Company: AOSL
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001387467-25-000017
Chunk: 16

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 1
Chunk 16
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 December 2, 2021, the Company ceased having control over the JV Company.  Therefore, the Company deconsolidated the JV Company as of that date.  Subsequently, the Company has accounted for its investment in the JV Company using the equity method of accounting.  As of December 31, 2024, the percentage of outstanding JV equity interest beneficially owned by the Company was 42.8%.In the past three years, the Company has been reducing its equity ownership of the JV Company to increase the flexibility of the JV Company to raise capital to fund its future expansion.  On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $68.5 million based on currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company.  The funding of the investment will be made in three installments.  The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024.  The remaining installments are expected to be paid by July 31, 2025.  This transaction was considered as closed when the JV Company completed the registration of the issuance of equity interest to the investor with the local government authority on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2%.

The Company accounts for its investment in the JV Company as an equity method investment and reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information of the JV Company.  During the three and six months ended December 31, 2024, the Company recorded a $0.6 million loss and $1.6 million loss of its equity share of the JV Company, respectively, using lag reporting.  During the three and six months ended December 31, 2023, the Company recorded a $0.7 million loss and $3.4 million loss, respectively,  of its equity share of the JV Company, respectively, using lag reporting. 

12

ALPHA AND OMEGA SEMICONDUCTOR LIMITEDNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

3. Related Party Transactions

As of December 31