What changed in this filing

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Item 1. Financial Statements

2021-02-08 compared with 2020-11-06 · 270 added, 174 removed, 643 unchanged (41% of the section changed)

3 unchanged sentences

(Unaudited, in thousands except par value per share)

September 30,

2020 June 30,

Current assets:

2 unchanged sentences

Accounts receivable, net 24,934 13,272

Inventories 144,307 135,528

Other current assets 10,833 8,807

6 unchanged sentences

Other long-term assets 4,607 5,804

Total assets $ 853,165 $ 792,939

LIABILITIES AND EQUITY

18 unchanged sentences

issued and outstanding:

none at September 30, 2020 and June 30, 2020

none at December 31, 2020 and June 30, 2020

Common shares, par value $ 0.002 per share:

1 unchanged sentence

issued and outstanding:

32,021 shares and 25,383 shares, respectively at September 30, 2020 and 31,944 shares and 25,305 shares, respectively at June 30, 2020

32,394 shares and 25,765 shares, respectively at December 31, 2020 and 31,944 shares and 25,305 shares, respectively at June 30, 2020

Treasury shares at cost:

6,638 shares at September 30, 2020 and 6,639 shares at June 30, 2020

6,629 shares at December 31, 2020 and 6,639 shares at June 30, 2020

( 66,097 ) ( 66,184 )

Additional paid-in capital 254,980 246,103

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss) 1,481 ( 5,127 )

Retained earnings 141,289 118,833

Total Alpha and Omega Semiconductor Limited shareholder's equity 331,718 293,689

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, in thousands except par value per share)

Noncontrolling interest 142,938 138,199

Total equity 474,656 431,888

Total liabilities and equity $ 853,165 $ 792,939

3 unchanged sentences

(Unaudited, in thousands except per share data)

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

Revenue $ 158,830 $ 117,860 $ 310,381 $ 235,662

Cost of goods sold 110,081 93,454 219,109 184,324

Gross profit 48,749 24,406 91,272 51,338

Operating expenses

8 unchanged sentences

Net loss attributable to noncontrolling interest ( 363 ) ( 3,568 ) ( 1,170 ) ( 6,435 )

Net income attributable to Alpha and Omega Semiconductor Limited

Net income per common share attributable to Alpha and Omega Semiconductor Limited

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income per share

Net income (loss) attributable to Alpha and Omega Semiconductor Limited $ 12,903 $ ( 1,005 ) $ 22,477 $ 4

Net income (loss) per common share attributable to Alpha and Omega Semiconductor Limited

Basic $ 0.50 $ ( 0.04 ) $ 0.88 $ 0.00

Diluted $ 0.47 $ ( 0.04 ) $ 0.84 $ 0.00

Weighted average number of common shares attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share

Basic 25,672 24,701 25,506 24,620

Diluted 27,353 24,701 26,834 25,362

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

Net income (loss) including noncontrolling interest $ 12,540 $ ( 4,573 ) $ 21,307 $ ( 6,431 )

11 unchanged sentences

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Total AOS Shareholders' Equity

Noncontrolling Interest

Accumulated Other Comprehensive Income (Loss) Retained Earnings

Total AOS Shareholders' Equity Noncontrolling Interest Total Equity

Balance, September 30, 2020 $ 64 $ ( 66,171 ) $ 248,967 $ ( 2,146 ) $ 128,394 $ 309,108 $ 140,114 $ 449,222

Exercise of common stock options and release of restricted stock units — — 1,495 — — 1,495 — 1,495

Reissuance of treasury stock upon exercise of common stock options and release of restricted stock units — 74 — — ( 8 ) 66 — 66

Withholding tax on restricted stock units — — ( 541 ) — — ( 541 ) — ( 541 )

Issuance of shares under ESPP 1 — 1,635 — — 1,636 — 1,636

Share-based compensation — — 2,424 — — 2,424 — 2,424

Restricted stock units settlement in connection with service — — 1,000 — — 1,000 — 1,000

Net income (loss) — — — — 12,903 12,903 ( 363 ) 12,540

Cumulative translation adjustment — — — 3,627 — 3,627 3,187 6,814

Balance, December 31, 2020 $ 65 $ ( 66,097 ) $ 254,980 $ 1,481 $ 141,289 $ 331,718 $ 142,938 $ 474,656

Common Shares Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total AOS Shareholders' Equity Noncontrolling Interest Total Equity

Balance, June 30, 2020 $ 64 $ ( 66,184 ) $ 246,103 $ ( 5,127 ) $ 118,833 $ 293,689 $ 138,199 $ 431,888

Exercise of common stock options and release of restricted stock units — — 1,495 — — 1,495 — 1,495

Reissuance of treasury stock upon exercise of common stock options and release of restricted stock units — 87 — — ( 21 ) 66 — 66

Withholding tax on restricted stock units — — ( 953 ) — — ( 953 ) — ( 953 )

Issuance of shares under ESPP 1 — 1,635 — — 1,636 — 1,636

Share-based compensation — — 4,700 — — 4,700 — 4,700

2 unchanged sentences

Cumulative translation adjustment — — — 6,608 — 6,608 5,909 12,517

Balance, September 30, 2020

Balance, December 31, 2020 $ 65 $ ( 66,097 ) $ 254,980 $ 1,481 $ 141,289 $ 331,718 $ 142,938 $ 474,656

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited, in thousands)

Common Shares

1 unchanged sentence

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss)

Retained Earnings

Total AOS Shareholders' Equity

Noncontrolling Interest

Accumulated Other Comprehensive Income (Loss) Retained Earnings

Total AOS Shareholders' Equity Noncontrolling Interest Total Equity

Balance, September 30, 2019 $ 62 $ ( 66,227 ) $ 236,683 $ ( 5,876 ) $ 126,481 $ 291,123 $ 146,430 $ 437,553

Exercise of common stock options and release of restricted stock units — — 26 — — 26 — 26

Withholding tax on restricted stock units — — ( 99 ) — — ( 99 ) — ( 99 )

Issuance of shares under ESPP 1 — 1,700 — — 1,701 — 1,701

Share-based compensation — — 2,487 — — 2,487 — 2,487

Net loss — — — — ( 1,005 ) ( 1,005 ) ( 3,568 ) ( 4,573 )

Cumulative translation adjustment — — — 1,637 — 1,637 1,418 3,055

Balance, December 31, 2019 $ 63 $ ( 66,227 ) $ 240,797 $ ( 4,239 ) $ 125,476 $ 295,870 $ 144,280 $ 440,150

Common Shares Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total AOS Shareholders' Equity Noncontrolling Interest Total Equity

Balance, June 30, 2019 $ 62 $ ( 66,240 ) $ 234,410 $ ( 2,693 ) $ 125,485 $ 291,024 $ 152,265 $ 443,289

Exercise of common stock options and release of restricted stock units — — 26 — — 26 — 26

Reissuance of treasury stock upon exercise of common stock options and release of restricted stock units — 13 — — ( 13 ) — — —

Withholding tax on restricted stock units — — ( 195 ) — — ( 195 ) — ( 195 )

Issuance of shares under ESPP 1 — 1,700 — — 1,701 — 1,701

Share-based compensation — — 4,856 — — 4,856 — 4,856

1 unchanged sentence

Cumulative translation adjustment — — — ( 1,546 ) — ( 1,546 ) ( 1,550 ) ( 3,096 )

Balance, September 30, 2019

Balance, December 31, 2019 $ 63 $ ( 66,227 ) $ 240,797 $ ( 4,239 ) $ 125,476 $ 295,870 $ 144,280 $ 440,150

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended September 30,

Six Months Ended December 31,

Cash flows from operating activities

Net income (loss) including noncontrolling interest $ 21,307 $ ( 6,431 )

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 25,689 21,754

4 unchanged sentences

Accounts receivable, net ( 11,662 ) ( 9,576 )

Inventories ( 8,779 ) ( 4,856 )

Other current and long-term assets ( 1,793 ) 940

2 unchanged sentences

Accrued and other liabilities 14,299 6,306

Net cash provided by (used in) operating activities

Net cash provided by operating activities 45,933 7,711

Cash flows from investing activities

1 unchanged sentence

Purchases of property and equipment in JV Company ( 9,926 ) ( 12,067 )

Proceeds from sale of property and equipment 10 —

Government grant related to equipment 119 1,254

Net cash used in investing activities ( 24,639 ) ( 31,167 )

1 unchanged sentence

Withholding tax on restricted stock units ( 953 ) ( 195 )

Proceeds from exercise of stock options and ESPP 3,197 1,727

Proceeds from borrowings 31,008 33,708

1 unchanged sentence

Principal payments on finance leases ( 8,119 ) ( 3,403 )

Net cash used in financing activities

Net cash provided by (used in) financing activities ( 4,779 ) 10,974

Effect of exchange rate changes on cash, cash equivalents and restricted cash 4,120 ( 347 )

Net decrease in cash, cash equivalents and restricted cash

Net increase (decrease) in cash, cash equivalents and restricted cash 20,635 ( 12,829 )

Cash, cash equivalents and restricted cash at beginning of period 162,704 124,295

17 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods.

Operating results for the three months ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021 or any other interim period.

Operating results for the three and six months ended December 31, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2021 or any other interim period.

The condensed consolidated balance sheets at June 30, 2020 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020.

Reclassification

The Company has reclassified certain amounts previously reported in its financial statements to conform to the current presentation.

These reclassifications did not have a material impact on our consolidated financial statements.

Joint Venture

On March 29, 2016, the Company entered into a joint venture contract (the “JV Agreement”) with two investment funds owned by the Municipality of Chongqing (the “Chongqing Funds”), pursuant to which the Company and the Chongqing Funds formed a joint venture, (the “JV Company”), for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility in the Liangjiang New Area of Chongqing, China (the “JV Transaction”).

On March 29, 2016, the Company entered into a joint venture contract (the “JV Agreement”) with two investment funds owned by the Municipality of Chongqing (the “Chongqing Funds”), pursuant to which the Company and the Chongqing Funds formed a joint venture, (the “JV Company”), for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility ("Fab") in the LiangJiang New Area of Chongqing, China (the “JV Transaction”).

The Fab is being built in phases.

As of September 30, 2020 , the Company owns 51 % , and the Chongqing Funds own 49 % of the equity interest in the JV Company.

As of December 31, 2020, the Company owns 51 %, and the Chongqing Funds own 49 % of the equity interest in the JV Company.

The Joint Venture is accounted under the provisions of the consolidation guidance since the Company has controlling financial interest.

4 unchanged sentences

As a result of the COVID-19 pandemic and the global economic downturn and changing consumer behaviors due to various restrictions imposed by governments, the Company has experienced shifting market trends, including an increasing demand in the markets for notebooks, PCs and gaming devices and decreasing demand for mobile phone and industrial products, as more consumers are staying at and working from home.

While the Company has recently benefited from the increasing demand of PC related products, there is no guarantee that this trend will continue, and such increasing demand may discontinue or decline as government authorities relax COVID-19 related restrictions.

Furthermore, as the COVID-19 pandemic continues and global economic downturn and high unemployment persists, consumer spending may slow down substantially, in which case the Company may experience a significant decline of customer orders for its products, including those designed for PC-related applications, and such decline will adversely affect its financial conditions and results of operations.

The extent to which the COVID-19 pandemic may impact the Company's business will depend on future

While the Company has recently benefited from the

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

developments which are uncertain, such as the duration of the outbreak, travel restrictions, governmental mandates issued to mitigate the spread of the disease, business closures, economic disruptions, and the effectiveness of actions taken to contain and treat the virus.

increasing demand of PC related products, there is no guarantee that this trend will continue, and such increasing demand may discontinue or decline as government authorities relax COVID-19 related restrictions.

The extent to which the COVID-19 pandemic may impact the Company's business will depend on future developments which are uncertain, such as the duration of the outbreak, travel restrictions, governmental mandates issued to mitigate the spread of the disease, business closures, economic disruptions, and the effectiveness of actions taken to contain and treat the virus.

Accordingly, the COVID-19 pandemic may have a negative impact on the Company's sales and results of operations, the size and duration of which is difficult to predict.

3 unchanged sentences

To the extent there are material differences between these estimates and actual results, the Company's condensed consolidated financial statements will be affected.

On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to stock rotation returns, price adjustments, allowance for doubtful accounts, inventory reserves, warranty accrual, income taxes, leases, share-based compensation, recoverability of and useful lives for property, plant and equipment and intangible assets, as well as economic implications of the COVID-19 pandemic.

The Company determines if an arrangement is a lease at inception.

Operating leases are included in operating lease right-of-use ("ROU") assets, current operating lease liabilities and long-term operating lease liabilities on the Company's condensed consolidated balance sheets.

Finance leases are included in property, plant and equipment, finance lease liabilities and long-term finance leases liabilities on the condensed consolidated balance sheets.

Finance leases are included in property, plant and equipment, current finance lease liabilities and long-term finance leases liabilities on the condensed consolidated balance sheets.

Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date.

19 unchanged sentences

For restricted stock awards subject to market conditions, the fair value of each restricted stock award is estimated at the date of grant using the Monte-Carlo pricing model.

The fair value of stock options is estimated on the date of grant using the Black-Scholes option valuation model.

Share-based compensation expense is recognized on the accelerated attribution basis over the requisite service period of the award, which generally equals the vesting period.

The fair value of stock options is estimated

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

on the date of grant using the Black-Scholes option valuation model.

Share-based compensation expense is recognized on the accelerated attribution basis over the requisite service period of the award, which generally equals the vesting period.

Restricted Cash

2 unchanged sentences

These balances have been excluded from the Company’s cash and cash equivalents balance and are classified as restricted cash in the Company’s condensed consolidated balance sheets.

As of September 30, 2020 and June 30, 2020, the amount of restricted cash was $ 4.3 million and $ 4.2 million , respectively.

As of December 31, 2020 and June 30, 2020, the amount of restricted cash was $ 2.4 million and $ 4.2 million, respectively.

Fair Value of Financial Instruments

The fair value of cash equivalents is based on observable market prices which have been categorized in Level 1 in the fair value hierarchy.

The fair value of cash equivalents is categorized in Level 1 in the fair value hierarchy.

Cash equivalents consist primarily of short-term bank deposits.

The carrying values of financial instruments such as cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to their short-term maturities.

The carrying value of the company's debt is considered a reasonable estimate of fair value which is estimated by considering the current rates available to the Company for debt of the same remaining maturities, structure and terms of the debts.

Government Grants

3 unchanged sentences

The Company records such grants either as a reduction of the related expense, a reduction of the cost of the related asset, or as other income depending upon the nature of the grant.

As a result of such grants, during the three months ended September 30, 2020, the Company reduced interest expense and operating expenses by $ 0.8 million and $ 1.9 million , respectively.

During the three months ended September 30, 2019, the Company reduced interest expense by $ 2.3 million.

As a result of such grants, during the three and six months ended December 31, 2020, the Company reduced interest expense by $ 0.7 million and $ 1.5 million , property, plant and equipment by $ 0.1 million and $ 0.1 million, and operating expenses by $ 1.7 million and $ 3.6 million, r espectively.

During the three and six months ended December 31, 2019, the Company reduced interest expense by $ 1.1 million and $ 3.4 million, property, plant and equipment by $ 1.3 million and $ 1.3 million, and operating expenses by $ 0.5 million and $ 0.5 million, respectively.

Long-lived Assets

8 unchanged sentences

Therefore, the Company concluded that the carrying amount of the long-lived assets is recoverable as of June 30, 2020.

As of September 30, 2020, the Company performed a qualitative assessment and concluded that indicators of potential impairment did not exit.

Therefore, there was no impairment of long-lived assets as of September 30, 2020.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income (Loss)

2 unchanged sentences

Total comprehensive income (loss) is presented in the condensed consolidated statements of comprehensive income (loss).

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Recent Accounting Pronouncements

4 unchanged sentences

This ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares, (2) whether counterparty rights rank higher shareholder’s rights, and (3) whether collateral is required.

Specifically, the ASU eliminated the need for the Company to assess whether a contract on the entity’s own equity (1) permits settlement in unregistered shares, (2) whether counterparty rights rank higher than shareholder’s rights, and (3) whether collateral is required.

In addition, the ASU requires incremental disclosure related to contracts on the entity’s own equity and clarifies the treatment of certain financial instruments accounted for under this ASU on earnings per share.

1 unchanged sentence

The Company does not expect the adoption of this guidance will have a material impact on its consolidated financial position, results of operations or cash flows.

This ASU may be applied on a full retrospective of modified retrospective basis.

This ASU is effective January 1, 2022 and interim periods presented.

Early adoption of the ASU is permitted by the Company effective January 1, 2021.

The Company is in the process of assessing the adoption of the ASU on the Company’s financial statements.

In January 2020, the FASB issued ASU No.

35 unchanged sentences

The Company determines whether there is an expected loss on its accounts receivable by reviewing all available data, including its customers' latest available financial statements, their credit standing and historical collection experience, as well as current and future market and economic conditions.

As of September 30, 2020 and June 30, 2020, the allowance for credit losses on the Company's trade receivables remained immaterial.

Net Income Per Common Share Attributable to Alpha and Omega Semiconductor Limited

The following table presents the calculation of basic and diluted net income per share attributable to common shareholders:

Three Months Ended September 30,

As of December 31, 2020, the allowance for credit losses on the Company's trade receivables remained immaterial.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Net Income (Loss) Per Common Share Attributable to Alpha and Omega Semiconductor Limited

The following table presents the calculation of basic and diluted net income (loss) per share attributable to common shareholders:

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

(in thousands, except per share data)

Net income attributable to Alpha and Omega Semiconductor Limited

Net income (loss) attributable to Alpha and Omega Semiconductor Limited $ 12,903 $ ( 1,005 ) $ 22,477 $ 4

Weighted average number of common shares used to compute basic net income per share 25,672 24,701 25,506 24,620

3 unchanged sentences

Weighted average number of common shares used to compute diluted net income per share 27,353 24,701 26,834 25,362

Net income per share attributable to Alpha and Omega Semiconductor Limited:

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following potential dilutive securities were excluded from the computation of diluted net income per share as their effect would have been anti-dilutive:

Three Months Ended September 30,

(in thousands)

Net income (loss) per share attributable to Alpha and Omega Semiconductor Limited:

Basic $ 0.50 $ ( 0.04 ) $ 0.88 $ 0.00

Diluted $ 0.47 $ ( 0.04 ) $ 0.84 $ 0.00

The following potential dilutive securities were excluded from the computation of diluted net income (loss) per share as their effect would have been anti-dilutive:

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

(in thousands) (in thousands)

Employee stock options and RSUs 7 2,040 66 337

ESPP 35 868 134 597

Total potential dilutive securities 42 2,908 200 934

5 unchanged sentences

The Company closely monitors the aging of accounts receivable from its distributors and direct customers, and regularly reviews their financial positions, where available.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In the past, the Company shipped its product indirectly to Huawei and its affiliates (collectively, “Huawei”) through distributors.

5 unchanged sentences

Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts:

Three Months Ended September 30,

Three Months Ended December 31, Six Months Ended December 31,

Percentage of revenue 2020 2019 2020 2019

September 30,

Customer A 28.4 % 31.3 % 28.6 % 30.0 %

Customer B 36.4 % 37.0 % 34.8 % 36.0 %

2020 June 30,

Percentage of accounts receivable

Customer A 17.4 % *

Customer B 14.4 % *

Customer C 23.6 % 29.8 %

Customer D 10.0 % *

Customer E * 20.1 %

Customer F * 10.4 %

Customer G * 10.3 %

Customer H * 10.9 %

* Less than 10%

3 unchanged sentences

Accounts receivable, net:

September 30,

2020 June 30,

(in thousands)

3 unchanged sentences

Accounts receivable, net $ 24,934 $ 13,272

September 30,

2020 June 30,

(in thousands)

2 unchanged sentences

Finished goods 19,724 18,288

$ 144,307 $ 135,528

Other current assets:

September 30,

2020 June 30,

(in thousands)

7 unchanged sentences

Other receivables 181 69

$ 10,833 $ 8,807

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Pr operty, plant and equipment, net:

September 30,

2020 June 30,

(in thousands)

Land $ 4,877 $ 4,877

Building 63,696 58,875

Manufacturing machinery and equipment 493,487 447,079

4 unchanged sentences

Land use rights 9,213 8,502

715,398 655,263

accumulated depreciation ( 324,344 ) ( 291,515 )

391,054 363,748

Equipment and construction in progress 39,754 48,592

1 unchanged sentence

Intangible assets, net:

September 30,

2020 June 30,

(in thousands)

Patents and technology rights $ 18,037 $ 18,037

Trade name 268 268

Customer relationships 1,150 1,150

19,455 19,455

accumulated amortization ( 4,634 ) ( 2,954 )

14,821 16,501

Goodwill 269 269

Intangible assets, net $ 15,090 $ 16,770

5 unchanged sentences

Other long-term assets:

September 30,

2020 June 30,

(in thousands)

4 unchanged sentences

Office leases deposits 1,103 766

Other 164 184

$ 4,607 $ 5,804

Accrued liabilities:

September 30,

2020 June 30,

(in thousands)

8 unchanged sentences

Customer deposit 4,663 2,813

ESPP payable 847 608

$ 60,483 $ 54,986

The activities in the warranty accrual, included in accrued liabilities, are as follows:

Three Months Ended September 30,

Six Months Ended December 31,

(in thousands)

Beginning balance $ 709 $ 623

Additions 239 130

Utilization ( 181 ) ( 102 )

Ending balance $ 767 $ 651

The activities in the stock rotation accrual, included in accrued liabilities, are as follows:

Three Months Ended September 30,

Six Months Ended December 31,

(in thousands)

Beginning balance $ 3,358 $ 1,921

Additions 4,180 5,990

Utilization ( 3,645 ) ( 4,075 )

Ending balance $ 3,893 $ 3,836

2 unchanged sentences

Other long-term liabilities:

September 30,

2020 June 30,

(in thousands)

1 unchanged sentence

Computer software liabilities 960 1,897

Equipment liabilities 1,804 —

Deferred payroll taxes 2,432 826

1 unchanged sentence

* Customer deposits are from Customer A and Customer B for securing future product shipments from the Company.

The Company reclassified $ 2.0 million of the customer deposit to short term accrued liabilities during the three months ended September 30, 2020 since the repayment of this amount is due within a year.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

2 unchanged sentences

Short-term borrowings

On April 15, 2020, the JV Company entered into a one-year loan agreement with China Everbright Bank in China to borrow a maximum of Chinese Renminbi (RMB) 100 million (approximately $ 14.3 million based on the currency exchange rate between RMB and U.S.

On November 13, 2020, the JV Company entered into a one-year loan agreement with China Merchant Bank in China.

The JV Company can borrow up to Chinese Renminbi ("RMB") 50.0 million, or $ 7.6 million, based on the currency exchange rate between RMB and U.S.

Dollar on November 13, 2020.

The loan's interest rates are based on the China one-year loan prime rate ("LPR") plus 1.4 % per annum.

Interest payments are due quarterly with the entire principal due not later than November 19, 2021.

During the three months ended December 31, 2020, the JV Company borrowed RMB 50.0 million, or $ 7.7 million, at an interest rate of 5.25 % per annum.

As of December 31, 2020, the outstanding balance of this loan was $ 7.7 million.

On April 15, 2020, the JV Company entered into a one-year loan agreement with China Everbright Bank in China to borrow a maximum of RMB 100.0 million (approximately $ 14.3 million based on the currency exchange rate between RMB and U.S.

Dollar on April 15, 2020), in the amount in RMB or USD.

1 unchanged sentence

The loan consists of RMB 20 million for working capital borrowing in Chinese yuan and RMB 80 million for borrowing in US dollars that is collateralized by eligible accounts receivable.

During the three months ended June 30, 2020, the JV Company borrowed RMB 20 million , or $ 2.8 million based on the currency exchange rate between RMB and U.S.

Dollar, at a fixed interest rate of 5.1375 % per annum under the working capital loan.

The JV Company also borrowed $ 7.1 million and $ 1.9 million at a fixed interest rate of 2.7 % and 2.8 % per annum, respectively, during the same period under the accounts receivable collateralized loan.

During the three months ended September 30, 2020, the JV Company repaid $ 9.0 million and borrowed $ 11.3 million at a fixed interest rate of 2.7 % per annum under the accounts receivable collateralized loan.

As of September 30, 2020, the total outstanding balance under the loan was $ 14.2 million.

During the three months ended December 31, 2020, the JV Company borrowed $ 12.1 million at a fixed interest rate of 2.7 % per annum.

As of December 31, 2020, the total outstanding balance under the loan was $ 15.2 million which included RMB 20 million or $ 3.1 million borrowed during the three months ended June 30, 2020.

In October 2019, the Company's subsidiary in China entered into a line of credit facility with Bank of Communications Limited in China.

3 unchanged sentences

Dollar on October 31, 2019.

As of September 30, 2020 , there was no outstanding balance under the loan.

On September 23, 2019, the JV Company entered into a short-term revolving loan agreement with China Everbright bank in China.

The JV Company can borrow up to RMB 50.0 million , or $ 7.1 million based on the currency exchange rate between RMB and U.S.

Dollar on September 23, 2019, at varying interest rates, in RMB or USD.

Interest payments with the entire principal were due no later than 90 days from each borrowing date.

As of September 30, 2020, there was no outstanding balance under the loan.

In October 2020, this line of credit was renewed with the same terms and a maturity date of April 21, 2022.

As of December 31, 2020, there was no outstanding balance under the loan.

On November 29 and December 4, 2018, the JV Company entered into two, one-year loan agreements with China Merchant Bank and Chongqing LiangJiang New District China Merchants Group Limited Company in China to provide loans for RMB 80 million and RMB 20 million, respectively, or $ 14.5 million in total based on the currency exchange rate between RMB and U.S.

2 unchanged sentences

Interest payments are due monthly and quarterly with the entire principal due not later than January 21, 2021.

As of September 30, 2020 , there was no outstanding balance under the loan.

As of December 31, 2020, there was no o utstanding balance under the loan.

On November 16, 2018, the Company's subsidiary in China entered into a line of credit facility with Industrial and Commercial Bank of China, which expired on September 30, 2019.

2 unchanged sentences

Dollar on November 16, 2018.

In October 2019, this line of credit was renewed with the same terms and a maturity date of September 30, 2020.

On September 30, 2020 , there was no outstanding balance under the line of credit and the line of credit expired.

In December 2020, this line of credit was renewed with the same terms and a maturity date of December 31, 2021.

As of December 31, 2020, there was no outstanding balance under the loan.

Accounts Receivable Factoring Agreement

6 unchanged sentences

This agreement, with certain financial covenants required, has no expiration date.

The Borrower was in compliance with these covenants as of September 30, 2020 .

During the three months ended September 30, 2020, the Company borrowed $ 29.7 million and repaid this amount in full.

As of September 30, 2020 , there was no outstanding balance and the Company had unused credit of approximately $ 30.0 million .

The Borrower was in compliance with these covenants as of December 31, 2020.

During the three and six months ended December 31, 2020, the Company borro wed $ 7.0 million and $ 36.7 million, respectively, and repaid each amount in full.

As of December 31, 2020, there was no outstanding balance and the Company had unused credit of approximately $ 30.0 million .

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

14 unchanged sentences

Other terms of this agreement remain the same.

As of September 30, 2020 , the outstanding balance of the Lease Financing of 271.0 million RMB (equivalent of $ 39.8 million based on the currency exchange rate as of September 30, 2020 ) was recorded under short-term and long-term finance lease liabilities.

As of December 31, 2020, the outstanding balance of the Lease Financ ing of 244.0 million RMB (equivalent of $ 37.4 million based on the currency exchange rate as of December 31, 2020) was recorded under short-term and long-term finance lease liabilities.

See future minimum lease payment table for finance lease liabilities in Note 6.

4 unchanged sentences

Beginning December 18, 2020, the JV Company is required to make consecutive semi-annual payments of principal until December 8, 2024.

Interest payment is due on March 20, June 20, September 20 and December 20 of each year based on China one-year loan prime rate ("LPR") plus 1.3 % .

Interest payments are due on March 20, June 20, September 20 and December 20 of each year based o n the LPR pl us 1.3 %.

The JV Company drew down RMB 250 million (approximately $ 35.3 million based on the currency exchange rate between RMB and U.S.

Dollar on June 30, 2020) in April 2020.

As of September 30, 2020, the outstanding balance of the loan was $ 36.7 million .

As of December 31, 2020, the outstanding balance of the loan was $ 36.0 million.

In December 2019, the JV Company entered into a loan agreement with China Development Bank in the amount of $ 24.0 million.

3 unchanged sentences

The interest is required to be paid on March 21 and September 21 each year.

As of September 30, 2020 , the outstanding balance of the loan was $ 24.0 million .

As of December 31, 2020, the outstanding balance of the loan was $ 21.6 million.

On March 12, 2019, the JV Company entered into a loan agreement with The Export-Import Bank of China in the aggregate principal amount of RMB 200 million (approximately $ 29.8 million based on currency exchange rate between RMB and U.S.

9 unchanged sentences

On June 24, 2020, a modification of this loan was signed, pursuant to which the interest rate was changed to be based on the five-year loan prime rate in China plus 0.74 %, or 5.39 %.

Other terms of this loan remain the same.

During the three months ended December 31, 2019, the JV Company paid 6.0 million RMB

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

under this agreement.

As of September 30, 2020 , the outstanding balance of the loan was 194 million RMB (equivalent of $ 28.5 million based on the currency exchange rate as of September 30, 2020 ).

of this loan remain the same.

As of December 31, 2020, the outstanding balance of the loan was 189 million RMB (equivalent of $ 28.9 million b ased on the currency exchange rate as of December 31, 2020).

On May 1, 2018, Jireh Semiconductor Incorporated ("Jireh"), a wholly-owned subsidiary of the Company, entered into a loan agreement with a financial institution (the "Bank") that provided a term loan in the amount of $ 17.8 million.

4 unchanged sentences

The loan agreement contains customary restrictive covenants and includes certain financial covenants that require the Company to maintain, on a consolidated basis, specified financial ratios.

The Company was in compliance with these covenants as of September 30, 2020 .

As of September 30, 2020 , the outstanding balance of the term loan was $ 15.7 million .

The Company was in compliance with these covenants as of December 31, 2020.

As of December 31, 2020, the outstanding balance of the term loan w as $ 15.5 million.

On August 15, 2017, Jireh entered into a credit agreement with the Bank that provided a term loan in an amount up to $ 30.0 million for the purpose of purchasing certain equipment for the Company's fabrication facility located in Oregon.

2 unchanged sentences

In January 2018 and July 2018, Jireh drew down the loan in the amount of $ 13.2 million and $ 16.7 million, respectively.

Beginning in October 2018, Jireh was required to pay to the Bank on each payment date, the outstanding principal amount of the loan in monthly installments.

Beginning in October 2018, Jireh is required to pay to the Bank on each payment date, the outstanding principal amount of the loan in monthly installments.

The loan accrues interest based on an adjusted LIBOR as defined in the credit agreement, plus a specified applicable margin in the range of 1.75 % to 2.25 %, based on the outstanding balance of the loan.

The credit agreement contains customary restrictive covenants and includes certain financial covenants that require the Company to maintain, on a consolidated basis, specified financial ratios and fixed charge coverage ratio.

The Company was in compliance with these covenants as of September 30, 2020 .

As of September 30, 2020 , the outstanding balance of the term loan was $ 14.9 million .

The Company was in compliance with these covenants as of December 31, 2020.

As of December 31, 2020, the outstanding balance of the term loan w as $ 13.0 million.

Maturities of short-term debt and long-term debt were as follows (in thousands):

1 unchanged sentence

2021 (Remaining) $ 24,784

Total principal of debts

Total principal 137,858

debt issuance costs ( 1,188 )

Total principal of debt, less debt issuance costs

Short-term Debt

Long-term Debt

Total principal, less debt issuance costs $ 136,670

Short-term Debt Long-term Debt

Principal amount $ 44,060 $ 93,798

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The components of the Company’s operating and finance lease expenses are as follows for the periods presented (in thousands):

Three Months Ended September 30,

Six Months Ended December 31,

Operating Leases:

3 unchanged sentences

Amortization of equipment 1,149 1,716

Interest 1,187 1,457

Short-term leases

4 unchanged sentences

Supplemental balance sheets information related to the Company’s operating and finance leases is as follows (in thousands, except lease term and discount rate):

September 30,

2020 June 30,

Operating Leases :

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Supplemental cash flow information related to the Company’s operating and finance lease is as follows (in thousands):

Three Months Ended September 30,

Six Months Ended December 31,

Cash paid from amounts included in the measurement of lease liabilities:

2 unchanged sentences

Financing cash flows from finance lease $ 8,119 $ 3,403

Future minimum lease payments are as follows as of September 30, 2020 (in thousands):

Operating Leases

Finance Leases

The remainder of 2021

Non-cash investing and financing information:

Operating lease right-of-use assets obtained in exchange for lease obligations $ 2,824 $ 16,088

Future minimum lease payments are as follows as of December 31, 2020 (in thousands):

Operating Leases Finance Leases

The remainder of fiscal 2021 $ 3,088 $ 9,241

2022 6,697 17,803

2023 5,561 12,904

Thereafter 21,458 —

Total minimum lease payments 44,713 39,948

12 unchanged sentences

Any remaining balance of the losses is charged to retained earnings.

During the three months ended September 30, 2020 , the Company did not repurchase any shares pursuant to the Repurchase Program.

During the six months ended December 31, 2020, the Company did no t repurchase any shares pursuant to the Repurchase Program.

Since the inception of the program, the Company repurchased an aggregate of 6,784,648 shares for a total cost of $ 67.3 million, at an average price of $ 9.92 per share, excluding fees and related expenses.

No repurchased shares have been retired.

Of the 6,784,648 repurchased shares, 146,928 shares with a weighted average repurchase price of $ 10.30 per share, were reissued at an average price of $ 5.25 per share pursuant to option exercises and vested restricted share units ("RSU").

As of September 30, 2020 , approximately $ 13.4 million remained available under the Repurchase Program.

Of the 6,784,648 repurchased shares, 155,670 shar es with a weighted average repurchase price o f $ 10.19 per share, were reissued at an average price of $ 5.37 p er share pursuant to option exercises and vested restricted share units ("RSU").

As of December 31, 2020, approximately $ 13.4 million remained available under the Repurchase Program.

Time-based Restricted Stock Units ("TRSU")

The following table summarizes the Company's TRSU activities for the three months ended September 30, 2020 :

The following table summarizes the Company's TRSU activities for the six months ended December 31, 2020:

Number of Restricted Stock

Weighted Average

Units Weighted Average

Grant Date Fair

Value Per Share

Weighted Average

Aggregate Intrinsic Value

Value Per Share Weighted Average

Term (Years) Aggregate Intrinsic Value

Nonvested at June 30, 2020 932,138 $ 11.36 1.66 $ 10,141,661

Nonvested at September 30, 2020

Granted 211,635 $ 17.70

Vested ( 181,460 ) $ 16.27

Forfeited ( 13,375 ) $ 10.47

Nonvested at December 31, 2020 948,938 $ 11.85 1.29 $ 22,432,894

Market-based Restricted Stock Units ("MSUs")

3 unchanged sentences

The Company estimated the grant date fair values of its MSUs using a Monte-Carlo simulation model.

On August 31, 2020, the Compensation Committee of the Board approved a modification of the terms of MSU to extend the performance period through December 31, 2022 and change the commencement date for the four-year time-based service period January 1, 2023.

On August 31, 2020, the Compensation Committee of the Board approved a modification of the terms of MSU to (i) extend the performance period through December 31, 2022 and (ii) change the commencement date for the four-year time-based service period to January 1, 2023.

The fair value of these MSUs was recalculated to reflect the change as of August 31, 2020 and the unrecognized compensation amount was adjusted to reflect the increase in fair value.

The incremental expenses for the three months ended September 30, 2020 was immaterial.

The Company recorded approximately $ 0.2 million and $ 0.2 million of expenses for MSUs during the three months ended September 30, 2020 and 2019, respectively.

The incremental expenses for the three and six months ended December 31, 2020 were immaterial.

The Company recorded approximatel y $ 0.4 million and $ 0.6 million of expenses for MSUs during the three and six months ended December 31, 2020, respectively, and approximately $ 0.1 million and $ 0.3 million during the three and six months ended December 31, 2019, respectively.

Performance-based Restricted Stock Units ("PRSUs")

5 unchanged sentences

goals were met.

The Company recorded approximately $ 0.4 million and $ 0.2 million of expense for these PRSUs during the three months ended September 30, 2020 and 2019, respectively.

The Company recorded approximately $ 0.4 million and $ 0.8 million o f expense for these PRSUs during the three and six months ended December 31, 2020, respectively, and approximately $ 0.5 million and $ 0.7 million during the three and six months ended December 31, 2019, respectively.

During the three months ended June 30, 2019, the Company announced an incentive program.

4 unchanged sentences

Such non-cash compensation expense was recorded as part of share-based compensation expense in the condensed consolidated statements of operations.

In September 2020, the Company granted RSUs total valued at $ 1.0 million to participants, which were fully vest immediately due to achievement of certain objective measures.

The following table summarizes the Company's PRSUs activities for the three months ended September 30, 2020 :

During the three and six months ended December 31, 2020, the Company granted RSUs valued at $ 1.0 million and $ 2.0 million, respectively, to participants, which were fully vested due to achievement of certain objective measures.

The following table summarizes the Company's PRSUs activities for the six months ended December 31, 2020:

Number of Performance-based Restricted Stock

Weighted Average

Units Weighted Average

Grant Date Fair

Value Per Share

Weighted Average

Value Per Share Weighted Average

Contractual Term

Aggregate Intrinsic Value

(Years) Aggregate Intrinsic Value

Nonvested at June 30, 2020 342,775 $ 12.38 1.60 $ 3,729,392

Nonvested at September 30, 2020

Forfeited ( 1,750 ) $ 16.61

Nonvested at December 31, 2020 341,025 $ 12.36 1.09 $ 8,061,831

Stock Options

The Company did not grant any stock options during the three months ended September 30, 2020 and 2019.

The following table summarizes the Company's stock option activities for the three months ended September 30, 2020 :

Exercise Price

Term (in years)

Intrinsic Value

The Company did no t grant any stock options during the three and six months ended December 31, 2020 and 2019.

The following table summarizes the Company's stock option activities for the six months ended December 31, 2020:

Weighted Average

Average Remaining

Number of Exercise Price Contractual Aggregate

Shares Per Share Term (in years) Intrinsic Value

Outstanding at June 30, 2020 643,978 $ 8.79 2.89 $ 1,544,664

Outstanding at September 30, 2020

Exercised ( 134,559 ) $ 11.60

Outstanding at December 31, 2020 509,419 $ 8.05 2.81 $ 7,940,606

Options vested and expected to vest 509,419 $ 8.05 2.81 $ 7,940,606

Exercisable at September 30, 2020

Exercisable at December 31, 2020 509,419 $ 8.05 2.81 $ 7,940,606

Employee Share Purchase Plan ("ESPP")

The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:

Three Months Ended September 30,

Six Months Ended December 31,

Volatility rate 63.1 %

Risk-free interest rate 0.2 %

Expected term

Expected term 1.3 years

Dividend yield 0 %

3 unchanged sentences

T he total share-based compensation expense recognized in the condensed consolidated statements of operations for the periods presented was as follows:

Three Months Ended September 30,

(in thousands)

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

(in thousands) (in thousands)

Cost of goods sold $ 383 $ 404 $ 768 $ 840

1 unchanged sentence

Selling, general and administrative 1,598 1,611 3,009 3,020

As of September 30, 2020 , total unrecognized compensation cost under the Company's equity plans was $ 13.1 million , which is expected to be recognized over a weighted-average period of 2.5 years.

The Company recognized income tax expense of approximately $ 1.0 million and $ 0.4 million for the three months ended September 30, 2020 and 2019 , respectively.

The income tax expense of $ 1.0 million for the three months ended September 30, 2020 included a $ 0.03 million discrete tax benefit.

The income tax expense of $ 0.4 million for the three months ended September 30, 2019 included a $ 0.02 million discrete tax expense.

Excluding the discrete income tax items, the effective tax rate for the three months ended September 30, 2020 and 2019 was 10.7 % and ( 27.3 )% , respectively.

The changes in the effective tax rate and tax expense between the periods resulted primarily from the Company reporting pretax book income of $ 9.8 million for the three months ended September 30, 2020 vs.

a pretax book loss of $ 1.4 million for the three months ended September 30, 2019.

$ 3,224 $ 2,487 $ 6,100 $ 4,856

As of December 31, 2020, total unrecognized compensation cost under the Company's equity plans was $ 12.4 million, which is expected to be recognized over a weighted-average period of 2.4 years.

The Company recognized income tax expense of approximately $ 0.7 million and $ 0.6 million for the three months ended December 31, 2020 and 2019, respectively.

The income tax expense of $ 0.7 million for the three months ended December 31, 2020 included a $ 0.01 million discrete tax expense.

The income tax expense of $ 0.6 million for the three months ended December 31, 2019 included a $ 0.01 million discrete tax expense.

Excluding the discrete income tax items, the effective tax rate for the three months ended December 31, 2020 and 2019 was 5.0 % and ( 13.8 )%, respectively.

The changes in the effective tax rate and tax expense between the periods resulted primarily from the Company reporting pretax book income of $ 13.2 million for the three months ended December 31, 2020 as compared to a pretax book loss of $ 4.0 million for the three months ended December 31, 2019.

The Company recognized income tax expense of approximately $ 1.7 million and $ 1.0 million for the six months ended December 31, 2020 and 2019, respectively.

The income tax expense of $ 1.7 million for the six months ended December 31, 2020 included a $ 0.02 million discrete tax benefit.

The income tax expense of $ 1.0 million for the six months ended December 31, 2019 included a $ 0.03 million discrete tax expense.

Excluding the discrete income tax items, the effective tax rate for the six months ended December 31, 2020 and 2019 was 7.4 % and ( 17.4 )%, respectively.

The changes in the effective tax rate and tax expense between the periods resulted primarily from the Company reporting pretax book income of $ 23.0 million for the six months ended December 31, 2020 as compared to a pretax book loss of $ 5.5 million for the six months ended December 31, 2019.

The Company files its income tax returns in the United States and in various foreign jurisdictions.

5 unchanged sentences

These assessments can require considerable estimates and judgments.

As of September 30, 2020, the gross amount of unrecognized tax benefits was approximately $ 7.2 million , of which $ 4.3 million , if recognized, would reduce the effective income tax rate in future periods.

As of December 31, 2020, the gross amount of unrecognized tax benefits was approximately $ 7.2 million, of which $ 4.3 million , if recognized, would reduce the effective income tax rate in future periods.

If the Company's estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required.

4 unchanged sentences

tax laws, including, but not limited to, (1) allowing U.S.

federal net operating losses originated in the 2018, 2019 or 2020 tax years to be carried back five years to recover taxes paid based upon taxable income in the prior five years, (2) eliminating the 80% of taxable income limitation on net operating losses for the 2018, 2019 and 2020 tax years (the 80% limitation will be reinstated for tax years after 2020), (3) accelerating the refund of prior year alternative minimum tax credits, (4) modifying the bonus depreciation for qualified improvement property and (5) modifying the limitation on deductible interest expense.

As a result of the ability to carryback net operating losses from the June 2018 and June 2019 years to the June 2015 to June 2017 tax years, net operating losses which were previously tax-effected using the current 21% U.S.

federal tax rate were

federal net operating losses originated in the 2018, 2019 or 2020 tax years to be carried back five years to recover taxes paid based upon taxable income in the

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

revalued to the U.S.

prior five years, (2) eliminating the 80% of taxable income limitation on net operating losses for the 2018, 2019 and 2020 tax years (the 80% limitation will be reinstated for tax years after 2020), (3) accelerating the refund of prior year alternative minimum tax credits, (4) modifying the bonus depreciation for qualified improvement property and (5) modifying the limitation on deductible interest expense.

federal tax rate were revalued to the U.S.

tax rates in effect for the June 2015 to June 2017 tax years due to the ability of receiving tax refunds for the taxes paid in these years.

Accordingly, we reported a discrete tax benefit of $ 1.1 million in the quarter ended March 31, 2020 related to the re-measurement of the net operating losses that could be realized via the new net operating loss carryback provisions.

Accordingly, the Company reported a discrete tax benefit of $ 1.1 million in the quarter ended March 31, 2020 related to the re-measurement of the net operating losses that could be realized via the new net operating loss carryback provisions.

Consolidated Appropriations Act, 2021” (“CAA 2021”), Enacted December 27, 2020

On December 27, 2020, the United States enacted the Consolidated Appropriations Act, 2021, which made changes to existing U.S.

There was no material impact of the tax law changes included in the Consolidated Appropriations Act, 2021 to the Company.

On July 27, 2015, in Altera Corp.

12 unchanged sentences

Court of Appeals for the Ninth Circuit’s decision.

AOS has no t recorded any benefit related to the Altera Corporation Tax Court decision in any period through September 2020.

AOS has no t recorded any benefit related to the Altera Corporation Tax Court decision in any period through December 2020.

The Company will continue to monitor ongoing developments and potential impact to its financial statements.

11 unchanged sentences

The revenue by geographical location in the following tables is based on the country or region in which the products were shipped to:

Three Months Ended September 30,

(in thousands)

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

(in thousands) (in thousands)

Hong Kong $ 134,506 $ 97,244 $ 261,106 $ 190,346

China 22,851 16,571 46,060 33,083

South Korea 146 2,279 282 8,269

United States 1,139 898 2,595 1,999

Other countries 188 868 338 1,965

$ 158,830 $ 117,860 $ 310,381 $ 235,662

The following is a summary of revenue by product type:

Three Months Ended September 30,

(in thousands)

Three Months Ended December 31, Six Months Ended December 31,

2020 2019 2020 2019

(in thousands) (in thousands)

Power discrete $ 118,500 $ 99,321 * $ 232,872 $ 198,001 *

Power IC 37,381 16,825 71,839 34,410

Packaging and testing services 2,949 1,714 5,670 3,251

$ 158,830 $ 117,860 $ 310,381 $ 235,662

* Certain products were reclassified from power discrete to Power IC.

Long-lived assets, net consisting of property, plant and equipment and land use rights, by geographical area are as follows:

September 30,

2020 June 30,

(in thousands)

China $ 329,404 $ 310,600

United States 100,672 100,984

Other countries 732 756

$ 430,808 $ 412,340

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

2 unchanged sentences

Purchase Commitments

As of September 30, 2020 and June 30, 2020 , the Company had approximately $ 44.4 million and $ 43.9 million , respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others.

As of September 30, 2020 and June 30, 2020 , the Company had approximately $ 19.8 million and $ 18.0 million , primarily for the JV Company, respectively, of capital commitments for the purchase of property and equipment.

As of December 31, 2020 and June 30, 2020, the Company had approximately $ 45.6 million and $ 43.9 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materia ls, wafers, spare parts, packaging and testing services and others.

As of December 31, 2020 and June 30, 2020, the Company had approximate ly $ 38.1 million a nd $ 18.0 million, primarily for the JV Company, respectively, of capital commitments for the purchase of property and equipment.

Other Commitments

24 unchanged sentences

On October 27, 2020, the Defendants moved to dismiss the action in its entirety.

The Company believes the claims in the Gray Action are

Plaintiff filed his opposition on December 11,

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

without merit and intends to vigorously defend this litigation.

2020 and Defendants filed their reply brief on January 25, 2021.

The Company believes the claims in the Gray Action are without merit and intends to vigorously defend this litigation.

Given the case is in its early stages and still on going, the Company cannot estimate the reasonably possible loss or range of loss that may occur.

4 unchanged sentences

Further, the Company's obligations under these agreements may be limited in time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements.

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at September 30, 2020 and June 30, 2020 .

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at December 31, 2020 and June 30, 2020.

The Company has agreed to indemnify its directors and certain employees as permitted by law and pursuant to its Bye-laws, and has entered into indemnification agreements with its directors and executive officers.

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements