAN, Taiwan, Aug. 21, 2014 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (LEDS), a global provider of vertical LED technology solutions, today announced sampling and volume availability of the first in its new Enhanced FlipChip, or EF, LED series. The series launches with the EF-B40, a blue 40-mil flip chip that simplifies the packaging and integration process by eliminating wire-bonding while increasing both lumen-density and decreasing the lumen-per-dollar value proposition while enabling packagers to use standard surface mount assembly techniques.

Regarding the technical advantages of the EF Series, Mark Tuttle, General Manager for SemiLEDs Optoelectronics Co., Ltd., explained, "SemiLEDs' unique flip chip approach combines a sapphire front surface and proprietary back side architecture that provides the electrical contacts exclusively on the bottom of the chip, making it fully compatible with chip-on-board (COB) surface mount processes. Eliminating wire-bonds also lowers the profile of the chips, and allows them to be placed more closely together, which results in higher lumen-density and reduces the complexity of the optics. The EF series is an ideal platform for COB assemblies, or really for any approach that calls for either secondary optic design or high-density mounting."

Flip chip construction presents what was originally the bottom sapphire layer in a horizontal LED structure as the top surface of the chip. By "flipping" the chip in this manner, the electrical pads become part of the bottom of the device rather than running bonding wires from the top surface of the chip down to the package or board. Not only are delicate areas of the chip protected by the clear sapphire layer, but by eliminating wire bonds, arguably the most failure-prone part of any LED assembly, both reliability and overall design flexibility of the packaged device are increased. In addition, individual chips may be more closely mounted, opening the door to more densely packed arrays of LED chips. The nearly continuous light emitting surface, unbroken by gaps, bonding wires, or top electrodes, can greatly simplify the mounting and mixing requirements of the optics, producing smooth lighting effects. In addition, in a flip chip structure, the heat-generating junction is positioned adjacent to the substrate, increasing thermal conductivity and allowing improved device performance at high currents.

The EF-B40 is available in wavelengths from 445 to 460nm, with outputs of up to 300 lumens at 1A as a packaged emitter. The SAC compatible chips are offered with standard Au bonding pads, or are available with an AuSn option to further reduce thermal resistance and add to system reliability. A 140-degree viewing angle makes the EF ideal for general and commercial lighting, while the lowered profile addresses the application needs of LED backlight, smartphone flash or LED projector.

SemiLEDs' EF series of LED chips are RoHS compliant with production quantities available now.

CHUNAN, Taiwan, Aug. 13, 2014 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (LEDS), a global provider of vertical LED technology solutions, today announced sampling and volume availability of a complete line of 80x80mil rugged metal LED chips, including white, blue, and UV variations. The EV-80mil family allows packagers and integrators a wider variety of high-efficiency/high-output choices to address the growing number of applications in both the commercial lighting and industrial spaces. With the new family, a single 80x80mil device will typically replace four 40x40mil LED chips, which simplifies packaging and optical designs, while minimizing color fringing and shadow effects common to multi-chip implementations. SemiLEDs EV family, which combines vertical LED architectures with rugged copper-alloy substrates, has proven to be especially well-suited for handling the increased thermal and electrical demands of large-chip implementations.

Mark Tuttle, General Manager for SemiLEDs Optoelectronics Co., Ltd., commented, "Applications in commercial and residential lighting, along with UV industrial applications, share the common challenge of achieving high output in compact form-factors, in the most cost-effective manner. SemiLEDs' unique vertical-metal architectures allow these devices to be driven hard, without compromising either their stability or reliability, allowing packagers and integrators to deliver maximum optical power from extremely small package or chip-on-board footprints." Mr. Tuttle continued, "The EV-80mil line is also able to deliver substantial versatility, including die-level white options that incorporate SemiLEDs' proprietary ReadyWhite(TM) phosphor coating technology, which minimizes blue-leakage and delivers impressive levels of color uniformity with tight binning options for low-profile and multi-color white packaged LEDs."

The new EV-80mil ReadyWhite(TM) chips incorporate SemiLEDs' proprietary phosphor technology, and when packaged in a typical 5x5mm ceramic package, can be expected to deliver up to 1200 lumens at 3A. They are available in correlated color temperatures (CCTs) ranging from 2600 to 10,000K with color rendering indices from a minimum 65 to a minimum of 90, after packaging. Combined with their vertical LED chip architecture, SemiLEDs' ReadyWhite(TM) solutions deliver a package-ready white chip to COB, single-die or multi-die packaging applications, eliminating requirements for sophisticated and costly phosphor manufacturing technology. When driven with currents below 1.0A, with the 80mil ReadyWhite chips deliver up to 145 cool white lumens per watt in typical package configurations, and are suited for such applications as outdoor street or area lighting, or heavy duty flashlights/torches.

The 80mil blue chips are available in standard wavelengths from 445 to 460nm, with options up to 470nm additionally available upon request, and deliver up to 4000mW of optical power at 450nm in typical ceramic packaging. As single-chip implementations, the ReadyWhite and blue chips are ideally suited to narrow beam pattern kilolumen applications that benefit from simplified optics and compact emitter sizes, including projectors, MR/GU/PAR spotlights, and automotive front lighting. The reduced chip count from the larger devices also simplifies system architectures for high-bay and other multi-die kilolumen applications.

"While much of the news in the LED industry is focused on general lighting, there is an incredible amount of innovation going on in the industrial and medical arenas," continued Mr. Tuttle. "The 80mil UV solution from SemiLEDs allows tremendous power per square millimeter for high output-density industrial requirements. Applications ranging from spot curing to 3D printing and fiber optic coupled systems, as well as completely new applications, are all benefitting from the increased optical control that is enabled by solid state solutions such as SemiLEDs single-die 80mil series," he stated.

The UV 80mil is offered in wavelengths ranging from 360 to 420nm with optical outputs up to 4000mW when driven at 3A in typical ceramic packages. For industrial applications, including spot curing of polymers, inks, and adhesives, to 3D printing and fiber optic coupled systems, the 80mil design enables an 8-10W single chip point source, eliminating the need for sophisticated optic designs to collimate light, as well as avoiding dark gaps inherent to designs that use multiple smaller chips. The single chip approach increases flexibility for varying the beam patterns through secondary optics, increases UV exposure consistency, and maximizes delivered UV optical power across the target areas.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 
On July 21, 2014, Mr. Timothy Lin gave notice to resign as the Interim Chief Financial Officer of SemiLEDs Corporation (the “Company”) effective on August 20, 2014, which is his last day of employment. There was no disagreement between Mr. Lin and the Company regarding any matter relating to the Company’s operations, policies or practices. The Company is actively searching for a candidate to fill the Chief Financial Officer position.

Third Quarter Fiscal Year 2014 Financial Results

• Revenue for the third quarter of fiscal 2014 was $4.6 million, an 11% increase compared to $4.2 million in the second quarter of fiscal 2014.
• GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2014 was $6.4 million, or a net loss of $0.23 per diluted share, which is approximately flat compared to the second quarter of fiscal 2014.

"We continue to be encouraged by the progress we have made in reorienting our business toward more profitable segments of the LED industry, such as UV and components, evidenced by our 11% sequential revenue growth in the most recent quarter," said Trung Doan, Chairman, President and CEO. "While we gain traction and grow our presence in these markets, we remain focused on operational cost improvements to lower our negative cash flow and accelerate our path to profitability," concluded Doan.

Second Quarter 2014 Financial Results

• Revenue for the second quarter of fiscal 2014 was $4.2 million, a 22% increase compared to $3.4 million in the first quarter of fiscal 2014. 
• On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2014 was $5.9 million, or a net loss of $0.21 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $5.8 million, or a net loss of $0.21 per diluted share, for the first quarter of fiscal 2014.

�We are pleased with the sequential revenue growth we achieved in the quarter, however we continue to take actions to reduce our cost and lower our negative cash flow while reorienting the business toward more profitable and specialty segments of the industry, such as UV, entertainment and architecture,� said Trung Doan, Chairman, President and CEO. �As we focus our development efforts on new product offerings and technology advances for these specialty markets, we believe our financial results will improve in the quarters to come,� concluded Doan.

First Quarter  2014 Financial Results 

• Revenue for the first quarter of fiscal 2014 was $3.4 million, a 45% decrease compared to $6.2 million in the first quarter of fiscal 2013.
• non-GAAP basis, net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2014 was $5.8 million, or a net loss of $0.21 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $8.6 million, or a net loss of $0.31 per diluted share, for the first quarter of fiscal 2013.

"We are encouraged by the progress we have made in the most recent quarter,� said Trung Doan, Chairman, President and CEO. �While we are still in the early stages of executing on our strategy, the sequential improvement in gross margin demonstrates the initial impact of our efforts," concluded Doan.

Fourth Quarter 2013 Financial Results

• Revenue for the fourth quarter of fiscal 2013 was $3.4 million, a 38% decrease compared to $5.5 million in the fourth quarter of fiscal 2012. 
• Non-GAAP basis, net loss attributable to SemiLEDs stockholders for the fourth quarter of fiscal 2013 was $7.3 million, or a net loss of $0.26 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $16.6 million, or a net loss of $0.60 per diluted share, for the fourth quarter of fiscal 2012.

"We continue to pursue our strategy of lowering our dependency on general lighting chip sales where supply is exceeding demand, while at the same time broadening our component and UV product lines where pricing pressure is reduced," said Trung Doan, Chairman, President and CEO. ?Our goal is to improve gross margin and operating cash flow," concluded Doan.

Third Quarter 2013 Financial Results

• Revenue  was $3.5 million, a 62% decrease compared to $9.2 million in the third quarter of fiscal 2012. GAAP net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2013 was $11.0 million, or a net loss of $0.40 per diluted share, compared to GAAP net loss attributable to SemiLEDs stockholders of $10.0 million, or a net loss of $0.36 per diluted share, for the third quarter of fiscal 2012.
• Non-GAAP basis, net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2013 was $6.6 million, or a net loss of $0.24 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $8.0 million, or a net loss of $0.29 per diluted share, for the third quarter of fiscal 2012.

�Unfortunately the combination of a series of one-time events greatly impacted our business performance this quarter,� said Trung Doan, Chairman, President and CEO. �Despite this brief set-back, we remain confident we have the right strategy in place, focusing on profitable market segments where the performance and quality of our products continues to differentiate us,� concluded Doan.

CHUNAN, Taiwan, June 5, 2013 (GLOBE NEWSWIRE) -- SemiLEDs Corporation (Nasdaq:LEDS), the world leader in vertical UV-LED technology solutions, today announced the release of two new product families, the 10-watt high-power N9 series, and the 0.17 to 0.50-watt mid-power P50N series. Both product families take advantage of SemiLEDs unique patented vertical LED structure that delivers superior performance in directional industrial applications, such as printing, coating and curing, and specialty applications including signage and medical or cosmetic uses.

The N9 series, housed on a 9 x 9mm ceramic package, is offered in wavelengths from 385 to 420nm in 5nm bins. Drive currents up to 1,000mA delivers typical output of 5,000mW of optical power at the nominal 350mA drive rate at 30V. The lambertian output distribution is highly compatible with secondary optics to allow precise control of the high-intensity UV light. Compared to the standard 1000-4000 hour life of the incumbent UV lamp technologies, vertical UV-LED systems support lifetimes of up to 50,000 hours under optimal thermal management conditions, thereby decreasing system maintenance requirements in applications where even planned downtime carries substantial monetary costs. In addition, with instant on/off capabilities and a compact point-source that is compatible with a wide variety of optics, the SemiLEDs N9 UV-LED allows solution integrators to eliminate maintenance-intensive components such as mechanical shutters or focusing windows. High-output UV sources are commonly used in semiconductor and electronic photo-resistive etching or processing, as well as high-throughput printing systems, and larger scale industrial bonding or curing applications, often eliminating the need for toxic solvents.

The mid-power P50N UV-LED series consists of a complete product family available for 0.17, 0.34 and 0.50-watt drive options, delivering up to 140mW of output, for wavelengths from 385 to 420nm in 5nm bins. The 5 x 5mm package is ideally suited for integration into compact arrays or for high-reliability backlight elements in UV-driven signage. The wide selection of output combinations simplifies the system integrator's task by allowing a common design platform for portable device applications, such as cosmetics or health care, where differing performance profiles are needed to address separate curing or treatment functions.

"SemiLEDs has consistently led the way in development of cost effective UV-LED solutions that efficiently provide a wide range of output options, delivering the UV light where and how it is needed," commented Ilkan Cokgor, SemiLEDs Executive VP of Sales and Marketing. "With the addition of the high-power N9, and mid-power P50N series, SemiLEDs has really opened up that area of the industrial market where both very high-output single UV-LED sources, and cost-effective UV-LED arrays, have not previously been available. Given the key advantages that UV-LEDs bring to the market, including increased efficiency and lifetime, reduction of hazardous substances, and the virtual elimination of heat in the beam, we expect this advanced technology will displace the inefficient, short-lifetime incumbents over the next few years."

HSINCHU, Taiwan--(BUSINESS WIRE)--SemiLEDs Corporation (NASDAQ: LEDS), �SemiLEDs� or the �Company,� a developer and manufacturer of LED chips and LED components, today announced its financial results for the second quarter of fiscal year 2013, ended February 28, 2013.

Revenue for the second quarter of fiscal 2013 was $4.8 million, a 39% decrease compared to $7.9 million in the second quarter of fiscal 2012. GAAP net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2013 was $6.0 million, or a net loss of $0.22 per diluted share, compared to GAAP net loss attributable to SemiLEDs stockholders of $7.1 million, or a net loss of $0.26 per diluted share, for the second quarter of fiscal 2012.

�Demand has improved; however, the pricing environment for the general lighting market remains challenging,� said Trung Doan, Chairman, President and CEO. �I believe we are on the right track and this is a turning point for SemiLEDs. From an execution standpoint, we need to focus on profitable markets and control cost,� concluded Doan.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the second quarter of fiscal 2013 was $5.4 million, or a net loss of $0.19 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $6.1 million, or a net loss of $0.22 per diluted share, for the second quarter of fiscal 2012.

GAAP gross margin for the second quarter of fiscal 2013 was negative 69%, compared with gross margin for the second quarter of fiscal 2012 of negative 9%. Operating margin for the second quarter of fiscal 2013 was negative 145% compared with negative 73% in the second quarter of fiscal 2012. Gross margin for the second quarter of fiscal 2013 was negatively impacted by reduction in revenues, a decrease in the average selling price of LED chips, and an excess capacity charges for our LED chips.

The Company�s cash and cash equivalents were $43.9 million at the end of the second quarter of fiscal 2013, compared to the first quarter fiscal 2013, the Company had cash and cash equivalents of $39.3 million and short-term investments consisting of time deposits with initial maturities of greater than three months but less than one year of $8.3 million. Cash used in operating activities was $4.2 million in the second quarter of fiscal 2013.

HSINCHU, Taiwan--(BUSINESS WIRE)--SemiLEDs Corporation (NASDAQ: LEDS), “SemiLEDs” or the “Company,” announced today that it has filed a Form 12b-25, Notification of Late Filing, with the U.S. Securities and Exchange Commission (“SEC”) that allows the Company to extend the deadline to file its Annual Report on Form 10-K for the fiscal year ended August 31, 2012. With this extension, if the Form 10-K is filed by December 14, 2012, the Form 10-K will be deemed to be timely filed.

Additional time is needed because the Company has not had sufficient time to update its disclosure and financial statements to reflect the recent determination that assets related to Xurui Guangdian Co., Ltd. (“China SemiLEDs”), in which SemiLEDs holds a 49% equity interest, had been materially impaired, as previously announced by the Company and reported in its Current Report on Form 8-K filed on November 26, 2012, and reflected in its preliminary financial results announced on November 28, 2012. The Company expects to file its Form 10-K no later than December 14, 2012.

Third Quarter 2012 Results

• Revenue for the third quarter of fiscal 2012 was $9.2 million, a 64% increase compared to $5.6 million in the third quarter of fiscal 2011.
• On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the third quarter of fiscal 2012 was $8.0 million, or a net loss of $0.29 per diluted share, compared to non-GAAP net loss attributable to SemiLEDs stockholders of $4.3 million, or a net loss of $0.16 per diluted share, for the third quarter of fiscal 2011.

“While we have been prudent in our spending this past year, we have continued to invest in research and development. We are excited about the prospects for our recently announced Enhanced Vertical (EV) LED product series. These products, which we are introducing globally, increase our addressable market and are the foundation for future revenue growth. We have already received interest and have some customers that have begun the evaluation process,” said Trung Doan, Chairman and CEO of SemiLEDs. “We look forward to announcing more innovative products in the months to come that will further strengthen our position in the market place,” concluded Doan.

On February 8, 2012, the Company received a notice from The NASDAQ Stock Market acknowledging that the Company no longer complies with the audit committee requirements as set forth in Listing Rule 5605 and confirming the Company’s opportunity to regain compliance within the cure period provided in Listing Rule 5605(c)(4).

First Quarter 2012 Results

Revenue for the first quarter of fiscal 2012 was $6.7 million, a 48% decrease compared to $13.0 million in the first quarter of fiscal 2011.

On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the first quarter of fiscal 2012 was $7.1 million, or a loss of $0.26 per diluted share, compared to non-GAAP net income attributable to SemiLEDs stockholders of $3.9 million, or $0.12 per diluted share, for the first quarter of fiscal 2011.

Financial Outlook 

For its second quarter of fiscal 2012 ending February 29, 2012, SemiLEDs expects revenue in a range of $7 million to $8 million with GAAP net loss attributable to SemiLEDs stockholders of $7.6 million to $7.1 million, or a loss of $0.28 to $0.26 per diluted share, based on an estimated 27.4 million diluted weighted average shares. GAAP gross margin is expected to be negative.

Fourth Quarter 2011 Results

• Revenue for the fourth quarter of fiscal 2011 was $5.3 million, a 54% decrease from $11.5 million in the fourth quarter of fiscal 2010.
• On a non-GAAP basis, net loss attributable to SemiLEDs stockholders for the fiscal year 2011 was $14.3 million, or a loss of $0.79 per diluted share, compared to non-GAAP net income attributable to SemiLEDs stockholders of $11.0 million, or $0.25 per diluted share, for the fiscal year 2010.

“As expected, the market remained challenging in Asia for LED chips and components. The China market is not improving due to inflationary and monetary issues together with depressed economic conditions around the world. We continue to see pricing pressure due to the weak demand in the China outdoor street lighting market, together with the overcapacity of backlight that has spilled over to the general lighting market. The ASP erosion is not as extreme as in prior quarters and prices have stabilized somewhat,” said Trung Doan, Chairman and CEO of SemiLEDs. “With so much uncertainty, we remain cautious in our near term outlook but continue to believe in the industry’s long term market opportunities. When the Chinese government releases funds for the five year plan, we expect to benefit given that we are one of the few companies that meets the program’s requirements and that we have local presence with our JV, China SemiLEDs,” continued Doan.

Financial Outlook

For its first quarter of fiscal 2012 ending November 30, 2011, SemiLEDs expects revenue in a range of $6.0 million to $7.0 million with GAAP net loss attributable to SemiLEDs stockholders of $8.5 million to $8.0 million, or a loss of $0.31 to $0.29 per diluted share, based on an estimated 27.3 million diluted weighted average shares. GAAP gross margin is expected to be negative.

We have incurred significant losses since inception, including net losses of $0.8 million and $3.7 million during the years ended August 31, 2008 and 2009, respectively. For the year ended August 31, 2010 and the nine months ended May 31, 2011, we generated net income of $10.8 million and net loss of $2.5 million, respectively. We believe that, based on our current level of operations and spending needs, the net proceeds from our initial public offering, together with our existing liquidity sources and anticipated funds from operations, will satisfy our cash requirements for at least the next 12 months. However, if we are not able to continue 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 to support our working capital requirements or for other purposes. There can be no assurance that additional financing will be available to us or that, if available, such financing will be available on terms favorable to us.

• Revenue for the third quarter of fiscal 2011 was $5.6 million, a 43% decrease compared to $9.9 million in the third quarter of fiscal 2010.

• GAAP net loss for the third quarter of fiscal 2011 was $5.1 million, or a loss of $0.19 per diluted share, compared to GAAP net income of $3.2 million, or $0.09 per diluted share, for the third quarter of fiscal 2010. The Company recorded a foreign currency transaction loss of $0.2 million in the quarter.

• On a non-GAAP basis, net loss for the third quarter of fiscal 2011 was $4.3 million, or a loss of $0.16 per diluted share, compared to non-GAAP net income of $3.3 million, or $0.09 per diluted share, for the third quarter of fiscal 2010.

• GAAP gross margin for the third quarter of fiscal 2011 was 9%, compared with 51% in the third quarter of fiscal 2010.

• Operating margin for the third quarter of fiscal 2011 was negative 70%, compared with 36% in the third quarter of fiscal 2010. Margins were negatively impacted by a charge of $1.1 million for the write-downs of inventory.

• The Company's cash and cash equivalents was $94.4 million at the end of the third quarter, compared to the prior quarter ending balance of $102.6 million. Cash used in operations was $3.3 million in the third quarter of fiscal 2011.

“Our fiscal third quarter was challenging as pricing pressure and end demand weakness continued from the fiscal second quarter. However, we are seeing pricing stabilize,” said Trung Doan, Chairman and CEO of SemiLEDs. “We remain focused on improving our cost structure by accelerating our efforts to transition to four inch wafer production at our Taiwan facility, continuing to ramp four inch production volume at China SemiLEDs, as well as supporting our customers to maximize the benefits of our metal vertical chip structures to reduce the total cost of ownership.”

Financial Outlook

• For its fourth quarter of fiscal 2011 ending August 31, 2011, SemiLEDs expects
• revenue in a range of $5.5 million to $6.5 million
• GAAP net loss of $6.7 million to $6.4 million
• loss of $0.25 to $0.23 per diluted share, based on an estimated 27.3 million diluted weighted average shares.
• GAAP gross margin is expected to be negative.

On June 16, 2011, SemiLEDs Optoelectronics Co., Ltd. (“Taiwan SemiLEDs”), a wholly-owned subsidiary of SemiLEDs Corporation (the “Company”), renewed a loan agreement with E. Sun Bank (the “Lender”) that had expired on March 18, 2011. The renewed loan agreement (the “Comprehensive Loan Agreement”) provides for the following three facilities: (i) an unsecured revolving credit facility that permits Taiwan SemiLEDs to borrow loans from time to time in an aggregate principal amount of up to NT$100,000,000 (approximately US$3.5 million at the exchange rate of NT$28.82 to US$1.00) (the “Line of Credit”) for working capital purposes; (ii) the issuance of overseas letters of credit of up to an aggregate of US$6.5 million (the “Overseas Letters of Credit”); and (iii) financing of up to US$6.5 million in the aggregate for international transactions using the documents against acceptance (D/A), documents against payment (D/P) or open account (O/A) payment methods (the “International Financing”). Under the Comprehensive Loan Agreement, the total amount drawn down by Taiwan SemiLEDs from the three facilities may not exceed NT$200,000,000 (approximately US$7.0 million at the exchange rate of NT$28.82 to US$1.00) in the aggregate. The term of the Comprehensive Loan Agreement is from May 19, 2011 to May 19, 2012.

 

Under the Line of Credit, the term of each borrowing must not exceed 180 days and the interest rate on such borrowing is to be calculated on a variable basis based on the market interest rate for commercial paper of the Lender recorded on the date of each respective loan drawdown application, plus an annual rate of 0.75%.

 

Under the Overseas Letters of Credit, the application fee is 0.075% of the draft or advance payment under each respective letter of credit but in no event less than NT$400. The term under each respective letter of credit must not exceed 270 days. The interest rate for a draft or advance payment is to be calculated on a variable basis based on: (i) the fixed one-month deposit rate index of the Lender plus an annual rate of 0.61% in the event that Taiwan SemiLEDs applies for a short-term loan in New Taiwan Dollars to offset the borrowings under each overseas letter of credit. The term for such short-term loan must not exceed 180 days; or (ii) the SIBOR rate (or the LIBOR rate if the draft or advance payment is denominated in currencies other than U.S. dollars) plus an annual rate of 0.7% divided by 0.946 for U.S. dollar loans. The term for such short-term loan must not exceed 180 days.

 

Under the International Financing, the financing period must not exceed 180 days and the interest that is payable is to be calculated on a variable basis based on: (i) the SIBOR rate (or the LIBOR rate if the financing arrangement is denominated in currencies other than U.S. dollars) plus an annual rate 0.7% divided by 0.946 for U.S. dollar loans; or (ii) the fixed one-month deposit rate index of the Lender plus an annual rate of 0.61% in the event that Taiwan SemiLEDs applies for a short-term loan in New Taiwan Dollars to offset the borrowings under the International Financing.

 

The Comprehensive Loan Agreement expires if the first drawdown is not made on or prior to September 19, 2011. In addition, the properties that Taiwan SemiLEDs previously pledged to the Lender pursuant to existing loan agreements between Taiwan SemiLEDs and the Lender will not be released if there is any outstanding balance under either such existing loan agreements or the Comprehensive Loan Agreement.

HSINCHU, Taiwan--(BUSINESS WIRE)--SemiLEDs Corporation today announced its financial results for the second quarter of fiscal year 2011, ended February 28, 2011.

• Revenue for the second quarter of fiscal 2011 was $10.0 million, a 30% increase compared to $7.7 million in the second quarter of fiscal 2010.

"While we believe the long term market opportunity of LEDs has not changed, the quarter did not meet our expectations relative to revenue, EPS or gross margin due to the aggressive, competitive pricing environment and our decision to preserve our market share," said Trung Doan, Chairman and CEO of SemiLEDs. "Efforts to improve our gross margin include taking actions to improve our yield, transition to four inch wafers in our Taiwan facility, as well as ramping volume production of our new high brightness LED chip, I-Do, which delivers up to 135 lumens per watt, enabling us to provide our customers with a very cost effective lighting solution."

• GAAP net loss for the second quarter of fiscal 2011 was $1.2 million, or a loss of $0.05 per diluted share, compared to GAAP net income of $1.9 million, or $0.04 per diluted share, for the second quarter of fiscal 2010. The Company recorded a foreign currency transaction loss of $0.2 million in the quarter.
• On a non-GAAP basis, net loss for the second quarter of fiscal 2011 was $0.7 million, or a loss of $0.03 per diluted share, compared to non-GAAP net income of $1.9 million, or $0.04 per diluted share, for the second quarter of fiscal 2010.
• The Company's cash and cash equivalents was $102.6 million at the end of the second quarter, an increase over the prior quarter ending balance of $9.9 million. SemiLEDs completed an initial public offering in December 2010, generating net proceeds of $95.5 million, before deducting expenses of the offering of $3.4 million. Cash flow from operations was $1.7 million in the second quarter of fiscal 2011 compared to $1.6 million in the first quarter of fiscal 2011.

Financial Outlook

• For its third quarter of fiscal 2011 ending May 31, 2011, SemiLEDs expects revenue in a range of $6.0 million to $7.0 million with GAAP net loss of $2.6 million to $2.0 million, or a loss of $0.10 to $0.07 per diluted share, based on an estimated 27.3 million diluted weighted average shares. GAAP gross margin is expected to be in the range of 25% to 30%.

We believe that, based on our current level of operations and anticipated growth, the net proceeds from our initial public offering, together with our existing liquidity sources and anticipated funds from operations, will satisfy our cash requirements for at least the next 12 months.

• Our revenues increased by approximately 94.1% from $6.7 million during the three months ended November 30, 2009 to $13.0 million during the three months ended November 30, 2010. The $6.3 million increase in revenues reflects a $3.6 million increase in revenues attributable to sales of LED chips and a $2.3 million increase in revenues attributable to sales of LED components.
• Our gross profit increased from $1.8 million during the three months ended November 30, 2009 to $6.6 million during the three months ended November 30, 2010. Our gross margin percentage increased from 27.4% during the three months ended November 30, 2009 to 51.0% during the three months ended November 30, 2010, primarily due to a change in our product mix to higher margin products and improved capacity utilization as we operated at or near full capacity as a result of increased customer demand for our LED chips and LED components, and improved production yields.

SEMILEDS CORPORATION

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except for share and per share amounts)

 

		November 30, 2010			August 31, 2010
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	9,871		$	13,520
Accounts receivable, net of allowance for doubtful accounts of $108 and $101		10,249			7,620
Accounts receivable from related parties		376			73
Inventory		13,295			11,362
Prepaid expenses and other current assets		3,456			2,269
Total current assets		37,247			34,844
Property, plant and equipment, net		41,833			31,929
Intangible assets, net		445			380
Investments in unconsolidated entities		15,785			15,961
Other assets		784			792
TOTAL ASSETS		$	96,094		$	83,906
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	4,626		$	2,814
Accrued liabilities		5,248			4,355
Long-term debt, current portion		4,450			1,752
Total current liabilities		14,324			8,921
Long-term debt, net of current portion		3,787			3,786
Total liabilities		18,111			12,707
Commitments and contingencies (Note 6)
STOCKHOLDERS’ EQUITY:
Common stock, $0.0000056 par value—29,071,428 and 29,071,428 shares authorized; 7,486,570 and 7,427,905 shares issued and outstanding as of November 30, 2010 and August 31, 2010		—			—
Convertible preferred stock issuable in Series A to E, $0.0000056 par value—13,718,873 shares authorized; 13,718,852 shares issued and outstanding as of November 30, 2010 and August 31, 2010		—			—
Additional paid-in capital		70,664			70,510
Accumulated other comprehensive income (loss)		2,369			(441		)
Retained earnings		4,950			1,130
Total stockholders’ equity		77,983			71,199
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY		$	96,094		$	83,906

 

See notes to condensed consolidated financial statements.

 

3

Hsinchu, Taiwan (January 13, 2011) — SemiLEDs Corporation today announced its financial results for the first quarter of fiscal year 2011, ended November 30, 2010.

 

• Revenue for the first quarter of fiscal 2011 was $13.0 million, a 94.1% increase compared to $6.7 million in the first quarter of fiscal 2010.
  
• GAAP net income for the first quarter of fiscal 2011 was $3.8 million, or $0.11 per diluted share, compared to GAAP net income of $0.4 million, or $0.00 per diluted share
  
• On a non-GAAP basis, net income for the first quarter of fiscal 2011 was $3.9 million, or $0.12 per diluted share, compared to non-GAAP net income of $0.4 million, or $0.00 per diluted share.

“We are very pleased with our recent accomplishments. We achieved excellent financial results in our first fiscal quarter of 2011 including record revenues and strong gross margins, and successfully completed our IPO in December 2010,” said Trung Doan, Chairman and CEO of SemiLEDs. “The LED lighting market remains strong particularly within Asia and we are well positioned to take advantage of this opportunity both through our Taiwan operations and China SemiLEDs.”

 

Financial Outlook

• For its second quarter of fiscal 2011 ending February 28, 2011, SemiLEDs expects:
  
• revenue in a range of $10.5 million to $12.5 million
  
• GAAP net income of $1.6 million to $2.6 million, or $0.06 to $0.09 per diluted share, based on an estimated 27.7 million diluted weighted average shares.
  
• GAAP gross margin is expected to be in the range of 44% to 46%.

 

Second quarter guidance reflects pricing pressure being experienced by the Company during the quarter.

 

 

SemiLEDs Corp plans initial public offering.

Company Snapshot:

Develops, manufactures and sells LED chips and LED components

Industry Snapshot:

• Light emitting diodes, or LEDs, are solid-state electronic components that emit light in a variety of brightness levels and colors. LEDs are increasingly used in a growing number of applications ranging from consumer electronics, such as backlighting for handsets, laptops and televisions, to general lighting, such as outdoor and indoor lighting.

• LEDs have recently begun penetrating the general lighting market, which includes applications for architectural, replacement lamp, retail display, commercial, industrial, outdoor area and residential uses. According to the Freedonia Group, an independent market research firm, the general lighting market, including sales of the light fixtures and bulbs, is estimated to be in excess of $100 billion.

• Currently LED lighting accounts for a small portion of the general lighting market. However, we believe that increased LED performance, reduced LED cost, growing awareness of the advantages of LEDs and government policies that discourage the use of some traditional lighting technologies and support LED adoption will continue to drive the adoption of LEDs in the general lighting market. LED lighting consists of the LED components, optics, heat sinks, power supplies and fixtures. An LED component is an LED chip that has been packaged. According to Strategies Unlimited, an independent market research firm, revenues attributable to LED components for general lighting applications were $665 million in 2009 and are estimated to grow to $4.3 billion by 2014, which represents a compound annual growth rate of 45%.

• However, to increase penetration of the general lighting market, LED chip and package manufacturers must continue to reduce the total cost of ownership of LED lighting. Total cost of ownership primarily includes: (i) the upfront cost of the LED device, which includes the LED chip costs and the cost of packaging the LED chips; (ii) the lifetime energy cost; and (iii) the frequency of replacement, which is in part a function of the product lifespan. Although energy cost and lifespan tend to favor LED lighting over some traditional lighting technologies, currently the upfront cost of an LED device is significantly higher than that of traditional lighting technologies.

Use Of proceeds:

• approximately $40.0 million to expand production capacity in Taiwan, including to (i) pay for the purchase of additional manufacturing space and build out existing space in Hsinchu, (ii) pay the purchase price for the three additional reactors that are expected to be delivered by the end of December 2010, and (iii) purchase additional manufacturing equipment, including reactors, as well as hire additional employees in the next 12 months;

• approximately $10.0 million to build a test line and for research and development expenses related to LED chip production based on 6" wafers;

• the balance of the net proceeds for general corporate purposes, including working capital and capital expenditures.

• We may also use a portion of the net proceeds to acquire or invest in complementary technologies, solutions or businesses or to obtain rights to such complementary technologies, solutions or businesses. There are no agreements, understandings or commitments with respect to any such acquisition or investment at this time. See "Use of Proceeds."

Underwriter:

• BofA Merrill Lynch
• Barclays Capital
• Jefferies & Company
• Canaccord Genuity
• Caris & Company, Inc.

Proposed offering price: $14.50 and $16.50

Post Merger Share Calculation:

•   7,723,346: Pre IPO shares
• 13,718,852: Shares from convertible preferred
•     594,760: Shares from class B conversion to class A 
•  5,250,000: Registered shares of Common Stock
•     787,500: Underwriter shares 

GeoTeam® best effort calculation of total post IPO shares assuming full conversions:  28,861,958

Financial Snapshot: August Year End

2010 vs 2009

• Revenues: 37.8 million vs. $11.6 million
• Adjusted Net Income: $1.8 million vs. loss  (Note that 2010 net income was reduced by about $9 million due to dividends and undistributed earnings on convertible preferred stock).

Pro Forma Valuation: using price of $15.50 and new share count

• Trailing EPS (ADS): $0.06 (or $0.37 after adding back dividend).
• Trailing P/E:  285.3 (or 41.9 after adding back preferred stock adjustments).