What changed in this filing

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Item 1. Financial Statements

2025-02-06 compared with 2024-11-05 · 200 added, 222 removed, 659 unchanged (39% of the section changed)

3 unchanged sentences

(Unaudited, in thousands except par value per share)

September 30,

2024 June 30,

38 unchanged sentences

issued and outstanding:

none at September 30, 2024 and June 30, 2024

none at December 31, 2024 and June 30, 2024

Common shares, par value $ 0.002 per share:

1 unchanged sentence

issued and outstanding:

36,162 shares and 29,024 shares, respectively at September 30, 2024 and 36,107 shares and 28,969 shares, respectively at June 30, 2024

36,367 shares and 29,232 shares, respectively at December 31, 2024 and 36,107 shares and 28,969 shares, respectively at June 30, 2024

Treasury shares at cost:

7,138 shares at September 30, 2024 and 7,138 shares at June 30, 2024

7,135 shares at December 31, 2024 and 7,138 shares at June 30, 2024

( 79,192 ) ( 79,213 )

9 unchanged sentences

(Unaudited, in thousands except per share data)

Three Months Ended September 30,

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

2024 2023 2024 2023

Revenue $ 173,156 $ 165,285 $ 355,043 $ 345,918

Cost of goods sold 1

133,145 121,284 270,506 250,992

Gross profit 40,011 44,001 84,537 94,926

5 unchanged sentences

Other income (loss), net 663 ( 472 ) 13 ( 446 )

Interest income, net 453 229

Net income (loss) before income taxes ( 449 ) 9,636

Interest income 1,135 1,323 2,400 2,644

Interest expenses ( 701 ) ( 1,049 ) ( 1,513 ) ( 2,141 )

Net income (loss) before income taxes and loss from equity method investment ( 4,811 ) ( 1,332 ) ( 5,260 ) 8,304

Income tax expense 1,242 894 2,282 2,032

8 unchanged sentences

Diluted 29,163 27,939 29,083 29,830

(1) - Amounts include related party transactions.

Refer to footnote 3, Related Party Transaction.

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended September 30,

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

2024 2023 2024 2023

Net income (loss) $ ( 6,614 ) $ ( 2,923 ) $ ( 9,110 ) $ 2,863

Other comprehensive loss, net of tax

Foreign currency translation adjustment ( 159 ) ( 5,407 )

Comprehensive income (loss)

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments, net of $( 628 ) and $ 157 tax in each of the three months ended December 31, 2024 and 2023, respectively, and $( 525 ) and $ 1,069 tax in each of the six months ended December 31, 2024 and 2023, respectively

2,856 ( 419 ) 2,697 ( 5,826 )

Comprehensive loss $ ( 3,758 ) $ ( 3,342 ) $ ( 6,413 ) $ ( 2,963 )

See accompanying notes to these condensed consolidated financial statements.

3 unchanged sentences

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (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

Exercise of common stock options and release of restricted stock units 134 — — — 726 — — 726

Reissuance of treasury stock upon exercise of common stock options and release of RSUs — — 3 22 — — ( 22 ) —

Withholding tax on restricted stock units ( 9 ) — — — ( 219 ) — — ( 219 )

Issuance of shares under ESPP 177 — — — 3,423 — — 3,423

Share-based compensation — — — — 8,691 — — 8,691

— — — — — — ( 2,923 ) ( 2,923 )

Foreign currency translation adjustment, net of tax — — — — — ( 419 ) — ( 419 )

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

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

Retained Earnings Total Shareholders' Equity

Balance, June 30, 2023 34,811 $ 70 ( 7,157 ) $ ( 79,365 ) $ 329,034 $ ( 8,111 ) $ 642,291 $ 883,919

Exercise of common stock options and release of restricted stock units 238 — — — 1,172 — — 1,172

Reissuance of treasury stock upon exercise of common stock options and release of RSUs — — 3 22 — — ( 22 ) —

Withholding tax on restricted stock units ( 21 ) — — — ( 602 ) — — ( 602 )

Issuance of shares under ESPP 177 — — — 3,423 — — 3,423

Share-based compensation — — — — 9,609 — — 9,609

1 unchanged sentence

Foreign currency translation adjustment, net of tax — — — — — ( 5,826 ) — ( 5,826 )

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

See accompanying notes to these condensed consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited, in thousands)

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

Retained Earnings Total Shareholders' Equity

Balance, September 30, 2024 36,162 $ 72 ( 7,138 ) $ ( 79,213 ) $ 359,429 $ ( 13,578 ) $ 628,562 $ 895,272

Exercise of common stock options and release of restricted stock units 36 — — — 0 — — 0

Reissuance of treasury stock upon release of RSUs

— — 3 21 — — ( 21 ) —

Withholding tax on restricted stock units ( 8 ) — — — ( 305 ) — — ( 305 )

Issuance of shares under ESPP 177 1 — 3,420 — — 3,421

Share-based compensation — — — — 7,950 — — 7,950

— — — — — — ( 6,614 ) ( 6,614 )

Foreign currency translation adjustment, net of tax — — — — — 2,856 — 2,856

Balance, December 31, 2024 36,367 $ 73 ( 7,135 ) $ ( 79,192 ) $ 370,494 $ ( 10,722 ) $ 621,927 $ 902,580

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

2 unchanged sentences

Exercise of common stock options and release of restricted stock units 109 — — — 91 — — 91

Reissuance of treasury stock upon release of RSUs

— — 3 21 — — ( 21 ) —

Withholding tax on restricted stock units ( 26 ) — — — ( 978 ) — — ( 978 )

Issuance of shares under ESPP 177 1 — — 3,420 — — 3,421

Share-based compensation — — — — 14,852 — — 14,852

1 unchanged sentence

Foreign currency translation adjustment, net of tax — — — — — 2,697 — 2,697

Balance, September 30, 2024 36,162 $ 72 ( 7,138 ) $ ( 79,213 ) $ 359,429 $ ( 13,578 ) $ 628,562 $ 895,272

Balance, December 31, 2024 36,367 $ 73 ( 7,135 ) $ ( 79,192 ) $ 370,494 $ ( 10,722 ) $ 621,927 $ 902,580

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Three Months Ended September 30,

Six Months Ended December 31,

Cash flows from operating activities

Net income (loss) $ ( 9,110 ) $ 2,863

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

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

Depreciation and amortization 28,690 26,524

12 unchanged sentences

Income taxes payable 277 ( 759 )

Increase (decrease) in deferred revenue ( 2,591 ) 1,109

Deferred revenue ( 2,591 ) ( 4,358 )

Accrued and other liabilities ( 10,365 ) ( 15,233 )

Net cash provided by operating activities 11,021 13,823

Net cash provided by (used in) operating activities 25,126 ( 9,628 )

Cash flows from investing activities

Purchases of property and equipment ( 14,420 ) ( 22,030 )

Proceeds from sale of property and equipment — 150

Government grant related to equipment 320 449

2 unchanged sentences

Withholding tax on restricted stock units ( 978 ) ( 602 )

Proceeds from exercise of stock options and released of restricted stock 91 446

Proceeds from exercise of stock options and ESPP 3,512 4,595

Repayments of borrowings ( 5,807 ) ( 5,713 )

26 unchanged sentences

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

Operating results for the three months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025 or any other interim period.

Operating results for the six months ended December 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025 or any other interim period.

The consolidated balance sheet at June 30, 2024 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, 2024.

Joint Venture

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

Prior to December 1, 2021, the JV Company was accounted for under the provisions of the consolidation guidance since the Company had controlling financial interest.

As of December 2, 2021, the Company ceased having control over the JV Company.

Therefore, the Company deconsolidated the JV Company as of that date.

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

As of September 30, 2024, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.8 %.

Use of Estimates

2 unchanged sentences

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

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

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 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.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

The Company determined its incremental borrowing rate based on the information available at the lease commencement date.

The operating lease ROU assets also include any lease payments made and exclude lease incentives.

Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise such options.

Operating lease expense is generally recognized on a straight-line basis over the lease term.

Variable lease payments are expensed as incurred and are not included within the operating lease ROU asset and lease liability calculation.

The Company does not record leases on the consolidated balance sheet with a term of one year or less.

The Company elected to combine its lease and non-lease components as a single lease component for all asset classes.

On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to stock rotation returns, price adjustments, inventory reserves, income taxes, leases, share-based compensation, recoverability of and useful lives for property, plant and equipment and intangible assets.

Revenue recognition

11 unchanged sentences

Stock rotation returns are governed by contract and are limited to a specified percentage of the monetary value of products purchased by distributors during a specified period.

The Company records an allowance for stock rotation returns based on historical returns, current expectations, and individual distributor agreements.

The Company records an allowance for stock rotation returns based on historical returns, expected sales volumes and individual distributor agreements.

The Company also provides special pricing to certain distributors, primarily based on volume, to encourage resale of the Company’s products.

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

5 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 $ 45.0 million, consisting of an upfront fee and milestone payments 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.

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

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 months ended September 30, 2024 and 2023, the Company recorded license and development revenue of $ 5.6 million and $ 5.6 million, respectively.

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

As of September 30, 2024, the Company had recorded a total of $ 36.8 million of license and development revenue.

When our performance under the contract precedes our receipt of consideration from the customer, and the receipt of consideration is conditional upon factors other than the passage of time, a contract asset is recorded.

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

Share-based Compensation Expense

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company maintains an equity-settled, share-based compensation plan to grant restricted share units and stock options.

The Company recognizes expense related to share-based compensation awards that are ultimately expected to vest based on estimated fair values on the date of grant.

The fair value of restricted share units is based on the fair value of the Company’s common share on the date of grant.

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

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

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

The Employee Share Purchase Plan (the “ESPP”) is accounted for at fair value on the date of grant using the Black-Scholes option valuation model.

The Company uses the input method to measure progress and recognize revenue, based on the effort expended relative to the estimated total effort to satisfy the performance obligation.

The Company recognizes a contract liability when payments are in excess of revenue recognized, which is presented as deferred revenue on the balance sheet.

When the Company’s performance under the contract precedes its receipt of consideration from the customer, and the receipt of consideration is conditional upon factors other than the passage of time, a contract asset is recorded.

During the six months ended December 31, 2024, the Company recorded license and development revenue of $ 2.6 million that was previously included in the deferred revenue balance as of June 30, 2024.

During the six months ended December 31, 2024, the Company recognized license and development revenue of $ 8.5 million that precedes its receipt of payments, resulting in a balance of $ 8.5 million of contract assets as of December 31, 2024.

As of December 31, 2024, the Company had recorded a total of $ 42.2 million of license and development revenue.

During the three and six months ended December 31, 2024, the Company recorded license and development revenue of $ 5.4 million and $ 11.0 million, respectively.

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.

Restricted Cash

The Company maintains restricted cash in connection with cash balances temporarily restricted for regular business operations.

The Company maintains restricted cash in connection with cash balances temporarily restricted by the local custom authority for regular business operations.

These balances have been excluded from the Company’s cash and cash equivalents balance and are classified as restricted cash in the Condensed Consolidated Balance Sheets.

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

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

3 unchanged sentences

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 (loss).

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

2 unchanged sentences

instead the equity method investment is tested for impairment.

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

The Company reviews for impairment whenever factors indicate that the carrying amount of the investment is determined to be other than temporary.

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

The Company carries inventories at the lower of cost (determined on a first-in, first-out basis) or net realizable value.

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 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.

Adjustments to inventory, once established are not reversed until the related inventory has been sold or scrapped.

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.

Fair Value of Financial Instruments

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

Cash equivalents consist primarily of short-term bank deposits.

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

The carrying value of the

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

Government Grants

The Company occasionally receives government grants that provide financial assistance for certain eligible expenditures in China.

These grants include reimbursements on interest expense on bank borrowings, payroll tax credits, credit for property, plant and equipment in a particular geographical location, employment credits, as well as business expansion credits.

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attaching to it, and that the grant will be received.

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

As a result of such grants, during the three months ended September 30, 2024, the Company reduced property, plant and equipment by $ 0.2 million.

During the three months ended September 30, 2023, the Company did not receive any grants.

Accounting for income taxes

Income tax expense or benefit is based on income or loss before income taxes.

The Company’s interim period tax provision for (benefit from) income taxes is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period.

The Company’s interim period tax provision for (or benefit from) income taxes is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period.

Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.

The Company’s quarterly tax provision and estimate of its annual effective tax rate are subject to variation due to several factors, including variability in accurately predicting its pre-tax income or loss and the mix of jurisdictions to which they relate, and changes in how the Company does business.

The Company’s quarterly tax provision and estimate of its annual effective tax rate are subject to variation due to several factors, including variability in forecasting its pre-tax income or loss and the mix of jurisdictions to which they relate, and changes in how the Company does business.

Deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts.

4 unchanged sentences

While the final tax outcome of these matters may differ from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

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 Company is subject to income tax expense or benefit based upon pre-tax income or loss reported in the Condensed Consolidated Statements of Income (Loss) and the provisions of currently enacted tax laws.

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

3 unchanged sentences

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.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

3 unchanged sentences

The Company considers evidence such as our past operating results, the existence of cumulative losses in recent years and our forecast of future taxable income.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

8 unchanged sentences

The provision for income taxes includes the impact of changes to reserves, as well as the related net interest and penalties.

Long-lived Assets

The Company reviews all long-lived assets whenever events or changes in circumstance indicate that these assets may not be recoverable.

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.

Comprehensive Income (Loss)

9 unchanged sentences

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its disclosures within the consolidated financial statements.

The Company plans to adopt the ASU in the fourth quarter of fiscal year 2025 and

is currently evaluating the impact of the ASU on its disclosure within the consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, “ Income Taxes (Topic 740) – Improvements to Income Tax Disclosures ”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

This guidance is effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its income tax disclosures within the consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

which income taxes are paid.

This guidance is effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its income tax disclosures within the consolidated financial statements.

In November 2024, the FASB issued ASU No.

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”, which improves disclosure requirements and provides more detailed information about an entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Equity Method Investment in Equity Investee

On December 1, 2021 (the “Effective Date”), Alpha & Omega Semiconductor (Shanghai) Ltd.

(“AOS SH”) and Agape Package Manufacturing (Shanghai) Limited (“APM SH” and, together with AOS SH, the “Sellers”), each a wholly-owned subsidiary of the Company, entered into a share transfer agreement (“STA”) with a third-party investor to sell a portion of the Company's equity interest in the JV Company which consists of a power semiconductor packaging, testing and 12-inch wafer fabrication facility in Chongqing, China (the “Transaction”).

The Transaction closed on December 2, 2021 (the “Closing Date”), which reduced the Company’s equity interest in the JV Company from 50.9 % to 48.8 %.

Also, the Company’s right to designate directors on the board of JV Company was reduced to three (3) out of seven (7) directors, from four (4) directors prior to the Transaction.

As a result of the Transaction and other factors, the Company no longer has a controlling financial interest in the JV Company.

The JV Company was deconsolidated from the consolidated financial statements effective as of the Closing Date.

On December 24, 2021, the Company entered into a share transfer agreement with another third-party investor, pursuant to which the Company sold to this investor 1.1 % of outstanding equity interest held by the Company in the JV Company.

In addition, the JV Company adopted an employee equity incentive plan and issued an equity interest equivalent to 3.99 % of the JV Company in exchange to cash.

As a result of these two transactions, the Company owned 45.8 % of the equity interest in the JV Company as of December 31, 2021.

On January 26, 2022, the JV Company completed a financing transaction pursuant to a corporate investment agreement (the “Investment Agreement”) between the JV Company and certain third-party investors (the “New Investors”).

Under the Investment Agreement, the New Investors purchased newly issued equity interest of the JV Company, representing approximately 7.82 % of post-transaction outstanding equity interests of the JV Company, for a total purchase price of RMB 509 million (or approximately USD 80 million based on the currency exchange rate as of January 26, 2022) (the “Investment”).

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

As of September 30, 2024 and June 30, 2024, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.8 %.

On March 29, 2016, the Company entered into the JV Agreement to form a joint venture, (the “JV Company”) for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility in the Liangjiang New Area of Chongqing, China (the “JV Transaction”).

Prior to December 1, 2021, the JV Company was accounted for as a consolidated subsidiary since the Company had controlling financial interest.

As of December 2, 2021, the Company ceased having control over the JV Company.

Therefore, the Company deconsolidated the JV Company as of that date.

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

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

In the past three years, the Company has been reducing its equity ownership of the JV Company to increase the flexibility of the JV Company to raise capital to fund its future expansion.

On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $ 68.5 million based on currency exchange rate between RMB and U.S.

Dollar on December 31, 2024) in the JV Company.

The funding of the investment will be made in three installments.

The JV Company received the first installment of RMB 40 million (or $ 5.5 million) on December 31, 2024.

The remaining installments are expected to be paid by July 31, 2025.

This transaction was considered as closed when the JV Company completed the registration of the issuance of equity interest to the investor with the local government authority on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2 %.

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 months ended September 30, 2024 and 2023, the Company recorded a $ 1.0 million loss and $ 2.7 million loss of its equity share of the JV Company, respectively, using lag reporting.

During the three and six months ended December 31, 2024, the Company recorded a $ 0.6 million loss and $ 1.6 million loss of its equity share of the JV Company, respectively, using lag reporting.

During the three and six months ended December 31, 2023, the Company recorded a $ 0.7 million loss and $ 3.4 million loss, respectively, of its equity share of the JV Company, respectively, using lag reporting.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Related Party Transactions

As of September 30, 2024, the Company owned a 42.8 % equity interest in the JV Company, which, by definition, is a related party to the Company.

As of December 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 September 30, 2024, AOS recorded the net amount of $ 17.2 million as payable related to equity investee, net, in the Condensed Consolidated Balance Sheet.

The purchases by AOS for the three months ended September 30, 2024 and 2023 were $ 28.3 million and $ 29.8 million, respectively, and the sales by AOS for the three months ended September 30, 2024 and 2023 were $ 2.2 million and $ 0.8 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 consigning 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, 2024, AOS recorded the net amount of $ 18.1 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, 2024 were $ 28.2 million and $ 56.5 million, respectively, and the sales by AOS for the three and six months ended December 31, 2024 were $ 3.1 million and $ 5.3 million, respectively.

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.

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 September 30,

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

2024 2023 2024 2023

(in thousands, except per share data)

13 unchanged sentences

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

Three Months Ended September 30,

(in thousands)

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

2024 2023 2024 2023

(in thousands) (in thousands)

Employee stock options and RSUs 2,573 1,984 2,578 90

ESPP 729 1,229 716 324

Total potential dilutive securities 3,302 3,213 3,294 414

8 unchanged sentences

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

Three Months Ended September 30,

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

Percentage of revenue 2024 2023 2024 2023

1 unchanged sentence

Customer B 52.7 % 41.3 % 52.1 % 44.1 %

September 30,

2024 June 30,

Percentage of accounts receivable

Customer A 10.4 % *

Customer B 32.7 % *

1 unchanged sentence

Customer D 10.4 % 33.4 %

Customer E 10.6 % *

* Less than 10%

3 unchanged sentences

Accounts receivable, net:

September 30,

2024 June 30,

2 unchanged sentences

Allowance for price adjustments ( 47,094 ) ( 41,689 )

Allowance for doubtful accounts ( 30 ) ( 30 )

Allowance for credit losses ( 30 ) ( 30 )

Accounts receivable, net $ 19,879 $ 12,546

September 30,

2024 June 30,

5 unchanged sentences

Other current assets:

September 30,

2024 June 30,

13 unchanged sentences

Property, plant and equipment, net:

September 30,

2024 June 30,

13 unchanged sentences

Intangible assets, net:

September 30,

2024 June 30,

7 unchanged sentences

Intangible assets, net $ 1,893 $ 3,516

Estimated future minimum amortization expense of intangible assets is as follows (in thousands):

F uture amortization expense of intangible assets is as follows (in thousands):

Year ending June 30,

3 unchanged sentences

Other long-term assets:

September 30,

2024 June 30,

4 unchanged sentences

Deposit with supplier 18,221 22,117

Other long-term deposits 29 37

Office leases deposits 1,283 1,418

2 unchanged sentences

Accrued liabilities:

September 30,

2024 June 30,

12 unchanged sentences

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

As of September 30, 2024, $ 9.0 million were from Customer A, $ 5.5 million were from Customer B, and $ 11.1 million were from other customers.

As of December 31, 2024, $ 9.0 million for such deposits were from Customer A, $ 4.5 million were from Customer B, and $ 13.9 million were from other customers.

As of June 30, 2024, $ 9.0 million were from Customer A, $ 8.9 million were from Customer B, and $ 14.3 million were from other customers.

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

Three Months Ended September 30,

Six Months Ended December 31,

(in thousands)

1 unchanged sentence

Additions 656 643

Released ( 700 ) —

Utilization ( 403 ) ( 165 )

3 unchanged sentences

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

Three Months Ended September 30,

Six Months Ended December 31,

(in thousands)

4 unchanged sentences

Other long-term liabilities:

September 30,

2024 June 30,

1 unchanged sentence

Customer deposits $ 8,000 $ 19,661

Computer software liabilities 390 —

Other long-term liabilities $ 8,390 $ 19,661

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

As of September 30, 2024, $ 8.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 4.7 million were from other customers.

As of December 31, 2024, $ 5.0 million for such deposits were from Customer A, $ 1.0 million were from Customer B, and $ 2.0 million were from other customers.

As of June 30, 2024, $ 12.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 5.7 million were from other customers.

7 unchanged sentences

The Company could borrow up to approximately RMB 140 million or $ 19.2 million based on currency exchange rate between RMB and U.S.

Dollar on September 30, 2024 with a maturity date of March 15, 2025.

As of September 30, 2024, there was no outstanding balance for this loan.

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

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

In December 2023, Industrial and Commercial Bank of China provided a line of credit facility to one of the Company’s

2 unchanged sentences

The Company could borrow up to approximately RMB 72.0 million, or $ 9.9 million based on currency exchange rate between RMB and U.S.

Dollar on September 30, 2024, with a maturity date of December 31, 2024.

As of September 30, 2024, there was no outstanding balance for this loan.

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

As of December 31, 2024, there was no outstanding balance for this loan and this loan expired.

In September 2023, China Construction Bank provided a line of credit facility to one of the Company’s subsidiaries in

1 unchanged sentence

The Company could borrow up to approximately RMB 50 million or $ 6.9 million based on currency exchange rate between RMB and U.S.

Dollar on September 30, 2024 with a maturity date of September 8, 2025.

As of September 30, 2024, there was no outstanding balance for this loan.

Dollar on December 31, 2024 with a maturity date of September 8, 2025.

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

Accounts Receivable Factoring Agreement

8 unchanged sentences

Other terms remain the same.

As of September 30, 2024, the Borrower was in compliance with these covenants.

As of September 30, 2024, there was no outstanding balance and the Company had unused credit of approximately $ 8.0 million.

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

As of December 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 net book value of $ 13.2 million as of September 30, 2024.

As of September 30, 2024, the outstanding balance of this debt financing was $ 8.5 million.

The financing arrangement is secured by this equipment and other equipment which had the net book value of $ 12.8 million as of December 31, 2024.

As of December 31, 2024, the outstanding balance of this debt financing was $ 7.9 million.

Long-term bank borrowings

9 unchanged sentences

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

As of September 30, 2024, Jireh was in compliance with these covenants and the outstanding balance of this loan wa s $ 27.0 million.

As of December 31, 2024, Jireh was in compliance with these covenants and the outstanding balance of this loan was $ 24.7 million.

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

9 unchanged sentences

The Company evaluates contracts for lease accounting at contract inception and assesses lease classification at the lease commencement date.

Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities and operating lease liabilities - long-term on the Condensed Consolidated Balance Sheets.

Finance leases are included in property, plant and equipment, finance lease liabilities and finance lease liabilities-long-term on the Condensed Consolidated Balance Sheets.

The Company recognizes a ROU asset and corresponding lease obligation liability at the lease commencement date where the lease obligation liability is measured at the present value of the minimum lease payments.

As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate at lease commencement.

The Company uses an interest rate commensurate with the interest rate to borrow on a collateralized basis over a similar term with an amount equal to the lease payments.

Operating leases are primarily related to offices, research and development facilities, sales and marketing facilities, and manufacturing facilities.

In addition, long-term supply agreements to lease gas tank equipment and purchase industrial gases are accounted for as operating leases.

Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs.

For operating leases, the amortization of the ROU asset and the accretion of its lease obligation liability result in a single straight-line expense recognized over the lease term.

The finance lease is related to the $ 5.1 million of a machinery lease financing with a vendor.

4 unchanged sentences

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

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three Months Ended September 30,

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

2024 2023 2024 2023

Operating leases:

7 unchanged sentences

Total lease expenses $ 1,904 $ 1,993 $ 4,129 $ 4,044

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30, 2024 June 30,

December 31, 2024 June 30,

Operating Leases :

11 unchanged sentences

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

Three Months Ended September 30,

Six Months Ended December 31,

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

4 unchanged sentences

Operating lease right-of-use assets obtained in exchange for lease obligations $ 892 $ 3,588

Future minimum lease payments are as follows as of September 30, 2024 (in thousands):

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Year ending June 30, Operating Leases Finance Leases

11 unchanged sentences

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

The following table summarizes the Company’ TRSU activities for the three months ended September 30, 2024:

The following table summarizes the Company’ TRSU activities for the six months ended December 31, 2024:

Number of Time-based Restricted Stock

7 unchanged sentences

Forfeited ( 23,088 ) $ 28.65

Nonvested at September 30, 2024 1,417,886 $ 29.29 1.49 $ 52,631,928

Nonvested at December 31, 2024 1,470,035 $ 29.83 1.31 $ 54,435,396

Market-based Restricted Stock Units ( “ MSUs ” )

12 unchanged sentences

risk-free interest rate of 3.93 %, expected term of 2.40 years, expected volatility of 57.81 % and dividend yield of 0 %.

The Company recorded $ 0.8 million of expenses for the three months ended September 30, 2024, and a negative $ 6.3 million of expenses for the three months ended September 30, 2023.

The Company recorded $ 1.4 million and $ 2.2 million of expenses for the three and six months ended December 31, 2024.

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.

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

4 unchanged sentences

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 $ 0.3 million of expenses for MSUs during the three months ended September 30, 2024 and 2023, respectively.

The following table summarizes the Company’ MSUs activities for the three months ended September 30, 2024:

The Company recorded $ 0.2 million and $ 0.4 million of expenses for MSUs during the three and six months ended December 31, 2024, respectively, and $ 0.3 million and $ 0.6 million of

expenses during the three and six months ended December 31, 2023, respectively.

The following table summarizes the Company’ MSUs activities for the six months ended December 31, 2024:

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

7 unchanged sentences

Nonvested at June 30, 2024 1,727,000 $ 28.15 2.83 $ 64,537,990

Vested ( 270,000 ) $ 5.17

Forfeited ( 8,000 ) $ 48.44

Nonvested at September 30, 2024 1,719,000 $ 28.05 3.10 $ 63,809,280

Nonvested at December 31, 2024 1,449,000 $ 32.31 3.38 $ 53,656,470

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 $ 0.9 million and $ 0.4 million of expe ns e for these PRSUs during the three months ended September 30, 2024 and 2023, respectively.

The following table summarizes the Company’s PRSUs activities for the three months ended September 30, 2024:

The Company recorded approximately $ 1.0 million and $ 1.9 million of expe ns e for these PRSUs during the three and six months ended December 31, 2024, respectively, and $ 0.8 million and $ 1.2 million of expense for the three and six months ended December

31, 2023, respectively.

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

Number of Performance-based Restricted Stock

5 unchanged sentences

Nonvested at June 30, 2024 344,125 $ 30.69 1.73 $ 12,859,951

Nonvested at September 30, 2024 344,125 $ 30.69 1.47 $ 12,773,920

Nonvested at December 31, 2024 344,125 $ 30.69 1.25 $ 12,742,949

Stock Options

The Company did no t grant any stock options during the three months ended September 30, 2024 and 2023.

The following table summarizes the Company’s stock option activities for the three months ended September 30, 2024:

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

The following table summarizes the Company’s stock option activities for the six months ended December 31, 2024:

Weighted Average

4 unchanged sentences

Exercised ( 10,000 ) $ 9.07 $ 265,267

Outstanding at September 30, 2024 0 0.00 0.00 $ 0.00

Outstanding at December 31, 2024 0 $ 0.00 0.00 $ 0.00

Employee Share Purchase Plan (“ESPP”)

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

Three Months Ended September 30,

Six Months Ended December 31,

Volatility rate 54.1 %

5 unchanged sentences

Share-based Compensation Expense

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

Three Months Ended September 30,

(in thousands)

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

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

2024 2023 2024 2023

(in thousands) (in thousands)

Cost of goods sold $ 1,123 $ 1,504 $ 2,138 $ 1,716

2 unchanged sentences

$ 7,950 $ 8,691 $ 14,852 $ 9,609

As of September 30, 2024, total unrecognized compensation cost under the Company’s share-based compensation plans was $ 49.8 million, which is expected to be recognized over a weighted-average period of 3.0 years.

The Company recognized income tax expense of approximately $ 1.0 million and $ 1.1 million for the three months ended September 30, 2024 and 2023, respectively.

The income tax expense of $ 1.0 million for the three months ended September 30, 2024 included a $ 0.08 million discrete tax expense.

The income tax expense of $ 1.1 million for the three months ended September 30, 2023 included a $ 0.05 million discrete tax expense.

Excluding the discrete income tax items, the income tax expense for the three months ended September 30, 2024 and 2023 was $ 1.0 million and $ 1.1 million, respectively, and the effective tax rate for the three months ended September 30, 2024 and 2023 was ( 65.8 )% and 15.7 %, 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 $ 1.5 million for the three months ended September 30, 2024 as compared to $ 6.9 million of pretax book income for the three months ended September 30, 2023.

As of December 31, 2024, total unrecognized compensation cost under the Company’s share-based compensation plans was $ 46.2 million, which is expected to be recognized over a weighted-average period of 2.9 years.

The Company recognized income tax expense of approximately $ 1.2 million and $ 0.9 million for the three months ended December 31, 2024 and 2023, respectively.

The income tax expense of $ 1.2 million for the three months ended December 31, 2024 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 0.9 million for the three months ended December 31, 2023 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, 2024 and 2023 was $ 1.2 million and $ 0.8 million, respectively, and the effective tax rate for the three months ended December 31, 2024 and 2023 was ( 22.1 )% and ( 41.2 )%, 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 $ 5.4 million for the three months ended December 31, 2024 as compared to $ 2.0 million of pretax book loss for the three months ended December 31, 2023.

The Company recognized income tax expense of approximately $ 2.3 million and $ 2.0 million for the six months ended

December 31, 2024 and 2023, respectively.

The income tax expense of $ 2.3 million for the six months ended December 31, 2024

included a $ 0.1 million discrete tax expense.

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

Excluding the discrete income tax items, income tax expense for the six months ended December 31, 2024 and 2023 was $ 2.1 million and $ 1.9 million, respectively, and the effective tax rate for the six months ended December 31, 2024 and 2023 was ( 31.4 )% and 39.2 %, 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 $ 6.8 million for the six months ended December 31, 2024 as

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

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

5 unchanged sentences

These assessments can require considerable estimates and judgments.

As of September 30, 2024, the gross amount of unrecognized tax benefits was approximately $ 10.1 million, of which $ 6.9 million, if recognized, would reduce the effective income tax rate in future periods.

As of December 31, 2024, the gross amount of unrecognized tax benefits was approximately $ 10.2 million, of which $ 7.0 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.

2 unchanged sentences

“The Chip and Science Act of 2022”, Enacted August 2, 2022

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In August 2022 the U.S.

3 unchanged sentences

Currently, we are evaluating the impact of the Chips Act to us.

“The Inflation Reduction Act”, Enacted August 16, 2022

In August 2022 the United States enacted tax legislation through the Inflation Reduction Act (IRA).

The IRA introduces a 15% corporate alternative minimum tax (CAMT) for corporations whose average annual adjusted financial statement income (AFSI) for

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

any consecutive three-tax-year period preceding the applicable tax year exceeds $1 billion.

The CAMT is effective for tax years beginning after 31 December 2022.

The CAMT is currently not applicable to the Company.

Bermuda Corporate Income Tax for Tax Years Beginning in 2025

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

5 unchanged sentences

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.

Altera Litigation

On July 27, 2015, in Altera Corp.

Commissioner, the U.S.

Tax Court issued an opinion related to the treatment of stock-based compensation expense in an intercompany cost-sharing arrangement.

In the July 2015 ruling, the Tax Court concluded that the sharing of the cost of employee stock compensation in a company’s cost-sharing arrangement was invalid under the U.S.

Administrative Procedures Act.

In June 2019, a panel of the Ninth Circuit of the U.S.

Court of Appeals reversed this decision.

In July 2019, Altera petitioned U.S.

Court of Appeals for the Ninth Circuit to hold an en banc rehearing of the case.

The petition was subsequently denied by the Ninth Circuit.

Altera appealed the case to the U.S.

Supreme Court in February 2020, but the U.S.

Supreme Court declined to hear the case in June 2020, leaving intact the U.S.

Court of Appeals for the Ninth Circuit’s decision.

AOS has not recorded any benefit related to the Altera Corporation Tax Court decision in any period through September 30, 2024.

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

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 September 30,

(in thousands)

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

2024 2023 2024 2023

(in thousands) (in thousands)

Hong Kong $ 150,640 $ 124,081 $ 304,135 $ 265,287

5 unchanged sentences

The following is a summary of revenue by product type:

Three Months Ended September 30,

(in thousands)

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

2024 2023 2024 2023

(in thousands) (in thousands)

Power discrete $ 112,956 $ 108,780 $ 235,410 $ 230,280

5 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

September 30,

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

2024 June 30,

8 unchanged sentences

Purchase Commitments

As of September 30, 2024 and June 30, 2024, the Company had approximately $ 107.4 million and $ 100.8 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others.

As of September 30, 2024 and June 30, 2024, the Company had approximately $ 6.3 million and $ 6.9 million, respectively, of capital commitments for the purchase of property and equipment.

As of December 31, 2024 and June 30, 2024, the Company had approximately $ 87.9 million and $ 100.8 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, 2024 and June 30, 2024, the Company had approximately $ 15.5 million and $ 6.9 million, respectively, of capital commitments for the purchase of property and equipment.

Other Commitments

17 unchanged sentences

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

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

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.

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

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

The Company has not recorded a liability associated with these indemnification arrangements, as it historically has not incurred any material costs associated with such indemnification obligations.

3 unchanged sentences

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

What changed 10-Q

Item 1. Financial Statements