Company: AOSL
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001387467-25-000044
Chunk: 67

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 67
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 with early adoption permitted.  The Company is currently evaluating the impact of the ASU on its consolidated financial statements.

11

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

2. Equity Method Investment in Equity Investee

On March 29, 2016, the Company entered into the JV Agreement to form a joint venture, (the “JV Company”) for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility in the Liangjiang New Area of Chongqing, China (the “JV Transaction”).  Prior to December 1, 2021, the JV Company was accounted for as a consolidated subsidiary since the Company had controlling financial interest.  As of 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.  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 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%.  During the three and nine months ended March 31, 2025, the Company recorded a gain of $0.5 million on the change of equity interest in the JV Company.  As of March 31, 2025, the percentage of outstanding JV equity interest beneficially owned by the Company was 39.2%.

The Company accounts for its investment in the