Commitments and Contingencies

9 Months Ended

May 31, 2024

Commitments and Contingencies Disclosure [Abstract]

5. Commitments and Contingencies

Operating Lease Agreements —The Company has several operating leases with unrelated parties, primarily for land, plant and office spaces in Taiwan, which include cancelable and noncancelable leases and which expire at various dates between December 2024 and December 2040. 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 lessors. 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 lease. Lease expense related to these noncancelable operating leases was $37 thousand and $118 thousand for the three and nine months ended May 31, 2024, respectively. Lease expense related to these noncancelable operating leases was $39 thousand and $125 thousand for the three and nine months ended May 31, 2023, respectively.

Balance sheet information related to the Company’s leases is presented below:


	May 31, 2024		August 31, 2023
Assets
Operating lease right of use assets	$	1,109	$	1,371
Liabilities
Operating lease liabilities, current portion	$	108	$	139
Operating lease liabilities, less current portion		1,001		1,232
Total	$	1,109	$	1,371

The following provides details of the Company’s lease expenses:


	Three Months Ended May 31,
	2024		2023
Operating lease expenses, net	$	37	$	39


	Nine Months Ended May 31,
	2024		2023
Operating lease expenses, net	$	118	$	125

Other information related to leases is presented below:


	Nine Months Ended May 31,
	2024			2023
Cash Paid for amounts Included In Measurement of Liabilities:
Operating cash flows from operating leases	$	118		$	125
Weighted Average Remaining Lease Term:
Operating leases	15.56 years			15.98 years
Weighted Average Discount Rate
Operating leases		1.76	%		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 noncancelable minimum rental payments for the Company’s operating leases as of May 31, 2024 consisted of the following (in thousands):


	Operating
Years Ending August 31,	Leases
Remainder of 2024	$	37
2025		111
2026		80
2027		81
2028		81
Thereafter		875
Total future minimum lease payments, undiscounted		1,265
Less: Imputed interest		156
Present value of future minimum lease payments	$	1,109

Purchase Obligations —The Company had purchase commitments for inventory, property, plant and equipment in the amount of zero and $116 thousand as of May 31, 2024 and August 31, 2023, 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.

As of May 31 2024, 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.