SemiLEDs Corp 8-K

What Happened
SemiLEDs Corporation (LEDS) filed an 8-K disclosing further amendments to secured loan agreements with its Chairman/CEO Trung Doan and with Simplot Taiwan Inc. (which received an assignment from J.R. Simplot Company). The amendments extend the maturity dates of the loans to January 15, 2027 and, for the Simplot loan, convert $364,924.63 of unpaid interest into principal, resulting in a new principal balance of $664,924.63. The loans were originally made in January 2019 ($1.7M from Trung Doan and $1.5M from J.R. Simplot) at an 8% annual interest rate and are secured by a second-priority security interest in the company’s headquarters building.

Key Details

• Original loans: $1.7 million (Trung Doan) and $1.5 million (J.R. Simplot) dated January 8, 2019; 8% interest; secured by second-priority lien on HQ.
• Assignment: J.R. Simplot assigned its loan to Simplot Taiwan Inc. (effective Jan 7, 2024).
• Maturities extended to January 15, 2027 for both lenders (amendments entered Jan 15, 2026).
• Interest capitalization: $364,924.63 of unpaid interest on the Simplot loan was added to principal, creating a new principal of $664,924.63.
• Stock repayment provisions: amendments permit repayment (by mutual agreement) via issuance of common stock—Simplot can receive up to $1.2M in share-based repayment (per Feb 28, 2025 amendment); the company previously repaid $800,000 to Trung Doan by delivering 629,921 shares at $1.27 (Feb 9, 2024).

Why It Matters
These amendments push cash repayment obligations out to January 2027 and increase the principal on the Simplot loan by the capitalized interest amount, which changes the company’s outstanding debt profile. The lenders’ ability to accept partial repayment in common stock (up to stated limits) means future share issuances could dilute existing shareholders if those options are used. The loans remain secured by the company’s headquarters, which is relevant to creditors’ claims. Investors should note the continued reliance on related-party and shareholder-backed financing and monitor future disclosures for any cash repayment, additional amendments, or share issuances.