Company: AOSL
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001387467-25-000066
Chunk: 40

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 40
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 the United States and in various foreign jurisdictions.  The tax years 2004 to 2025 remain open to examination by U.S. federal and state tax authorities.  The tax years 2019 to 2025 remain open to examination by foreign tax authorities.

Our 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, we regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.  These assessments can require considerable estimates and judgments.   As of September 30, 2025, the gross amount of unrecognized tax benefits was approximately $10.8 million, of which $7.4 million, if recognized, would reduce the effective income tax rate in future periods.  If our 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 we determine the liabilities are no longer necessary.  We do not anticipate any material changes to its uncertain tax positions during the next twelve months.

Liquidity and Capital Resources 

Our principal need for liquidity and capital resources is to maintain sufficient working capital to support our operations and to invest adequate capital expenditures to grow our business. To date, we finance our operations and capital expenditures primarily through funds generated from operations and borrowings under our term loans, financing lease and other debt agreements.

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 includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interests 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