Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 31

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 15
Chunk 31
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 and long-term debt were as follows (in thousands):Year ending June 30,2026$11,871 202714,344 2028536 Total principal of debt26,751 Less: debt issuance costs(27)Total principal of debt, less debt issuance costs$26,724 Short-term DebtLong-term DebtTotalPrincipal amount$11,871 $14,880 $26,751 Less: debt issuance costs(19)(8)(27)Total debt, less debt issuance costs$11,852 $14,872 $26,724 

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8. Leases

The Company evaluates contracts for lease accounting at contract inception and assesses lease classification at the lease commencement date.  Operating leases are included in operating lease right-of-use (“ROU”) assets, operating lease liabilities and operating lease liabilities - long-term on the Company's consolidated balance sheets.  Finance leases are included in property, plant and equipment, finance lease liabilities and finance lease liabilities-long-term on the consolidated balance sheets.  The Company recognizes a ROU asset and corresponding lease obligation liability at the lease commencement date where the lease obligation liability is measured at the present value of the minimum lease payments.  As most of the leases do not provide an implicit rate, the Company uses its incremental borrowing rate at lease commencement.  The Company uses an interest rate commensurate with the interest rate to borrow on a collateralized basis over a similar term with an amount equal to the lease payments.  Operating leases are primarily related to offices, research and development facilities, sales and marketing facilities, and manufacturing facilities.  In addition, long-term supply agreements to lease gas tank equipment and purchase industrial gases are accounted for as operating leases.  Lease agreements frequently include renewal provisions and require the Company to pay real estate taxes, insurance and maintenance costs.  For operating leases, the amortization of the ROU asset and the accretion of its lease obligation liability result in a single straight-line expense recognized over the lease term.  The finance lease is related to the $5.1 million of a machinery lease financing with a vendor.  In September 2022, the lease was amended to make a monthly payment of principal and interest as a fixed amount effective in October 2022.  Other terms remain the same.  The amendment was accounted for as a lease modification and no gain or loss was recognized.  The Company does not record leases on the consolidated balance sheet with a term of one year or less.The components of