ALPHA & OMEGA SEMICONDUCTOR Ltd 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2026, the end of the period covered by this Annual Report on Form 10-K. Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are designed to provide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to a company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based upon that evaluation as of the end of the period covered in this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2026. Management’s Annual Report on Internal Control over Financial Reporting Our management, including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), as amended from time to time. Based on the assessment, our management concluded that the Company's internal control over financial reporting was effective as of June 30, 2026. The effectiveness of the Company’s internal control over financial reporting as of June 30, 2026 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report included in this Annual Report on Form 10-K. Changes in Internal Control Over Financial Reporting As required by Rule 13a-15(d) under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, evaluated our internal control over financial reporting to determine whether any changes occurred during the fourth fiscal quarter covered by this Form 10-K that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there were no changes during the fourth fiscal quarter ended June 30, 2026. Inherent Limitations on the Effectiveness of Controls While our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance that their respective objectives will be met, we do not expect that our disclosure controls and procedures or our internal control over financial reporting are or will be capable of preventing or detecting all errors and all fraud. Any 57 control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system's objectives will be met. 58 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Alpha and Omega Semiconductor Limited: Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Alpha and Omega Semiconductor Limited and subsidiaries (the "Company") as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2026, of the Company and our report dated August 27, 2026, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP San Jose, California August 27, 2026 59 Item 9B. Other Information None Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not Applicable. 60 PART III Certain information required by Part III is omitted from this Annual Report on Form 10-K because we intend to file our definitive proxy statement for our next annual general meeting of shareholders, pursuant to Regulation 14A of the Securities Exchange Act of 1934, as amended (the “2026 Proxy Statement”), no later than 120 days after the end of fiscal year 2026, and certain information to be included in the 2026 Proxy Statement is incorporated herein by reference. Item 10. Directors, Executive Officers and Corporate Governance The information required by this item concerning our directors, executive officers, Section 16 compliance and corporate governance matters is contained in part under the caption “Business - Executive Officers” in Part I of this report, and the remainder is incorporated by reference to the information set forth in the sections titled “Election of Directors” and “Delinquent Section 16(a) Reports” in the 2026 Proxy Statement. Item 11. Executive Compensation The information required by this item regarding executive compensation is incorporated by reference from the information set forth under the captions “Compensation of Non-Employee Directors” and “Executive Compensation,” in the 2026 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to the information set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the 2026 Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item regarding related party transactions and director independence is incorporated by reference from the information set forth under the captions “Board of Directors and Committees of the Board” and “Related Party Transactions” in the 2026 Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this item regarding principal accountant fees and services is incorporated by reference from the information set forth under the caption “Principal Accounting Fees and Services” in the 2026 Proxy Statement. 61 PART IV Item 15. Exhibits and Financial Statement Schedules (a) The following documents are filed as part of this annual report: (1) Consolidated Financial Statements. The index to the consolidated financial statements is below. Item Page Report of Independent Registered Public Accounting Firm (Deloitte & Touche LLP - PCAOB Firm ID No. 34 ) 63 Report of Independent Registered Public Accounting Firm (Baker Tilly US, LLP - PCAOB Firm ID No. 23 ) 65 Consolidated Balance Sheets 66 Consolidated Statements of Operations 67 Consolidated Statements of Comprehensive Loss 68 Consolidated Statements of Equity 69 Consolidated Statements of Cash Flows 70 Notes to the Consolidated Financial Statements 72 (2) Financial Statement Schedule. Schedule II - Valuation and Qualifying accounts 104 (b) Exhibits The exhibits listed on the accompanying Index to Exhibits in Item 15(b) below are filed as part of, or hereby incorporated by reference into, this Annual Report on Form 10-K. 62 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Alpha and Omega Semiconductor Limited Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Alpha and Omega Semiconductor Limited and subsidiaries (the "Company") as of June 30, 2026 and 2025, the related consolidated statements of operations, comprehensive loss, equity, and cash flows, for the years ended June 30, 2026 and 2025 , and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for the years ended June 30, 2026 and 2025 , in conformity with the accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated August 27, 2026, expressed an unqualified opinion on the Company's internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Inventories — Excess and Obsolete Inventory Reserve — Refer to Note 1 to the financial statements Critical Audit Matter Description The Company evaluates the adequacy of the excess and obsolete inventory reserve based upon a review of inventory quantities on hand compared to forecasted demand. Management’s estimates of forecasted demand are based upon analysis and assumptions including, but not limited to, historical usage, sales forecasts, customer backlog, and projected and current economic trends. We identified the excess and obsolete inventory reserve as a critical audit matter due to the significant assumptions management makes with regards to estimating the forecasted demand. This required a high degree of auditor judgement and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s estimates of forecasted demand. How the Critical Audit Matter Was Addressed in the Audit 63 Our audit procedures related to management’s estimates of forecasted demand used in the excess and obsolete inventory reserve included the following, among others: • We tested the effectiveness of internal controls over management’s review of the excess and obsolete inventory reserve, including internal controls designed to review and approve forecasted demand and the underlying inputs and assumptions regarding historical usage, sales forecasts, customer backlog, and projected and current economic trends. • We evaluated management’s ability to accurately estimate forecasted demand by selecting a sample of inventory products as of June 30, 2025, and comparing usage in the current year to forecasted demand estimates made in the prior year. • We selected a sample of inventory products as of June 30, 2026, and tested the forecasted demand by comparing internal and external information (e.g. historical usage, customer backlog, historical channel inventory levels held at distributors, communications with customers, expected product lifecycles, economic trends, and inquiries with sales personnel, as applicable) with the Company’s forecasted demand. • We considered, when relevant, the existence of contradictory evidence based on reading of internal communications to management and the board of directors, Company press releases, and analyst reports, as well as our observations and inquiries as to changes within the business and information obtained through other areas of the audit. /s/ Deloitte & Touche LLP San Jose, California August 27, 2026 We have served as the Company's auditor since 2024. 64 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of Alpha and Omega Semiconductor Limited: Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive loss, equity, and cash flows of Alpha and Omega Semiconductor Limited (the “Company”) for the year ended June 30, 2024, and the related notes and schedule (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended June 30, 2024, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Baker Tilly US, LLP We served as the Company's auditor from 2022 to 2024. Santa Clara, California August 23, 2024 (August 28, 2025, as to the effects of the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, described in Note 13) 65 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED BALANCE SHEETS (in thousands, except par value per share) June 30, 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 180,771 $ 153,079 Restricted cash 654 419 Accounts receivable, net 42,798 34,772 Inventories 201,384 189,677 Other current assets 12,311 18,215 Total current assets 437,918 396,162 Property, plant and equipment, net 314,671 314,097 Operating lease right-of-use assets, net 22,271 21,288 Intangible assets, net 1,347 269 Equity method investment 142,658 279,122 Deferred income tax assets 8,630 599 Other long-term assets 36,060 22,766 Total assets $ 963,555 $ 1,034,303 LIABILITIES AND EQUITY Current liabilities: Accounts payable $ 46,951 $ 60,044 Accrued liabilities 57,677 59,027 Payable related to equity investee, net 8,694 15,809 Income taxes payable 2,849 1,790 Short-term debt 3,094 11,852 Deferred revenue 726 — Finance lease liabilities 1,085 1,007 Operating lease liabilities 6,290 4,978 Total current liabilities 127,366 154,507 Long-term debt 537 14,872 Income taxes payable - long-term 4,776 4,201 Deferred income tax liabilities 11,936 13,192 Finance lease liabilities - long-term 189 1,274 Operating lease liabilities - long-term 16,787 16,925 Other long-term liabilities 4,063 7,000 Total liabilities 165,654 211,971 Commitments and contingencies (Note 15) Equity: Preferred shares, par value $ 0.002 per share: Authorized: 10,000 shares; issued and outstanding: none at June 30, 2026 and 2025 — — Common shares, par value $ 0.002 per share: Authorized: 100,000 shares; issued and outstanding: 38,294 shares and 30,253 shares, respectively at June 30, 2026 and 37,127 shares and 30,009 shares, respectively at June 30, 2025 77 74 Treasury shares at cost; 8,041 shares at June 30, 2026 and 7,118 shares at June 30, 2025 ( 97,097 ) ( 79,058 ) Additional paid-in capital 406,933 379,779 Accumulated other comprehensive loss ( 3,526 ) ( 12,390 ) Retained earnings 491,514 533,927 Total shareholders' equity 797,901 822,332 Total liabilities and shareholders' equity $ 963,555 $ 1,034,303 The accompanying notes are an integral part of these consolidated financial statements. 66 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Year Ended June 30, 2026 2025 2024 Revenue $ 678,927 $ 696,162 $ 657,274 Cost of goods sold 1 527,383 535,158 485,356 Gross profit 151,544 161,004 171,918 Operating expenses: Research and development 103,858 94,265 89,940 Selling, general and administrative 90,881 95,175 85,734 Total operating expenses 194,739 189,440 175,674 Operating loss ( 43,195 ) ( 28,436 ) ( 3,756 ) Other income (loss), net 4,381 ( 1,004 ) ( 73 ) Interest income 3,958 4,283 5,168 Interest expenses ( 775 ) ( 2,639 ) ( 3,982 ) Net loss before income taxes and equity method investment income (loss) ( 35,631 ) ( 27,796 ) ( 2,643 ) Income tax expense (benefit) 7,468 ( 8,625 ) 3,649 Net loss before equity method investment income (loss) ( 43,099 ) ( 19,171 ) ( 6,292 ) Equity method investment income (loss) 834 ( 77,805 ) ( 4,789 ) Net loss $ ( 42,265 ) $ ( 96,976 ) $ ( 11,081 ) Net loss per common share Basic $ ( 1.41 ) $ ( 3.30 ) $ ( 0.39 ) Diluted $ ( 1.41 ) $ ( 3.30 ) $ ( 0.39 ) Weighted average number of common share used to compute net loss per share: Basic 29,951 29,405 28,236 Diluted 29,951 29,405 28,236 (1) - Amounts include related party transactions. Refer to footnote 3, Related Party Transactions. The accompanying notes are an integral part of these consolidated financial statements. 67 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands) Year ended June 30, 2026 2025 2024 Net loss $ ( 42,265 ) $ ( 96,976 ) $ ( 11,081 ) Other comprehensive income (loss), net of tax Foreign currency translation adjustment, net of $ 1,927 , $( 43 ) and $ 876 tax in each of the fiscal year ended June 30, 2026, 2025 and 2024, respectively. 8,864 1,029 ( 5,308 ) Comprehensive loss $ ( 33,401 ) $ ( 95,947 ) $ ( 16,389 ) The accompanying notes are an integral part of these consolidated financial statements. 68 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED STATEMENTS OF EQUITY (in thousands) Preferred Shares Common Shares Treasury Stock Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Shares Amount Shares Amount 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 RSUs — — 1,210 2 — — 2,311 — — 2,313 Reissuance of treasury stock upon exercise of common stock options and release of RSUs — — — — 19 152 — — ( 152 ) 0 Withholding tax on restricted stock units — — ( 320 ) — — — ( 7,678 ) — — ( 7,678 ) Issuance of shares under Employee Stock Purchase Plan — — 406 — — — 7,801 — — 7,801 Share-based compensation expense — — — — — — 21,641 — — 21,641 Net loss — — — — — — — — ( 11,081 ) ( 11,081 ) Foreign currency translation adjustment — — — — — — — ( 5,308 ) — ( 5,308 ) Balance, June 30, 2024 — — 36,107 72 ( 7,138 ) ( 79,213 ) 353,109 ( 13,419 ) 631,058 891,607 Exercise of common stock options and release of RSUs — — 968 1 — — 90 — — 91 Reissuance of treasury stock upon exercise of common stock options and release of RSUs — — — — 20 155 — — ( 155 ) 0 Withholding tax on restricted stock units — — ( 348 ) — — — ( 10,698 ) — — ( 10,698 ) Issuance of shares under Employee Stock Purchase Plan — — 400 1 — — 7,709 — — 7,710 Share-based compensation expense — — — — — — 29,569 — — 29,569 Net loss — — — — — — — — ( 96,976 ) ( 96,976 ) Foreign currency translation adjustment — — — — — — — 1,029 — 1,029 Balance, June 30, 2025 — — 37,127 74 ( 7,118 ) ( 79,058 ) 379,779 ( 12,390 ) 533,927 822,332 Release of RSUs — — 976 2 — — ( 1 ) — — 1 Reissuance of treasury stock upon release of RSUs — — — — 19 148 — — ( 148 ) 0 Withholding tax on restricted stock units — — ( 335 ) — — — ( 7,518 ) — — ( 7,518 ) Issuance of shares under Employee Stock Purchase Plan — — 526 1 — — 7,995 — — 7,996 Repurchase of common shares under share repurchase program — — — — ( 942 ) ( 18,187 ) — — — ( 18,187 ) Share-based compensation expense — — — — — — 26,678 — — 26,678 Net loss — — — — — — — — ( 42,265 ) ( 42,265 ) Foreign currency translation adjustment — — — — — — — 8,864 — 8,864 Balance, June 30, 2026 — $ — 38,294 $ 77 ( 8,041 ) $ ( 97,097 ) $ 406,933 $ ( 3,526 ) $ 491,514 $ 797,901 The accompanying notes are an integral part of these consolidated financial statements. 69 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended June 30, 2026 2025 2024 Cash flows from operating activities Net loss $ ( 42,265 ) $ ( 96,976 ) $ ( 11,081 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 57,251 62,396 53,757 Equity method investment (income) loss ( 834 ) 77,805 4,789 Gain on recovery of privately-held investment ( 290 ) — — Share-based compensation expense 26,678 29,569 21,641 Deferred income taxes, net ( 9,287 ) ( 13,274 ) ( 880 ) Loss on disposal of property and equipment 54 80 78 Impairment of property and equipment 334 1,045 — Impairment of privately-held investment — 100 — Changes in operating assets and liabilities: Accounts receivable ( 8,026 ) ( 22,226 ) 9,873 Inventories ( 11,707 ) 6,073 ( 12,503 ) Other current and long-term assets 1,395 ( 465 ) 1,927 Payable related to equity investee, net ( 7,115 ) 2,127 1,731 Accounts payable ( 12,110 ) 13,289 ( 2,406 ) Income taxes payable 1,634 ( 399 ) ( 1,974 ) Deferred revenue 726 ( 2,591 ) ( 5,482 ) Accrued and other liabilities ( 12,758 ) ( 26,885 ) ( 33,760 ) Net cash (used in) provided by operating activities ( 16,320 ) 29,668 25,710 Cash flows from investing activities Proceeds from sale of equity interest in the JV Company 147,652 — — Purchases of property and equipment ( 51,752 ) ( 37,180 ) ( 37,088 ) Purchases of intangible assets ( 569 ) — — Proceeds from sale of property and equipment 11 61 383 Proceeds from sale of privately-held investment 290 — — Government grants related to equipment 145 678 961 Loan receivable from suppliers ( 9,677 ) — — Net cash provided by (used in) investing activities 86,100 ( 36,441 ) ( 35,744 ) Cash flows from financing activities Withholding tax on restricted stock units ( 7,518 ) ( 10,698 ) ( 7,678 ) Proceeds from exercise of stock options and ESPP 7,997 7,801 10,114 Payments for repurchase of common shares ( 18,156 ) — — Repayments of borrowings ( 23,121 ) ( 11,664 ) ( 11,472 ) Principal payments on finance leases ( 1,007 ) ( 935 ) ( 867 ) Net cash used in financing activities ( 41,805 ) ( 15,496 ) ( 9,903 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 48 ) 227 ( 126 ) Net increase (decrease) in cash, cash equivalents and restricted cash 27,927 ( 22,042 ) ( 20,063 ) Cash, cash equivalents and restricted cash at beginning of year 153,498 175,540 195,603 Cash, cash equivalents and restricted cash at end of year $ 181,425 $ 153,498 $ 175,540 70 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended June 30, 2026 2025 2024 Supplemental disclosures of cash flow information: Cash paid for interest $ 1,079 $ 2,920 $ 2,564 Cash paid for income taxes $ 17,485 $ 4,615 $ 5,758 Supplemental disclosures of non-cash investing and financing information: Property and equipment purchased but not yet paid $ 10,840 $ 10,574 $ 7,381 Reissuance of treasury stock $ 148 $ 155 $ 152 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 180,771 $ 153,079 $ 175,127 Restricted cash 654 419 413 Total cash, cash equivalents, and restricted cash $ 181,425 $ 153,498 $ 175,540 The accompanying notes are an integral part of these consolidated financial statements. 71 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. The Company and Significant Accounting Policies The Company Alpha and Omega Semiconductor Limited and its subsidiaries (the “Company”, “AOS”, “we” or “us”) design, develop and supply a broad range of power semiconductors. The Company's portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for computers, servers and telecommunications equipment. The Company conducts its operations primarily in the United States, Hong Kong, China, and South Korea. Basis of Preparation The consolidated financial statements include the accounts of all subsidiaries. All intercompany account balances and transactions have been eliminated. The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Equity Method Investment Income (Loss) 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”), which the Company records under the equity method of accounting in the periods presented because 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. Since the Company is unable to obtain accurate financial information from the JV Company in a timely manner, the Company’s share of earnings or losses of the JV Company is recorded on a one quarter lag. 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 or loss 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 Operations. Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor and investee. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to them. Equity method goodwill is not amortized; instead the equity method investment is tested for impairment. 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 Consolidated Statements of Operations. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. To the extent there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected. On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to reserve of stock rotation returns, allowance for price adjustments, allowance for expected credit loss, inventory reserves, warranty accrual, income taxes, leases, share-based compensation, recoverability of and useful lives for property, plant and equipment. Foreign Currency Transactions and Translation Most of the Company's principal subsidiaries use U.S. dollars as their functional currency because their transactions are primarily conducted and settled in U.S. dollars. All of their revenues and a significant portion of their operating expenses are denominated in U.S. dollars. The functional currencies for the Company’s in-house packaging and testing facilities in China are U.S. dollars, and a majority of their capital expenditures are denominated in U.S. dollars. Foreign currency transactions are translated into the functional currencies using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses, resulting from the settlement of such transactions and from the re-measurement of monetary assets and liabilities denominated in foreign currencies using exchange rates at balance sheet date and non-monetary assets and liabilities using historical exchange rates, are recognized in the consolidated statements of operations. 72 For the Company’s subsidiaries which use the local currency as their functional currency, their results and financial position are translated into U.S. dollars using exchange rates at balance sheet dates for assets and liabilities and using average exchange rates for income and expenses items. The resulting translation differences are presented as a separate component of accumulated other comprehensive income (loss) in the consolidated statements of equity. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents primarily consist of cash on hand and short-term bank deposits with original maturities of three months or less. Cash equivalents are highly liquid investments with stated maturities of three months or less as of the dates of purchase. The carrying amounts reported for cash and cash equivalents are considered to approximate fair values based upon their short maturities. Cash and cash equivalents are maintained with reputable major financial institutions. If, due to current economic conditions or other factors, one or more of the financial institutions with which the Company maintains deposits fails, the Company's cash and cash equivalents may be at risk. Deposits with these banks may exceed the amount of insurance provided on such deposits; however, these deposits typically may be redeemed upon demand and, therefore, bear minimal risk. 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 Company’s consolidated balance sheets. As of June 30, 2026 and 2025, the amount of restricted cash was $ 0.7 million and $ 0.4 million, respectively. Accounts Receivable, net The allowance for expected credit loss is based on assessment of the expected collectability of accounts receivable from customers. The Company reviews the allowance by considering factors such as historical collection experience, credit quality, age of the accounts receivable balances and current economic conditions that may affect a customer’s ability to pay. The Company writes off a receivable and charges against its recorded allowance when it has exhausted its collection efforts without success. Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are the following: • Level 1 - Quoted prices in active markets for identical assets or liabilities. • Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Fair Value of Financial Instruments The fair value of cash equivalents is based on observable market prices and have been 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. Level 2 inputs were used to estimate the fair value of the equity method investment for the purpose of recognizing the other than temporary impairment recorded in 2025. The carrying value of the Company’s debt is considered a reasonable estimate of fair value which is estimated by considering the current rates available to the Company for debt of the same remaining maturities, structure and terms of the debts. Inventories The Company carries inventories at the lower of cost (determined on a first-in, first-out basis) or net realizable value. Cost includes semiconductor wafer and raw materials, labor, depreciation expenses and other manufacturing expenses and 73 overhead, and packaging and testing fees paid to third parties if subcontractors are used. The Company evaluated its inventory for salability, obsolescence and other available applicable information. When evaluating the adequacy of its provision for excess and obsolete inventory, the Company identifies excess and obsolete products and also analyzes historical usage, forecasted demand, projected and current economic trends. If actual economic trends are less favorable than those forecasted, additional future inventory write-downs may be required, which could adversely affect our operating results. Property, Plant and Equipment Property, plant and equipment are stated at historical cost less accumulated depreciation. Historical cost includes expenditures that are directly attributable to the acquisition of the items and the costs incurred to make the assets ready for their intended use. Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets as follows: Building and building improvements 20 years Manufacturing machinery and equipment 7 to 10 years Equipment and tooling 3 to 5 years Computer hardware and software 3 to 5 years Office furniture and equipment 3 to 5 years Leasehold improvements 2 to 15 years Vehicle 5 years Equipment and construction in progress represent equipment received but the necessary installation has not been fully performed or building construction and leasehold improvements have been started but not yet completed. Equipment and construction in progress are stated at cost and transferred to the respective asset class when fully completed and ready for their intended use. Internal-use software development costs are capitalized to the extent that the costs are directly associated with the development of identifiable and unique software products controlled by the Company that are expected to generate economic benefits beyond one year. Costs incurred during the application development stage are required to be capitalized. The application development stage is characterized by software design and configuration activities, coding, testing and installation. Training costs and maintenance are expensed as incurred, while upgrades and enhancements are capitalized if such expenditures will result in additional functionality. Costs include employee costs incurred and fees paid to outside consultants for the software development and implementation. Internally developed software is amortized over its estimated useful life of three to five years starting from the date when it is ready for its intended use. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized as selling, general and administrative expenses in the consolidated statements of operations. Costs of maintenance and repairs that do not improve or extend the lives of the respective assets are expensed as incurred. 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 fiscal year ended June 30, 2026, the Company reduced property, plant and equipment by $ 0.1 million and operating expenses by $ 0.1 million. During the fiscal year ended June 30, 2025 and 2024, the Company reduced property, plant and equipment by $ 0.7 million and $ 1.0 million, respectively. 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 74 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. During the fiscal year ended June 30, 2026 and 2025, the Company identified certain purchased manufacturing equipment that was unable to meet its production process requirements. Because the equipment had no alternative uses, the Company recorded an impairment of $ 0.3 million and $ 1.0 million, respectively, related to such equipment. There was no impairment of long-lived assets for fiscal year 2024. Revenue Recognition The Company determines revenue recognition through the following steps: (1) identification of the contract with a customer; (2) identification of the performance obligations in the contract; (3) determination of the transaction price; (4) allocation of the transaction price to the performance obligations in the contract; and (5) recognition of revenue when, or as, a performance obligation is satisfied. The Company recognizes revenue at a point in time when its performance obligation has been satisfied and control of the product is transferred to the customer, as determined by the agreed upon shipping terms, net of estimated stock rotation returns and price adjustments that it expects to provide to certain distributors. The Company presents revenue net of sales taxes and any similar assessments. Our standard payment terms range from 30 to 60 days. The Company sells its products primarily to distributors, who in turn sell the products globally to various end customers. Sales to most distributors are made under terms allowing certain price adjustments of the Company’s products held in their inventory or upon sale to their end customers. Revenue from sales to distributors is recognized upon the transfer of control to the distributor. In the ordinary course of business, our distributors may need to sell our products to end customers at prices below the standard distribution price in order to remain competitive and secure sales. After the distributors sell the Company’s products to their end customers, the distributors submit a “ship-and-debit” price adjustment claim to the Company to adjust the distributor’s cost from the standard price to the pre-approved lower price. After the Company verifies that the claim was pre-approved, a credit memo is issued to the distributors for the ship-and-debit claim. In determining the transaction price, the Company considers ship-and-debit price adjustments to be variable consideration. The Company estimates the variable consideration of the allowance for price adjustments at the time revenue is recognized. The Company also allows stock rotation returns from certain distributors. 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, expected sales volumes and individual distributor agreements. 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. The Company’s performance obligations relate to contracts with a duration of less than one year. The Company elected to apply the practical expedient provided in ASC 606, “Revenue from Contracts with Customers”. Therefore, the Company is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The Company recognizes the incremental direct costs of obtaining a contract, which consist of sales commissions, when control over the products they relate to transfers to the customer. Applying the practical expedient, the Company recognizes commissions as expense when incurred, as the amortization period of the commission asset the Company would have otherwise recognized is less than one year. Packaging and testing services revenue is recognized at a point in time upon shipment of serviced products to the customer. License and Development Services Revenue Recognition In February 2023, the Company entered into a license agreement with a customer to license the Company’s proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $ 45.0 million. The license and development fee required significant integration to create a combined output to the customer and was determined to be one performance obligation and was recognized over the 24 months when the Company performed the engineering and development services. The Company used 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. As of June 30, 2025, all revenue was recognized and all consideration was received associated with the license agreement, therefore we no longer have any obligations under the license agreement. During the fiscal years ended June 30, 2026, 2025 and 2024, the Company recorded $ 0.0 million, $ 13.8 million and $ 21.2 million of license and development revenue, respectively. Leases 75 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. Finance leases are included in property, plant and equipment, finance lease liabilities and long-term finance leases liabilities on the consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The Company determines 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. Product Warranty The Company provides a standard one-year warranty for products from the date of purchase by the end customers. The Company accrues for estimated warranty costs at the time revenue is recognized. The Company's warranty obligation is determined by product failure rates, labor and material costs for replacing defective parts, related freight costs for failed parts and other costs to fulfill warranty obligation. The Company monitors its warranty claims and maintains warranty reserves based on historical experiences and anticipated warranty claims known at the time of estimation. Shipping and Handling Costs Shipping and handling costs are included in cost of goods sold. Research and Development Research and development costs are expensed as incurred. Provision for Income Taxes Income tax expense or benefit is based on income or loss before taxes. 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. The Company is subject to income taxes in a number of jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company establishes accruals for certain tax contingencies based on estimates of whether additional taxes may be due. 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. Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part. When it is more likely than not that all or some portion of specific deferred tax assets such as net operating losses or research and experimentation tax credit carryforwards will not be realized, a valuation allowance must be established for the amount of the deferred tax assets that cannot be realized. The Company considers all available positive and negative evidence on a jurisdiction-by-jurisdiction basis when assessing whether it is more likely than not that deferred tax assets are recoverable. 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. The Company has concluded that it should report a full valuation allowance on its state research and development tax credit carryforwards as the Company annually generates more state R&D tax credits than it could use based on its forecasts. 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 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 76 likely to be realized upon ultimate settlement. Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met those thresholds will continue to require significant judgment by management. If the ultimate resolution of tax uncertainties is different from what is currently estimated, a material impact on income tax expense could result. The Company's provision for income taxes is subject to volatility and could be adversely impacted by changes in earnings or tax laws and regulations in various jurisdictions. The Company is subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities. The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes. To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made. The provision for income taxes includes the impact of changes to reserves, as well as the related net interest and penalties. Share-based Compensation Expense The Company maintains an equity-settled, share-based compensation plan to grant restricted share units. 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. 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. In addition, judgment is also required in estimating the number of stock-based awards that are expected to be forfeited. Forfeitures are estimated based on historical experience. 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. Advertising Advertising expenditures are expensed as incurred. Advertising expense was $ 0.5 million, $ 0.5 million and $ 0.6 million in the fiscal years ended June 30, 2026, 2025, and 2024, respectively. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company's accumulated other comprehensive loss consists of cumulative foreign currency translation adjustments. Recent Accounting Pronouncements Recently Adopted Accounting Standards In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU No. 2023-09”). The purpose of this guidance is to enhance the transparency and usefulness of income tax disclosures and provide comprehensive income tax information, particularly in relation to rate reconciliation and income taxes paid in the U.S. and foreign jurisdictions. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024. This guidance impacts only the Company’s disclosures with no impacts to its financial condition or results of operations. The Company adopted this guidance for the year ended June 30, 2026 on a prospective basis. See Note 12. Income Taxes for additional information. Recently Issued Accounting Standards not yet adopted 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. In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides an optional practical expedient for estimating 77 future credit losses based on current conditions as of the balance sheet date and assuming those conditions do not change over the remaining life of the accounts receivable. The guidance will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect this ASU to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs. The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-10, “Accounting for Government Grants Received by Business Entities”. This amendment provides guidance on the recognition, measurement, and presentation of government grants. This amendment will be effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-scope Improvements”. This update makes targeted, narrow-scope improvements to the interim reporting guidance in Topic 270 to clarify application and improve consistency in practice. The amendments do not change the underlying principles of interim reporting. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on its condensed consolidated financial statements and disclosures. 78 2. Equity Method Investment in Equity Investee At the beginning of fiscal year 2024, we held 42.2 % interest in the JV company. 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 %. On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the third-party investor agreed to invest RMB 500 million (or $ 68.5 million based on the currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company in exchange for a 7.09 % interest. This transaction closed 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 %. In the fourth quarter of fiscal year 2025, the Company began negotiations with a third-party strategic investor to sell a portion of its outstanding equity interest in the JV Company. On July 14, 2025, the Company entered into an equity transfer agreement with the investor to sell approximately 20.3 % of outstanding equity interest in the JV Company for an aggregate cash consideration of approximately $ 150 million to be paid in four installments, subject to satisfaction of certain conditions. As of June 30, 2026, all of the conditions were satisfied, and the Company received all installment payments. The Company identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025. Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $ 76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025. The impairment loss is recorded within Equity method investment loss in the consolidated statement of operations for the year-ended June 30, 2025. 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 fiscal year ended June 30, 2026, the Company recorded $ 0.8 million of equity method investment income, including the $ 1.1 million gain on the related sale of a portion of its interest in the equity method investment and immaterial loss of its equity share of the JV Company, using lag reporting. During the fiscal years ended June 30, 2025 and 2024, the Company recorded $ 77.8 million including the impairment loss and $ 4.8 million of equity method investment loss, respectively, using lag reporting. As of June 30, 2026, the percentage of outstanding JV equity interest beneficially owned by the Company was 18.9 %. The difference between the investment’s carrying value on June 30, 2026 of $ 142.7 million and the underlying equity in net assets of approximately $ 54.8 million as of March 31, 2026 relates primarily to equity method goodwill. Summarized Financial Information The following table presents summarized financial information for the JV Company (in thousands): As of March 31, 2026 As of March 31, 2025 As of March 31, 2024 Current assets $ 111,936 $ 101,151 $ 86,280 Non-current assets $ 337,353 $ 315,420 $ 338,450 Current liabilities $ 146,278 $ 61,341 $ 70,776 Non-current liabilities $ 13,455 $ 82,124 $ 81,899 For the period April 1, 2025 to March 31, 2026 For the period April 1, 2024 to March 31, 2025 For the period April 1, 2023 to March 31, 2024 Revenue $ 164,738 $ 142,921 $ 128,951 Gross profit $ 12,284 $ 8,662 $ 1,844 Operating expenses $ 12,534 $ 10,637 $ 9,174 Net loss $ 2,577 $ 3,195 $ 9,477 79 3. Related Party Transactions As of June 30, 2026, the Company owned 18.9 % 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. The JV Company reimbursed AOS for purchases made on its behalf of $ 1.1 million, $ 11.3 million and $ 9.8 million during the fiscal year ended June 30, 2026, 2025 and 2024, respectively. Due to the right of offset of receivables and payables with the JV Company, as of June 30, 2026 and 2025, AOS recorded the net amount of $ 8.7 million and $ 15.8 million, respectively, as a payable related to equity investee, net, on the Consolidated Balance Sheet. The purchases by AOS for the fiscal year ended June 30, 2026, 2025 and 2024 were $ 105.4 million, $ 109.1 million and $ 96.6 million, respectively. 80 4. Net Loss Per Common Share Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares outstanding, plus potential shares of common stock during the period. Potential shares of common stock include dilutive shares attributable to the assumed exercise of share options, employee share purchase plan shares and vesting of restricted stock units using the treasury stock method. Under the treasury stock method, potential common shares outstanding are not included in the computation of diluted net income (loss) per share if their effect is anti-dilutive. The following table presents the calculation of basic and diluted net loss per share: Year Ended June 30, 2026 2025 2024 (in thousands, except per share data) Numerator: Net loss $ ( 42,265 ) $ ( 96,976 ) $ ( 11,081 ) Denominator: Basic: Weighted average number of common shares used to compute basic net loss per share 29,951 29,405 28,236 Diluted: Weighted average number of common shares used to compute diluted net loss per share 29,951 29,405 28,236 Net loss per share: Basic $ ( 1.41 ) $ ( 3.30 ) $ ( 0.39 ) Diluted $ ( 1.41 ) $ ( 3.30 ) $ ( 0.39 ) The following potential dilutive securities were excluded from the computation of diluted net loss per share as their effect would have been anti-dilutive: Year Ended June 30, 2026 2025 2024 (in thousands) Employee stock options and RSUs 2,354 2,475 2,822 ESPP 1,060 629 1,019 Total potential dilutive securities 3,414 3,104 3,841 81 5. Concentration of Credit Risk and Significant Customers The Company manages its credit risk associated with exposure to distributors and direct customers on outstanding accounts receivable through the application and review of credit approvals, credit ratings and other monitoring procedures. In some instances, the Company also obtains letters of credit from certain customers. Credit sales, which are mainly on credit terms of 30 to 60 days, are only made to customers who meet the Company’s credit requirements, while sales to new customers or customers with low credit ratings are usually made on an advance payment basis. The Company considers its trade accounts receivable to be of good credit quality because its key distributors and direct customers have long-standing business relationships with the Company and the Company has not experienced any significant bad debt write-offs of accounts receivable in the past. The Company closely monitors the aging of accounts receivable from its distributors and direct customers, and regularly reviews their financial positions, where available. Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts: Year Ended June 30, Percentage of revenue 2026 2025 2024 Customer A 19.3 % 22.1 % 25.0 % Customer B 53.0 % 51.3 % 46.0 % June 30, Percentage of accounts receivable 2026 2025 Customer A * 14.9 % Customer B 62.4 % 52.3 % * Less than 10% 82 6. Balance Sheet Components Accounts receivable, net June 30, 2026 2025 (in thousands) Accounts receivable $ 81,527 $ 75,604 Less: Allowance for price adjustments ( 38,699 ) ( 40,802 ) Less: Allowance for credit losses ( 30 ) ( 30 ) Accounts receivable, net $ 42,798 $ 34,772 Inventories June 30, 2026 2025 (in thousands) Raw materials $ 75,764 $ 81,341 Work in-process 95,528 91,591 Finished goods 30,092 16,745 $ 201,384 $ 189,677 Other current assets June 30, 2026 2025 (in thousands) Value-added tax receivable $ 397 $ 339 Other prepaid expenses 1,820 2,383 Prepaid insurance 4,301 3,669 Prepaid maintenance 1,636 1,990 Deposit with supplier 786 7,073 Prepaid income tax 780 336 Interest receivable 195 191 Short term deposit 356 534 Other receivables 2,040 1,700 $ 12,311 $ 18,215 83 Property, plant and equipment, net June 30, 2026 2025 (in thousands) Land $ 4,877 $ 4,877 Building and building improvements 73,292 71,961 Manufacturing machinery and equipment 472,841 442,462 Equipment and tooling 40,960 37,918 Computer equipment and software 54,238 53,509 Office furniture and equipment 3,642 3,267 Leasehold improvements 43,967 43,901 693,817 657,895 Less: accumulated depreciation and amortization ( 421,809 ) ( 371,836 ) 272,008 286,059 Equipment and construction in progress 42,663 28,038 Property, plant and equipment, net $ 314,671 $ 314,097 Total depreciation expense was $ 51.1 million, $ 54.2 million and $ 50.5 million for fiscal years 2026, 2025 and 2024, respectively. The Company capitalized $ 0.0 million, $ 0.2 million and $ 0.6 million of software development costs during fiscal years 2026, 2025 and 2024, respectively. Amortization of capitalized software development costs was $ 0.3 million in fiscal year 2026, $ 0.5 million in fiscal year 2025 and $ 0.6 million in fiscal year 2024. Unamortized capitalized software development costs in each of the periods presented at June 30, 2026 and 2025 were $ 0.4 million and $ 0.7 million, respectively. Other long-term assets June 30, 2026 2025 (in thousands) Prepayments for property and equipment $ 440 $ 1,973 Customs deposit 703 814 Deposit with supplier 22,857 18,080 Long-term loan receivable 9,677 — Office leases deposits 1,161 1,358 Other 1,222 541 $ 36,060 $ 22,766 84 Intangible assets, net June 30, 2026 2025 (in thousands) Patents and technology rights $ 18,037 $ 18,037 Software license 1,485 — Trade name 268 268 Customer relationships 1,150 1,150 20,940 19,455 Less: accumulated amortization ( 19,862 ) ( 19,455 ) 1,078 — Goodwill 269 269 Intangible assets, net $ 1,347 $ 269 The Company is amortizing intangible assets of patents and technology rights related to a license agreement with STMicroelectronics International N.V. Amortization expense for intangible assets was $ 1.1 million, $ 3.2 million and $ 3.2 million for the years ended June 30, 2026, 2025 and 2024, respectively. The estimated useful lives for patents and technology rights and trade name were five years and ten years , respectively. All intangible assets, except software license were fully amortized as of June 30, 2026. The weighted average useful lives for software license was approximately three years . Accrued liabilities June 30, 2026 2025 (in thousands) Accrued compensation and benefits $ 20,925 $ 17,766 Warranty accrual 2,090 2,118 Stock rotation accrual 6,937 6,184 Accrued professional fees 3,219 3,399 Accrued inventory 2,071 1,465 Accrued facilities related expenses 2,419 2,184 Accrued property, plant and equipment 2,598 2,704 Other accrued expenses 6,093 4,755 Customer deposits 9,769 17,030 ESPP payable 1,556 1,422 $ 57,677 $ 59,027 Short-term customer deposits are payments received from customers for securing future product shipments. As of June 30, 2026, $ 5.0 million were from Customer A and $ 5.0 million were from other customers. As of June 30, 2025, $ 7.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 8.0 million were from other customers. 85 The activity in the warranty accrual, included in accrued liabilities is as follows: Year Ended June 30, 2026 2025 2024 (in thousands) Beginning balance $ 2,118 $ 2,407 $ 1,674 Addition 1,793 1,096 1,186 Released — ( 700 ) — Utilization ( 1,821 ) ( 685 ) ( 453 ) Ending balance $ 2,090 $ 2,118 $ 2,407 The activity in the stock rotation accrual, included in accrued liabilities is as follows: Year Ended June 30, 2026 2025 2024 (in thousands) Beginning balance $ 6,184 $ 4,660 $ 5,588 Addition 16,804 12,834 11,044 Utilization ( 16,051 ) ( 11,310 ) ( 11,972 ) Ending balance $ 6,937 $ 6,184 $ 4,660 Other long-term liabilities June 30, 2026 2025 (in thousands) Customer deposits $ 3,457 $ 7,000 Other 606 — Other long-term liabilities $ 4,063 $ 7,000 Customer deposits are payments received from customers for securing future product shipments. As of June 30, 2026, $ 3.5 million were from other customers. As of June 30, 2025, $ 5.0 million were from Customer A and $ 2.0 million were from other customers. 86 7. Bank Borrowing Accounts receivable factoring agreement On August 9, 2019, one of the Company's wholly-owned subsidiaries (the "Borrower") entered into a factoring agreement with the Hongkong and Shanghai Banking Corporation Limited (“HSBC”), whereby the Borrower assigns certain of its accounts receivable with recourse. 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 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. In addition, any cash held in the restricted bank account controlled by HSBC has a legal right of offset against the borrowing. This agreement, with certain financial covenants required, has no expiration date. On August 11, 2021, the Borrower signed an agreement with HSBC to decrease the borrowing maximum amount to $8.0 million with certain financial covenants required. Other terms remain the same. In August 2025, this factoring agreement was terminated. As of June 30, 2026, there was no outstanding balance. Debt financing In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the Company’s wholly-owned subsidiaries, entered into a financing arrangement agreement with a company (“Lender”) for the lease and purchase of a machinery equipment manufactured by a supplier. This agreement includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interest and principal to the Lender in September 2022 when the final installation and acceptance of the equipment were completed. After the end of such payment term, Jireh has the option to purchase the equipment for $1. The implied interest rate was 4.75% per annum which was adjustable based on every five basis point increase in 60-month U.S. Treasury Notes. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50% of the total purchase price of the equipment, to the supplier. In June 2022, the equipment was delivered to Jireh after Lender paid 40% of the total purchase price, for euro 4.8 million, to the supplier on behalf of Jireh. In September 2022, Lender paid the remaining 10% payment for the total purchase price and reimbursed Jireh for the 50% down payment, after the installation and configuration of the equipment. The title of the equipment was transferred to Lender following such payment. The agreement was amended with fixed implied interest rate of 7.51% and monthly payment of principal and interest effective in October 2022. Other terms remain the same. In addition, Jireh purchased hardware for the machine under this financing arrangement. The purchase price of this hardware was $0.2 million. The financing arrangement is secured by this equipment and other equipment at Jireh, which had a net book value of $10.5 million as of June 30, 2026. As of June 30, 2026, the outstanding balance of this debt financing was $3.6 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 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. Jireh is required to make consecutive quarterly payments of principal and interest. The loan accrues interest based on the 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 June 30, 2025, Jireh was in compliance with these covenants and the outstanding balance of this loan was $20.3 million. In August 2025, the Company paid the outstanding balance in full. As of June 30, 2026, there was no outstanding balance. At June 30, 2026, maturities of short-term debt and long-term debt were as follows (in thousands): 87 Year ending June 30, 2027 $ 3,094 2028 537 Total principal $ 3,631 Short-term Debt Long-term Debt Total Principal amount $ 3,094 $ 537 $ 3,631 88 8. Leases 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 Company's consolidated balance sheets. Finance leases are included in property, plant and equipment, finance lease liabilities and finance lease liabilities-long-term on the 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. In September 2022, the lease was amended to make a monthly payment of principal and interest as a fixed amount effective in October 2022. Other terms remain the same. The amendment was accounted for as a lease modification and no gain or loss was recognized. The Company does not record leases on the consolidated balance sheet with a term of one year or less. The components of the Company’s operating and finance lease expenses are as follows for the years presented (in thousands): Year Ended June 30, 2026 2025 2024 Operating leases: Fixed rent expense $ 6,326 $ 6,497 $ 6,268 Variable rent expense 1,071 1,098 1,095 Finance lease: Depreciation of equipment 513 513 513 Interest 137 210 277 Short-term leases: Short-term lease expenses 222 173 161 Total lease expenses $ 8,269 $ 8,491 $ 8,314 89 Supplemental balance sheet information related to the Company’s operating and finance leases is as follows (in thousands, except lease term and discount rate): June 30, 2026 2025 Operating Leases : ROU assets associated with operating leases $ 22,271 $ 21,288 Finance Lease: Property, plant and equipment, gross $ 5,133 $ 5,133 Accumulated depreciation ( 2,197 ) ( 1,684 ) Property, plant and equipment, net $ 2,936 $ 3,449 Weighted average remaining lease term (in years) Operating leases 4.03 5.00 Finance lease 1.25 2.25 Weighted average discount rate Operating leases 4.97 % 4.88 % Finance lease 7.51 % 7.51 % Supplemental cash flow information related to the Company’s operating and finance leases is as follows (in thousands): Year Ended June 30, 2026 2025 2024 Cash paid from amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 6,976 $ 6,466 $ 6,330 Operating cash flows from finance lease $ 137 $ 210 $ 277 Financing cash flows from finance lease $ 1,007 $ 935 $ 867 Non-cash investing and financing information: Operating lease right-of-use assets obtained in exchange for lease obligations $ 6,756 $ 1,162 $ 5,884 Future minimum lease payments are as follows as of June 30, 2026 (in thousands): Operating Leases Finance Leases 2027 $ 7,328 $ 1,144 2028 6,873 191 2029 5,209 — 2030 4,050 — 2031 1,034 — Thereafter 1,157 — Total minimum lease payments 25,651 1,335 Less amount representing interest ( 2,574 ) ( 61 ) Total lease liabilities $ 23,077 $ 1,274 90 9. Shareholders’ Equity Common Shares The Company’s Bye-laws, as amended, authorized the Company to issue 100,000,000 common shares with par value of $ 0.002 . Each common share is entitled to one vote. The holders of common shares are also entitled to receive dividends whenever funds are legally available and when and if declared by the board of directors. No dividends had been declared as of June 30, 2026. In November 2025, the Board of Directors of the Company approved a new share repurchase program (the “Repurchase Program”) that authorizes the Company to repurchase its common shares from the open market pursuant to a pre-established Rule 10b5-1 trading plan or through privately negotiated transactions up to an aggregate of $ 30.0 million. The amount and timing of any repurchases under the Repurchase Program depend on a number of factors, including but not limited to, the trading price, volume and availability of the Company’s common shares. Shares repurchased under this program are accounted for as treasury shares and the total cost of shares repurchased is recorded as a reduction of shareholders' equity. From time to time, treasury shares may be reissued as part of the Company’s share-based compensation programs. Gains on the reissuance of treasury stock are credited to additional paid-in capital; losses are charged to additional paid-in capital to offset the net gains, if any, from previous sales or reissuance of treasury stock. Any remaining balance of the losses is charged to retained earnings. During fiscal year 2026, the Company repurchased an aggregate of 941,883 shares from the open market, for a total cost of $ 18.2 million, excluding fees and related expenses, at an average price of $ 19.22 per share. As of June 30, 2026, approximately $ 11.9 million remained available under the Repurchase Program. 91 10. Share-based Compensation 2018 Omnibus Incentive Plan The 2009 Share Option/Share Issuance Plan (the “2009 Plan”) was approved in September 2009 at the annual general meeting of shareholders in connection with the Company's IPO. At the annual general meeting of shareholders in November 2018, the 2009 Plan was approved to be terminated and the 2018 Omnibus Incentive Plan (the “2018 Plan”) was effective. No further awards will be made under the 2009 Plan. The 2018 Plan authorized the board of directors to grant incentive share options, non-statutory share options and restricted shares to employees, directors, non-employee directors and consultants of the Company and its subsidiaries for up to 2,065,000 common shares. The 2018 Plan does not include an evergreen authorization. Therefore, the Company is not permitted to increase the number of shares reserved in the share pool without obtaining further shareholder approval. Outstanding shares under the 2018 Plan and awards granted under the 2009 Plan that expire, are forfeited or cancelled or terminate prior to the issuance of the shares subject to those awards or are settled in cash will be available for subsequent issuance under the 2018 Plan. At the annual general meeting of shareholders from 2021 to 2025, the shares reserved for issuance under the 2018 Plan was approved to increase by a total of 3,137,000 shares, to 5,202,000 shares. As of June 30, 2026, 361,313 shares were available for grant under the 2018 Plan. Beginning with the 2014 Annual Shareholders Meeting, on the date of each annual shareholders meeting, each individual who commences service as a non-employee Board member by reason of his or her election to the Board at such annual meeting and each individual who is to continue to serve as a non-employee Board member, whether or not that individual is standing for re-election to the Board at that particular annual meeting, will automatically be granted an award in the form of restricted share units covering that number of common shares determined by dividing one hundred sixty thousand dollars ($ 160,000 ) by the average fair market value per share for the ninety ( 90 )-day period preceding the grant date, up to a maximum of 10,000 shares. Under the 2018 Plan, incentive share options and RSU are to be granted at a price that is not less than 100 % and nonstatutory share options are to be granted at not less than 85 % of the fair value of the common shares, at the date of grant for employees and consultants. Options and RSUs generally vest over a four-year to five-year period, and are exercisable for a maximum period of ten years after the date of grant. The fair value of RSU, including time-based restricted stock units and performance-based restricted stock units is based on the market price of the Company's common shares on the date of grant. Time-based Restricted Stock Units (“TRSU”) The total fair value of TRSUs vested during the years ended June 30, 2026, 2025 and 2024 was $ 17.7 million, $ 17.9 million and $ 15.6 million, respectively. The following table summarizes the Company’s TRSU activities: Number of Time-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Recognition Period (Years) Aggregate Intrinsic Value Nonvested at June 30, 2023 1,385,065 $ 32.48 $ 45,430,132 Granted 679,993 $ 23.12 Vested ( 521,109 ) $ 30.00 Forfeited ( 74,814 ) $ 30.34 Nonvested at June 30, 2024 1,469,135 $ 29.13 $ 54,901,575 Granted 655,738 $ 29.39 Vested ( 574,664 ) $ 31.17 Forfeited ( 58,283 ) $ 28.25 Nonvested at June 30, 2025 1,491,926 $ 28.50 $ 38,282,821 Granted 874,131 $ 24.63 Vested ( 589,481 ) $ 30.03 Forfeited ( 147,607 ) $ 28.56 Nonvested at June 30, 2026 1,628,969 $ 25.86 1.71 $ 77,099,103 92 Performance-based Restricted Stock Units (“PRSU”) In March each year since fiscal year 2017, the Company granted PRSU to certain personnel. The number of shares to be ultimately earned under the PRSU is determined based on the level of attainment of predetermined financial goals. The PRSU vests in four equal annual installments from the first anniversary date after the grant date if certain predetermined financial goals were met. The Company recorded $ 4.4 million, $ 4.0 million, and $ 2.8 million of expenses for these PRSUs during the years ended June 30, 2026, 2025 and 2024, respectively. The total fair value of PRSUs vested during the years ended June 30, 2026, 2025 and 2024 was $ 4.3 million, $ 4.5 million, and $ 3.8 million, respectively. The following table summarizes the Company’s PRSU activities: Number of Performance-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Recognition Period (Years) Aggregate Intrinsic Value Nonvested at June 30, 2023 526,714 $ 32.19 $ 17,276,219 Granted 209,250 $ 21.55 Vested ( 123,632 ) $ 30.50 Forfeited ( 268,207 ) $ 26.59 Nonvested at June 30, 2024 344,125 $ 30.69 $ 12,859,951 Granted 209,750 $ 27.61 Vested ( 133,910 ) $ 33.60 Forfeited ( 10,402 ) $ 48.65 Nonvested at June 30, 2025 409,563 $ 27.71 $ 10,509,387 Granted 204,000 $ 21.43 Vested ( 138,808 ) $ 30.75 Forfeited ( 26,317 ) $ 33.57 Nonvested at June 30, 2026 448,438 $ 23.57 1.82 $ 21,224,571 Market-based Restricted Stock Units (“MSUs”) I n December 2021, the Company granted 1.0 million market-based restricted stock units to certain personnel. The number of shares to be earned at the end of the performance period was determined based on the Company’s achievement of specified stock prices and revenue thresholds during the performance period from January 1, 2022 to December 31, 2024 as well as the recipients remaining in continuous service with the Company through such period. The MSU vests in four equal annual installments after the end of performance period. The Company estimated the grant date fair values of its MSUs using a Monte-Carlo simulation model. In September 2023, the Company determined it was no longer probable that it would achieve the minimum revenue threshold specified in the awards. Therefore, the Company reversed all of the previously recognized expenses of $ 6.4 million for these MSUs. In addition, on September 19, 2023, the Compensation Committee of the Board approved a modification of the terms of MSUs to extend the performance period through December 31, 2025, changed the commencement date for the four-year time-based service period to January 1, 2026, and reduced the achievement of specified stock prices and revenue thresholds. The fair value of these MSUs was revalued to reflect the change using a Monte-Carlo simulation model. In June 2024, the Company determined it was no longer probable that the revenue thresholds for the modified MSU would be achieved. Therefore, the Company reversed $ 2.4 million in the June 2024 quarter that was recorded during fiscal year 2024 related to the modification on September 19, 2023. On August 8, 2024, the Compensation Committee of the Board approved modifications of the terms of MSUs to extend the performance period through December 31, 2026, change the commencement date for the four-yea r time-based service period to January 1, 2027, and reduce the revenue thresholds. The fair value of these MSUs was revalued to reflect the change using a Monte-Carlo simulation model with the following assumptions: risk-free interest rate of 3.93 %, expected term of 2.40 years, expected volatility of 57.81 % and dividend yield of 0 %. During fiscal year 2026, the Company reassessed the estimated achievement of the performance conditions associated with these MSUs, and concluded that a lower outcome was estimated to be achieved. As a result, the Company reversed $ 3.9 million of expenses previously recognized in prior periods during the fiscal year ended June 30, 2026. The Company recorded approximately $( 0.3 ) million, $ 5.0 million, and $( 6.4 ) million of expenses for these MSUs during the fiscal years ended June 30, 2026, 2025 and 2024, respectively. On August 13, 2026, the Compensation Committee of the Board approved a modification to the terms of the MSUs to reduce the minimum revenue threshold. The modification did not change 93 the stock price targets, performance period, service condition, or other material terms of the awards. There was no impact to the estimated achievement of the performance condition as of June 30, 2026, and no impact to the financial statements for the year ended June 30, 2026, as a result of the modification. During the quarter ended September 30, 2018, the Company granted 1.3 million MSUs to certain personnel. The number of shares to be earned at the end of the performance period is determined based on the Company’s achievement of specified stock prices and revenue thresholds during the performance period as well as the recipients remaining in continuous service with the Company through such period. The Company recorded approximately $ 0.3 million, $ 0.6 million, and $ 1.0 million of expense for these MSUs during the years ended June 30, 2026, 2025 and 2024, respectively. The total fair value of MSUs vested during the years ended June 30, 2026, 2025 and 2024 was $ 1.4 million, $ 1.4 million, and $ 1.4 million, respectively. The following table summarizes the Company’s MSUs activities: Number of Market-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Recognition Period (Years) Aggregate Intrinsic Value Nonvested at June 30, 2023 2,108,000 $ 25.86 $ 69,142,400 Vested ( 275,000 ) $ 5.17 Forfeited ( 106,000 ) $ 42.32 Nonvested at June 30, 2024 1,727,000 $ 28.15 $ 64,537,990 Vested ( 270,000 ) $ 5.17 Forfeited ( 21,000 ) $ 38.14 Nonvested at June 30, 2025 1,436,000 $ 32.32 $ 36,847,760 Vested ( 267,500 ) $ 5.17 Forfeited ( 131,500 ) $ 44.33 Nonvested at June 30, 2026 1,037,000 $ 37.80 2.39 $ 49,081,210 Stock Option The following table summarizes the Company's stock option activities: Weighted Weighted Average Average Remaining Number of Exercise Price Contractual Aggregate Shares Per Share Term (in years) Intrinsic Value Outstanding at June 30, 2023 319,375 $ 7.53 Exercised ( 309,375 ) $ 7.48 $ 5,588,750 Outstanding at June 30, 2024 10,000 $ 9.07 Exercised ( 10,000 ) $ 9.07 $ 265,267 Outstanding at June 30, 2025 — $ 0.00 Exercised — $ 0.00 $ 0 Outstanding at June 30, 2026 — $ 0.00 0.00 $ 0 Options vested and expected to vest — $ 0.00 0.00 $ 0 Exercisable at June 30, 2026 — $ 0.00 0.00 $ 0 The 2018 Employee Share Purchase Plan At the annual general meeting of shareholders in November 2018, the 2018 Employee Share Purchase Plan (“Purchase Plan” or “ESPP”) was approved, under which 1,430,000 common shares are available for issuance. The Purchase Plan does not include an evergreen authorization, therefore the Company is not permitted to increase the number of shares reserved in the share pool without obtaining further shareholder approval. At the annual general meetings of shareholders in 2021 and 2023, the shares reserved for issuance under the ESPP was approved to increase by 1,070,000 and 1,200,000 shares, respectively to a total of 3,700,000 shares. The Purchase Plan provided for a series of overlapping offering periods with a duration of 24 94 months, generally beginning on May 15 and November 15 of each year. The Purchase Plan allows employees to purchase common shares through payroll deductions of up to 15 % of their eligible compensation. Such deductions will accumulate over a six-month accumulation period without interest. After such accumulation period, common shares will be purchased at a price equal to 85 % of the fair market value per share on either the first day of the offering period or the last date of the accumulation period, whichever is less. The maximum number of shares that may be purchased by a participant on any purchase date may not exceed 875 shares for a total of 3,500 shares per a 24-month offering period. In addition, no participant may purchase more than $ 25,000 worth of common stock in any one calendar year period. No more than 300,000 common shares may be purchased by all participants on any purchase date. The ESPP is compensatory and results in compensation expense. The fair values of common shares to be issued under the ESPP were determined using the Black-Scholes option pricing model with the following assumptions: Year Ended June 30, 2026 2025 2024 Volatility rate 76.0 % - 81.0 % 54.1 % - 71.0 % 53.0 % - 64.3 % Risk-free interest rate 3.7 % - 3.9 % 4.1 % - 4.4 % 5.0 % - 5.2 % Expected term 1.3 years 1.3 years 1.3 years Dividend yield — % — % — % The weighted-average estimated fair value of employee stock purchase rights granted pursuant to the ESPP during the fiscal years ended June 30, 2026, 2025 and 2024 was $ 8.74 , $ 12.07 and $ 10.16 per share, respectively. Share-based Compensation Expenses The total share-based compensation expense related to TRSU, PRSUs, MSUs, and ESPP described above, recognized in the consolidated statements of operations for the years presented was as follows: Year Ended June 30, 2026 2025 2024 (in thousands) Cost of goods sold $ 4,469 $ 4,224 $ 3,434 Research and development 7,071 8,123 5,210 Selling, general and administrative 15,138 17,222 12,997 $ 26,678 $ 29,569 $ 21,641 Total unrecognized share-based compensation expense as of June 30, 2026 was $ 41.9 million including estimated forfeitures, which is expected to be recognized over a weighted-average period of 1.8 years. 11. Employee Benefit Plans The Company maintains a 401(k) retirement plan for the benefit of qualified employees in the U.S. Employees who participate may elect to make salary deferral contributions to the plan up to 100 % of the employees' eligible salary subject to annual Internal Revenue Code maximum limitations. The employer’s contribution is discretionary. Effective from April 1, 2022, the Company began to match 50 % of employee contribution up to 4 % of eligible compensation for a 2 % maximum match. During the fiscal years ended June 30, 2026, 2025 and 2024, the Company made employer match contributions of $ 1.9 million, $ 1.8 million and $ 1.8 million, respectively. The Company makes mandatory contributions for its employees to the respective local governments in terms of retirement, medical insurance and unemployment insurance, where applicable, according to labor and social security laws and regulations of the countries and areas in which the Company operates. The retirement contribution rate is 7.7 % in the U.S., 16.0 % to 17.0 % in China, 6.0 % in Taiwan, 12.0 % in India, 9.3 % in Germany, 3 % in UK and 10 % in Serbia. The Company has no obligations for the payment of such social benefits beyond the required contributions as set out above. 95 12. Income Taxes The domestic and foreign components of income before taxes are: Year Ended June 30, 2026 2025 2024 (in thousands) U.S. operations $ 11,311 $ 8,229 $ 9,079 Non-U.S. operations ( 46,942 ) ( 36,025 ) ( 11,722 ) Net loss before income taxes $ ( 35,631 ) $ ( 27,796 ) $ ( 2,643 ) The provision (benefit) for income taxes is comprised of: Year Ended June 30, 2026 2025 2024 (in thousands) U.S. federal taxes: Current $ 1,002 $ 721 $ 485 Deferred ( 445 ) 190 1,652 Non-U.S. taxes: Current 17,702 3,972 3,187 Deferred ( 10,793 ) ( 13,502 ) ( 1,669 ) State taxes, net of federal benefit: Current 2 ( 6 ) ( 6 ) Total provision (benefit) for income taxes $ 7,468 $ ( 8,625 ) $ 3,649 The table below provides the income tax rate reconciliation for the years ended June 30, 2025 and June 30, 2024, prepared in accordance with the disclosure requirements in effect prior to the Company's adoption of ASU 2023-09. As the Company adopted ASU 2023-09 on a prospective basis, the rate reconciliation for periods prior to the year ended June 30, 2026 has not been recast to reflect the updated categories and disaggregation requirements of ASU 2023-09. See Note 1 Summary of Significant Accounting Policies—Recent Accounting Pronouncements for additional details on the adoption of ASU 2023-09. The reconciliation of the federal statutory income tax rate to our effective income tax rate for the years ended June 30, 2025 and June 30, 2024 is as follows (in percentage): Year Ended June 30, 2025 2024 United States statutory rate 21.0 % 21.0 % Stock-based compensation ( 0.3 ) ( 3.7 ) Foreign taxes, net ( 38.9 ) ( 186.9 ) Outside basis difference on equity method investment 45.1 27.4 Tax credits 7.7 86.2 Non-deductible expenses ( 1.0 ) ( 6.9 ) Tax exempt income — 2.8 Non-deductible executive compensation ( 6.0 ) ( 78.6 ) Foreign derived intangible income deduction 2.0 — Other 1.4 0.6 31.0 % ( 138.1 ) % 96 The Company adopted ASU 2023-09 guidance for the year ended June 30, 2026 on a prospective basis. The following table presents a reconciliation of income taxes computed at the statutory federal income tax rate to the effective tax rate implied by the accompanying Consolidated Statements of Operations for the year ended June 30, 2026 in accordance with ASU 2023-09. In preparing the rate reconciliation, the Company is using the United States federal tax rate of 21% as the starting point in the rate reconciliation. While the Company is incorporated in Bermuda with a zero percent statutory tax rate, the Company has significant operations in the United States. Furthermore, using the 21% United States federal tax rate is consistent with prior period rate reconciliation reporting. The reconciliation of the effective tax rate for income taxes from the federal statutory rate were as follows (in thousands, except percentages): Year Ended June 30, 2026 Amount (in thousands) Percentages Tax at federal statutory rate $ ( 7,482 ) 21.00 % State and local income tax, net of federal (national) income tax effect * 2 ( 0.01 ) % Foreign tax effects: Cayman - foreign rate differential between Cayman and U.S. 12,925 ( 36.28 ) % China Withholding tax 2,639 ( 7.41 ) % Outside basis difference on equity method investment 930 ( 2.61 ) % Other 193 ( 0.54 ) % Hong Kong Hong Kong - Foreign rate differential between Hong Kong and U.S. ( 460 ) 1.29 % Other 405 ( 1.14 ) % India Withholding tax 395 ( 1.11 ) % Other ( 2 ) 0.01 % Other foreign jurisdictions ( 140 ) 0.39 % Effect of cross-border tax laws FDII ( 610 ) 1.73 % Tax credits Federal research and development credit ( 2,324 ) 6.52 % Nontaxable or nondeductible items Non-deductible compensation 972 ( 2.73 ) % Other 203 ( 0.57 ) % Changes in unrecognized tax benefits (report all jurisdictions) ( 178 ) 0.50 % Provision for income taxes $ 7,468 ( 20.96 ) % *California and Oregon make up the majority of state tax expense in this category Analysis of Effective Tax Rate Between Fiscal Years As shown in the above effective tax rate analysis, the Company’s effective tax rate was ( 21.0 )% , 31.0 %, and ( 138.1 )% for fiscal years 2026, 2025 and 2024, respectively, a 52 % difference between fiscal years 2026 and 2025. The primary reason for the large percentage differences in the overall effective tax rate reconciliation between fiscal year 2026 and fiscal year 2025 was a result of fiscal year 2025 reporting a tax benefit of $ 12.5 million (a 45.1 % effective tax rate impact in fiscal year 2025) vs. a fiscal year 2026 tax expense of $ 0.9 million (a negative 2.6 % effective tax rate impact) on the outside basis difference on the equity method investment, for a total 47.7 % effective tax rate impact between the two years. A secondary reason for the difference in the effective tax rate difference between fiscal year 2026 and fiscal year 2025 is that the Company incurred 97 $ 3.0 million (a negative 8.5 % effective tax rate impact) of withholding taxes in fiscal year 2026 vs $ 0 withholding taxes in fiscal year 2025. The primary reason for the large percentage differences in the overall effective tax rate reconciliation between fiscal year 2024 and fiscal year 2026 as well as between the fiscal year 2024 and fiscal year 2025 is mainly due to the smaller amount of pretax book loss of $ 2.6 million as the denominator in the calculation of effective tax rate reconciliation in fiscal year 2024, as compared to the larger amount of pretax book loss of $ 35.6 million in fiscal year 2026 as the denominator as well as the pretax book loss of $ 27.8 million in fiscal year 2025 as the denominator in calculating the effective tax rates for these years. When comparing the effective tax rate impact on the differences in pretax book loss between fiscal year 2026 versus fiscal year 2024, the net value of fiscal year 2026 loss is approximately 13.5 times higher than the pretax book loss in fiscal year 2024. Therefore, the percentage impact on the effective tax rate in fiscal year 2026 is approximately 13.5 times higher than in fiscal year 2024, simply due to the large variance in pretax book loss between the two years. The impact of the pretax book loss denominator effect also largely explains the differences in the effective tax rate differences between fiscal years 2026 and 2024 for tax credits and non-deductible executive compensation expense. The differences between “Foreign Taxes, net” is a result of changes in the mix of earnings in various geographic jurisdictions between fiscal year 2026 and fiscal year 2024. Similarly, when comparing the effective tax rate impact on the differences in pretax book loss between fiscal year 2025 versus fiscal year 2024, the net value of fiscal year 2025 loss is approximately 10.5 times higher than the pretax book loss in fiscal year 2024. Therefore, the percentage impact on the effective tax rate in fiscal year 2025 is approximately 10.5 times higher than in fiscal year 2024, simply due to the large variance in pretax book loss between the two years. The impact of the pretax book loss denominator effect also fully explains the differences in the effective tax rate differences between fiscal years 2025 and 2024 for tax credits and non-deductible executive compensation expense. The differences between “Foreign Taxes, net” is a result of changes in the mix of earnings in various geographic jurisdictions between fiscal year 2025 and fiscal year 2024. The differences concerning “Outside Basis Differences on Equity Method Investment” between the two years is a result of the larger amount of equity method loss in fiscal year 2025 in comparison with that of fiscal year 2024. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities are as follows: June 30, 2026 2025 (in thousands) Deferred tax assets: Accrued compensation $ 2,715 $ 2,327 Net operating loss carryforwards — — Depreciation 8,002 7,210 Tax credits 17,355 16,957 Operating lease liabilities 3,299 3,953 Capitalized R&D costs 1,016 1,302 Accruals and reserves 495 434 Total deferred tax assets 32,882 32,183 Valuation allowance ( 10,071 ) ( 8,751 ) Total deferred tax assets, net of valuation allowance 22,811 23,432 Deferred tax liabilities: Depreciation and amortization ( 17,275 ) ( 18,538 ) Right of use assets ( 3,090 ) ( 3,724 ) Investments ( 5,752 ) ( 13,763 ) Total deferred tax liabilities ( 26,117 ) ( 36,025 ) Net deferred tax liabilities $ ( 3,306 ) $ ( 12,593 ) The breakdown between deferred tax assets and liabilities is as follows: 98 June 30, 2026 2025 (in thousands) Deferred tax assets $ 8,630 $ 599 Deferred tax liabilities ( 11,936 ) ( 13,192 ) Net deferred tax liabilities $ ( 3,306 ) $ ( 12,593 ) The Company’s valuation allowance related to deferred income taxes as reflected in the consolidated balance sheets was $ 10.1 million and $ 8.8 million as of June 30, 2026 and 2025, respectively. The change in valuation allowance for June 30, 2026 and 2025 was an increase of $ 1.3 million and an increase of $ 1.5 million, respectively. At June 30, 2026 and 2025, the Company provided a valuation allowance for its state research and development credit carryforward deferred tax assets of $ 10.1 million and $ 8.8 million, respectively, as it generated more state tax credits each year than it can utilize. The Company intends to maintain a valuation allowance equal to the state research and development credit carryforwards in excess of the state net deferred tax liabilities on all other state book and tax differences and net operating loss carryforward. At June 30, 2026, the Company had federal research and development tax credit carryforwards of approximately $ 7.2 million. The federal tax credits begin to expire in 2043, if not utilized. At June 30, 2026, the Company had state tax credit carryforwards of approximately $ 12.7 million, of which $ 11.3 million carryforward indefinitely, $ 1.1 million have a 10 to 15 years life (beginning to expire in 2033) and $ 0.3 million with a 20 years life, (beginning to expire in 2038). The Company intends to reinvest the undistributed earnings of its foreign subsidiaries indefinitely, except for Alpha and Omega Semiconductor (Cayman) Ltd. and AOS International LP. Should the Company decide to remit this income to its Bermuda parent company in a future period, its provision for income taxes may increase materially in that period. The determination of the unrecognized deferred tax liability on these earnings is not practicable due to the complexity and variety of assumptions necessary to estimate the tax. As of June 30, 2026, the Company has recorded a deferred tax liability of $ 7.2 million for the basis difference related to our investment in the JV Company. The following table presents the net cash paid by the Company for income taxes during the year ended June 30, 2026. Dollars (in thousands) Domestic U.S. Federal $ 1,220 U.S. State — Foreign China 14,959 Other 1,306 $ 17,485 A reconciliation of the beginning and ending amount of unrecognized tax benefits from July 1, 2023 to June 30, 2026 is as follows: 99 Year Ended June 30, 2026 2025 2024 (in thousands) Balance at beginning of year $ 10,742 $ 10,088 $ 9,335 Additions based on tax positions related to the current year 825 826 764 Reductions based on tax positions related to prior years ( 2 ) ( 5 ) ( 11 ) Reductions due to lapse of applicable statute of limitations ( 178 ) ( 167 ) — Balance at end of year $ 11,387 $ 10,742 $ 10,088 At June 30, 2026, the total unrecognized tax benefits of $ 11.4 million included $ 7.6 million of unrecognized tax benefits that have been netted against the related deferred tax assets. The remaining $ 3.8 million of unrecognized tax benefits was recorded within long-term income tax payable on the Company's consolidated balance sheet as of June 30, 2026. The total unrecognized tax benefits of $ 11.4 million at June 30, 2026 included $ 7.9 million that, if recognized, would reduce the effective income tax rate in future periods. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision in the period that such determination is made. The amount of interest and penalties accrued at June 30, 2026 was $ 1.0 million, of which $ 0.2 million was recognized in the year ended June 30, 2026. The amount of interest and penalties accrued at June 30, 2025 was $ 0.8 million, of which $ 0.2 million was recognized in the year ended June 30, 2025. The Company files its income tax returns in the United States and in various foreign jurisdictions. The tax years 2009 to 2026 remain open to examination by U.S. federal tax authorities due to tax attribute carryovers. The tax years 2006 to 2026 remain open to examination by U.S. state tax authorities due to tax attribute carryovers. The tax years 2020 to 2026 remain open to examination by foreign tax authorities. The Company's income tax returns are subject to examinations by the Internal Revenue Service and other tax authorities in various jurisdictions. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. 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. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. One Big Beautiful Bill Act, Enacted July 4, 2025 On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law. This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. The key provisions include allowing immediate expensing of domestic research and experimental expenditures, new limitations on interest expense deductibility, reinstatement of 100% bonus depreciation for qualified assets placed in service in the United States after January 19, 2025 as well as changes to the calculation of taxable income resulting from the foreign derived intangible income deduction. The Company has concluded that the impact of OBBB for the current year is immaterial. 100 13. Segment and Geographic Information The Company is organized as, and operates in, one operating segment: the design, development and supply of power semiconductor products for computing, consumer electronics, communication and industrial applications. The chief operating decision-maker is the Chief Executive Officer. The financial information presented to the Company’s Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources. The Chief Executive Officer assesses performance of the Company, monitors budget versus actual results and determines how to allocated resources based on the consolidated net income or loss as reported on the Company’s Consolidated Statement of Operations. There are no other expense categories regularly provided to the Chief Executive Officer that are not already included in the Consolidated Statements of Operations. The Company has one business segment, and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level. Accordingly, the Company reports as a single operating segment. The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. Because the Company’s distributors sell their products to end customers which may have a global presence, revenue by geographical location is not necessarily representative of the geographical distribution of sales to end user markets. The revenue by geographical location in the following tables is based on the country or region in which the products were shipped to: Year Ended June 30, 2026 2025 2024 (in thousands) Hong Kong $ 649,268 $ 617,574 $ 524,788 China 16,417 58,514 95,417 South Korea 1,905 1,691 9,956 United States 7,275 4,093 4,938 Other countries 4,062 14,290 22,175 $ 678,927 $ 696,162 $ 657,274 The following is a summary of revenue by product type: Year Ended June 30, 2026 2025 2024 (in thousands) Power discrete $ 437,787 $ 449,507 $ 426,146 Power IC 233,870 229,926 205,778 Packaging and testing services and other 7,270 2,888 4,119 License and development services — 13,841 21,231 $ 678,927 $ 696,162 $ 657,274 Long-lived assets, net consisting of property, plant and equipment and land use rights, net, as well as operating lease right-of-use assets, net by geographical area are as follows: June 30, 2026 2025 (in thousands) China $ 103,037 $ 99,389 United States 226,629 230,518 Other countries 7,276 5,478 $ 336,942 $ 335,385 101 14. Restricted Net Assets Laws and regulations in China permit payments of dividends by the Company's subsidiaries in China only out of their retained earnings, if any, as determined in accordance with China accounting standards and regulations. Each China subsidiary is also required to set aside at least 10 % of its after-tax profit, if any, based on China accounting standards each year to its statutory reserves until the cumulative amount of such reserves reaches 50 % of its registered capital. As a result of these China laws and regulations, the Company's subsidiaries in China are restricted in their abilities to transfer a portion of their net assets to the Company. As of June 30, 2026 and 2025, such restricted portion amounted to approximately $ 94.0 million and $ 93.9 million, or 11.8 % and 11.4 %, of our total consolidated net assets attributable to the Company, respectively. As the Company's subsidiaries in China are not revenue generating operating units, the Company does not expect to repatriate funds in the form of dividends, loans or advances from its subsidiaries in China for working capital and other funding purposes. 15. Commitments and Contingencies Purchase commitments As of June 30, 2026 and 2025, the Company had approximately $ 63.6 million and $ 85.9 million, respectively, of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others. As of June 30, 2026 and 2025, the Company had approximately $ 8.6 million, and $ 14.1 million, respectively, of commitments for the purchase of property and equipment. Other commitments See Notes 1, 7 and 8 to the Consolidated Financial Statements contained in this annual Report on Form 10-K for descriptions of commitments including Joint Venture, bank borrowings and leases. Contingencies and indemnities The Company has in the past, and may from time to time in the future, become involved in legal proceedings arising from the normal course of business activities. The semiconductor industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. Irrespective of the validity of such claims, the Company could incur significant costs in the defense of such claims and suffer adverse effects on its operations. The Company is a party to a variety of agreements that it has 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. Typically, these obligations arise in the context of contracts entered into by the Company, under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants related to such matters as title to assets sold, certain intellectual property rights, specified environmental matters and certain income taxes. In these circumstances, payment by the Company is customarily conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party's claim. 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 June 30, 2026 and 2025. 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 recorded a liability associated with these indemnification arrangements, as it historically has not incurred any material costs associated with such indemnification obligations. Costs associated with such indemnification obligations may be mitigated by insurance coverage that the Company maintains. 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. Environmental matters The Company is subject to various federal, state, local, and foreign laws and regulations governing environmental matters, including the use, handling, discharge, and disposal of hazardous materials. The Company believes that it has been in material compliance with applicable environmental regulations and standards. Complying with current laws and regulations 102 has not had a material adverse effect on the Company’s financial condition and results of operations. However, it is possible that additional environmental issues may arise in the future, which the Company cannot currently predict. 103 SCHEDULE II ALPHA AND OMEGA SEMICONDUCTOR LIMITED VALUATION AND QUALIFYING ACCOUNTS (in thousands) Allowance Allowance Valuation Allowance for Doubtful for Price for Deferred Accounts Adjustments Tax Assets June 30, 2023 $ 30 $ 39,976 $ 6,686 Additions — 204,153 580 Reductions — ( 202,440 ) — June 30, 2024 $ 30 $ 41,689 $ 7,266 Additions — 204,555 1,485 Reductions — ( 205,442 ) — June 30, 2025 $ 30 $ 40,802 $ 8,751 Additions — 179,183 1,320 Reductions — ( 181,286 ) — June 30, 2026 $ 30 $ 38,699 $ 10,071 104 (b) Index to Exhibits: Number Description 3.1 Memorandum of Association of Registrant (incorporated by reference to Exhibit 3.1 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 3.2 Amended and Restated Bye-laws of Registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on November 12, 2015) 3.3 Amendment No. 1 to Amended and Restated Bye-Laws of Registrant (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Commission on November 14, 2017) 4.1 Form of Common Share Certificate (incorporated by reference to Exhibit 4.2 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 4.2 Description of Securities of the Registrant (incorporated by reference to Exhibit 4.2 on to the Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 29, 2023) 10.1†† Foundry Agreement dated as of January 10, 2002 between the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.16 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 10.2†† First Addendum to Foundry Agreement dated as of July 28, 2005 between the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.17 from Registration Statement on Form F-1 (File No. 333-165823) initially filed with the Commission on March 31, 2010) 10.3†† Second Addendum to Foundry Agreement dated as of April 11, 2007 between the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.18 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 10.4†† Foundry Service Agreement dated as of November 2, 2009 between Alpha & Omega Semiconductor (Macau), Ltd. and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.6 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 10.5 Non-Exclusive Distributor Agreement dated as of July 27, 2010 between Alpha & Omega Semiconductor (Hong Kong) Limited and Frontek Technology Corporation (incorporated by reference to Exhibit 4.17 from Annual Report on Form 20-F (File No. 001-34717) filed with the Commission on September 2, 2010) 10.6†† Supplement to Non-Exclusive Distributor Agreement dated as of July 27, 2010 between Alpha & Omega Semiconductor (Hong Kong) Limited and Frontek Technology Corporation (incorporated by reference to Exhibit 4.18 from Annual Report on Form 20-F (File No. 001-34717) filed with the Commission on September 2, 2010) 10.7†† First Amendment of Supplement to Distribution Agreement dated as of April 21, 2011 between Alpha & Omega Semiconductor (Hong Kong) Limited and Frontek Technology Corporation(incorporated by reference to Exhibit 10.15 from Annual Report Form 10-K (File No. 001-34717) filed with the Commission on September 9, 2011) 10.8 Non-Exclusive Distributor Agreement dated as of July 27, 2010 between Alpha & Omega Semiconductor (Hong Kong) Limited and Promate Electronic Co., Ltd. (incorporated by reference to Exhibit 4.19 from Annual Report on Form 20-F (File No. 001-34717) filed with the Commission on September 2, 2010) 10.9†† Supplement to Non-Exclusive Distributor Agreement dated as of July 27, 2010 between Alpha & Omega Semiconductor (Hong Kong) Limited and Promate Electronic Co., Ltd. (incorporated by reference to Exhibit 4.20 from Annual Report on Form 20-F (File No. 001-34717) filed with the Commission on September 2, 2010) 10.10†† First Amendment of Supplement to Distribution Agreement dated as of April 21, 2011 between Alpha & Omega Semiconductor (Hong Kong) Limited and Promate Electronic Co., Ltd. (incorporated by reference to Exhibit 10.18 from Annual Report Form 10-K (File No. 001-34717) filed with the Commission on September 9, 2011) 10.11 Supplement to Distribution Agreement dated as of July 27, 2010 between the Registrant and Promate Electronic Co., Ltd (incorporated by reference to Exhibit 10.2 from Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 6, 2015) 105 10.12 Lease dated as of December 23, 2009 between Alpha and Omega Semiconductor Incorporated and OA Oakmead II, LLC (incorporated by reference to Exhibit 10.19 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 10.13 Guarantee dated as of January 5, 2010 between the Registrant and OA Oakmead II, LLC (incorporated by reference to Exhibit 10.20 from Registration Statement on Form F-1 (File No. 333-165823) filed with the Commission on March 31, 2010) 10.14 Third Addendum to Foundry Agreement dated as of March 6, 2012 by and among the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.34 from Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 31, 2012) 10.15 (+) Form of Indemnification Agreement (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 9, 2017) 10.16 First Amendment to Lease dated as of December 23, 2009 between Alpha and Omega Semiconductor Incorporated and ECI Five Oakmead, LLC (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on May 11, 2020) 10.17 Amended and Restated Alpha & Omega Semiconductor Limited 2018 Omnibus Incentive Plan (as amended and restated effective as of November 11, 2025) (incorporated by reference to Appendix A to the Definitive Proxy Statement on Schedule 14A filed with the Commission on September 18, 2025) 10.18 Amendment to Market Performance Restricted Share Unit Agreement (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on November 6, 2020) 10.19 Alpha & Omega Semiconductor Limited 2018 Employee Purchase Plan (as amended and restated effective as of November 7, 2024) (incorporated by reference to Appendix A to the definitive proxy statement on Schedule 14A (File No. 001-34717) filed with the Commission on September 25, 2024) 10.20(+) 2021 Officer Form Retention Agreement for Executive Officers of Alpha and Omega Semiconductor Limited (incorporated by reference to Exhibit 10.45 from Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 30, 2021) 10.21(+) Second Amendment To Lease US Sunnyvale Office (incorporated by reference to Exhibit 10.47 from Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 30, 2021) 10.22(+) Third Amendment To Lease US Sunnyvale Office (incorporated by reference to Exhibit 10.48 from Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 30, 2021) 10.23* Amended and Restated Director Compensation Policy 10.24 Fourth Addendum to Foundry Agreement dated as of July 28, 2005 between the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on May 10, 2022) 10.25 Fifth Addendum to Foundry Agreement dated as of July 28, 2005 between the Registrant and Shanghai Hua Hong NEC Electronics Company, Limited (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on May 10, 2022) 10.26(+) Executive Chairman Employment Agreement (Mike Chang) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on May 8, 2023) 10.27(+) Chief Executive Officer Employment Agreement (Stephen Chang) (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on May 8, 2023) 10.28 Market Performance Restricted Share Unit Agreement, (incorporated by reference to Exhibit 10.32 to the Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 23, 2024) 10.29 The Fourth Supplement to Non-Exclusive Distributor Agreement dated as of January 1, 2024 between Alpha & Omega Semiconductor (Hong Kong) Limited and Frontek Technology Corporation, (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 6, 2025) 106 10.30 Fifth Supplement to Distribution Agreement dated as of July 1, 2024 between Alpha & Omega Semiconductor (Hong Kong) Limited and Frontek Technology Corporation (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 6, 2025) 10.31 Fourth Supplement to Distribution Agreement dated as of July 1, 2024 between Alpha & Omega Semiconductor (Hong Kong) Limited and Promate Electronic Co., Ltd. (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 6, 2025) 10.32 Fifth Supplement to Distribution Agreement dated as of October 1, 2025 between Alpha & Omega Semiconductor (Hong Kong) Limited and Promate Electronic Co., Ltd. (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q (File No. 001-34717) filed with the Commission on February 5, 2026) 10.33 Calendar Year 202 6 Executive Incentive Cash Bonus Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10Q (File No. 001-34717) filed with the Commission on May 6 , 202 6 10.34*(+) Amendment to Employment Agreement, dated as of November 6, 2025, by and between the registrant and Dr. Mike Chang 16.1 Letter from Baker Tilly USA, LLP to the Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 to the Current Report on Form 8-K (File No. 001-34717) filed with the Commission on November 25, 2024) 19.1 Statement of Company Policy Regarding Insider Trading amended and restated on May 11, 2023 (incorporated by reference to Exhibit 19.1 to the Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 23, 2024) . 21.1* List of Subsidiaries of the Registrant 23.1* Consent of Deloitte & Touche LLP, independent registered public accounting firm 23.2* Consent of Baker Tilly US, LLP, independent registered public accounting firm 31.1* Certification of Chief Executive Officer required by Rule 13(a)-14(a) under the Exchange Act 31.2* Certification of Chief Financial Officer required by Rule 13(a)-14(a) under the Exchange Act 32.1* Certification of Chief Executive Officer required by Rule 13a-14(b) under the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code 32.2* Certification of Chief Financial Officer required by Rule 13a-14(b) under the Exchange Act and Section 1350 of Chapter 63 of Title 18 of the United States Code 97 Compensation of Recoupment Policy dated October 2, 2023 (incorporated by reference to Exhibit 97 to the Annual Report on Form 10-K (File No. 001-34717) filed with the Commission on August 23, 2024) 99.1* Chongqing SIMIC Semiconductor Limited Unaudited Financial Statements as of and for the year ended December 31, 2025 99.2* Chongqing Alpha and Omega Semiconductor Limited Report of Independent Auditor as of and for the years ended December 31, 2024 and December 31, 2023 101.INS XBRL Instance 101.SCH XBRL Taxonomy Extension Schema 101.CAL XBRL Taxonomy Extension Calculation 101.DEF XBRL Taxonomy Extension Definition 101.LAB XBRL Taxonomy Extension Labels 101.PRE XBRL Taxonomy Extension Presentation * Filed with this Annual Report on Form 10-K. †† Confidential treatment has been granted for certain information contained in this document pursuant to an order of the Securities and Exchange Commission. Such information has been omitted and filed separately with the Securities and Exchange Commission. (+) Indicates management contract or compensatory plan or arrangement. 107 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. August 27, 2026 ALPHA AND OMEGA SEMICONDUCTOR LIMITED By: /s/ STEPHEN C. CHANG Stephen C. Chang Chief Executive Officer (Principal Executive Officer) 108 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints Stephen C. Chang and Yifan Liang, and each or any one of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this report, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signature Title Date /s/ STEPHEN C. CHANG Chief Executive Officer and Director August 27, 2026 Stephen C. Chang (Principal Executive Officer) /s/ YIFAN LIANG Chief Financial Officer and Corporate Secretary August 27, 2026 Yifan Liang (Principal Financial Officer and Principal Accounting Officer) /s/ MIKE F. CHANG Chairman of the Board and Executive Vice President of Strategic Initiatives August 27, 2026 Mike F. Chang, Ph.D. /s/ CLAUDIA CHEN Director August 27, 2026 Claudia Chen /s/ JOSHUA CHIEN Director August 27, 2026 Joshua Chien /s/ SO-YEON JEONG Director August 27, 2026 So-Yeon Jeong /s/ HANQING (HELEN) LI Director August 27, 2026 Hanqing (Helen) Li /s/ KING OWYANG Director August 27, 2026 King Owyang /s/ MICHAEL L. PFEIFFER Director August 27, 2026 Michael L. Pfeiffer /s/ MICHAEL J. SALAMEH Director August 27, 2026 Michael J. Salameh 109