What changed in this filing

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Item 1. Financial Statements

2023-05-08 compared with 2023-02-08 · 160 added, 179 removed, 777 unchanged (30% of the section changed)

26 unchanged sentences

Short-term debt 24,877 25,563

Deferred revenue 14,370 —

Finance lease liabilities 851 802

12 unchanged sentences

issued and outstanding:

none at December 31, 2022 and June 30, 2022

none at March 31, 2023 and June 30, 2022

Common shares, par value $ 0.002 per share:

1 unchanged sentence

issued and outstanding:

34,181 shares and 27,565 shares, respectively at December 31, 2022 and 33,988 shares and 27,371 shares, respectively at June 30, 2022

34,575 shares and 27,858 shares, respectively at March 31, 2023 and 33,988 shares and 27,371 shares, respectively at June 30, 2022

Treasury shares at cost:

6,616 shares at December 31, 2022 and 6,617 shares at June 30, 2022

6,717 shares at March 31, 2023 and 6,617 shares at June 30, 2022

( 68,605 ) ( 66,000 )

6 unchanged sentences

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited, in thousands except per share data)

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

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

6 unchanged sentences

Total operating expenses 45,188 41,170 135,038 121,436

Operating income 8,785 27,717 34,319 52,666

Operating income (loss) ( 14,402 ) 31,232 19,917 83,898

Other income (loss), net ( 513 ) 263 ( 1,432 ) 720

Interest expense, net ( 397 ) ( 541 ) ( 1,005 ) ( 2,717 )

Interest income (expense), net 5 ( 308 ) ( 1,000 ) ( 3,025 )

Gain on deconsolidation of the JV Company — — — 399,093

Loss on changes of equity interest in the JV Company, net — ( 7,641 ) — ( 7,641 )

Net income before income taxes 7,485 419,101 32,395 441,858

Gain (loss) on changes of equity interest in the JV Company, net — 4,501 — ( 3,140 )

Net income (loss) before income taxes ( 14,910 ) 35,688 17,485 477,546

Income tax expense 2,517 2,902 5,550 38,318

Net income before income from equity method investment 5,826 385,005 29,362 406,442

Equity method investment income from equity investee 511 — 3,013 —

Net income 6,337 385,005 32,375 406,442

Net income (loss) before income (loss) from equity method investment ( 17,427 ) 32,786 11,935 439,228

Equity method investment income (loss) from equity investee ( 1,480 ) ( 1,136 ) 1,533 ( 1,136 )

Net income (loss) ( 18,907 ) 31,650 13,468 438,092

Net loss attributable to noncontrolling interest — — — 20

Net income attributable to Alpha and Omega Semiconductor Limited $ 6,337 $ 382,998 $ 32,375 $ 406,422

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

Net income (loss) attributable to Alpha and Omega Semiconductor Limited $ ( 18,907 ) $ 31,650 $ 13,468 $ 438,072

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

Basic $ ( 0.68 ) $ 1.18 $ 0.49 $ 16.47

Diluted $ ( 0.68 ) $ 1.11 $ 0.46 $ 15.58

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

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

Basic 27,710 26,829 27,537 26,596

2 unchanged sentences

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

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

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

Net income including noncontrolling interest $ 6,337 $ 385,005 $ 32,375 $ 406,442

Other comprehensive income, net of tax

Net income (loss) including noncontrolling interest $ ( 18,907 ) $ 31,650 $ 13,468 $ 438,092

Other comprehensive income (loss), net of tax

Foreign currency translation adjustment 3,748 162 ( 10,236 ) 1,649

10 unchanged sentences

Additional Paid-In Capital

Accumulated Other Comprehensive Income (Loss) Retained Earnings

Accumulated Other Comprehensive Income Retained Earnings

Total AOS Shareholders' Equity Noncontrolling Interest Total Equity

Balance, September 30, 2021 $ 66 $ ( 66,052 ) $ 264,321 $ 2,229 $ 200,307 $ 400,871 $ 141,119 $ 541,990

Balance, December 31, 2021 $ 67 $ ( 66,046 ) $ 275,410 $ 1,260 $ 583,299 $ 793,990 $ — $ 793,990

Exercise of common stock options and release of restricted stock units — — 558 — — 558 — 558

1 unchanged sentence

Withholding tax on restricted stock units — — ( 7,732 ) — — ( 7,732 ) — ( 7,732 )

Issuance of shares under ESPP 1 — 2,422 — — 2,423 — 2,423

Share-based compensation — — 8,273 — — 8,273 — 8,273

Restricted stock units settlement in connection with service — — 400 — — 400 — 400

Net income including noncontrolling interest through December 1, 2021 — — — — 382,998 382,998 2,007 385,005

Net income including noncontrolling interest — — — — 31,650 31,650 — 31,650

Foreign currency translation adjustment — — — 162 — 162 — 162

Deconsolidation of the JV company — — — ( 1,793 ) — ( 1,793 ) ( 143,889 ) ( 145,682 )

Balance, December 31, 2021 $ 67 $ ( 66,046 ) $ 275,410 $ 1,260 $ 583,299 $ 793,990 $ — $ 793,990

Balance, March 31, 2022 $ 67 $ ( 66,006 ) $ 276,509 $ 1,422 $ 614,909 $ 826,901 $ — $ 826,901

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

9 unchanged sentences

Deconsolidation of noncontrolling interest — — — ( 1,793 ) — ( 1,793 ) ( 143,889 ) ( 145,682 )

Balance, December 31, 2021 $ 67 $ ( 66,046 ) $ 275,410 $ 1,260 $ 583,299 $ 793,990 $ — $ 793,990

Balance, March 31, 2022 $ 67 $ ( 66,006 ) $ 276,509 $ 1,422 $ 614,909 $ 826,901 $ — $ 826,901

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

(Unaudited, in thousands)

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

Balance, September 30, 2022 $ 68 $ ( 65,996 ) $ 299,196 $ ( 3,827 ) $ 656,028 $ 885,469 $ — $ 885,469

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

Balance, December 31, 2022 $ 68 $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674 $ — $ 899,674

Exercise of common stock options and release of restricted stock units 1 — 531 — — 532 — 532

1 unchanged sentence

Withholding tax on restricted stock units — — ( 5,556 ) — — ( 5,556 ) — ( 5,556 )

Issuance of shares under ESPP — — 4,080 — — 4,080 — 4,080

Repurchase of common shares under shares repurchase program — ( 2,665 ) — — — ( 2,665 ) — ( 2,665 )

Share-based compensation — — 10,432 — — 10,432 — 10,432

Net income — — — — 6,337 6,337 — 6,337

Net loss — — — — ( 18,907 ) ( 18,907 ) — ( 18,907 )

Foreign currency translation adjustment, net of tax — — — 3,748 — 3,748 — 3,748

Balance, December 31, 2022 $ 68 $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674 $ — $ 899,674

Balance, March 31, 2023 $ 69 $ ( 68,605 ) $ 321,548 $ ( 9,156 ) $ 643,402 $ 887,258 $ — $ 887,258

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

4 unchanged sentences

Issuance of shares under ESPP — — 4,080 — — 4,080 — 4,080

Repurchase of common shares under shares repurchase program — ( 2,665 ) — — — ( 2,665 ) — ( 2,665 )

Share-based compensation — — 34,119 — — 34,119 — 34,119

1 unchanged sentence

Foreign currency translation adjustment, net of tax — — — ( 10,236 ) — ( 10,236 ) — ( 10,236 )

Balance, December 31, 2022 $ 68 $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674 $ — $ 899,674

Balance, March 31, 2023 $ 69 $ ( 68,605 ) $ 321,548 $ ( 9,156 ) $ 643,402 $ 887,258 $ — $ 887,258

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

Cash flows from operating activities

5 unchanged sentences

Depreciation and amortization 31,162 34,263

Income from equity investment ( 3,013 ) —

Loss (income) from equity investment ( 1,533 ) 1,136

Share-based compensation expense 34,119 21,454

9 unchanged sentences

Income taxes payable on deconsolidation and changes of equity interest in the JV Company — 3,490

Increase in deferred revenue 14,370 —

Accrued and other liabilities ( 29,366 ) 65,122

10 unchanged sentences

Proceeds from exercise of stock options and ESPP 4,631 3,282

Payment for repurchases of common shares ( 2,665 ) —

Proceeds from borrowings 8,632 59,262

11 unchanged sentences

(Unaudited, in thousands)

2022 December 31,

2023 March 31,

Reconciliation of cash, cash equivalents, and restricted cash:

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 six months ended December 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023 or any other interim period.

Operating results for the nine months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2023 or any other interim period.

The consolidated balance sheet at June 30, 2022 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, 2022.

8 unchanged sentences

Subsequently, the Company has accounted for its investment in the JV Company using the equity method of accounting.

As of December 31, 2022, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2 %.

As of March 31, 2023, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2 %.

Such reduction reflects (i) the sale by the Company of approximately 2.1 % of the outstanding JV equity interest which resulted in the deconsolidation of the JV Company, (ii) additional sale by the Company of approximately 1.1 % of outstanding JV equity interest in December 2021, (iii) the adoption of an employee equity incentive plan and the issuance of additional equity interest equivalent to 3.99 % of the JV Company to investors in exchange for cash in December 2021, and (iv) issuance of additional equity interest of JV to investors in January 2022.

Certain Significant Risks and Uncertainties Related to Outbreak of Coronavirus Disease 2019 (“COVID-19”)

During the first two years of the COVID-19 pandemic from 2019 to 2021, consumer behaviors changed due to various government restrictions that accelerated the growth of remote-working options by employers.

As a result, the Company experienced an increasing demand in markets for notebooks, personal computing ("PC"), gaming devices and other products,

During the first half of calendar year 2022, the Company's operations were negatively impacted by China’s zero-Covid policy that resulted in factory shutdowns and supply chain shortages, including the temporary suspension of its factory operations in Shanghai from April to June 2022.

In December 2022, the Chinese government issued new guidelines easing some of its strict zero-COVID policies, including the relaxation of testing requirements and travel restrictions.

The change of

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

and the Company benefited from the increased demand for PC related products.

During the first half of calendar year 2022, COVID-19 cases and hospitalization rate continued to decline and governments in various jurisdictions, including the U.S.

and Europe, have lifted various restrictions and limitations on economic activities.

At the same time, new variants of COVID-19 continued to emerge and contributed to recent rise of infection rates in various jurisdictions in which the Company operates, including China and U.S.

Also, the Company was affected by certain global impacts resulting from the pandemic, including disruption of the product supply chains, shortages of semiconductor components, and delays in shipments, product development, and product launches and rising inflation rates.

In addition, during the first half of calendar year 2022, the Company's operations were negatively impacted by China’s zero-Covid policy that resulted in factory shutdowns and supply chain shortages, including the temporary suspension of its factory operations in Shanghai from April to June 2022.

In December 2022, the Chinese government issued new guidelines easing some of its strict zero-COVID policies, including the relaxation of testing requirements and travel restrictions.

However, the change of COVID-policy and reopening of commercial activities resulted in a significant increase of COVID infections in China, which may adversely affect the Company’s operations in China.

COVID-policy and reopening of commercial activities resulted in a significant increase of COVID infections in China, which may adversely affect the Company’s operations in China.

During the three months ended March 31, 2023, as China and other parts of the world in which we conduct our business have ended pandemic restriction have largely returned to normal.

In general, our business operations are no longer affected by the COVID-19 pandemic.

Use of Estimates

30 unchanged sentences

Allowance for price adjustments is recorded against accounts receivable and the provision for stock rotation rights is included in accrued liabilities on the Condensed Consolidated Balance Sheets.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s performance obligations relate to contracts with a duration of less than one year.

3 unchanged sentences

Applying the practical expedient, the Company recognizes commissions as expense when incurred, as the amortization period of the commission asset the Company would have otherwise recognized is less than one year.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Packaging and testing services revenue is recognized at a point in time upon shipment of serviced products to the customer.

License and Development Revenue Recognition

In February 2023, the Company entered into a license agreement with a customer to license the Company’s proprietary SiC technology and to provide 24-month engineering and development services for a total fee of $ 45 million, consisting of an upfront fee of $ 18 million paid to the Company in March 2023, and the remaining amount to be paid upon the achievement of specified engineering services and product milestones.

The license and development fee is determined to be one performance obligation and is recognized over the 24 months when the Company performs the engineering and development services.

The Company uses the input method to measure progression, representing a faithful depiction of the transfer of services.

During the three months ended March 31, 2023, the Company recorded $ 3.6 million of license and development revenue.

The amount of contract liability is recorded as deferred revenue on the balance sheets.

In addition, the Company also entered an accompanying supply agreement to provide limited wafer supply to the customer.

Material right to the customer is presented due to the commitment of limited wafer supply after the development period;

however, deemed to be insignificant to the transaction price.

Share-based Compensation Expense

9 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 December 31, 2022 and June 30, 2022, the amount of restricted cash was $ 0.3 million and $ 0.3 million, respectively.

As of March 31, 2023 and June 30, 2022, the amount of restricted cash was $ 0.2 million and $ 0.3 million, respectively.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Equity method investment

The Company uses the equity method of accounting when it has the ability to exercise significant influence, but not control, as determined in accordance with generally accepted accounting principles, over the operating and financial policies of the investee.

Effective December 2, 2021, the Company reduced its equity interest in the JV Company and experienced a loss of control of the JV Company.

As a result, beginning December 2, 2021, the Company records its investment under equity method of accounting.

Effective December 2, 2021, the Company reduced its equity interest in the JV Company and no longer controls of the JV Company.

As a result, beginning December 2, 2021, the Company records its investment under the equity method of accounting.

Since the Company is unable to obtain accurate financial information from the JV Company in a timely manner, the Company records its share of earnings or losses of such affiliate on a one quarter lag.

10 unchanged sentences

Cost primarily consists of semiconductor wafers and raw materials, labor, depreciation expenses and other manufacturing expenses and overhead, and packaging and testing fees paid to third parties if subcontractors are used.

Valuation of inventories is based on its periodic review of inventory quantities on hand as compared with its sales forecasts, historical usage, aging of

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

inventories, production yield levels and current product selling prices.

Valuation of inventories is based on its periodic review of inventory quantities on hand as compared with its sales forecasts, historical usage, aging of inventories, production yield levels and current product selling prices.

If actual market conditions are less favorable than those forecasted by the Company, additional future inventory write-downs may be required that could adversely affect its operating results.

11 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 and six months ended December 31, 2022, the Company reduced property, plant and equipment by $ 0.3 million and $ 0.6 million, and operating expenses by $ 0.1 million and $ 0.1 million, respectively.

During the three and six months ended December 31, 2021, the Company reduced interest expense by $ 0.9 million and $ 0.9 million, property, plant and equipment by $ 0.1 million and $ 1.2 million, and operating expenses by $ 0.2 million and $ 0.2 million, respectively.

As a result of such grants, during the three and nine months ended March 31, 2023, the Company reduced property, plant and equipment by nil and $ 0.6 million, and operating expenses by $ 0.0 million and $ 0.1 million, respectively.

During the three and nine months ended March 31, 2022, the Company reduced interest expense by nil and $ 0.9 million, property, plant and equipment by nil and $ 1.2 million, and operating expenses by $ 0.0 million and $ 0.2 million, respectively.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accounting for income taxes

13 unchanged sentences

The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely to be realized upon ultimate settlement.

Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

those thresholds will continue to require significant judgment by management.

Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met those thresholds will continue to require significant judgment by management.

If the ultimate resolution of tax uncertainties is different from what is currently estimated, a material impact on income tax expense could result.

7 unchanged sentences

When evaluating long-lived assets, if the Company concludes that the estimated undiscounted cash flows attributable to the assets are less than their carrying value, the Company recognizes an impairment loss based on the excess of the carrying amount of the assets over their respective fair values, which could adversely affect its results of operations.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Comprehensive Income

4 unchanged sentences

Recently Issued Accounting Standards not yet adopted

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2022-04, "Supplier Finance Programs (Subtopic 405-50):

In September 2022, the FASB issued ASU No.

2022-04, "Liabilities - Supplier Finance Programs (Subtopic 405-50):

Disclosure of Supplier Finance Program Obligations".

33 unchanged sentences

The Company accounts for its investment in the JV Company as an equity method investment and reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information of the JV Company.

During the three and six months ended December 31, 2022, the Company recorded $ 0.5 million and $ 3.0 million of its equity in income of the JV Company, respectively, using lag reporting.

As of December 31, 2022, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.2 %.

During the three and nine months ended March 31, 2023, the Company recorded a $ 1.5 million in loss and a $ 1.5 million income of its equity share of the JV Company, respectively, using lag reporting.

As of March 31, 2023, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.2 %.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Related Party Transactions

As of December 31, 2022, the Company owned 42.2 % equity interest in the JV Company, which, by definition, is a related party to the Company.

As of March 31, 2023, the Company owned 42.2 % equity interest in the JV Company, which, by definition, is a related party to the Company.

The JV Company supplies 12-inch wafers and provides assembly and testing services to AOS.

AOS also sells 8-inch wafers to the JV Company for further assembly and testing services.

Due to the right of offset of receivables and payables with the JV Company, as of December 31, 2022, AOS recorded the net amount of $ 21.6 million presented as payable related to equity investee, net, in the Condensed Consolidated Balance Sheet.

The purchases by AOS for the three and six months ended December 31, 2022 were $ 39.8 million and $ 85.9 million, respectively, and the sales by AOS for the three and six months ended December 31, 2022 were $ 13.8 million and $ 30.4 million, respectively.

The purchases and sales by AOS since the December 2, 2021 deconsolidation of the JV Company for the three months ended December 31, 2021 were $ 15.6 million and $ 4.2 million, respectively.

AOS previously sold 8-inch wafers to the JV Company for further assembly and testing services until January 1, 2023, when it changed to consign the 8-inch wafers to the JV Company.

Due to the right of offset of receivables and payables with the JV Company, as of March 31, 2023, AOS recorded the net amount of $ 18.4 million presented as payable related to equity investee, net, in the Condensed Consolidated Balance Sheet.

The purchases by AOS for the three and nine months ended March 31, 2023 were $ 20.2 million and $ 106.1 million, respectively, and the sales by AOS for the three and nine months ended March 31, 2023 were $ 4.0 million and $ 34.4 million, respectively.

The purchases by AOS for the three and nine months ended March 31, 2022 were $ 45.8 million and $ 61.4 million, respectively, and the sales by AOS for the three and nine months ended March 31, 2022 were $ 14.2 million and $ 18.4 million, respectively.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 December 31, Six Months Ended December 31,

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 March 31, Nine Months Ended March 31,

2023 2022 2023 2022

(in thousands, except per share data)

Net income attributable to Alpha and Omega Semiconductor Limited $ 6,337 $ 382,998 $ 32,375 $ 406,422

Weighted average number of common shares used to compute basic net income per share 27,511 26,593 27,451 26,479

Net income (loss) attributable to Alpha and Omega Semiconductor Limited $ ( 18,907 ) $ 31,650 $ 13,468 $ 438,072

Weighted average number of common shares used to compute basic net income (loss) per share 27,710 26,829 27,537 26,596

Effect of potentially dilutive securities:

Stock options, RSUs and ESPP shares — 1,594 2,039 1,520

Weighted average number of common shares used to compute diluted net income per share 29,576 28,287 29,499 27,963

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

Weighted average number of common shares used to compute diluted net income (loss) per share 27,710 28,423 29,576 28,116

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

Basic $ ( 0.68 ) $ 1.18 $ 0.49 $ 16.47

Diluted $ ( 0.68 ) $ 1.11 $ 0.46 $ 15.58

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 December 31, Six Months Ended December 31,

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 March 31, Nine Months Ended March 31,

2023 2022 2023 2022

12 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 December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

Percentage of revenue 2023 2022 2023 2022

7 unchanged sentences

Customer C 46.0 % 12.0 %

Customer D 21.9 % *

* Less than 10%

85 unchanged sentences

Short-term customer deposits are payments received from customers for securing future product shipments.

As of December 31, 2022, $ 12.5 million were from Customer A and $ 10.2 million were from Customer B, and $ 12.4 million were from other customers.

As of March 31, 2023, $ 12.5 million were from Customer A and $ 10.2 million were from Customer B, and $ 20.6 million were from other customers.

As of June 30, 2022, $ 12.5 million were from Customer A and $ 16.2 million were from Customer B, and $ 11.9 million were from other customers.

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

Six Months Ended December 31,

Nine Months Ended March 31,

(in thousands)

6 unchanged sentences

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

Six Months Ended December 31,

Nine Months Ended March 31,

(in thousands)

10 unchanged sentences

Customer deposits are payments received from customers for securing future product shipments.

As of December 31, 2022, $ 24.0 million were from Customer A and $ 16.2 million were from Customer B, and $ 20.5 million were from other customers.

As of March 31, 2023, $ 22.0 million were from Customer A and $ 13.7 million were from Customer B, and $ 16.2 million were from other customers.

As of June 30, 2022, $ 34.5 million were from Customer A and $ 21.9 million were from Customer B, and $ 13.9 million were from other customers.

5 unchanged sentences

The purpose of the credit facility is to provide working capital borrowings.

The Company could borrow up to approximately RMB 140 million or $ 20.6 million based on currency exchange rage between RMB and U.S.

Dollar on January 31, 2023 with a maturity date of December 1, 2023.

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

This line of credit matured on February 14, 2021 and was based on the China Base Rate multiplied by 1.05 , or 4.99 % on October 31, 2019.

The purpose of the credit facility is to provide short-term borrowings.

The Company could borrow up to approximately RMB 60.0 million or $ 8.5 million based on the currency exchange rate between the RMB and the U.S.

Dollar on October 31, 2019.

In September 2021, this line of credit was renewed with maximum borrowings up to RMB 140.0 million with the same terms and a credit maturity date of September 18, 2022.

During the three months ended December 31, 2021, the Company borrowed RMB 11.0 million, or $ 1.6 million, at an interest rate of 3.85 % per annum, with principal due on November 18, 2022.

As of December 31, 2022, there was no outstanding balance and this loan was expired.

On November 16, 2018, one of the Company's subsidiaries in China entered into a line of credit facility with Industrial and Commercial Bank of China.

The purpose of the credit facility was to provide short-term borrowings.

The Company could borrow up to approximately RMB 140 million or $ 20.6 million based on currency exchange rate between RMB and U.S.

Dollar on November 16, 2018.

The RMB 72.0 million consists of RMB 27.0 million for trade borrowings with a maturity date of December 31, 2021, and RMB 45.0 million for working capital borrowings or trade borrowings with a maturity date of September 13, 2022.

During the three months ended December 31, 2021, the Company borrowed RMB 5.0 million, or $ 0.8 million, at an interest rate of 3.7 % per annum, with principal due on September 12, 2022.

As of December 31, 2022, there was no out standin g balance and this loan was expired.

Dollar on January 31, 2023 with a maturity date of December 1, 2023.

As of March 31, 2023, there was no outstanding balance for this loan.

Accounts Receivable Factoring Agreement

8 unchanged sentences

Other terms remain the same.

As of December 31, 2022, the Borrower was in compliance with these covenants.

As of December 31, 2022, there was no outstanding balance and the Company had unused credit of approximately $ 8.0 million.

As of March 31, 2023, the Borrower was in compliance with these covenants.

As of March 31, 2023, there was no outstanding balance and the Company had unused credit of approximately $ 8.0 million.

Debt financing

2 unchanged sentences

The implied interest rate was 4.75 % per annum which was adjustable based on every five basis point increase in 60-month U.S.

Treasury Notes, until the final installation and acceptance of the machine .

The total purchase price of this machinery equipment was euro 12.0 million.

Treasury Notes, until the final installation and acceptance of the equipment .

The total purchase price of this equipment was euro 12.0 million.

In April 2021, Jireh made a down payment of euro 6.0 million, representing 50 % of the total purchase price of the equipment, to the supplier.

6 unchanged sentences

The purchase price of this hardware was $ 0.2 million.

The financing arrangement is secured by this machinery equipment and the hardware which had the carrying amount of $ 13.1 million as of December 31, 2022.

As of December 31, 2022, the outstanding balance of this debt financing was $ 13.1 million.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The financing arrangement is secured by this equipment and other equipment which had the carrying amount of $ 13.1 million as of March 31, 2023.

As of March 31, 2023, the outstanding balance of this debt financing was $ 12.5 million.

Long-term bank borrowings

6 unchanged sentences

Jireh drew down $ 45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022.

As of December 31, 2022, Jireh was in compliance with these covenants and the outstanding balance of this loan was $ 42.8 million.

As of March 31, 2023, Jireh was in compliance with these covenants and the outstanding balance of this loan was $ 40.5 million.

On May 1, 2018, Jireh entered into a loan agreement with the Bank that provided a term loan in the amount of $ 17.8 million.

The obligation under the loan agreement is secured by certain real estate assets of Jireh and guaranteed by the Company.

The loan has a five-year term and matures on June 1, 2023.

The loan has a five-year term.

Beginning June 1, 2018, Jireh made consecutive monthly payments of principal and interest to the Bank.

The outstanding principal accrues interest at a fixed rate of 5.04 % per annum on the basis of a 360-day year.

The outstanding principal accrues interest at a fixed rate of 5.04 % per annum on the basis of a 360-day

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

1 unchanged sentence

The amendment was accounted for as a debt modification and no gain or loss was recognized.

The Company was in compliance with these covenants as of December 31, 2022.

As of December 31, 2022, the outstanding balance of the term loa n was $ 13.7 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.

The obligation under the credit agreement is secured by substantially all assets of Jireh and guaranteed by the Company.

The credit agreement has a five-year term and matured on August 15, 2022.

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 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.

In August 2021, Jireh signed an amendment of this loan with the Bank to modify the financial covenants requirement to align with the new term loan agreement entered into on August 18, 2021, discussed above.

The amendment was accounted for as a debt modification and no gain or loss was recognized.

The loan was paid in full in September 2022.

As of December 31, 2022, there was no outstanding balance .

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company was in compliance with these covenants as of March 31, 2023.

As of March 31, 2023, the outstanding balance of the term loa n was $ 13.5 million.

The Company paid this loan in full on May 1, 2023.

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

23 unchanged sentences

The amendment was accounted for as a debt modification and no gain or loss was recognized.

In addition, the finance lease related to the RMB 400.0 million of lease financing of the JV Company with YinHai Leasing Company and The Export-Import Bank of China was not included in the Company’s unaudited Condensed Consolidated Balance Sheet at December 31, 2022 due to the deconsolidation of the JV Company on December 2, 2021.

In addition, the finance lease related to the RMB 400.0 million of lease financing of the JV Company with YinHai Leasing Company and The Export-Import Bank of China was not included in the Company’s unaudited Condensed Consolidated Balance Sheet at March 31, 2023 due to the deconsolidation of the JV Company on December 2, 2021.

The Company does not record leases on the Condensed Consolidated Balance Sheets with a term of one year or less.

The Company’s unaudited Condensed Consolidated Statements of Income for the six months ended December 31, 2021 include the JV Company's results for the period preceding the deconsolidation on December 2, 2021.

The Company’s unaudited Condensed Consolidated Statements of Income for the nine months ended March 31, 2022 include the JV Company's results for the period preceding the deconsolidation on December 2, 2021.

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

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

23 unchanged sentences

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

Six Months Ended December 31,

Nine Months Ended March 31,

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

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Operating lease right-of-use assets obtained in exchange for lease obligations $ 2,859 $ 5,901

Future minimum lease payments are as follows as of December 31, 2022 (in thousands):

Future minimum lease payments are as follows as of March 31, 2023 (in thousands):

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

21 unchanged sentences

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

During the six months ended December 31, 2022, the Company did no t repurchase any shares pursuant to the Repurchase Program.

During the three months ended March 31, 2023, the Company repurchased an aggregate of 106,863 shares from the open market, for a total cost of $ 2.7 million, excluding fees and related expenses, at an average price of $ 24.9 per share.

Since the inception of the program, the Company repurchased an aggregate of 6,891,511 shares for a total cost of $ 70.0 million, at an average price of $ 10.16 per share, excluding fees and related expenses.

1 unchanged sentence

Of the 6,891,511 repurchased shares, 174,724 shares with a weighted average repurchase price of $ 9.98 per share, were reissued at an average price of $ 4.79 per share pursuant to option exercises and vested restricted share units (“RSU”).

As of December 31, 2022, approximately $ 13.4 million remained available under the Repurchase Program.

As of March 31, 2023, approximately $ 10.8 million remained available under the Repurchase Program.

Time-based Restric ted Stock Units ( “ TRSU ” )

The following table summarizes the Company's TRSU activities for the six months ended December 31, 2022:

The following table summarizes the Company's TRSU activities for the nine months ended March 31, 2023:

Number of Restricted Stock

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Forfeited ( 35,025 ) $ 31.34

Nonvested at December 31, 2022 1,255,533 $ 34.43 1.39 $ 35,870,578

Nonvested at March 31, 2023 1,341,395 $ 32.96 1.89 $ 36,150,595

Market-based Restricted Stock Units ( “ MSU ” )

In December 2021, the Company granted 1.0 million market-based restricted stock units ("MSUs") to its certain personnel.

In December 2021, the Company granted 1.0 million market-based restricted stock units ("MSUs") to certain personnel.

The number of shares to be earned at the end of performance period is determined based on the Company’s achievement of specified stock prices and revenue thresholds during the performance period from January 1, 2022 to December 31, 2024 as well as the recipients remaining in continuous service with the Company through such period.

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Risk-free interest rate of 1.0 %, expected term of 3.1 years, expected volatility of 62.8 % and dividend yield of 0 %.

The Company recorded $ 2.1 million and $ 4.1 million of expenses for these MSUs during the three and six months ended December 31, 2022, respectively, and $ 0.5 million of expenses during the three and six months ended December 31, 2021.

The Company recorded $ 2.1 million and $ 6.2 million of expenses for these MSUs during the three and nine months ended March 31, 2023, respectively, and $ 2.0 million and $ 2.5 million of expenses during the three and nine months ended March 31, 2022.

During the quarter ended September 30, 2018, the Company granted 1.3 million MSUs to certain personnel.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

expenses for MSUs during the three and six months ended December 31, 2022, respectively, and $ 0.4 million and $ 0.8 million of expenses for MSUs during the three and six months ended December 31, 2021, respectively.

expenses for MSUs during the three and nine months ended March 31, 2023, respectively, and $ 0.4 million and $ 1.2 million of expenses for MSUs during the three and nine months ended March 31, 2022, respectively.

Performance-based Restricted Stock Units (“PRSUs”)

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The PRSUs vest in four equal annual installments from the first anniversary date after the grant date if certain predetermined financial goals were met.

The Company recorded approximately $ 1.1 million and $ 2.7 million of e xpens e for these PRSUs during the three and six months ended December 31, 2022, respectively, and approximately $ 1.0 million and $ 2.0 million during the three and six months ended December 31, 2021.

The following table summarizes the Company’s PRSUs activities for the six months ended December 31, 2022:

The Company recorded approximately $ 1.4 million and $ 4.1 million of e xpens e for these PRSUs during the three and nine months ended March 31, 2023, respectively, and approximately $ 1.0 million and $ 3.0 million during the three and nine months ended March 31, 2022.

The following table summarizes the Company’s PRSUs activities for the nine months ended March 31, 2023:

Number of Performance-based Restricted Stock

6 unchanged sentences

Granted 264,214 $ 25.70

Vested ( 116,132 ) $ 30.54

Forfeited ( 10,743 ) $ 48.65

Nonvested at December 31, 2022 403,375 $ 36.33 1.35 $ 11,524,424

Nonvested at March 31, 2023 526,714 $ 32.19 2.03 $ 14,194,942

Stock Options

The Company did no t grant any stock options during the six months ended December 31, 2022 and 2021.

The following table summarizes the Company's stock option activities for the six months ended December 31, 2022:

The Company did no t grant any stock options during the nine months ended March 31, 2023 and 2022.

The following table summarizes the Company's stock option activities for the nine months ended March 31, 2023:

Weighted Average

4 unchanged sentences

Exercised ( 65,500 ) $ 8.42 $ 1,442,646

Outstanding at December 31, 2022 387,375 $ 7.70 1.03 $ 8,085,135

Outstanding at March 31, 2023 324,375 $ 7.55 0.96 $ 6,292,088

Options vested and expected to vest 324,375 $ 7.55 0.96 $ 6,292,088

Exercisable at December 31, 2022 387,375 $ 7.70 1.03 $ 8,085,135

Exercisable at March 31, 2023 324,375 $ 7.55 0.96 $ 6,292,088

Employee Share Purchase Plan (“ESPP”)

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

Six Months Ended December 31,

Nine Months Ended March 31,

Volatility rate 70.5 %

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On September 8, 2022, the Compensation Committee of the Board approved modifications to the terms of equity awards granted to a former officer who was a board member of the Company.

The modifications waived the four-year time based service performance of his MSU and allowed continuing vesting of his TRSU and PRSU according to the original awards' vesting schedule after his termination as a board member.

The modifications waived the four-year time based service performance of his MSU allowing continuing vesting of his TRSU and PRSU according to the original awards' vesting schedule after his termination as a board member.

The incremental expenses for these equity shares resulting from the modification were $ 3.9 million.

During the three and six months ended December 31, 2022, the Company recorded $ 2.8 million and $ 3.1 million, respectively, net of reversal of prior recorded expenses, of shared-based compensation for these equity shares.

During the three and nine months ended March 31, 2023, the Company recorded nil and $ 3.1 million, respectively, net of reversal of prior recorded expenses, of shared-based compensation for these equity shares.

The total share-based compensation expense recognized in the Condensed Consolidated Statements of Income for the periods presented was as follows:

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

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

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$ 10,432 $ 8,273 $ 34,119 $ 21,454

As of December 31, 2022, total unrecognized compensation cost under the Company's equity plans was $ 71.3 million, which is expected to be recognized over a weighted-average period of 2.9 years.

The Company recognized income tax expense of approximately $ 1.7 million and $ 34.1 million for the three months ended December 31, 2022 and 2021, respectively.

The income tax expense of $ 1.7 million for the three months ended December 31, 2022 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 34.1 million for the three months ended December 31, 2021 included a $ 32.8 million discrete tax expense related to the Company’s $ 391.5 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain as the Company switches from the consolidation method of accounting to the equity method of accounting related to this investment and no longer asserts permanent reinvestment related to the Company’s investment in the joint venture.

Excluding the discrete income tax items, the income tax expense for the three months ended December 31, 2022 and 2021 was $ 1.6 million and $ 1.3 million, respectively, and the effective tax rate for the three months ended December 31, 2022 and 2021 was 20.2 % and 4.7 %, respectively.

Excluding the effects of the discrete tax expense recorded in the three months ended December 31, 2022 and 2021, the changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from reporting pretax book income of $ 8.0 million for the three months ended December 31, 2022 as compared to $ 27.6 million of pretax book income (excluding the $ 391.5 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain) for the three months ended December 31, 2021.

The Company recognized income tax expense of approximately $ 3.0 million and $ 35.4 million for the six months ended December 31, 2022 and 2021, respectively.

The income tax expense of $ 3.0 million for the six months ended December 31, 2022 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 35.4 million for the six months ended December 31, 2021 included a $ 32.8 million discrete tax expense related to the Company’s $ 391.5 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain as the Company switches from the consolidation method of accounting to the equity method of accounting related to this investment and no longer asserts permanent reinvestment related to the Company’s investment in the joint venture as well as $ 0.1 million for other discrete income tax items.

Excluding the discrete income tax items, income tax expense for the six months ended December 31, 2022 and 2021 was $ 2.9 million and $ 2.5 million, respectively, and the effective tax rate for the six months ended December 31, 2022 and 2021 was 8.2 % and 5.0 %, respectively.

Excluding the effects of the discrete tax expense recorded in the six months ended December 31, 2022 and 2021, the changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from the Company reporting a pretax book income of $ 35.4 million for the six months ended December 31, 2022 as compared to pretax book income of $ 50.4 million of pretax book income (excluding the $ 391.5 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain) for the six months ended December 31, 2021.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2023, total unrecognized compensation cost under the Company's equity plans was $ 77.5 million, which is expected to be recognized over a weighted-average period of 2.8 years.

The Company recognized income tax expense of approximately $ 2.5 million and $ 2.9 million for the three months ended March 31, 2023 and 2022, respectively.

The income tax expense of $ 2.5 million for the three months ended March 31, 2023 included a $ 0.03 million discrete tax expense.

The income tax expense of $ 2.9 million for the three months ended March 31, 2022 included a $ 0.7 million discrete tax expense related to the Company’s $ 4.5 million of gain related to the revaluation of the Company's equity interest in a joint venture.

Excluding the discrete income tax items, the income tax expense for the three months ended March 31, 2023 and 2022 was $ 2.5 million and $ 2.2 million, respectively, and the effective tax rate for the three months ended March 31, 2023 and 2022 was ( 15.2 )% and 7.4 %, respectively.

Excluding the effects of the discrete tax expense recorded in the three months ended March 31, 2023 and 2022, the changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from reporting pretax book loss of $ 16.4 million for the three months ended March 31, 2023 as compared to $ 30.0 million of pretax book income (excluding the $ 4.5 million of gain related ot the revaluation of the Company's equity interest in a joint venture) for the three months ended March 31, 2022.

The Company recognized income tax expense of approximately $ 5.6 million and $ 38.3 million for the nine months ended March 31, 2023 and 2022, respectively.

The income tax expense of $ 5.6 million for the nine months ended March 31, 2023 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 38.3 million for the nine months ended March 31, 2022 included a $ 33.5 million discrete tax expense related to the Company’s $ 396.0 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain as the Company switches from the consolidation method of accounting to the equity method of accounting related to this investment and no longer asserts permanent reinvestment related to the Company’s investment in the joint venture as well as $ 0.1 million for other discrete income tax items.

Excluding the discrete income tax items, income tax expense for the nine months ended March 31, 2023 and 2022 was $ 5.4 million and $ 4.7 million, respectively, and the effective tax rate for the nine months ended March 31, 2023 and 2022 was 28.4 % and 6.0 %, respectively.

Excluding the effects of the discrete tax expense recorded in the nine months ended March 31, 2023 and 2022, the changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from the Company reporting a pretax book income of $ 19.0 million for the nine months ended March 31, 2023 as compared to pretax book income of $ 80.4 million of pretax book income (excluding the $ 396.0 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain) for the nine months ended March 31, 2022.

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

2 unchanged sentences

The tax years 2014 to 2022 remain open to examination by foreign tax authorities.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company's income tax returns are subject to examinations by the Internal Revenue Service and other tax authorities in various jurisdictions.

1 unchanged sentence

These assessments can require considerable estimates and judgments.

As of December 31, 2022, the gross amount of unrecognized tax benefits was approximately $ 8.7 million, of which $ 5.7 million, if recognized, would reduce the effective income tax rate in future periods.

As of March 31, 2023, the gross amount of unrecognized tax benefits was approximately $ 8.7 million, of which $ 5.7 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.

34 unchanged sentences

the design, development and supply of power semiconductor products for computing, consumer electronics, communication and industrial applications.

The chief operating decision-maker is the Chief Executive Officer.

The financial information presented to the Company’s Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources.

The chief operating decision-makers are the Executive Chairman and the Chief Executive Officer.

The financial information presented to the Company’s Executive Chairman and Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources.

The Company has one business segment, and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level.

2 unchanged sentences

Because the Company’s distributors sell their products to end customers which may have a global presence, revenue by geographical location is not necessarily representative of the geographical distribution of sales to end user markets.

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 December 31, Six Months Ended December 31,

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

6 unchanged sentences

$ 132,560 $ 203,239 $ 529,796 $ 583,593

The Company has classified certain amounts previously reported in revenue of power discrete and power IC to conform to the current presentation.

The following is a summary of revenue by product type:

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

Three Months Ended March 31, Nine Months Ended March 31,

2023 2022 2023 2022

3 unchanged sentences

Packaging and testing services 552 2,308 3,341 9,576

License and development services 3,630 — 3,630 —

$ 132,560 $ 203,239 $ 529,796 $ 583,593

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

9 unchanged sentences

Purchase Commitments

As of December 31, 2022 and June 30, 2022, the Company had approximately $ 77.2 million and $ 89.9 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others.

As of December 31, 2022 and June 30, 2022, the Company had approximately $ 23.7 million and $ 63.4 million, respectively, of capital commitments for the purchase of property and equipment.

As of March 31, 2023 and June 30, 2022, the Company had approximately $ 120.6 million and $ 89.9 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others.

As of March 31, 2023 and June 30, 2022, the Company had approximately $ 11.9 million and $ 63.4 million, respectively, of capital commitments for the purchase of property and equipment.

Other Commitments

18 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 December 31, 2022 and June 30, 2022.

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at March 31, 2023 and June 30, 2022.

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.

3 unchanged sentences

In addition, the Company may not be able to maintain such insurance coverage at reasonable cost, if at all, in the future.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Subsequent Event

On February 6, 2023, the Company entered into a license and engineering service agreement with a leading power semiconductor automotive supplier related to the Company’s Silicon Carbide (SiC) MOSFET and diode technology.

In the agreement, the Company will license and provide 24-month engineering support for its proprietary SiC technology for a total fee of $ 45 million, consisted of an upfront fees of $ 18 million payable within 45 days of the execution of the agreement, with the remaining amount to be paid upon our achievement of specified engineering services and product milestones.

In addition, the Company also entered an accompanying supply agreement to provide limited wafer supply.

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