Operating Lease Agreements —The Company has several operating leases with third parties, primarily for land, plant and office spaces in Taiwan, including cancelable and noncancelable leases that expire at various dates between August 2026 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 $41 thousand and $96 thousand for three months and six months ended February 28, 2026, respectively. Lease expense related to these noncancelable operating leases was $34 thousand and $72 thousand for three months and six months ended February 28, 2025, respectively.

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


	February 28, 2026		August 31, 2025
Assets
Operating lease right of use assets	$	1,047	$	1,141
Liabilities
Operating lease liabilities, current	$	127	$	145
Operating lease liabilities, less current portion		920		996
Total	$	1,047	$	1,141

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


	Three Months Ended
	February 28, 2026		February 28, 2025
Operating lease expenses, net	$	41	$	34


	Six Months Ended
	February 28, 2026		February 28, 2025
Operating lease expenses, net	$	81	$	72

Other information related to leases is presented below:


	Six Months Ended
	February 28, 2026			February 28, 2025
Cash Paid for amounts Included In Measurement of Liabilities:
Operating cash flows from operating leases	$	81		$	72
Weighted Average Remaining Lease Term:
Operating leases	13.80 years			14.08 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 February 28, 2026 consisted of the following (in thousands):


	Operating
Years Ending August 31,	Leases
Remainder of 2026	$	80
2027		105
2028		84
2029		84
2030		76
Thereafter		748
Total future minimum lease payments, undiscounted		1,177
Less: Imputed interest		(130	)
Present value of future minimum lease payments	$	1,047

Purchase Obligations —The Company had purchase commitments for inventory, property, plant and equipment in the amount of $5.6 million and $461 thousand as of February 28, 2026 and August 31, 2025, 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 February 28, 2026, 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.