ALPHA & OMEGA SEMICONDUCTOR Ltd

Previous wording

We are a designer, developer and global supplier of a broad portfolio of power semiconductors. Our portfolio of power semiconductors includes approximately 2,700 products, and has grown significantly with the introduction of over 100 new products in the fiscal year ended June 30, 2024, and over 60 and 130 new products in the fiscal years ended June 30, 2023 and 2022, respectively. During the six months ended December 31, 2024, we introduced 55 new products. Our teams of scientists and engineers have developed extensive intellectual property and technical knowledge that encompass major aspects of power semiconductors, which we believe enables us to introduce and develop innovative products to address the increasingly complex power requirements of advanced electronics. We have an extensive patent portfolio that consists of 940 patents and 58 patent applications in the United States as of December 31, 2024. We also have a total of 1,050 foreign patents, which were based primarily on our research and development efforts through December 31, 2024. We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost. Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, flat panel TVs, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.

Current wording

We are a designer, developer and global supplier of a broad portfolio of power semiconductors. Our portfolio of power semiconductors includes approximately 2,700 products, and has grown significantly with the introduction of over 100 new products in the fiscal year ended June 30, 2024, and over 60 and 130 new products in the fiscal years ended June 30, 2023 and 2022, respectively. During the nine months ended March 31, 2025, we introduced 75 new products. Our teams of scientists and engineers have developed extensive intellectual property and technical knowledge that encompass major aspects of power semiconductors, which we believe enables us to introduce and develop innovative products to address the increasingly complex power requirements of advanced electronics. We have an extensive patent portfolio that consists of 946 patents and 63 patent applications in the United States as of March 31, 2025. We also have a total of 1,054 foreign patents, which were based primarily on our research and development efforts through March 31, 2025. We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost. Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, flat panel TVs, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.

Previous wording

As of December 31, 2024, we owned approximately 42.8% of outstanding equity interest in a joint venture company (the “JV Company”) that operates a power semiconductor packaging, testing and 12-inch wafer fabrication facility (“Fab”) in the LiangJiang New Area of Chongqing, China, and we relied on the Fab to manufacture wafers to develop our products. On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $68.5 million based on currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company. The funding of the investment will be made in three installments. The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024. The remaining installments are expected to be paid by July 31, 2025. This transaction was considered as closed when the JV Company completed the registration of the issuance of equity interest to the investor with the local government authority on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2%.

Current wording

As of March 31, 2025, we owned approximately 39.2% of outstanding equity interest in a joint venture company (the “JV Company”) that operates a power semiconductor packaging, testing and 12-inch wafer fabrication facility (“Fab”) in the LiangJiang New Area of Chongqing, China, and we relied on the Fab to manufacture wafers to develop our products. On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $68.5 million based on currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company. The funding of the investment will be made in three installments. The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024. The remaining installments are expected to be paid by July 31, 2025. This transaction 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%.

Previous wording

In the past three years, we have been reducing our ownership of the JV Company to increase the flexibility of the JV Company to raise capital to fund its future expansion. The JV Company is also contemplating an eventual listing on the Science and Technology Innovation Board, or STAR Market, of the Shanghai Stock Exchange. The reduction of our ownership assists the JV Company in meeting certain regulatory listing requirements. A potential STAR Market listing may take several years to consummate and there is no guarantee that such listing by the JV Company will be successful or will be completed in a timely manner, or at all. In addition, the JV Company will continue to provide us with significant level of foundry capacity to enable us to develop and manufacture our products. Pursuant to an agreement with the JV Company and other shareholders of the JV Company, the JV Company is committed to provide us with a specified level of monthly wafer production capacity.

Current wording

Science and Technology Innovation Board, or STAR Market, of the Shanghai Stock Exchange. The reduction of our ownership assists the JV Company in meeting certain regulatory listing requirements. A potential STAR Market listing may take several years to consummate and there is no guarantee that such listing by the JV Company will be successful or will be completed in a timely manner, or at all. In addition, the JV Company will continue to provide us with significant level of foundry capacity to enable us to develop and manufacture our products. Pursuant to an agreement with the JV Company and other shareholders of the JV Company, the JV Company is committed to provide us with a specified level of monthly wafer production capacity.

Previous wording

Manufacturing costs and capacity availability: Our gross margin is affected by a number of factors including our manufacturing costs, utilization of our manufacturing facilities, the product mixes of our sales, pricing of wafers from third party foundries and pricing of semiconductor raw materials. Capacity utilization affects our gross margin because we have certain fixed costs at our Shanghai facilities and our Oregon Fab. If we are unable to utilize our manufacturing facilities at a desired level, our gross margin may be adversely affected. In addition, from time to time, we may experience wafer capacity constraints, particularly at third party foundries, that may prevent us from meeting fully the demand of our customers. While we can mitigate these constraints by increasing and re-allocating capacity at our own fab, we may not be able to do so quickly or at sufficient level, which could adversely affect our financial conditions and results of operations. We also rely on the JV Company to provide foundry capacity to manufacture our products, therefore it is important that we maintain continuous access to such capacity, which may not be available at sufficient level or at pricing terms favorable to us because of lack of control over the JV Company’s operation. We continue to maintain a business relationship with the JV Company to ensure uninterrupted supply of manufacturing capacity. Because we continue to rely on the JV Company to provide us with manufacturing capacity, if the JV Company take actions or make decisions that prevents us from accessing required capacity, our operations may be adversely affected.

Current wording

Manufacturing costs and capacity availability: Our gross margin is affected by a number of factors including our manufacturing costs, utilization of our manufacturing facilities, the product mixes of our sales, pricing of wafers from third party foundries and pricing of semiconductor raw materials. Capacity utilization affects our gross margin because we have certain fixed costs at our Shanghai facilities and our Oregon Fab. If we are unable to utilize our manufacturing facilities at a desired level, our gross margin may be adversely affected. In addition, from time to time, we may experience wafer capacity constraints, particularly at third party foundries, that may prevent us from meeting fully the demand of our customers. While we can mitigate these constraints by increasing and re-allocating capacity at our own fab, we may not be able to do so quickly or at sufficient level, which could adversely affect our financial conditions and results of operations. We also rely on third parties to provide foundry capacity to manufacture our products, including the JV Company, therefore it is important that we maintain continuous access to such capacity, which may not be available at sufficient level or at pricing terms favorable. If these third-party foundries, including the JV Company, take actions or make decisions that prevents us from accessing required capacity, our operations may be adversely affected.

Previous wording

In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45.0 million, consisting of an upfront fee and milestone payments of $18.0 million, $6.8 million and $9.0 million paid to us in the March 2023, July 2023 and February 2024, respectively, with the remaining amount to be paid upon the achievement of specified engineering services and product milestones. The license and development fee is determined to be one performance obligation and is recognized over the 24 months during which we perform the engineering and development services. We use the input method to measure progression of the transfer of services. During the three and six months ended December 31, 2024, we recorded $5.4 million and $11.0 million of license and development revenue, respectively, and during the three and the six months ended December 31, 2023, we recorded $5.5 million and $11.1 million of license and development revenue, respectively. As of December 31, 2024, we had recorded a total of $42.2 million of license and development revenue. When our performance under the contract precedes our receipt of consideration from the customer, and the receipt of consideration is conditional upon factors other than the passage of time, a contract asset is recorded. We also entered an accompanying supply agreement to provide limited wafer supply to the customer.

Current wording

In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and provided 24-months of engineering and development services for a total fee of $45.0 million. The license and development fee was determined to be one performance obligation and was recognized over the 24 months during which we performed the engineering and development services. We used the input method to measure progression of the transfer of services. During the three and nine months ended March 31, 2025, we recorded $2.8 million and $13.8 million of license and development revenue, respectively, and during the three and the nine months ended March 31, 2024, we recorded $5.1 million and $16.2 million of license and development revenue, respectively. As of March 31, 2025, we had recorded a total of $45.0 million of license and development revenue. When our performance under the contract preceded our receipt of consideration from the customer, and the receipt of consideration was conditional upon factors other than the passage of time, a contract asset was recorded. We also entered into an accompanying supply agreement to provide limited wafer supply to the customer.

Previous wording

The following tables set forth statements of income (loss), also expressed as a percentage of revenue, for the three and six months ended December 31, 2024 and 2023. Our historical results of operations are not necessarily indicative of the results for any future period.

Current wording

The following tables set forth statements of income (loss), also expressed as a percentage of revenue, for the three and nine months ended March 31, 2025 and 2024. Our historical results of operations are not necessarily indicative of the results for any future period.

Previous wording

Total revenue was $355.0 million for the six months ended December 31, 2024, an increase of $9.1 million, or 2.6%, as compared to $345.9 million for the same period last year. The increase was primarily due to an increase of $5.1 million and $3.6 million in sales of power discrete products and sales of power IC products, respectively, as well as an increase of $0.4 million in packaging and testing services and other, partially offset by a decrease of $0.1 million in license and development services. The net increase in power discrete and power IC product sales was primarily due to a 17.2% increase in unit shipment, partially offset by a 12.4% decrease in average selling price as compared to same period last year due to a shift in product mix. The net increase in revenues was primarily driven by a significant increase in the computing markets, particularly in graphics cards products, as well as an increase in the communication markets, particular in battery and mobile phone products, partially offset by a decrease in power supply and industrial markets, particularly in quick charger products. The increase in revenue of packaging and testing services for the six months ended December 31, 2024, as compared to same period last year, was primarily due to increased demand. The decrease in license and development services for the six months ended December 31, 2024 was related to the license agreement with a customer to license our proprietary SiC technology and to provide 24-month engineering and development services.

Current wording

Total revenue was $164.6 million for the three months ended March 31, 2025, an increase of $14.6 million, or 9.7% as compared to $150.1 million for the same quarter last year. The increase was primarily due to an increase of $13.0 million and $4.6 million in sales of power discrete products and sales of power IC products, respectively, offset by a decrease of $0.8 million in packaging and testing services and other, as well as a decrease of $2.3 million in license and development services. The net increase in power discrete and power IC product sales was primarily due to a 17.3% increase in unit shipment, partially offset by a 4.3% decrease in average selling price as compared to same quarter last year due to a shift in product mix. The net increase in revenues was primarily driven by a significant increase in the computing markets, particularly in graphics cards products and tablet products, as well as an increase in the power supply and industrial markets, particular in E-mobility products and quick chargers products, partially offset by a decrease in consumer markets, particularly in home appliances products. The decrease in revenue of packaging and testing services for the three months ended March 31, 2025, as compared to same quarter last year, was primarily due to decreased demand. The decrease in license and development services for the three months ended March 31, 2025 was related to the license agreement with a customer to license our proprietary SiC technology and provided 24-month engineering and development services, which was completed during the three months ended March 31, 2025.

Previous wording

Total revenue was $173.2 million for the three months ended December 31, 2024, an increase of $7.9 million, or 4.8% as compared to $165.3 million for the same quarter last year. The increase was primarily due to an increase of $4.2 million and $3.4 million in sales of power discrete products and sales of power IC products, respectively, as well as an increase of $0.3 million in packaging and testing services and other, partially offset by a decrease of $0.1 million in license and development services. The net increase in power discrete and power IC product sales was primarily due to a 18.8% increase in unit shipment, partially offset by a 11.8% decrease in average selling price as compared to same quarter last year due to a shift in product mix. The net increase in revenues was primarily driven by a significant increase in the computing markets, particularly in graphics cards products, as well as an increase in the communication markets, particular in battery, partially offset by a decrease in consumer markets, particularly in home appliances products. The increase in revenue of packaging and testing services for the three months ended December 31, 2024, as compared to same quarter last year, was primarily due to increased demand. The decrease in license and development services for the three months ended December 31, 2024 was related to the license agreement with a customer to license our proprietary SiC technology and to provide 24-month engineering and development services.

Current wording

Total revenue was $519.7 million for the nine months ended March 31, 2025, an increase of $23.7 million, or 4.8%, as compared to $496.0 million for the same period last year. The increase was primarily due to an increase of $18.1 million and $8.2 million in sales of power discrete products and sales of power IC products, respectively, partially offset by a decrease of $0.3 million in packaging and testing services and other, as well as a decrease of $2.3 million in license and development services. The net increase in power discrete and power IC product sales was primarily due to a 17.2% increase in unit shipment, partially offset by a 9.8% decrease in average selling price as compared to same period last year due to a shift in product mix. The net increase in revenues was primarily driven by a significant increase in the computing markets, particularly in graphics cards products and tablet products, as well as an increase in the communication markets, particular in battery and networking products, partially offset by a decrease in consumer markets, particularly in home appliances products. The decrease in revenue of packaging and testing services for the nine months ended March 31, 2025, as compared to same period last year, was primarily due to decreased demand. The decrease in license and development services for the nine months ended March 31, 2025 was related to the license agreement with a customer to license our proprietary SiC technology and provided 24-month engineering and development services, which was completed during the three months ended March 31, 2025.

Previous wording

Cost of goods sold was $133.1 million for the three months ended December 31, 2024, an increase of $11.9 million or 9.8%, as compared to $121.3 million for the same quarter last year. The increase was primarily due to 4.8% increase in sales. Gross margin decreased by 3.5 percentage points to 23.1% for the three months ended December 31, 2024, as compared to 26.6% for the same quarter last year. The decrease in gross margin was primarily due to average selling pricing erosion, higher material costs and less favorable product mix during the three months ended December 31, 2024.

Current wording

Cost of goods sold was $129.5 million for the three months ended March 31, 2025, an increase of $15.0 million or 13.1%, as compared to $114.5 million for the same quarter last year. The increase was primarily due to 9.7% increase in sales. Gross margin decreased by 2.3 percentage points to 21.4% for the three months ended March 31, 2025, as compared to 23.7% for the same quarter last year. The decrease in gross margin was primarily due to average selling pricing erosion, higher material costs and less favorable product mix during the three months ended March 31, 2025.

Previous wording

Cost of goods sold was $270.5 million for the six months ended December 31, 2024, an increase of $19.5 million, or 7.8%, as compared to $251.0 million for the same period last year. The increase was primarily due to 2.6% increase in sales. Gross margin decreased by 3.6 percentage points to 23.8% for the six months ended December 31, 2024, as compared to 27.4% for the same period last year. The decrease in gross margin was primarily due to average selling price erosion, higher material costs and less favorable product mix during the periods.

Current wording

Cost of goods sold was $400.0 million for the nine months ended March 31, 2025, an increase of $34.5 million, or 9.4%, as compared to $365.5 million for the same period last year. The increase was primarily due to 4.8% increase in sales. Gross margin decreased by 3.3 percentage points to 23.0% for the nine months ended March 31, 2025, as compared to 26.3% for the same period last year. The decrease in gross margin was primarily due to average selling price erosion, higher material costs and less favorable product mix during the periods.

Previous wording

Research and development expenses were $24.0 million for the three months ended December 31, 2024, an increase of $1.0 million, or 4.6%, as compared to $22.9 million for the same quarter last year. The increase was primarily attributable to a $0.5 million increase in employee compensation and benefit expense mainly due to higher bonus expense, as well as a $0.7 million increase in product prototyping engineering expense as a result of increased engineering activities, partially offset by a $0.2 million decrease in share-based compensation expense primarily due to less ESPP expenses in current quarter.

Current wording

Research and development expenses were $23.4 million for the three months ended March 31, 2025, an increase of $0.3 million, or 1.3%, as compared to $23.1 million for the same quarter last year. The increase was primarily attributable to a $0.5 million increase in employee compensation and benefit expense mainly due to higher bonus expense and higher severance expenses, as well as a $0.2 million increase in product prototyping engineering expense as a result of increased engineering activities, partially offset by a $0.3 million decrease in share-based compensation expense primarily due to more cancellation of awards in current quarter.

Previous wording

Research and development expenses were $46.4 million for the six months ended December 31, 2024, an increase of $1.4 million, or 3.1%, as compared to $45.0 million for the same period last year. The increase was primarily attributable to a $1.7 million increase in share-based compensation as a result of a modification of market-based restricted stock units in August 2024, partially offset by a $0.2 million decrease in product prototyping engineering expense as a result of decreased engineering activities, as well as a $0.1 million decrease in employee compensation and benefit expense mainly due to less headcount, partially offset by higher business and medical insurance expenses.

Current wording

Research and development expenses were $69.8 million for the nine months ended March 31, 2025, an increase of $1.7 million, or 2.5%, as compared to $68.1 million for the same period last year. The increase was primarily attributable to a $1.4 million increase in share-based compensation as a result of a modification of market-based restricted stock units in August 2024, as well as a $0.4 million increase in employee compensation and benefit expense mainly due to higher bonus expense and higher severance expenses.

Previous wording

Selling, general and administrative expenses were $22.0 million for the three months ended December 31, 2024, a decrease of $0.3 million, or 1.2%, as compared to $22.2 million for the same quarter last year. The decrease was primarily due to a $0.1 million decrease in share-based compensation expense as a result of less ESPP expenses, a $0.4 million decrease in audit fees, and $0.3 million decrease in consulting fees, partially offset by $0.6 million increase in employee compensation and benefits expenses primarily due to increased headcount.

Current wording

Selling, general and administrative expenses were $22.4 million for the three months ended March 31, 2025, a decrease of $0.5 million, or 2.3%, as compared to $23.0 million for the same quarter last year. The decrease was primarily due to a $0.7 million decrease in share-based compensation expense as a result of more cancellation of awards, a $0.5 million decrease in design-win commission and marketing demo fees, and $0.4 million decrease in allocation, partially offset by $0.2 million increase in legal expenses, as well as $0.9 million increase in employee compensation and benefits expenses primarily due to increased headcount, higher bonus expense, as well as higher severance expenses.

Previous wording

Selling, general and administrative expenses were $44.3 million for the six months ended December 31, 2024, an increase of $2.6 million, or 6.3%, as compared to $41.6 million for the same period last year. The increase was primarily attributable to a $3.1 million increase in share-based compensation as a result of a modification of market-based restricted stock units in August 2024, and $0.8 million increase in employee compensation and benefits expenses primarily due to increased headcount, partially offset by $0.8 million decrease in audit fees and $0.4 million decrease in consulting fees.

Current wording

Selling, general and administrative expenses were $66.7 million for the nine months ended March 31, 2025, an increase of $2.1 million, or 3.2%, as compared to $64.6 million for the same period last year. The increase was primarily attributable to a $2.4 million increase in share-based compensation as a result of a modification of market-based restricted stock units in August 2024, and $1.7 million increase in employee compensation and benefits expenses primarily due to increased headcount, higher bonus expense, as well as higher severance expenses, partially offset by $0.7 million decrease in audit fees, a $0.6 million decrease in design-win commission and marketing demo fees, $0.4 million decrease in consulting fees, and $0.4 million decrease in allocation.

Previous wording

Other income (loss), net was increased in the three and six months ended December 31, 2024 as compared to the same periods last year primarily due to decrease in foreign currency exchange loss as a result of the depreciation of RMB against USD.

Current wording

Other income (loss), net decreased in the three and nine months ended March 31, 2025, as compared to the same periods last year primarily due to an increase in foreign currency exchange loss as a result of the appreciation of RMB against USD.

Previous wording

Interest income was decreased in the three and six months ended December 31, 2024 as compared to the same periods last year primarily due to lower interest rates in the current periods.

Current wording

Interest income decreased in the three and nine months ended March 31, 2025, as compared to the same periods last year primarily due to lower interest rates in the current periods.

Previous wording

Interest expense was decreased in the three and six months ended December 31, 2024 as compared to the same periods last year primarily due to less outstanding loan balance in the current periods.

Current wording

Interest expense was decreased in the three and nine months ended March 31, 2025 as compared to the same periods last year primarily due to less outstanding loan balance in the current periods.

Previous wording

The Company recognized income tax expense of approximately $2.3 million and $2.0 million for the six months ended December 31, 2024 and 2023, respectively. The income tax expense of $2.3 million for the six months ended December 31, 2024 included a $0.1 million discrete tax expense. The income tax expense of $2.0 million for the six months ended December 31, 2023 included a $0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the six months ended December 31, 2024 and 2023 was $2.1 million and $1.9 million, respectively, and the effective tax rate for the six months ended December 31, 2024 and 2023 was (31.4%) and 39.2%, respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from reporting pretax book loss of $6.8 million for the six months ended December 31, 2024 as compared to $4.9 million of pretax book income for the six months ended December 31, 2023.

Current wording

The Company recognized income tax expense of approximately $0.7 million and $0.6 million for the three months ended March 31, 2025 and 2024, respectively. The income tax expense of $0.7 million for the three months ended March 31, 2025 included a $0.1 million discrete tax expense. The income tax expense of $0.6 million for the three months ended March 31, 2024 included a $0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the three months ended March 31, 2025 and 2024 was $0.6 million and $0.6 million, respectively, and the effective tax rate for the three months ended March 31, 2025 and 2024 was (5.8)% and (5.3%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year.

Previous wording

The Company recognized income tax expense of approximately $1.2 million and $0.9 million for the three months ended December 31, 2024 and 2023, respectively. The income tax expense of $1.2 million for the three months ended December 31, 2024 included a $0.1 million discrete tax expense. The income tax expense of $0.9 million for the three months ended December 31, 2023 included a $0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the three months ended December 31, 2024 and 2023 was $1.2 million and $0.8 million, respectively, and the effective tax rate for the three months ended December 31, 2024 and 2023 was (22.1)% and (41.2%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from reporting pretax book loss of $5.4 million for the three months ended December 31, 2024 as compared to $2.0 million of pretax book loss for the three months ended December 31, 2023.

Current wording

The Company recognized income tax expense of approximately $2.9 million and $2.6 million for the nine months ended March 31, 2025 and 2024, respectively. The income tax expense of $2.9 million for the nine months ended March 31, 2025 included a $0.2 million discrete tax expense. The income tax expense of $2.6 million for the nine months ended March 31, 2024 included a $0.2 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the nine months ended March 31, 2025 and 2024 was $2.7 million and $2.5 million, respectively, and the effective tax rate for the nine months ended March 31, 2025 and 2024 was (16.1%) and (43.4%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year as well as from reporting pretax book loss of $17.0 million for the nine months ended March 31, 2025 as compared to $5.7 million of pretax book loss for the nine months ended March 31, 2024.

Previous wording

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. As of December 31, 2024, the gross amount of unrecognized tax benefits was approximately $10.2 million, of which $7.0 million, if recognized, would reduce the effective income tax rate in future periods. If the Company’s estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. 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. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.

Current wording

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. As of March 31, 2025, the gross amount of unrecognized tax benefits was approximately $10.3 million, of which $7.0 million, if recognized, would reduce the effective income tax rate in future periods. If the Company’s estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. 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. The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.

Previous wording

subsidiaries in China. The purpose of the credit facility is to provide working capital borrowings. The Company could borrow up to approximately RMB 140 millionor $19.2 million based on currency exchange rate between RMB and U.S. Dollar on December 31, 2024 with a maturity date of March 15, 2025. As of December 31, 2024, there wasno outstanding balance for this loan.

Current wording

subsidiaries in China. The purpose of the credit facility is to provide working capital borrowings. The Company could borrow up to approximately RMB 140 million or$19.3 million based on currency exchange rate between RMB and U.S. Dollar on March 31, 2025. This line of credit expired on March 15, 2025. As of March 31, 2025, there was no outstanding balance for this loan.

Previous wording

In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the 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 has a 5 years term, after which 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, until the final installation and acceptance of the equipment. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50% of the total purchase price of the equipment, to the supplier. 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 which had the net book value of $12.8 million as of December 31, 2024. As of December 31, 2024, the outstanding balance of this debt financing was $7.9 million.

Current wording

In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the 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 has a 5 years term, after which 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, until the final installation and acceptance of the equipment. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50% of the total purchase price of the equipment, to the supplier. 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 the net book value of $12.5 million as of March 31, 2025. As of March 31, 2025, the outstanding balance of this debt financing was $7.2 million.

Previous wording

5.5 year term and matures on February 16, 2027. Jireh is required to make consecutive quarterly payments of principal and interest. The loan accrues interest based on adjusted SOFR plus the applicable margin based on the outstanding balance of the loan. This agreement contains customary restrictive covenants and includes certain financial covenants that the Company is required to maintain. Jireh drew down $45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022. As of December 31, 2024, Jireh was in compliance with these covenants andthe outstanding balance of this loan was $24.7 million.

Current wording

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 adjusted SOFR plus the applicable margin based on the outstanding balance of the loan. This agreement contains customary restrictive covenants and includes certain financial covenants that the Company is required to maintain. Jireh drew down $45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022. As of March 31, 2025, Jireh was in compliance with these covenants andthe outstanding balance of this loanwas $22.5 million.

Previous wording

As of December 31, 2024 and June 30, 2024, we had $182.8 million and $175.5 million of cash, cash equivalents and restricted cash, respectively. Our cash, cash equivalents and restricted cash primarily consist of cash on hand, restricted cash, and short-term bank deposits with original maturities of three months or less. Of the $182.8 million and $175.5 million cash, cash equivalents and restricted cash, $99.5 million and $55.0 million, respectively, are deposited with financial institutions outside the United States.

Current wording

As of March 31, 2025 and June 30, 2024, we had $169.6 million and $175.5 million of cash, cash equivalents and restricted cash, respectively. Our cash, cash equivalents and restricted cash primarily consist of cash on hand, restricted cash, and short-term bank deposits with original maturities of three months or less. Of the $169.6 million and $175.5 million cash, cash equivalents and restricted cash, $83.4 million and $55.0 million, respectively, are deposited with financial institutions outside the United States.

Previous wording

For the six months ended December 31, 2024, the $7.3 million decrease in cash used in investing activities compared to the same period last year was primarily due to less purchases of property and equipment in the six months ended December 31, 2024 compared to the same period last year.

Current wording

For the nine months ended March 31, 2025, the $6.4 million decrease in cash used in investing activities compared to the same period last year was primarily due to less purchases of property and equipment in the nine months ended March 31, 2025 compared to the same period last year.

Previous wording

For the six months ended December 31, 2024, the $1.6 million increase in cash used in financing activities compared to the same period last year was primarily due to $1.1 million decrease in proceeds from exercise of stock options and ESPP, and $0.4 million increase in common shares acquired to settle withholding tax related to vesting of restricted stock.

Current wording

For the nine months ended March 31, 2025, the $5.3 million increase in cash used in financing activities compared to the same period last year was primarily due to $2.1 million decrease in proceeds from exercise of stock options and ESPP, and $3.0 million increase in common shares acquired to settle withholding tax related to the release of restricted stock.