Operating Lease Agreements —The Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which include cancellable and noncancellable leases and which expire at various dates between December 2020 and December 2029. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. For lease agreements entered into or reassessed after the adoption of Topic 842, the Company did not combine lease and non-lease components.

Most leases do not include options to renew. The exercise of lease renewal options has to be agreed by the leasers. The depreciable life of assets and leasehold improvements are limited by the term of leases, unless there is a transfer of title or purchase option reasonably certain of exercise. Lease expense is recognized on a straight-line basis over the term of the leases. Lease expense related to these noncancellable operating leases were $40 and $38 thousand for three months ended November 30, 2020 and 2019, respectively.

	November 30, 2020
Assets
Operating lease right of use assets	$	168
Liabilities
Operating lease liabilities, current portion	$	77
Operating lease liabilities, less current portion		91
Total	$	168

	Three Months Ended
	November 30, 2020
Operating lease expenses, net	$	40

Other information related to leases is presented below:

	Three Months Ended
	November 30, 2020
Cash Paid for amounts Included In Measurement of Liabilities:
Operating cash flows from operating leases	$	40
Weighted Average Remaining Lease Term:
Operating leases	2.09 years
Weighted Average Discount Rate
Operating leases		1.76	%

As most of the Company’s leases do not provide an implicit rate, the Company uses its average borrowing rate from non-related parties of 1.76% based on the information available at commencement date in determining the present value of lease payments.

The aggregate future noncancellable minimum rental payments for the Company’s operating leases as of November 30, 2020 consisted of the following (in thousands):

Years Ending August 31,	Operating Leases
Remainder of 2021	$	62
2022		32
2023		12
2024		12
2025		12
Thereafter		52
Total future minimum lease payments, undiscounted	$	182
Less: Imputed interest		(14	)
Present value of future minimum lease payments	$	168

Purchase Obligations —The Company had purchase commitments for inventory, property, plant and equipment in the amount of $145 thousand and $33 thousand as of November 30, 2020 and August 31, 2020, respectively.

Litigation —The Company is directly or indirectly involved from time to time in various claims or legal proceedings arising in the ordinary course of business. The Company recognizes a liability when it is probable that a loss has been incurred and the amount is reasonably estimable. There is significant judgment required in assessing both the likelihood of an unfavorable outcome and whether the amount of loss, if any, can be reasonably estimated. However, the Company cannot predict the outcome of any litigation or the potential for future litigation.

On June 21, 2017, Well Thrive Ltd. (“Well Thrive”) filed a complaint against SemiLEDs Corporation in the United States District Court for the District of Delaware. The complaint alleged that Well Thrive was entitled to the return of $500 thousand paid toward a note purchase pursuant to a purchase agreement (the “Purchase Agreement”) effective July 6, 2016 with Dr. Peter Chiou, which was assigned to Well Thrive on August 4, 2016. Pursuant to the terms of the Purchase Agreement, the Company retained the $500 thousand payment as liquidated damages. Well Thrive alleged that the liquidated damages provision was unenforceable as an illegal penalty and did not reflect the amount of purported damages. On March 13, 2018, the Company filed a motion to enforce a settlement agreement between the parties to dismiss the lawsuit with prejudice. On March 27, 2018, Well Thrive filed an answering brief in opposition to the Company’s motion on the basis that Well Thrive never consented to dismiss the case. The judge’s order allowed the Company to conduct depositions of Well Thrive’s former lawyer, Dr. Chiou, and Mr. Chang Sheng-Chun, Well Thrive’s director, and to request documents relating to the issues surrounding the settlement. Based on this order, the Company arranged the depositions to obtain more evidence in support of a motion to enforce the settlement agreement. The Court held a trial on March 2, 2020. After the trial, judge ordered both sides to prepare post-trial briefs and proposed findings of fact for the Court to be submitted before the end of April 2020. Both sides submitted post-trial briefs and proposed findings of fact on April 30, 2020. On December 21, 2020, the judge, following a hearing, issued her judgment, which orders SemiLEDs to return the $500,000 to Well Thrive, and required both parties, on or before January 6, 2021, to submit information on the appropriate amount of interest to be added. On January 6, 2021, the Company filed a brief arguing that there should not be an award of prejudgment interest and Well Thrive is arguing for the amount of $135,774 in pre-judgment interest. The Company recorded the $500,000 in Advance receipt toward the convertible note under current liabilities as of November 30, 2020.

Except as described above, as of November 30, 2020, there was no pending or threatened litigation that could have a material impact on the Company’s financial position, results of operations or cash flows.