Company: AOSL
Filing Date: 2025-08-28
Form Type: 10-K
Source: 0001628280-25-041297
Chunk: 142

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-08-28
Form: 10-K
Item: Item 7
Chunk 142
---
 2024) in the JV Company.  This transaction closed 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%.  As such, we recorded a gain of $0.5 million on the change of equity interest in the JV Company during fiscal year ended June 30, 2025.

On July 14, 2025, we entered into an equity transfer agreement with the investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million.  We identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025.  Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025.

Income tax expense  

 Year Ended June 30, Change 20252024FY25 vs. FY24 (in thousands)(in thousands)(in percentage)Income tax expense (benefit)$(8,625)$3,649 $(12,274)(336.4)%

Income tax expense (benefit) for fiscal years 2025 and 2024 was $(8.6) million and $3.6 million, respectively.  Income tax expense decreased by $12.3 million in fiscal year 2025 as compared to fiscal year 2024.  The decrease was primarily related to the tax benefits reported in connection with the Company’s investment in the JV Company.  In fiscal year 2025, the Company reported a $77.8 million equity method investment loss, generating a $12.5 million tax benefit in fiscal year 2025 as compared to a $4.8 million equity method investment loss in fiscal year 2024 that generated a $0.7 million tax benefit in fiscal year 2024.  Excluding the $12.5 million tax benefit related to the $77.8 million of equity method loss in fiscal 2025, the fiscal 2025 tax 

50

would be $3.9 million of income tax expense.  The remaining difference in tax expense between fiscal years 202