SemiLEDs Corp

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in Part I, Item 1A, Risk Factors, of our 2025 Annual Report, other than as described below:

We may fail to qualify for continued listing on Nasdaq which could make it more difficult for investors to sell their shares.

Our common stock is listed on the Nasdaq Capital Market. To maintain that listing, we must satisfy the continued listing requirements of Nasdaq for continued listing on the Nasdaq Capital Market, including among other things, a minimum stockholders equity of $2.5 million and a minimum bid price for our common stock of $1.00 per share.

On December 4January 30, 20246, we received a notice from Nasdaq indicating that we did not meet the minimum of $2.5 million in stockholders equity required by Nasdaq Listing Rule 5550(b)(1) for continued listing or the alternatives of market value of listed securities or net income from continuing operations. Pursuant to the Nasdaq listing rule, we submitted a plan to Nasdaq. Nasdaq accepted our plan, and we were granted an extension of up to 180 calendar days from December 4, 2024 to evidence compliance.

On FebrJanuary 28, 2025, we repaid $1,200,000 and $400,000 of loan principal by delivering 722,891 shares and 240,963 shares of our common stock to Simplot Taiwan Inc. and Trung Doan, respectively. As a result of the repayment in shares, our stockholders equity exceeded $2.5 million as of February 28, 2025, and Nasdaq issued a conditional co30, 2026 to evidence compliance letter on April 17, 2025.

As of November 30, 2025, our stockholders equity was only $2.1 million, which is below the $2.5 million minimum. .

There can be no assurance that we will be able to regain and maintain compliance with Nasdaqs continued listing requirements or that our common stock will not be delisted from Nasdaq.

If our common stock is delisted by Nasdaq, we expect prices for our common stock to be quoted on one of the OTC Markets or the OTC Bulletin Board. Under such circumstances, stockholders may find it more difficult to sell, or to obtain accurate quotations, for our common stock, and our common stock would become substantially less attractive to certain purchasers such as financial institutions, hedge funds and other similar investors. There is no assurance, however, that prices of our common stock would be quoted on one of these other trading systems or that an active trading market for our common stock would thereafter exist, which would materially and adversely impact the market value of our common stock.

We may be required to delay the recognition of revenues if the shipment of equipment purchased on buy-sell orders is delayed.

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, 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.

We anticipate buy-sell purchase orders in the seconthird 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.

Trade matters, including tariffs, may impact our ability to compete cost-effectively.

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Our operations are subject to complex trade and customs laws, regulations, and tax requirements. The countries in which our products are sold may impose duties, tariffs, or other restrictions from time to time on our sales or adversely change existing restrictions. For example, the United States has recently imposed substantial tariffs on goods imported from many countries, including a 2015% tariff on goods imported from Taiwan. In fiscal year 2025, 1.6 percent of our products, by dollar value, were sold into the United States. The current political landscape, including with respect to the United States foreign policy priorities and relations with trading partners, has introduced greater uncertainty with respect to future tax and trade policy. We are unable to determine the impact that changes in tax and trade policy could have on our sales into the United States or other countries, but it could be material.