Company: AOSL
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0001387467-25-000017
Chunk: 136

Company: ALPHA & OMEGA SEMICONDUCTOR Ltd
Filing Date: 2025-02-06
Form: 10-Q
Item: Item 2
Chunk 136
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 August 9, 2019, one of the Company's wholly-owned subsidiaries (the “Borrower”) entered into a factoring agreement with Hongkong and Shanghai Banking Corporation Limited (“HSBC”), whereby the Borrower assigns certain of its accounts receivable with recourse.  This factoring agreement allows the Borrower to borrow up to 70% of the net amount of its eligible accounts receivable of the Borrower with a maximum amount of $30.0 million.  The interest rate is based on the Secured Overnight Financing Rate (“SOFR”), plus 2.01% per annum.  The Company is the guarantor for this agreement.  The Company is accounting for this transaction as a secured borrowing.  In addition, any cash held in the restricted bank account controlled by HSBC has a legal right of offset against the borrowing.  This agreement, with certain financial covenants required, has no expiration date.  On August 11, 2021, the Borrower signed an agreement with HSBC to reduce the borrowing maximum amount to $8.0 million with certain financial covenants required.  Other terms remain the same.  As of December 31, 2024, the Borrower was in compliance with these covenants.  As of December 31, 2024, there was no outstanding balance and the Company had unused credit of approximately $8.0 million. 

We believe that our current cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs, including working capital and capital expenditures, for at least the next twelve months.  In the long-term, we may require additional capital due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue.  If our cash is insufficient to meet our needs, we may seek to raise capital through debt financing.  The incurrence of indebtedness would result in increased debt service obligations and may include operating and financial covenants that would restrict our operations.  If we decide to raise capital through equity financing, the issuance of additional equity may result in dilution to our shareholders.  We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all.

Cash, cash equivalents and restricted cash  

As of December 31, 2024 and June 30, 2024, we had $182.8 million and $175.5 million of cash, cash equivalents and restricted cash,