Company: AOSL
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001387467-25-000066
Chunk: 42

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 42
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 August 2025, this agreement was terminated with no outstanding balance.

On August 9, 2019, one of our 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. We are the guarantor for this agreement. We are 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 

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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 with no outstanding balance.

We believe that our current cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs, including working capital and capital expenditures, for at least the next twelve months.  In the long-term, we may require additional capital due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.  If our cash is insufficient to meet our needs, we may seek to raise capital through debt financing.  The incurrence of indebtedness would result in increased debt service obligations and may include operating and financial covenants that would restrict our operations.  If we decide to raise capital through equity financing, the issuance of additional equity may result in dilution to our shareholders.  We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all.

Cash, cash equivalents and restricted cash  

As of September 30, 2025 and June 30, 2025, we had $223.9 million and $153.5 million of cash, cash equivalents and restricted cash, respectively.  Our cash, cash equivalents and restricted cash primarily consist of cash on hand,