What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-05-08 compared with 2024-02-07 · 152 added, 148 removed, 765 unchanged (28% of the section changed)

42 unchanged sentences

issued and outstanding:

none at December 31, 2023 and June 30, 2023

none at March 31, 2024 and June 30, 2023

Common shares, par value $ 0.002 per share:

1 unchanged sentence

issued and outstanding:

35,205 shares and 28,051 shares, respectively at December 31, 2023 and 34,811 shares and 27,654 shares, respectively at June 30, 2023

35,836 shares and 28,697 shares, respectively at March 31, 2024 and 34,811 shares and 27,654 shares, respectively at June 30, 2023

Treasury shares at cost:

7,154 shares at December 31, 2023 and 7,157 shares at June 30, 2023

7,139 shares at March 31, 2024 and 7,157 shares at June 30, 2023

( 79,220 ) ( 79,365 )

9 unchanged sentences

(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,

2024 2023 2024 2023

24 unchanged sentences

(Unaudited, in thousands)

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

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

2024 2023 2024 2023

8 unchanged sentences

(Unaudited, in thousands)

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss

Retained Earnings Total Shareholders' Equity

Balance, September 30, 2022 34,018 $ 68 ( 6,617 ) $ ( 65,996 ) $ 299,196 $ ( 3,827 ) $ 656,028 $ 885,469

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

Balance, December 31, 2022 34,181 $ 68 ( 6,616 ) $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674

Exercise of common stock options and release of restricted stock units 611 1 — — 531 — — 532

1 unchanged sentence

Withholding tax on restricted stock units ( 217 ) — — — ( 5,556 ) — — ( 5,556 )

Issuance of shares under ESPP 137 — — — 4,080 — — 4,080

Repurchase of common shares under shares repurchase program — — ( 107 ) ( 2,665 ) — — — ( 2,665 )

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

Net income — — — — — — 6,337 6,337

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

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

Balance, December 31, 2022 34,181 $ 68 ( 6,616 ) $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss

Retained Earnings Total Shareholders' Equity

Balance, March 31, 2023 34,575 $ 69 ( 6,717 ) $ ( 68,605 ) $ 321,548 $ ( 9,156 ) $ 643,402 $ 887,258

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

Balance, June 30, 2022 33,988 $ 68 ( 6,617 ) $ ( 66,000 ) $ 288,951 $ 1,080 $ 629,994 $ 854,093

3 unchanged sentences

Issuance of shares under ESPP 137 — — — 4,080 — — 4,080

Repurchase of common shares under shares repurchase program — — ( 107 ) ( 2,665 ) — — — ( 2,665 )

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

1 unchanged sentence

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

Balance, December 31, 2022 34,181 $ 68 ( 6,616 ) $ ( 65,990 ) $ 316,141 $ ( 12,904 ) $ 662,359 $ 899,674

Balance, March 31, 2023 34,575 $ 69 ( 6,717 ) $ ( 68,605 ) $ 321,548 $ ( 9,156 ) $ 643,402 $ 887,258

See accompanying notes to these condensed consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

(Unaudited, in thousands)

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss

Retained Earnings Total Shareholders' Equity

Balance, September 30, 2023 34,903 $ 70 ( 7,157 ) $ ( 79,365 ) $ 330,015 $ ( 13,518 ) $ 648,077 $ 885,279

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

Balance, December 31, 2023 35,205 $ 70 ( 7,154 ) $ ( 79,343 ) $ 342,636 $ ( 13,937 ) $ 645,132 $ 894,558

Exercise of common stock options and release of restricted stock units 918 2 — — 1,053 — — 1,055

3 unchanged sentences

Share-based compensation — — — — 8,465 — — 8,465

— — — — — — ( 2,923 ) ( 2,923 )

Net income — — — — — — ( 11,212 ) ( 11,212 )

Foreign currency translation adjustment, net of tax — — — — — 2,812 — 2,812

Balance, December 31, 2023 35,205 $ 70 ( 7,154 ) $ ( 79,343 ) $ 342,636 $ ( 13,937 ) $ 645,132 $ 894,558

Balance, March 31, 2024 35,836 $ 72 ( 7,139 ) $ ( 79,220 ) $ 345,413 $ ( 11,125 ) $ 633,797 $ 888,937

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss

8 unchanged sentences

Foreign currency translation adjustment, net of tax — — — — — ( 3,014 ) — ( 3,014 )

Balance, December 31, 2023 $ 35,205 $ 70 $ ( 7,154 ) $ ( 79,343 ) $ 342,636 $ ( 13,937 ) $ 645,132 $ 894,558

Balance, March 31, 2024 35,836 $ 72 ( 7,139 ) $ ( 79,220 ) $ 345,413 $ ( 11,125 ) $ 633,797 $ 888,937

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

$ 2,863 $ 32,375

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

Net income (loss) $ ( 8,349 ) $ 13,468

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

Depreciation and amortization 39,849 31,162

10 unchanged sentences

Income taxes payable ( 895 ) 2,506

Increase in deferred revenue ( 4,358 ) —

Increase (decrease) in deferred revenue ( 409 ) 14,370

Accrued and other liabilities ( 28,916 ) ( 29,366 )

Net cash provided by (used in) operating activities ( 9,628 ) 37,015

Net cash provided by operating activities 18,591 48,654

Cash flows from investing activities

6 unchanged sentences

Proceeds from exercise of stock options and ESPP 5,650 4,631

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

Proceeds from borrowings — 8,632

1 unchanged sentence

Principal payments on finance leases ( 644 ) ( 603 )

Net cash provided by (used in) financing activities ( 2,146 ) 4,526

Net cash used in financing activities ( 10,923 ) ( 6,417 )

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 83 ) ( 121 )

23 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, 2023 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024 or any other interim period.

Operating results for the nine months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2024 or any other interim period.

The consolidated balance sheet at June 30, 2023 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, 2023.

5 unchanged sentences

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

As of December 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.

As of June 30, 2023, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2 %.

In February 2024, the JV Company repurchased certain shares that were previously issued to employees under the employee equity incentive plan for $ 5.4 million, which

increased the Company’s percentage of equity ownership in the JV Company by 0.54 %.

As of March 31, 2024, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.8 %.

Use of Estimates

3 unchanged sentences

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.

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

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 consolidated balance sheets.

consolidated balance sheets.

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

30 unchanged sentences

License and Development Revenue Recognition

In February 2023, the Company entered into a license agreement with a customer, pursuant to which the Company agreed to license its proprietary Silicon Carbide (SiC) technology to the customer and engineering and development services for 24 months for a total fee of $ 45 million, consisting of an upfront fee of $ 18 million and $ 6.8 million paid to the Company in March 2023 and July 2023, respectively, with the remaining amount to be paid upon the achievement of specified engineering services and product milestones.

In February 2023, the Company entered into a license agreement with a customer, pursuant to which the Company agreed to license its proprietary Silicon Carbide (SiC) technology to the customer and engineering and development services for 24 months for a total fee of $ 45.0 million, consisting of fees of $ 18.0 million, $ 6.8 million and $ 9.0 million paid to the Company in March 2023, July 2023 and February 2024, respectively, with 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 during which the Company performs the engineering and development services.

The Company uses the input method to measure progress, which method represents a faithful depiction of the transfer of services.

During the three and six months ended December 31, 2023, the Company recorded license and development revenue of $ 5.5 million and $ 11.1 million, respectively.

During the three and nine months ended March 31, 2024, the Company recorded license and development revenue of $ 5.1 million and $ 16.2 million, respectively.

During the three and nine 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 consolidated balance sheets.

As of March 31, 2024, the Company had recorded a total of $ 26.1 million of license and development revenue.

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

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of December 31, 2023, the Company had recorded $ 21.1 million of license and development revenue.

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

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, 2023 and June 30, 2023, the amount of restricted cash was $ 0.2 million and $ 0.4 million, respectively.

As of March 31, 2024 and June 30, 2023, the amount of restricted cash was $ 0.2 million and $ 0.4 million, respectively.

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 1, 2021, the Company reduced its equity interest in the JV Company and no longer controls of the JV Company.

Effective December 1, 2021, the Company reduced its equity interest in the JV Company and no longer controls the JV Company.

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

1 unchanged sentence

The Company discloses and recognizes intervening events at the JV Company in the lag period that could materially affect its consolidated financial statements, if applicable.

The Company records its interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Consolidated Statements of Income.

Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor and investee.

3 unchanged sentences

The Company reviews for impairment whenever factors indicate that the carrying amount of the investment might not be recoverable.

In such a case, the decrease in value is recognized in the period the impairment occurs in the Condensed Consolidated Statements of Income.

In such a case, the decrease in value is recognized in the period the impairment occurs in the Condensed Consolidated Statements of Income (loss).

Valuation of inventories

5 unchanged sentences

If actual market conditions are more favorable than expected and the products that have previously been written down are sold, our gross margin would be favorably impacted.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Financial Instruments

1 unchanged sentence

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 values of financial instruments such as cash and cash equivalents, accounts

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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, credit risk and terms of the debts.

4 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, 2023, the Company reduced property, plant and equipment by $ 0.4 million and $ 0.4 million, respectively.

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.

As a result of such grants, during the three and nine months ended March 31, 2024, the Company reduced property, plant and equipment by $ 0.4 million and $ 0.8 million, respectively.

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.

Accounting for income taxes

9 unchanged sentences

Under current Bermuda law, the Company is not subject to any income or capital gains taxes in Bermuda.

In recent months, the Government of Bermuda announced that it has enacted the Corporate Income Tax Act 2023, potentially imposing a 15% corporate income tax (CIT) that would be taken into account in calculating the effective tax rate of Bermuda businesses under the Organization for Economic Cooperation and Development’s global minimum tax rules, that will be effective for tax years beginning on or after January 1, 2025.

The Company is closely analyzing the recently enacted Corporate Income Tax Act 2023 and the related potential tax and financial statement consequences.

The new Bermudian CIT may subject us to additional income taxes, which may adversely affect our results of operations.

As we have previously disclosed, the Government of Bermuda announced in December 2023 that it enacted the Corporate Income Tax Act 2023, potentially imposing a 15% corporate income tax (CIT) on Bermuda companies that are within the scope of the CIT, that will be effective for tax years beginning on or after January 1, 2025.

In particular, the CIT applies to multinational companies with annual revenue of 750 million euros or more in the consolidated financial statements of the ultimate parent entity for at least two of the four fiscal years immediately preceding the fiscal year when the CIT may apply.

The Company is not in a position to determine whether the annual revenues may meet and/or cross the 750 million Euro threshold for at least two of the four fiscal years immediately preceding the fiscal year when CIT may apply.

The Company continues to monitor and assess if and when it may be within the scope of the CIT.

If we become subject to the Bermuda CIT, we may be subject to additional income taxes, which may adversely affect our financial position, results of operations and our overall business.

Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part.

3 unchanged sentences

The Financial Accounting Standards Board (FASB), issued guidance which clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

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.

39 unchanged sentences

Following the closing of the Investment and as of June 30, 2022, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2 %.

In February 2024, the JV Company repurchased certain shares that were previously issued to employees under the employee equity incentive plan for $ 5.4 million, which increased the Company’s percentage of equity ownership in the JV Company by 0.54 %.

As of March 31, 2024, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.8 %.

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, 2023, the Company recorded a $ 0.7 million loss and $ 3.4 million loss of its equity share of the JV Company, respectively, using lag reporting.

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

During the three and nine months ended March 31, 2024, the Company recorded a $ 0.7 million loss and $ 4.1 million loss of its equity share of the JV Company, respectively, using lag reporting.

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

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Related Party Transactions

As of December 31, 2023, 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, 2024, the Company owned a 42.8 % 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 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 December 31, 2023, AOS recorded the net amount of $ 13.0 million 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, 2023 were $ 28.6 million and $ 58.4 million, respectively, and the sales by AOS for the three and six months ended December 31, 2023 were $ 3.0 million and $ 3.7 million, respectively.

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.

Due to the right of offset of receivables and payables with the JV Company, as of March 31, 2024, AOS recorded the net amount of $ 14.3 million 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, 2024 were $ 22.4 million and $ 80.8 million, respectively, and the sales by AOS for the three and nine months ended March 31, 2024 were $ 2.6 million and $ 6.3 million, respectively.

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.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

2 unchanged sentences

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,

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

2024 2023 2024 2023

14 unchanged sentences

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,

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

2024 2023 2024 2023

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 2024 2023 2024 2023

95 unchanged sentences

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

As of December 31, 2023, $ 10.0 million were from Customer A, $ 9.2 million were from Customer B, and $ 12.7 million were from other customers.

As of March 31, 2024, $ 10.0 million were from Customer A, $ 8.9 million were from Customer B, and $ 14.2 million were from other customers.

As of June 30, 2023, $ 13.5 million were from Customer A, $ 9.2 million were from Customer B, and $ 15.4 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, 2023, $ 14.0 million were from Customer A, $ 6.0 million were from Customer B, and $ 11.9 million were from other customers.

As of March 31, 2024, $ 12.0 million were from Customer A, $ 3.0 million were from Customer B, and $ 7.4 million were from other customers.

As of June 30, 2023, $ 21.0 million were from Customer A, $ 11.7 million were from Customer B, and $ 13.7 million were from other customers.

3 unchanged sentences

Short-term borrowings

In September 2023, one of the Company's subsidiaries in China entered into a line of credit facility with China Construction Bank.

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

The Company could borrow up to approximately RMB 50 million or $ 6.8 million based on currency exchange rate between RMB and U.S.

Dollar on September 30, 2023 with a maturity date of September 8, 2025.

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

In January 2023, one of the Company's subsidiaries in China entered into a line of credit facility with Bank of Communications Limited in China.

In March 2024, one of the Company's subsidiaries in China entered into a line of credit facility with Bank of Communications Limited in China.

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

The Company could borrow up to approximately RMB 140 million or $ 19.4 million based on currency exchange rate between RMB and U.S.

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

As of December 31, 2023, there was no outstanding balance and this loan expired.

In September 2022, one of the Company's subsidiaries in China entered into a line of credit facility with Industrial and Commercial Bank of China.

Dollar on March 31, 2024 with a maturity date of March 15, 2025.

As of March 31, 2024, there was no outstanding balance for this loan.

In December 2023, 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 working capital borrowings.

The Company could borrow up to approximately RMB 72.0 million, or $ 10.2 million based on currency exchange rate between RMB and U.S.

Dollar on December 31, 2023, with a maturity date of December 31, 2024.

As of March 31, 2024, there was no outstanding balance for this loan .

In September 2023, one of the Company's subsidiaries in China entered into a line of credit facility with China Construction Bank.

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

The Company could borrow up to approximately RMB 50 million or $ 6.8 million based on currency exchange rate between RMB and U.S.

Dollar on September 30, 2023 with a maturity date of September 8, 2025.

As of December 31, 2023, there was no outstanding balance and this loan expired.

As of March 31, 2024, there was no outstanding balance for this loan.

Accounts Receivable Factoring Agreement

1 unchanged sentence

This factoring agreement allows the Borrower to borrow up to 70 % of the net amount of its eligible accounts receivable of the Borrower with a maximum amount of $ 30.0 million.

The interest rate is based on one month London Interbank Offered Rate (“LIBOR”) plus 1.75 % per annum.

The interest rate is based on the Secured Overnight Financing Rate ("SOFR)", plus 2.01 % per annum.

The Company is the guarantor for this agreement.

The Company is accounting for this transaction as a secured borrowing under the Transfers and Servicing of Financial Assets guidance.

The Company is accounting for this transaction as a secured borrowing.

In addition, any cash held in the restricted bank account controlled by HSBC has a legal right of offset against the borrowing.

2 unchanged sentences

Other terms remain the same.

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

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

As of March 31, 2024, the Borrower was in compliance with these covenants.

As of March 31, 2024, there was no outstanding balance and the Company had unused credit of approximately $ 8.0 million.

Debt financing

12 unchanged sentences

The purchase price of this hardware was $ 0.2 million.

The financing arrangement is secured by this equipment and other equipment which had the carrying amount of $ 14.4 million as of December 31, 2023.

As of December 31, 2023, the outstanding balance of this debt financing was $ 10.4 million.

The financing arrangement is secured by this equipment and other equipment which had the net book value of $ 14.0 million as of March 31, 2024.

As of March 31, 2024, the outstanding balance of this debt financing was $ 9.8 million.

Long-term bank borrowings

On August 18, 2021, Jireh entered into a term loan agreement with a financial institution (the "Bank") in an amount up to $ 45.0 million for the purpose of expanding and upgrading the Company’s fabrication facility located in Oregon.

The obligation

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

The agreement has a

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

under the loan agreement is secured by substantially all assets of Jireh and guaranteed by the Company.

The agreement has a 5.5 year term and matures on February 16, 2027.

5.5 year term and matures on February 16, 2027.

Jireh is required to make consecutive quarterly payments of principal and interest.

The loan accrues interest based on adjusted LIBOR plus the applicable margin based on the outstanding balance of the loan.

The loan accrues interest based on adjusted SOFR plus the applicable margin based on the outstanding balance of the loan.

This agreement contains customary restrictive covenants and includes certain financial covenants that the Company is required to maintain.

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

As of December 31, 2023, Jireh was in compliance with these covenants and the outstanding balance of this loan wa s $ 33.8 million.

As of March 31, 2024, Jireh was in compliance with these covenants and the outstanding balance of this loan wa s $ 31.5 million.

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

26 unchanged sentences

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,

2024 2023 2024 2023

8 unchanged sentences

Total lease expenses $ 1,899 $ 2,008 $ 5,945 $ 5,975

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

December 31, 2023 June 30,

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

March 31, 2024 June 30,

Operating Leases :

10 unchanged sentences

Finance lease 7.51 % 7.51 %

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

Six Months Ended December 31,

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

Nine Months Ended March 31,

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

4 unchanged sentences

Operating lease right-of-use assets obtained in exchange for lease obligations $ 3,954 $ 2,859

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

Future minimum lease payments are as follows as of March 31, 2024 (in thousands):

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

21 unchanged sentences

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

As of December 31, 2023, the Company had repurchased an aggregate of 7,332,780 shares for a total cost of $ 81.1 million, at an average price of $ 11.01 per share, excluding fees and related expenses.

No repurchased shares have been retired.

Of the 7,332,780 repurchased shares, 178,349 shares with a weighted average repurchase price of $ 9.94 per share, were reissued at an average price of $ 4.69 per share pursuant to option exercises and vested restricted share units (“RSU”).

As of December 31, 2023, no remaining amount was available under the share repurchase program, which has been terminated.

As of March 31, 2024, no remaining amount was available under the share 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, 2023:

The following table summarizes the Company's TRSU activities for the nine months ended March 31, 2024:

Number of Restricted Stock

7 unchanged sentences

Forfeited ( 32,876 ) $ 32.35

Nonvested at December 31, 2023 1,399,898 $ 32.22 1.34 $ 36,481,342

Nonvested at March 31, 2024 1,518,659 $ 29.14 1.85 $ 33,471,244

Market-based Restricted Stock Units ( “ MSU ” )

7 unchanged sentences

The Company recognizes the total compensation cost of the modified MSUs beginning on the modification date over the remaining requisite service periods.

The Company recorded $ 1.2 million of expenses for the three months ended December 31, 2023, and a negative $ 5.1 million of expenses for the six months ended December 31, 2023 due to a $ 6.4 million of reversal of the prior recognized expenses.

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

The Company recorded $ 1.1 million of expenses for the three months ended March 31, 2024, and a negative $ 4.0 million of expenses for the nine months ended March 31, 2024 due to a $ 6.4 million of reversal of the prior recognized expenses.

The Company recorded $ 2.1 million and $ 6.2 million of expenses for the three and nine months ended March 31, 2023, respectively.

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

2 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 (i) extend the

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 Company recorded $ 0.2 million and $ 0.8 million of expenses for MSUs during the three and nine months ended March 31, 2024, respectively, and $ 0.3 million and $ 3.6 million of expenses for MSUs during the three and nine months ended March 31, 2023.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 Company recorded $ 0.3 million and $ 0.6 million of expenses for MSUs during the three and six months ended December 31, 2023, respectively, and $ 2.8 million and $ 3.3 million of expenses for MSUs during the three and six months ended December 31, 2022.

The following table summarizes the Company's MSUs activities for the six months ended December 31, 2023:

The following table summarizes the Company's MSUs activities for the nine months ended March 31, 2024:

Number of Performance-based Restricted Stock

8 unchanged sentences

Forfeited ( 10,000 ) $ 48.44

Nonvested at December 31, 2023 1,833,000 $ 28.96 3.37 $ 47,767,980

Nonvested at March 31, 2024 1,823,000 $ 28.86 3.12 $ 40,178,920

Performance-based Restricted Stock Units (“PRSUs”)

2 unchanged sentences

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 $ 0.8 million and $ 1.2 million of e xpens e for these PRSUs during the three and six months ended December 31, 2023, respectively, and $ 1.1 million and $ 2.7 million and for the three and six months ended December 31, 2022, respectively.

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

The Company recorded approximately $ 0.8 million and $ 2.0 million of expe ns e for these PRSUs during the three and nine months ended March 31, 2024, respectively, and $ 1.4 million and $ 4.1 million and for the three and nine months ended March 31, 2023, respectively.

The following table summarizes the Company’s PRSUs activities for the nine months ended March 31, 2024:

Number of Performance-based Restricted Stock

6 unchanged sentences

Granted 209,250 $ 21.55

Vested ( 123,632 ) $ 30.50

Forfeited ( 258,957 ) $ 26.41

Nonvested at December 31, 2023 526,714 $ 32.19 1.29 $ 13,726,167

Nonvested at March 31, 2024 353,375 $ 30.71 1.98 $ 7,788,385

Stock Options

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

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

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company did no t grant any stock options during the nine months ended March 31, 2024 and 2023.

The following table summarizes the Company's stock option activities for the nine months ended March 31, 2024:

Weighted Average

4 unchanged sentences

Exercised ( 299,375 ) $ 7.44 $ 5,406,850

Outstanding at December 31, 2023 161,875 $ 7.61 0.25 $ 2,987,294

Outstanding at March 31, 2024 20,000 $ 8.86 0.30 $ 263,600

Options vested and expected to vest 20,000 $ 8.86 0.30 $ 263,600

Exercisable at December 31, 2023 161,875 $ 7.61 0.25 $ 2,987,294

Exercisable at March 31, 2024 20,000 $ 8.86 0.30 $ 263,600

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 64.0 %

4 unchanged sentences

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,

2024 2023 2024 2023

4 unchanged sentences

$ 8,465 $ 10,432 $ 18,074 $ 34,119

As of December 31, 2023, total unrecognized compensation cost under the Company's equity plans was $ 48.7 million, which is expected to be recognized over a weighted-average period of 2.5 years.

The Company recognized income tax expense of approximately $ 0.9 million and $ 1.7 million for the three months ended December 31, 2023 and 2022, respectively.

The income tax expense of $ 0.9 million for the three months ended December 31, 2023 included a $ 0.1 million discrete tax expense.

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

Excluding the discrete income tax items, the income tax expense for the three months ended December 31, 2023 and 2022 was $ 0.8 million and $ 1.6 million, respectively, and the effective tax rate for the three months ended December 31, 2023 and 2022 was ( 41.2 )% and 20.2 %, respectively.

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 $ 2.0 million for the three months ended December 31, 2023 as compared to $ 8.0 million of pretax book income for the three months ended December 31, 2022.

The Company recognized income tax expense of approximately $ 2.0 million and $ 3.0 million for the six months ended December 31, 2023 and 2022, respectively.

The income tax expense of $ 2.0 million for the six months ended December 31, 2023 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 3.0 million for the six months ended December 31, 2022

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

included a $ 0.1 million discrete tax expense.

Excluding the discrete income tax items, income tax expense for the six months ended December 31, 2023 and 2022 was $ 1.9 million and $ 2.9 million, respectively, and the effective tax rate for the six months ended December 31, 2023 and 2022 was 39.2 % and 8.2 %, respectively.

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 $ 4.9 million for the six months ended December 31, 2023 as compared to $ 35.4 million of pretax book income for the six months ended December 31, 2022.

As of March 31, 2024, total unrecognized compensation cost under the Company's equity plans was $ 55.0 million, which is expected to be recognized over a weighted-average period of 2.5 years.

The Company recognized income tax expense of approximately $ 0.6 million and $ 2.5 million for the three months ended March 31, 2024 and 2023, respectively.

The income tax expense of $ 0.6 million for the three months ended March 31, 2024 included a $ 0.1 million discrete tax expense.

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

Excluding the discrete income tax items, the income tax expense for the three months ended March 31, 2024 and 2023 was $ 0.6 million and $ 2.5 million, respectively, and the effective tax rate for the three months ended March 31, 2024 and 2023 was ( 5.3 )% and ( 15.2 )%, respectively.

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 $ 10.6 million for the three months ended March 31, 2024 as compared to $ 16.4 million of pretax book loss for the three months ended March 31, 2023.

The Company recognized income tax expense of approximately $ 2.6 million and $ 5.6 million for the nine months ended March 31, 2024 and 2023, respectively.

The income tax expense of $ 2.6 million for the nine months ended March 31, 2024 included a $ 0.2 million discrete tax expense.

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

Excluding the discrete income tax items, income tax expense for the nine months ended March 31, 2024 and 2023 was $ 2.5 million and $ 5.4 million, respectively, and the effective tax rate for the nine months ended March 31, 2024 and 2023 was ( 43.4 )% and 28.4 %, respectively.

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 $ 5.7 million for the the nine months ended March 31, 2024 as compared to $ 19.0 million of pretax book income for the nine months ended March 31, 2023.

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

2 unchanged sentences

The tax years 2017 to 2023 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, 2023, the gross amount of unrecognized tax benefits was approximately $ 9.5 million, of which $ 6.3 million, if recognized, would reduce the effective income tax rate in future periods.

As of March 31, 2024, the gross amount of unrecognized tax benefits was approximately $ 9.5 million, of which $ 6.4 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.

22 unchanged sentences

The Company is subject to income tax expense or benefit based upon pre-tax income or loss reported in the consolidated statements of income (loss) and the provisions of currently enacted tax laws.

The parent company is incorporated under the laws of

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Bermuda and is subject to Bermuda law with respect to taxation.

The parent company is incorporated under the laws of Bermuda and is subject to Bermuda law with respect to taxation.

Under current Bermuda law, the Company is not subject to any income or capital gains taxes in Bermuda.

The Company is closely analyzing the recently enacted Corporate Income Tax Act 2023 and the related potential tax and financial statement consequences.

The new Bermudian CIT may subject us to additional income taxes, which may adversely affect our results of operations.

The Company continues to monitor and assess if and when it may be within the scope of the CIT.

If we become subject to the Bermuda CIT, we may be subject to additional income taxes, which may adversely affect our financial position, results of operations and our overall business.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

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 December 31, Six Months Ended December 31,

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

2024 2023 2024 2023

7 unchanged sentences

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,

2024 2023 2024 2023

2 unchanged sentences

Power IC 49,990 47,416 153,032 159,708

Packaging and testing services 744 1,206 1,489 2,789

Packaging and testing services and other 1,204 552 2,694 3,341

License and development services 5,051 3,630 16,159 3,630

13 unchanged sentences

Purchase Commitments

As of December 31, 2023 and June 30, 2023, the Company had approximately $ 99.5 million and $ 127.5 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, 2023 and June 30, 2023, the Company had approximately $ 11.4 million and $ 9.7 million, respectively, of capital commitments for the purchase of property and equipment.

As of March 31, 2024 and June 30, 2023, the Company had approximately $ 101.2 million and $ 127.5 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, 2024 and June 30, 2023, the Company had approximately $ 10.5 million and $ 9.7 million, respectively, of capital commitments for the purchase of property and equipment.

Other Commitments

6 unchanged sentences

Department of Justice (“DOJ”) commenced an investigation into the Company's compliance with export control regulations relating to its business transactions with Huawei and its affiliates (“Huawei”), which were added to the “Entity List” maintained by the Department of Commerce (“DOC”) on May 16, 2019.

The Company has been cooperating fully with federal authorities in the investigation, including responding to requests for documents, information and interviews from DOJ in connection with the investigation.

In connection with this investigation, DOC requested the Company to suspend shipments of its products to Huawei, and the Company complied with such request, and the Company has not shipped any product to Huawei after December 31, 2019.

The Company cooperated fully with federal authorities in the investigation, including responding to requests for documents, information and interviews from DOJ in connection with the investigation.

In connection with this investigation, DOC requested the Company to suspend shipments of its products to Huawei, and the Company complied with such request.

The Company has not shipped any product to Huawei after December 31, 2019.

On January 19, 2024, DOJ informed the Company that it has closed such investigation without any charges.

The Company intends to continue cooperating with the DOC in the ongoing civil investigation.

The Company continues to cooperate with the DOC in the ongoing civil investigation.

DOC has not informed the Company of any specific timeline or schedule under which DOC will complete its review.

The Company is a party to a variety of agreements that it has contracted with various third parties.

The Company is a party to a variety of agreements contracted with various third parties.

Pursuant to these agreements, the Company may be obligated to indemnify another party to such an agreement with respect to certain matters.

2 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, 2023 and June 30, 2023.

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at March 31, 2024 and June 30, 2023.

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.

2 unchanged sentences

However, such insurance may not cover any, or may cover only a portion of, the amounts the Company may be required to pay.

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

In addition, the Company may not be able to maintain such insurance coverage at a reasonable cost.

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