Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 95

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 1A
Chunk 95
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 Company and certain registrations, approvals by government authorities and closing of additional investment by the strategic investor in the JV Company’s equity, which are outside of our control.  For a more detailed description of the installment payments and related conditions, please see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview. We cannot be certain that these conditions will be satisfied on a timely basis, including those conditions that are outside of our control.  If these conditions are not met by the deadlines as set forth in the equity transfer agreement, we may be exposed to significant risks, including failure to receive a portion or any of the cash proceeds from the sale, which may adversely affect our ability to continue investment in technology, R&D projects and acquisition of assets complimentary to our business operations.  Furthermore, failure to meet these conditions may require the parties to terminate and unwind the transaction, which will adversely affect our reputation, business operations and stock price.

Our reliance on distributors to sell a substantial portion of our products subjects us to a number of risks.

We sell a substantial portion of our products to distributors, who in turn sell to our end customers.  Our distributors typically offer power semiconductor products from several different companies, including our direct competitors.  The distributors assume collection risk and provide logistical services to end customers, including stocking our products.  Two distributors, WPG and Promate, collectively accounted for 73.4%, 71.0% and 57.2% of our revenue for the fiscal years ended June 30, 2025, 2024 and 2023, respectively.  We currently have effective agreements with Promate and WPG to serve as our distributors, and such agreement is renewed automatically for one-year period continuously unless terminated earlier pursuant to the terms of such agreements.  We believe that our success will continue to depend upon these distributors. Our reliance on distributors subjects us to a number of risks, including:

•write-downs in inventories associated with stock rotation rights and increases in provisions for price adjustments granted to certain distributors;

•potential reduction or discontinuation of sales of our products by distributors;

•failure to devote resources necessary to sell our products at the prices, in the volumes and within the time frames that we expect;

•focusing their sales efforts on products of our competitors;

•dependence upon the continued viability and financial resources of these distributors, some of which are small organizations with limited working capital and all of which depend on general economic conditions and conditions within the semiconductor industry;

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•dependence on