Bermuda
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77-0553536
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Shares, $0.002 par value per share
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The NASDAQ Global Select Market
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Large accelerated filer
o
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Accelerated filer
x
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Non-accelerated filer
o
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(Do not check if a smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
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Page
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Part I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Part IV.
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Item 15.
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Item 1.
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Business
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Product Family
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Description
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Product Categories
within Product Type
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Typical Application
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Power Discretes
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Low on-resistance switch used for routing current and switching voltages in power control circuits
High power switches used for power circuits
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DC-DC for CPU/GPU
DC-AC conversion
AC-DC conversion
Load switching
Motor control
Battery protection
Power factor correction
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Smart phone chargers, battery packs, notebooks, desktop and servers, data centers, base stations, graphics card, game boxes, TVs, AC adapters, power supplies, motor control, power tools, E-vehicles, white goods and industrial motor drives, UPS systems, solar inverters and industrial welding
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Power ICs
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Integrated devices used for power management and power delivery
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DC-DC Buck conversion
DC-DC Boost conversion
Smart load switching DrMOS power stage
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Flat panel displays, TVs, Notebooks, Ultrabooks, servers, DVD/Blu-Ray players, set-top boxes, and networking equipment
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Analog power devices used for circuit protection and signal switching
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Transient voltage protection
Analog switch
Electromagnetic interference filter
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Notebooks, Ultrabooks, desktop PCs, tablets, flat panel displays, TVs, smart phones, and portable electronic devices
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•
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identification of a customer design opportunity;
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•
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qualification of the design opportunity by our FAEs through comparison of the power requirements against our product portfolio;
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•
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provision of a product sample to the end customer to be included in the customer's pre-production model with the goal of being included in the final bill of materials; and
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•
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placement by the customer, or through its distributor, of a full production order as the end customer increases to full volume production.
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•
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our success in expanding and diversifying our serviceable markets, and our ability to develop technologies and product solutions for these markets;
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•
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our capability in quickly developing and introducing proprietary technology and best in class products;
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•
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the performance and cost-effectiveness of our products relative to that of our competitors;
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•
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our ability and capacity to manufacture, package and deliver products in large volume on a timely basis at a competitive price;
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•
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our success in utilizing new and proprietary technologies to offer products and features previously not available in the marketplace;
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•
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our ability to recruit and retain analog semiconductor designers and application engineers; and
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•
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our ability to protect our intellectual property.
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Name
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Age
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Position
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Mike F. Chang, Ph.D.
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73
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Chairman of the Board and Chief Executive Officer
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Yueh-Se Ho, Ph.D.
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66
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Director and Chief Operating Officer
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Yifan Liang
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54
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Chief Financial Officer and Corporate Secretary
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Daniel Kuang Ming Chang
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63
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Senior Vice President of Strategic Business and World-wide Applications Engineering
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Item 1A.
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Risk Factors
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•
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Inability to gain or sustain sufficient new customers and market shares to offset the additional costs of building and operating a new facility;
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•
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Lack of sufficient control over the operation and finances of the joint venture;
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•
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Insufficient personnel with requisite expertise and experiences to operate a 12-inch fabrication facility;
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•
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High cost and unexpected expenses relating to upgrading and improving the packaging and testing and fabrication facilities;
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•
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Inability to fully integrate the joint venture with our existing fabrication facility in Oregon, and inability to fully utilize both fabrication facilities;
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•
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Failure of Chongqing Funds to meet its obligations under the JV Agreement;
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•
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Difficulties in protecting and enforcing our intellectual property rights;
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•
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Difficulties in maintaining international communications and coordination between our locations in the U.S. and China;
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•
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Inability to take advantage of the expected tax savings;
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•
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Changes or uncertainties in economic, legal, regulatory, social and political conditions in China, and lack of transparency and certainty in the Chinese regulatory process;
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•
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Labor disputes and difficulties in recruiting new employees; and
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•
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Additional costs and complexity with compliance of local and state regulations of Chongqing.
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•
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competition from other companies with greater resources and experiences in the digital power market;
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•
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the availability of and our ability to recruit and attract qualified personnel;
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•
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our lack of experience and reputation in the digital power market;
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•
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difficulties in designing products acceptable to customers; and
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•
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sales and marketing capability.
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•
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enhancing management information systems, including forecasting procedures;
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•
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further developing our operating, administrative, financial and accounting systems and controls;
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•
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managing our working capital and sources of financing;
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•
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maintaining close coordination among our engineering, accounting, finance, marketing, sales and operations organizations;
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•
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retaining, training and managing our employee base;
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•
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enhancing human resource operations and improving employee hiring and training programs;
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•
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realigning our business structure to more effectively allocate and utilize our internal resources;
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•
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improving and sustaining our supply chain capability; and
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•
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managing both our direct and distribution sales channels in a cost-efficient and competitive manner.
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•
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a deterioration in general demand for electronic products, particularly the PC market, as a result of global or regional financial crises and associated macro-economic slowdowns, and/or the cyclicality of the semiconductor industry;
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•
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a deterioration in business conditions at our distributors and /or end customers;
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•
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adverse general economic conditions in the countries where our products are sold or used;
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•
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the emergence and growth of markets for products we are currently developing;
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•
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our ability to successfully develop, introduce and sell new or enhanced products in a timely manner and the rate at which our new products replace declining orders for our older products;
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•
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the anticipation, announcement or introduction of new or enhanced products by us or our competitors;
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•
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the amount and timing of operating costs and capital expenditures, including expenses related to the maintenance and expansion of our business operations and infrastructure;
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•
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the announcement of significant acquisitions, disposition or partnership arrangements;
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•
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changes and delays in our JV Transaction;
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•
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operation of the JV Company;
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•
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changes in the utilization of our in-house manufacturing capacity;
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•
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supply and demand dynamics and the resulting price pressure on the products we sell;
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•
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the unpredictable volume and timing of orders, deferrals, cancellations and reductions for our products, which may depend on factors such as our end customers' sales outlook, purchasing patterns and inventory adjustments based on general economic conditions or other factors;
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•
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changes in the selling prices of our products and in the relative mix in the unit shipments of our products, which have different average selling prices and profit margins;
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•
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changes in laws and regulations affecting our business operations;
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•
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changes in costs associated with manufacturing of our products, including pricing of wafer, raw materials and assembly services;
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•
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announcement of significant share repurchase programs;
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•
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our concentration of sales in consumer applications and changes in consumer purchasing patterns and confidence; and
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•
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the adoption of new industry standards or changes in our regulatory environment.
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•
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general global and regional economic conditions;
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•
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late introduction or lack of market acceptance of their products;
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•
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lack of competitive pricing;
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•
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shortage of component supplies;
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•
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excess inventory in the sales channels into which our end customers sell their products;
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•
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changes in the supply chain; and
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•
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changes as a result of regulatory restrictions applicable to China-exported products.
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•
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significantly greater financial, technical, research and development, sales and marketing and other resources, enabling them to invest substantially more resources than us to respond to the adoption of new or emerging technologies or changes in customer requirements;
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•
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greater brand recognition and longer operating histories;
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•
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larger customer bases and longer, more established relationships with distributors or existing or potential end customers, which may provide them with greater reliability and information regarding future trends and requirements that may not be available to us;
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•
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the ability to provide greater incentives to end customers through rebates, and marketing development funds or similar programs;
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•
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more product lines, enabling them to bundle their products to offer a broader product portfolio or to integrate power management functionality into other products that we do not sell; and
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•
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captive manufacturing facilities, providing them with guaranteed access to manufacturing facilities in times of global semiconductor shortages.
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•
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limited control over delivery schedules, quality assurance and control and production costs;
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•
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discretion of foundries to reduce deliveries to us on short notice, allocate capacity to other customers that may be larger or have long-term customer or preferential arrangements with foundries that we use;
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•
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unavailability of, or potential delays in obtaining access to, key process technologies;
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•
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limited warranties on wafers or products supplied to us;
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•
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damage to equipment and facilities, power outages, equipment or materials shortages that could limit manufacturing yields and capacity at the foundries;
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•
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potential unauthorized disclosure or misappropriation of intellectual property, including use of our technology by the foundries to make products for our competitors;
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•
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financial difficulties and insolvency of foundries; and
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•
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acquisition of foundries by third parties.
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•
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unavailability of equipment, whether new or previously owned, at acceptable terms and prices;
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•
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facility equipment failure, power outages or other disruptions;
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•
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shortage of raw materials, including packaging substrates, copper, gold and molding compound;
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•
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failure to maintain quality assurance and remedy defects and impurities;
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•
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changes in the packaging requirements of customers; and
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•
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our limited experience in operating a high-volume packaging and testing facility.
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•
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write-downs in inventories associated with stock rotation rights and increases in provisions for price adjustments granted to certain distributors;
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•
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potential reduction or discontinuation of sales of our products by distributors;
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•
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failure to devote resources necessary to sell our products at the prices, in the volumes and within the time frames that we expect;
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•
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focusing their sales efforts on products of our competitors;
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•
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dependence upon the continued viability and financial resources of these distributors, some of which are small organizations with limited working capital and all of which depend on general economic conditions and conditions within the semiconductor industry;
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•
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dependence on the timeliness and accuracy of shipment forecasts and resale reports from our distributors;
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•
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management of relationships with distributors, which can deteriorate as a result of conflicts with efforts to sell directly to our end customers; and
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•
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our agreements with distributors which are generally terminable by either party on short notice.
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•
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policing any unauthorized use of or misappropriation of our intellectual property, which is often difficult and costly and could enable third parties to benefit from our technologies without paying us;
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•
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others independently developing similar proprietary information and techniques, gaining authorized or unauthorized access to our intellectual property rights, disclosing such technology or designing around our patents;
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•
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the possibility that any patent or registered trademark owned by us may not be enforceable or may be invalidated, circumvented or otherwise challenged in one or more countries and the rights granted there under may not provide competitive advantages to us;
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•
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uncertainty as to whether patents will be issued from any of our pending or future patent applications with the scope of the claims sought by us, if at all; and
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•
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intellectual property laws and confidentiality laws may not adequately protect our intellectual property rights, including, for example, in China where enforcement of China intellectual property-related laws have historically been less effective, primarily because of difficulties in enforcement and low damage awards.
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•
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incur substantial legal and personnel expenses to defend the claims or to negotiate for a settlement of claims;
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•
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pay substantial damages or settlement to the party claiming infringement;
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•
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refrain from further development or sale of our products;
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•
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attempt to develop non-infringing technology, which may be expensive and time consuming, if possible at all;
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•
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enter into costly royalty or license agreements that might not be available on commercially reasonable terms or at all;
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•
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cross-license our technology with a competitor to resolve an infringement claim, which could weaken our ability to compete with that competitor; and
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•
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indemnify our distributors, end customers, licensees and others from the costs of and damages of infringement claims by our distributors, end customers, licensees and others, which could result in substantial expenses for us and damage our business relationships with them.
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•
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economic and political instability;
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•
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costs and delays associated with transportations and communications;
|
•
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coordination of operations through multiple jurisdictions and time zones;
|
•
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fluctuations in foreign currency exchange rates;
|
•
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trade restrictions, changes in laws and regulations relating to, amongst other things, import and export tariffs, taxation, environmental regulations, land use rights and property; and
|
•
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the laws of, including tax laws, and the policies of the U.S. toward, countries in which we operate.
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•
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higher level of government involvement;
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•
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early stage of development of a market-oriented economy;
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•
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rapid growth rate;
|
•
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higher level of control over foreign currency exchange; and
|
•
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less efficient allocation of resources.
|
•
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actual or anticipated fluctuations in our operating results;
|
•
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general economic, industry, regional and global market conditions, including the economic conditions of specific market segments for our products, including the PC markets;
|
•
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our failure to meet analysts' expectations, including expectation regarding our revenue, gross margin and operating expenses;
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•
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changes in financial estimates and outlook by securities research analysts;
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•
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our ability to increase our gross margin;
|
•
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announcements by us or our competitors of new products, acquisitions, strategic partnerships, joint ventures or capital commitments;
|
•
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announcements of technological or competitive developments;
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•
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announcement of acquisition, partnership and major corporate transactions;
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•
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regulatory developments in our target markets affecting us, our customers or our competitors;
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•
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our ability to enter into new market segments, gain market share, diversify our customer base and successfully secure manufacturing capacity;
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•
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announcements regarding intellectual property disputes or litigation involving us or our competitors;
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•
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changes in the estimation of the future size and growth rate of our markets;
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•
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additions or departures of key personnel;
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•
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repurchase of shares under our repurchase program;
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•
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announcement of sales of our securities by us or by our major shareholders;
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•
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general economic or political conditions in China and other countries in Asia; and
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•
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other factors.
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•
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the ability of our board of directors to determine the rights, preferences and privileges of our preferred shares and to issue the preferred shares without shareholder approval;
|
•
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advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at shareholder meetings; and
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•
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the requirement to remove directors by a resolution passed by at least two-thirds of the votes cast by the shareholders having a right to attend and vote at the shareholder meeting.
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Location
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Square Footage
|
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Primary Use
|
|
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475 Oakmead Parkway
Sunnyvale, California, USA 94085
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57,000
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Research and development, marketing, sales and administration
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|||
3131 Northeast Brookwood Parkway
Hillsboro, Oregon, USA 97124
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245,000
|
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Wafer fabrication facility
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|
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Suite160, Rialto I, 7500 Rialto Boulevard,
Austin, Texas, USA 78735
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5,142
|
|
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Research and development (under construction)
|
|
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|
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Unit 701 Tesbury Centre, 28 Queen's
Road East, Wanchai, Hong Kong
|
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1,188
|
|
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Sales and distribution
|
|
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|
|||
Room 68, 27 Andar Centro
Comercial Praia Grande no.
429 Avenida da Praia Grande, Macau
|
|
81
|
|
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Manufacturing support
|
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|
|||
Building 8/9, No. 91, Lane 109, Rongkang
Road, Songjiang District, Shanghai,
China 201614
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194,269
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Packaging and testing, manufacturing support
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Building B1, Dongkai Industrial Park,
Songjiang Export Process Zone, Area B, Songjiang, Shanghai, China 201614
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250,198
|
|
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Packaging and testing, manufacturing support
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|
|
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|
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Room 1002-1005, 1007, Building 1
Jiali BuYeCheng
No. 218 Tianmu W. Road
Zhabei District, Shanghai, China 200070
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8,267
|
|
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Marketing and field application engineering support
|
|
|
|
|||
East 10F., Matshunichi Building,
No.9996 Shennan Blvd,
Shenzhen High-tech Park,
Nanshan District, Shenzhen, China 518057
|
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8,364
|
|
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Marketing and field application engineering support
|
|
|
|
|
|
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No.5-407, Yunhan Road,
Shuitu Hi-Tech Industrial Zone,
Beibei District, Chongqing, China 400714
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2,459,002
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Wafer fabrication facility and assembly and testing facility (land size 2,459,002, phase 1 building size 1,002,240)
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|
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9F, No.292, Yangguang St., Neihu
Dist., Taipei City 11491, Taiwan
R.O.C.
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17,642
|
|
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Marketing and field application engineering support, research and development
|
Location
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Square Footage
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|
Primary Use
|
|
7F, Unit 3 & 5, 16F, Unit 1, No.32, Gaotie 2nd Rd.,
Zhubei City, Hsinchu County 30274, Taiwan
R.O.C.
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9,443
|
|
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Research and development
|
|
|
|
|
|
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10th Floor, Bandi Building, Bongeunsa-ro 114,
Gangnam-gu, Seoul,
Korea, 135-907
|
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2,500
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|
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Marketing and field application engineering support
|
|
|
|
|
|
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Sampyeong-dong 621, Pangyo Innovally, C-501,
253, Pangyo-ro, Bundang-gu, Seongnam-si,
Gyeonggi-do, Korea
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3,173
|
|
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Marketing and field application engineering support
|
|
|
|
|||
10F, Koujimachi Sunrise Building,
Koujimachi 2-2-31, Chiyoda-ku,
Tokyo, Japan 102-0083
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|
884
|
|
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Marketing and field application engineering support
|
|
|
|
|
|
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5/F, No. 521 Yurakucyo building,
10-1, Yurakucho 1-chome, Chiyoda-ku,
Tokyo, Japan 100-0006
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1,625
|
|
|
Marketing and field application engineering support
|
|
|
|
|
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Item 3.
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Legal Proceedings
|
Item 5.
|
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
Fiscal 2017
|
Quarterly Periods
|
High
|
|
Low
|
||||
First Fiscal Quarter :
|
July 1, 2016 - September 30, 2016
|
$
|
23.03
|
|
|
$
|
13.44
|
|
Second Fiscal Quarter:
|
October 1, 2016 - December 31, 2016
|
$
|
23.43
|
|
|
$
|
18.40
|
|
Third Fiscal Quarter:
|
January 1, 2017- March 31, 2017
|
$
|
22.89
|
|
|
$
|
16.77
|
|
Fourth Fiscal Quarter:
|
April 1, 2017 - June 30, 2017
|
$
|
20.02
|
|
|
$
|
16.07
|
|
|
|
|
|
|
||||
Fiscal 2018
|
|
|
|
|
||||
First Fiscal Quarter :
|
July 1, 2017 - September 30, 2017
|
$
|
18.37
|
|
|
$
|
14.92
|
|
Second Fiscal Quarter:
|
October 1, 2017 - December 31, 2017
|
$
|
18.62
|
|
|
$
|
16.36
|
|
Third Fiscal Quarter:
|
January 1, 2018- March 31, 2018
|
$
|
17.74
|
|
|
$
|
13.94
|
|
Fourth Fiscal Quarter:
|
April 1, 2018 - June 30, 2018
|
$
|
16.09
|
|
|
$
|
14.18
|
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Dollar Value of Shares that May Be Purchased Under the Plans or Programs
|
||||||||||||||
May 7, 2018 to May 31, 2018
|
|
195,710
|
|
|
|
|
$
|
15.29
|
|
|
|
|
195,710
|
|
|
|
|
|
|
|
|
|
June 1, 2018
|
|
5,400
|
|
|
|
|
$
|
15.65
|
|
|
|
|
5,400
|
|
|
|
|
|
|
|
|
|
Total repurchase during the three months ended June 30, 2018
|
|
201,110
|
|
|
|
|
$
|
15.30
|
|
|
|
|
201,110
|
|
|
|
|
$
|
14,930,000
|
|
|
|
|
Year Ended June 30,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statements of Operations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenue
|
$
|
421,553
|
|
|
$
|
383,337
|
|
|
$
|
335,661
|
|
|
$
|
327,935
|
|
|
$
|
318,121
|
|
Cost of goods sold
|
309,625
|
|
|
291,516
|
|
|
269,839
|
|
|
267,453
|
|
|
259,050
|
|
|||||
Gross profit
|
111,928
|
|
|
91,821
|
|
|
65,822
|
|
|
60,482
|
|
|
59,071
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
37,344
|
|
|
29,835
|
|
|
26,006
|
|
|
27,075
|
|
|
24,409
|
|
|||||
Selling, general and administrative
|
66,164
|
|
|
48,842
|
|
|
37,874
|
|
|
37,625
|
|
|
34,554
|
|
|||||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
432
|
|
|
—
|
|
|
—
|
|
|||||
Total operating expenses
|
103,508
|
|
|
78,677
|
|
|
64,312
|
|
|
64,700
|
|
|
58,963
|
|
|||||
Operating income (loss)
|
8,420
|
|
|
13,144
|
|
|
1,510
|
|
|
(4,218
|
)
|
|
108
|
|
|||||
Interest income and other income (loss), net
|
(1,943
|
)
|
|
(141
|
)
|
|
(498
|
)
|
|
533
|
|
|
(177
|
)
|
|||||
Interest expense
|
(821
|
)
|
|
(91
|
)
|
|
(23
|
)
|
|
(181
|
)
|
|
(266
|
)
|
|||||
Income (loss) before income taxes
|
5,656
|
|
|
12,912
|
|
|
989
|
|
|
(3,866
|
)
|
|
(335
|
)
|
|||||
Income tax expense
|
708
|
|
|
3,652
|
|
|
4,021
|
|
|
3,897
|
|
|
2,769
|
|
|||||
Net income (loss) including noncontrolling interest
|
4,948
|
|
|
9,260
|
|
|
(3,032
|
)
|
|
(7,763
|
)
|
|
(3,104
|
)
|
|||||
Net loss attributable to noncontrolling interest
|
(9,315
|
)
|
|
(4,569
|
)
|
|
(104
|
)
|
|
—
|
|
|
—
|
|
|||||
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,263
|
|
|
$
|
13,829
|
|
|
$
|
(2,928
|
)
|
|
$
|
(7,763
|
)
|
|
$
|
(3,104
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
(0.13
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.12
|
)
|
Diluted
|
$
|
0.57
|
|
|
$
|
0.56
|
|
|
$
|
(0.13
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.12
|
)
|
Weighted average number of common share attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
23,901
|
|
|
23,526
|
|
|
22,452
|
|
|
26,429
|
|
|
25,952
|
|
|||||
Diluted
|
24,844
|
|
|
24,826
|
|
|
22,452
|
|
|
26,429
|
|
|
25,952
|
|
|
As of June 30,
|
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
||||||||||
|
(in thousands)
|
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
131,535
|
|
|
$
|
115,708
|
|
|
$
|
87,774
|
|
|
$
|
106,085
|
|
|
$
|
117,788
|
|
|
Working capital
|
$
|
130,532
|
|
|
$
|
130,566
|
|
|
$
|
118,450
|
|
|
$
|
147,351
|
|
|
$
|
151,322
|
|
|
Total assets
|
$
|
667,049
|
|
|
$
|
398,408
|
|
|
$
|
318,505
|
|
|
$
|
347,904
|
|
|
$
|
362,925
|
|
|
Bank borrowings - long term
|
$
|
26,786
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Capital leases - long term
|
$
|
56,791
|
|
|
$
|
866
|
|
|
$
|
1,695
|
|
|
$
|
64
|
|
|
$
|
1,005
|
|
|
Current portion of bank borrowings
|
$
|
3,811
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Current portion of capital leases
|
$
|
4,491
|
|
|
$
|
828
|
|
|
$
|
819
|
|
|
$
|
941
|
|
|
$
|
1,061
|
|
|
Total Alpha and Omega Semiconductor Limited shareholders’ equity
|
$
|
278,594
|
|
|
$
|
270,770
|
|
|
$
|
242,142
|
|
|
$
|
276,639
|
|
|
$
|
283,388
|
|
|
Item 7.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
Year Ended June 30,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
|||||||||
|
(in thousands)
|
|
(% of revenue)
|
|||||||||||||||||
Cost of goods sold
|
$
|
1,641
|
|
|
$
|
1,041
|
|
|
$
|
636
|
|
|
0.4
|
%
|
|
0.3
|
%
|
|
0.2
|
%
|
Research and development
|
1,855
|
|
|
1,361
|
|
|
1,115
|
|
|
0.4
|
%
|
|
0.4
|
%
|
|
0.3
|
%
|
|||
Selling, general and administrative
|
7,916
|
|
|
4,232
|
|
|
2,562
|
|
|
1.9
|
%
|
|
1.1
|
%
|
|
0.8
|
%
|
|||
|
$
|
11,412
|
|
|
$
|
6,634
|
|
|
$
|
4,313
|
|
|
2.7
|
%
|
|
1.8
|
%
|
|
1.3
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Power discrete
|
$
|
342,148
|
|
|
$
|
288,788
|
|
|
$
|
252,063
|
|
|
$
|
53,360
|
|
18.5
|
%
|
|
$
|
36,725
|
|
14.6
|
%
|
Power IC
|
67,083
|
|
|
82,389
|
|
|
69,344
|
|
|
(15,306
|
)
|
(18.6
|
)%
|
|
13,045
|
|
18.8
|
%
|
|||||
Packaging and testing services
|
12,322
|
|
|
12,160
|
|
|
14,254
|
|
|
162
|
|
1.3
|
%
|
|
(2,094
|
)
|
(14.7
|
)%
|
|||||
|
$
|
421,553
|
|
|
$
|
383,337
|
|
|
$
|
335,661
|
|
|
$
|
38,216
|
|
10.0
|
%
|
|
$
|
47,676
|
|
14.2
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Cost of goods sold
|
$
|
309,625
|
|
|
$
|
291,516
|
|
|
$
|
269,839
|
|
|
$
|
18,109
|
|
6.2
|
%
|
|
$
|
21,677
|
|
8.0
|
%
|
Percentage of revenue
|
73.4
|
%
|
|
76.0
|
%
|
|
80.4
|
%
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross profit
|
$
|
111,928
|
|
|
$
|
91,821
|
|
|
$
|
65,822
|
|
|
$
|
20,107
|
|
21.9
|
%
|
|
$
|
25,999
|
|
39.5
|
%
|
Percentage of revenue
|
26.6
|
%
|
|
24.0
|
%
|
|
19.6
|
%
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Research and development
|
$
|
37,344
|
|
|
$
|
29,835
|
|
|
$
|
26,006
|
|
|
$
|
7,509
|
|
25.2
|
%
|
|
$
|
3,829
|
|
14.7
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Selling, general and administrative
|
$
|
66,164
|
|
|
$
|
48,842
|
|
|
$
|
37,874
|
|
|
$
|
17,322
|
|
35.5
|
%
|
|
$
|
10,968
|
|
29.0
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Impairment of long-lived assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
432
|
|
|
$
|
—
|
|
100.0
|
%
|
|
$
|
(432
|
)
|
(100.0
|
)%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Interest income and other income (loss), net
|
$
|
(1,943
|
)
|
|
$
|
(141
|
)
|
|
$
|
(498
|
)
|
|
$
|
(1,802
|
)
|
1,278.0
|
%
|
|
$
|
357
|
|
(71.7
|
)%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
||||||||||||||
|
(in thousands)
|
|
(in thousands)
|
(in percentage)
|
|
(in thousands)
|
(in percentage)
|
||||||||||||||||
Interest expense
|
$
|
(821
|
)
|
|
$
|
(91
|
)
|
|
$
|
(23
|
)
|
|
$
|
(730
|
)
|
802.2
|
%
|
|
$
|
(68
|
)
|
295.7
|
%
|
|
|
Year Ended June 30,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
(in thousands)
|
||||||||||
Net cash provided by operating activities
|
|
$
|
3,480
|
|
|
$
|
42,648
|
|
|
$
|
40,182
|
|
Net cash used in investing activities
|
|
(194,095
|
)
|
|
(55,618
|
)
|
|
(21,721
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
206,953
|
|
|
40,809
|
|
|
(36,686
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(511
|
)
|
|
95
|
|
|
(86
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
|
$
|
15,827
|
|
|
$
|
27,934
|
|
|
$
|
(18,311
|
)
|
|
Payments Due by Period
|
||||||||||||||||||
|
|
|
Less than
|
|
|
|
More than
|
||||||||||||
|
Total
|
|
1 year
|
|
1-3 years
|
|
3-5years
|
|
5 years
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Bank borrowings
|
$
|
36,117
|
|
|
$
|
5,299
|
|
|
$
|
10,650
|
|
|
$
|
20,168
|
|
|
$
|
—
|
|
Capital leases
|
71,351
|
|
|
7,837
|
|
|
33,220
|
|
|
30,294
|
|
|
—
|
|
|||||
Operating leases
|
9,794
|
|
|
3,967
|
|
|
4,360
|
|
|
900
|
|
|
567
|
|
|||||
Capital commitments with respect to property and equipment
|
58,321
|
|
|
58,321
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase commitments with respect to inventories and others
|
38,036
|
|
|
38,036
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
213,619
|
|
|
$
|
113,460
|
|
|
$
|
48,230
|
|
|
$
|
51,362
|
|
|
$
|
567
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Quarter Ended
|
|
|||||||||||||||||
|
June 30,
2018 |
|
|
March 31,
2018 |
|
|
December 31,
2017 |
|
|
September 30,
2017 |
|
||||||||
|
(in thousands, except per share data)
|
|
|||||||||||||||||
Revenue
|
$
|
109,897
|
|
|
|
$
|
102,902
|
|
|
|
$
|
103,896
|
|
|
|
$
|
104,858
|
|
|
Gross profit
|
$
|
29,183
|
|
|
|
$
|
27,133
|
|
|
|
$
|
28,082
|
|
|
|
$
|
27,530
|
|
|
Operating income (loss)
|
$
|
(75
|
)
|
|
|
$
|
681
|
|
|
|
$
|
3,224
|
|
|
|
$
|
4,590
|
|
|
Net income (loss) including noncontrolling interest
|
$
|
(3,025
|
)
|
|
|
$
|
(488
|
)
|
|
|
$
|
5,122
|
|
|
|
$
|
3,339
|
|
|
Net loss attributable to noncontrolling interest
|
$
|
(4,046
|
)
|
|
|
$
|
(2,139
|
)
|
|
|
$
|
(1,669
|
)
|
|
|
$
|
(1,461
|
)
|
|
Net income attributable to Alpha and Omega Semiconductor Limited
|
$
|
1,021
|
|
|
|
$
|
1,651
|
|
|
|
$
|
6,791
|
|
|
|
$
|
4,800
|
|
|
Net income per common share attributable to Alpha and Omega Semiconductor Limited
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.04
|
|
|
|
$
|
0.07
|
|
|
|
$
|
0.28
|
|
|
|
$
|
0.20
|
|
|
Diluted
|
$
|
0.04
|
|
|
|
$
|
0.07
|
|
|
|
$
|
0.27
|
|
|
|
$
|
0.19
|
|
|
|
Quarter Ended
|
|
|||||||||||||||||
|
June 30,
2017 |
|
|
March 31,
2017 |
|
|
December 31,
2016 |
|
|
September 30,
2016 |
|
||||||||
|
(in thousands, except per share data)
|
|
|||||||||||||||||
Revenue
|
$
|
98,007
|
|
|
|
$
|
93,281
|
|
|
|
$
|
94,687
|
|
|
|
$
|
97,362
|
|
|
Gross profit
|
$
|
25,086
|
|
|
|
$
|
22,697
|
|
|
|
$
|
22,094
|
|
|
|
$
|
21,944
|
|
|
Operating income
|
$
|
3,561
|
|
|
|
$
|
3,005
|
|
|
|
$
|
2,836
|
|
|
|
$
|
3,742
|
|
|
Net income including noncontrolling interest
|
$
|
2,787
|
|
|
|
$
|
2,386
|
|
|
|
$
|
1,657
|
|
|
|
$
|
2,430
|
|
|
Net loss attributable to noncontrolling interest
|
$
|
(1,332
|
)
|
|
|
$
|
(1,170
|
)
|
|
|
$
|
(1,190
|
)
|
|
|
$
|
(877
|
)
|
|
Net income attributable to Alpha and Omega Semiconductor Limited
|
$
|
4,119
|
|
|
|
$
|
3,556
|
|
|
|
$
|
2,847
|
|
|
|
$
|
3,307
|
|
|
Net income per common share attributable to Alpha and Omega Semiconductor Limited
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.17
|
|
|
|
$
|
0.15
|
|
|
|
$
|
0.12
|
|
|
|
$
|
0.14
|
|
|
Diluted
|
$
|
0.17
|
|
|
|
$
|
0.14
|
|
|
|
$
|
0.11
|
|
|
|
$
|
0.14
|
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
Item
|
Page
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
131,535
|
|
|
$
|
115,708
|
|
Restricted cash
|
189
|
|
|
221
|
|
||
Accounts receivable, net
|
33,755
|
|
|
28,410
|
|
||
Inventories
|
90,182
|
|
|
76,254
|
|
||
Other current assets
|
29,551
|
|
|
4,883
|
|
||
Total current assets
|
285,212
|
|
|
225,476
|
|
||
Property, plant and equipment, net
|
331,656
|
|
|
148,191
|
|
||
Intangible assets, net
|
16,591
|
|
|
282
|
|
||
Deferred income tax assets - long-term
|
4,892
|
|
|
4,594
|
|
||
Other long-term assets
|
28,698
|
|
|
19,865
|
|
||
Total assets
|
$
|
667,049
|
|
|
$
|
398,408
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
92,661
|
|
|
$
|
63,134
|
|
Accrued liabilities
|
49,841
|
|
|
28,386
|
|
||
Income taxes payable
|
2,211
|
|
|
1,748
|
|
||
Short-term debt
|
3,811
|
|
|
—
|
|
||
Deferred margin
|
1,665
|
|
|
814
|
|
||
Capital leases
|
4,491
|
|
|
828
|
|
||
Total current liabilities
|
154,680
|
|
|
94,910
|
|
||
Long-term debt
|
26,786
|
|
|
—
|
|
||
Income taxes payable - long-term
|
924
|
|
|
922
|
|
||
Deferred income tax liabilities
|
713
|
|
|
2,659
|
|
||
Capital leases - long-term
|
56,791
|
|
|
866
|
|
||
Other long-term liabilities
|
993
|
|
|
502
|
|
||
Total liabilities
|
240,887
|
|
|
99,859
|
|
||
Commitments and contingencies (
Note 13
)
|
|
|
|
|
|
||
Equity:
|
|
|
|
||||
Preferred shares, par value $0.002 per share:
|
|
|
|
||||
Authorized: 10,000 shares; Issued and outstanding: none at June 30, 2018 and 2017
|
—
|
|
|
—
|
|
||
Common shares, par value $0.002 per share:
|
|
|
|
||||
Authorized: 100,000 shares; issued and outstanding: 30,400 shares and 23,860 shares at June 30, 2018 and 29,600 shares and 23,992 shares at June 30, 2017
|
61
|
|
|
59
|
|
||
Treasury shares at cost; 6,540 shares at June 30, 2018 and 5,608 shares at June 30, 2017
|
(64,790
|
)
|
|
(49,836
|
)
|
||
Additional paid-in capital
|
220,244
|
|
|
206,332
|
|
||
Accumulated other comprehensive income
|
440
|
|
|
306
|
|
||
Retained earnings
|
122,639
|
|
|
113,909
|
|
||
Total Alpha and Omega Semiconductor Limited shareholders’ equity
|
278,594
|
|
|
270,770
|
|
||
Noncontrolling interest
|
147,568
|
|
|
27,779
|
|
||
Total equity
|
426,162
|
|
|
298,549
|
|
||
Total liabilities and equity
|
$
|
667,049
|
|
|
$
|
398,408
|
|
|
|
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
421,553
|
|
|
$
|
383,337
|
|
|
$
|
335,661
|
|
Cost of goods sold
|
309,625
|
|
|
291,516
|
|
|
269,839
|
|
|||
Gross profit
|
111,928
|
|
|
91,821
|
|
|
65,822
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Research and development
|
37,344
|
|
|
29,835
|
|
|
26,006
|
|
|||
Selling, general and administrative
|
66,164
|
|
|
48,842
|
|
|
37,874
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
432
|
|
|||
Total operating expenses
|
103,508
|
|
|
78,677
|
|
|
64,312
|
|
|||
Operating income
|
8,420
|
|
|
13,144
|
|
|
1,510
|
|
|||
|
|
|
|
|
|
||||||
Interest income and other income (loss), net
|
(1,943
|
)
|
|
(141
|
)
|
|
(498
|
)
|
|||
Interest expense
|
(821
|
)
|
|
(91
|
)
|
|
(23
|
)
|
|||
Income before income taxes
|
5,656
|
|
|
12,912
|
|
|
989
|
|
|||
Income tax expense
|
708
|
|
|
3,652
|
|
|
4,021
|
|
|||
Net income (loss) including noncontrolling interest
|
4,948
|
|
|
9,260
|
|
|
(3,032
|
)
|
|||
Net loss attributable to noncontrolling interest
|
(9,315
|
)
|
|
(4,569
|
)
|
|
(104
|
)
|
|||
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,263
|
|
|
$
|
13,829
|
|
|
$
|
(2,928
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per common share attributable to Alpha and Omega Semiconductor Limited
|
|
|
|
|
|
||||||
Basic
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
(0.13
|
)
|
Diluted
|
$
|
0.57
|
|
|
$
|
0.56
|
|
|
$
|
(0.13
|
)
|
|
|
|
|
|
|
||||||
Weighted average number of common share attributable to Alpha and Omega Semiconductor Limited used to compute net income (loss) per share:
|
|
|
|
|
|
||||||
Basic
|
23,901
|
|
|
23,526
|
|
|
22,452
|
|
|||
Diluted
|
24,844
|
|
|
24,826
|
|
|
22,452
|
|
|
Year ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) including noncontrolling interest
|
$
|
4,948
|
|
|
$
|
9,260
|
|
|
$
|
(3,032
|
)
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
244
|
|
|
(1,012
|
)
|
|
(135
|
)
|
|||
Comprehensive income (loss)
|
5,192
|
|
|
8,248
|
|
|
(3,167
|
)
|
|||
Noncontrolling interest
|
(9,205
|
)
|
|
(5,118
|
)
|
|
(103
|
)
|
|||
Comprehensive income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,397
|
|
|
$
|
13,366
|
|
|
$
|
(3,064
|
)
|
|
Convertible Preferred Shares
|
|
Common Shares
|
|
Treasury Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Other Comprehensive Income
|
|
Retained Earnings
|
|
Total AOS Shareholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||||
Balance, June 30, 2015
|
—
|
|
|
$
|
—
|
|
|
27,314
|
|
|
$
|
55
|
|
|
(998
|
)
|
|
$
|
(8,593
|
)
|
|
$
|
181,040
|
|
|
$
|
905
|
|
|
$
|
103,232
|
|
|
$
|
276,639
|
|
|
$
|
—
|
|
|
$
|
276,639
|
|
Exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
926
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
5,329
|
|
|
—
|
|
|
—
|
|
|
5,330
|
|
|
—
|
|
|
5,330
|
|
|||||||||
Reissuance of treasury stock upon exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
242
|
|
|
—
|
|
|
242
|
|
|||||||||
Withholding tax on restricted stock units
|
—
|
|
|
—
|
|
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,036
|
)
|
|
—
|
|
|
—
|
|
|
(1,036
|
)
|
|
—
|
|
|
(1,036
|
)
|
|||||||||
Issuance of common shares under Employee Stock Purchase Plan
|
—
|
|
|
—
|
|
|
258
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,798
|
|
|
—
|
|
|
—
|
|
|
1,799
|
|
|
—
|
|
|
1,799
|
|
|||||||||
Repurchase of common shares under shares repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,695
|
)
|
|
(42,081
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,081
|
)
|
|
—
|
|
|
(42,081
|
)
|
|||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,313
|
|
|
—
|
|
|
—
|
|
|
4,313
|
|
|
—
|
|
|
4,313
|
|
|||||||||
Net loss including noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,928
|
)
|
|
(2,928
|
)
|
|
(104
|
)
|
|
(3,032
|
)
|
|||||||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
|
(136
|
)
|
|
1
|
|
|
(135
|
)
|
|||||||||
Balance, June 30, 2016
|
—
|
|
|
—
|
|
|
28,405
|
|
|
57
|
|
|
(5,651
|
)
|
|
(50,199
|
)
|
|
191,444
|
|
|
769
|
|
|
100,071
|
|
|
242,142
|
|
|
(103
|
)
|
|
242,039
|
|
|||||||||
Exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
1,015
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
7,788
|
|
|
—
|
|
|
—
|
|
|
7,790
|
|
|
—
|
|
|
7,790
|
|
|||||||||
Reissuance of treasury stock upon exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
43
|
|
|
363
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
372
|
|
|
—
|
|
|
372
|
|
|||||||||
Withholding tax on restricted stock units
|
—
|
|
|
—
|
|
|
(112
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,071
|
)
|
|
—
|
|
|
—
|
|
|
(2,071
|
)
|
|
—
|
|
|
(2,071
|
)
|
|||||||||
Issuance of common shares under Employee Stock Purchase Plan
|
—
|
|
|
—
|
|
|
292
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,537
|
|
|
—
|
|
|
—
|
|
|
2,537
|
|
|
—
|
|
|
2,537
|
|
|||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,634
|
|
|
—
|
|
|
—
|
|
|
6,634
|
|
|
—
|
|
|
6,634
|
|
|||||||||
Net income (loss) including noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,829
|
|
|
13,829
|
|
|
(4,569
|
)
|
|
9,260
|
|
|||||||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(463
|
)
|
|
—
|
|
|
(463
|
)
|
|
(549
|
)
|
|
(1,012
|
)
|
|||||||||
Contributions by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
33,000
|
|
|
33,000
|
|
|||||||||
Balance, June 30, 2017
|
—
|
|
|
—
|
|
|
29,600
|
|
|
59
|
|
|
(5,608
|
)
|
|
(49,836
|
)
|
|
206,332
|
|
|
306
|
|
|
113,909
|
|
|
270,770
|
|
|
27,779
|
|
|
298,549
|
|
|||||||||
Exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
645
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1,543
|
|
|
—
|
|
|
—
|
|
|
1,544
|
|
|
—
|
|
|
1,544
|
|
|||||||||
Reissuance of treasury stock upon exercise of common stock options and release of RSUs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|
144
|
|
|
—
|
|
|
—
|
|
|
(53
|
)
|
|
91
|
|
|
—
|
|
|
91
|
|
|||||||||
Withholding tax on restricted stock units
|
—
|
|
|
—
|
|
|
(145
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,363
|
)
|
|
—
|
|
|
—
|
|
|
(2,363
|
)
|
|
—
|
|
|
(2,363
|
)
|
|||||||||
Issuance of common shares under Employee Stock Purchase Plan
|
—
|
|
|
—
|
|
|
300
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
3,320
|
|
|
—
|
|
|
—
|
|
|
3,321
|
|
|
—
|
|
|
3,321
|
|
|||||||||
Repurchase of common shares under shares repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(950
|
)
|
|
(15,098
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,098
|
)
|
|
—
|
|
|
(15,098
|
)
|
|||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,412
|
|
|
—
|
|
|
—
|
|
|
11,412
|
|
|
—
|
|
|
11,412
|
|
|||||||||
Net income (loss) including noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,263
|
|
|
14,263
|
|
|
(9,315
|
)
|
|
4,948
|
|
|||||||||
Deferred tax asset related to ASU 2016-06 adoption
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,480
|
)
|
|
(5,480
|
)
|
|
—
|
|
|
(5,480
|
)
|
|||||||||
Cumulative translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
134
|
|
|
—
|
|
|
134
|
|
|
110
|
|
|
244
|
|
|||||||||
Contributions by noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
128,994
|
|
|
128,994
|
|
|||||||||
Balance, June 30, 2018
|
—
|
|
|
$
|
—
|
|
|
30,400
|
|
|
$
|
61
|
|
|
(6,540
|
)
|
|
$
|
(64,790
|
)
|
|
$
|
220,244
|
|
|
$
|
440
|
|
|
$
|
122,639
|
|
|
$
|
278,594
|
|
|
$
|
147,568
|
|
|
$
|
426,162
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss) including noncontrolling interest
|
$
|
4,948
|
|
|
$
|
9,260
|
|
|
$
|
(3,032
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
29,419
|
|
|
27,188
|
|
|
27,303
|
|
|||
Share-based compensation expense
|
11,412
|
|
|
6,634
|
|
|
4,313
|
|
|||
Deferred income taxes, net
|
(2,244
|
)
|
|
7,224
|
|
|
871
|
|
|||
(Gain) loss on disposal of property and equipment
|
45
|
|
|
(425
|
)
|
|
95
|
|
|||
Impairment of long-lived assets
|
—
|
|
|
—
|
|
|
432
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(5,345
|
)
|
|
(1,816
|
)
|
|
12,187
|
|
|||
Inventories
|
(13,928
|
)
|
|
(7,406
|
)
|
|
(4,674
|
)
|
|||
Other current and long-term assets
|
(34,625
|
)
|
|
(4,584
|
)
|
|
(310
|
)
|
|||
Accounts payable
|
4,872
|
|
|
4,515
|
|
|
(1,162
|
)
|
|||
Income taxes payable
|
466
|
|
|
(1,264
|
)
|
|
960
|
|
|||
Accrued and other liabilities
|
8,460
|
|
|
3,322
|
|
|
3,199
|
|
|||
Net cash provided by operating activities
|
3,480
|
|
|
42,648
|
|
|
40,182
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchase of property and equipment excluding JV Company
|
(49,390
|
)
|
|
(30,799
|
)
|
|
(21,901
|
)
|
|||
Purchase of property and equipment in JV Company
|
(128,359
|
)
|
|
(16,052
|
)
|
|
—
|
|
|||
Purchases of land use rights in JV Company
|
—
|
|
|
(8,737
|
)
|
|
—
|
|
|||
Purchases of intangible assets
|
(16,384
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from sale of property and equipment
|
6
|
|
|
603
|
|
|
—
|
|
|||
(Increase) decrease in restricted cash
|
32
|
|
|
(33
|
)
|
|
180
|
|
|||
Investment in a privately held company
|
—
|
|
|
(600
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(194,095
|
)
|
|
(55,618
|
)
|
|
(21,721
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Proceeds from investment by noncontrolling interest
|
128,994
|
|
|
33,000
|
|
|
—
|
|
|||
Withholding tax on restricted stock units
|
(2,363
|
)
|
|
(2,071
|
)
|
|
(1,036
|
)
|
|||
Proceeds from exercise of stock options and ESPP
|
4,956
|
|
|
10,699
|
|
|
7,371
|
|
|||
Proceeds from borrowings
|
30,950
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from financing lease
|
60,416
|
|
|
—
|
|
|
—
|
|
|||
Payment for repurchase of common shares
|
(15,098
|
)
|
|
—
|
|
|
(42,081
|
)
|
|||
Repayments of borrowings
|
(74
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments on capital leases
|
(828
|
)
|
|
(819
|
)
|
|
(940
|
)
|
|||
Net cash provided by (used in) financing activities
|
206,953
|
|
|
40,809
|
|
|
(36,686
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(511
|
)
|
|
95
|
|
|
(86
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
15,827
|
|
|
27,934
|
|
|
(18,311
|
)
|
|||
Cash and cash equivalents at beginning of year
|
115,708
|
|
|
87,774
|
|
|
106,085
|
|
|||
Cash and cash equivalents at end of year
|
$
|
131,535
|
|
|
$
|
115,708
|
|
|
$
|
87,774
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
700
|
|
|
$
|
70
|
|
|
$
|
9
|
|
Cash paid for income taxes
|
$
|
2,985
|
|
|
$
|
2,550
|
|
|
$
|
3,139
|
|
|
|
|
|
|
|
||||||
Supplemental disclosures of non-cash investing and financing information:
|
|
|
|
|
|
||||||
Property and equipment purchased but not yet paid
|
$
|
68,156
|
|
|
$
|
23,155
|
|
|
$
|
5,711
|
|
Property and equipment acquired under capital leases
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,449
|
|
Reissuance of treasury stock
|
$
|
53
|
|
|
$
|
(9
|
)
|
|
$
|
233
|
|
•
|
Level 1 - Quoted prices in active markets for identical assets or liabilities.
|
•
|
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
|
•
|
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
|
Building
|
|
20 years
|
Manufacturing machinery and equipment
|
|
3 to 10 years
|
Equipment and tooling
|
|
5 years
|
Computer equipment and software
|
|
3 to 5 years
|
Office furniture and equipment
|
|
5 years
|
Leasehold improvements
|
|
2 to 15 years based on shorter of expected economic useful life or the lease term
|
Land use rights
|
|
50 years
|
Patents and technology rights
|
|
3 to 7 years
|
Trade name
|
|
3 years
|
Customer relationships
|
|
4 years
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,263
|
|
|
$
|
13,829
|
|
|
$
|
(2,928
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
||||||
Weighted average number of common shares used to compute basic net income (loss) per share
|
23,901
|
|
|
23,526
|
|
|
22,452
|
|
|||
|
|
|
|
|
|
||||||
Diluted:
|
|
|
|
|
|
||||||
Weighted average number of common shares used to compute basic net income (loss) per share
|
23,901
|
|
|
23,526
|
|
|
22,452
|
|
|||
Effect of potentially dilutive securities:
|
|
|
|
|
|
||||||
Stock options, RSUs and ESPP shares
|
943
|
|
|
1,300
|
|
|
—
|
|
|||
Weighted average number of common shares used to compute diluted net income (loss) per share
|
24,844
|
|
|
24,826
|
|
|
22,452
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to Alpha and Omega Semiconductor Limited:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.60
|
|
|
$
|
0.59
|
|
|
$
|
(0.13
|
)
|
Diluted
|
$
|
0.57
|
|
|
$
|
0.56
|
|
|
$
|
(0.13
|
)
|
|
Year Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
|
(in thousands)
|
|||||||
Employee stock options and RSUs
|
186
|
|
|
105
|
|
|
3,206
|
|
ESPP
|
182
|
|
|
19
|
|
|
414
|
|
Total potential dilutive securities
|
368
|
|
|
124
|
|
|
3,620
|
|
|
|
Year Ended June 30,
|
|||||||
Percentage of revenue
|
|
2018
|
|
2017
|
|
2016
|
|||
Customer A
|
|
28.3
|
%
|
|
26.9
|
%
|
|
23.8
|
%
|
Customer B
|
|
35.2
|
%
|
|
35.8
|
%
|
|
37.2
|
%
|
Customer C
|
|
*
|
|
|
10.6
|
%
|
|
12.3
|
%
|
|
|
June 30,
|
||||
Percentage of accounts receivable
|
|
2018
|
|
2017
|
||
Customer A
|
|
17.1
|
%
|
|
33.2
|
%
|
Customer B
|
|
35.5
|
%
|
|
13.2
|
%
|
Customer C
|
|
10.6
|
%
|
|
16.4
|
%
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Accounts receivable
|
$
|
52,687
|
|
|
$
|
48,039
|
|
Less: Allowance for price adjustments
|
(18,902
|
)
|
|
(19,599
|
)
|
||
Less: Allowance for doubtful accounts
|
(30
|
)
|
|
(30
|
)
|
||
Accounts receivable, net
|
$
|
33,755
|
|
|
$
|
28,410
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Raw materials
|
$
|
47,097
|
|
|
$
|
32,118
|
|
Work in-process
|
35,243
|
|
|
36,081
|
|
||
Finished goods
|
7,842
|
|
|
8,055
|
|
||
|
$
|
90,182
|
|
|
$
|
76,254
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
VAT receivable
|
$
|
17,601
|
|
|
$
|
591
|
|
Other prepaid expenses
|
2,121
|
|
|
1,129
|
|
||
Prepaid insurance
|
906
|
|
|
621
|
|
||
Prepaid maintenance
|
556
|
|
|
421
|
|
||
Prepayment to supplier
|
227
|
|
|
148
|
|
||
Prepaid income tax
|
761
|
|
|
1,356
|
|
||
Customs deposit
|
5,749
|
|
|
—
|
|
||
Lease financing cost
|
960
|
|
|
—
|
|
||
Other receivables
|
670
|
|
|
617
|
|
||
|
$
|
29,551
|
|
|
$
|
4,883
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Land
|
$
|
4,877
|
|
|
$
|
4,877
|
|
Building
|
4,325
|
|
|
4,325
|
|
||
Manufacturing machinery and equipment
|
265,192
|
|
|
215,275
|
|
||
Equipment and tooling
|
16,605
|
|
|
13,549
|
|
||
Computer equipment and software
|
25,686
|
|
|
24,346
|
|
||
Office furniture and equipment
|
2,314
|
|
|
1,935
|
|
||
Leasehold improvements
|
29,900
|
|
|
29,136
|
|
||
Land use rights
|
9,089
|
|
|
8,849
|
|
||
|
357,988
|
|
|
302,292
|
|
||
Less: accumulated depreciation
|
(225,184
|
)
|
|
(194,882
|
)
|
||
|
132,804
|
|
|
107,410
|
|
||
Equipment and construction in progress
|
198,852
|
|
|
40,781
|
|
||
Property, plant and equipment, net
|
$
|
331,656
|
|
|
$
|
148,191
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Prepayments for property and equipment
|
$
|
17,599
|
|
|
$
|
12,964
|
|
Investments in privately held companies
|
700
|
|
|
700
|
|
||
Prepaid income tax
|
—
|
|
|
4,377
|
|
||
Lease financing costs
|
1,922
|
|
|
—
|
|
||
VAT long-term receivable
|
3,396
|
|
|
—
|
|
||
Customs deposit
|
1,589
|
|
|
1,118
|
|
||
Other long-term deposits
|
2,252
|
|
|
—
|
|
||
Office leases deposits
|
853
|
|
|
490
|
|
||
Other
|
387
|
|
|
216
|
|
||
|
$
|
28,698
|
|
|
$
|
19,865
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Patents and technology rights
|
$
|
17,633
|
|
|
$
|
1,248
|
|
Trade name
|
268
|
|
|
268
|
|
||
Customer relationships
|
1,150
|
|
|
1,150
|
|
||
|
19,051
|
|
|
2,666
|
|
||
Less: accumulated amortization
|
(2,729
|
)
|
|
(2,653
|
)
|
||
|
16,322
|
|
|
13
|
|
||
Goodwill
|
269
|
|
|
269
|
|
||
Intangible assets, net
|
$
|
16,591
|
|
|
$
|
282
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Accrued compensation and benefits
|
$
|
18,484
|
|
|
$
|
13,727
|
|
Warranty accrual
|
535
|
|
|
1,866
|
|
||
Stock rotation accrual
|
1,750
|
|
|
1,871
|
|
||
Accrued professional fees
|
1,922
|
|
|
2,500
|
|
||
Accrued inventory
|
667
|
|
|
410
|
|
||
Accrued facilities related expenses
|
2,163
|
|
|
1,501
|
|
||
Accrued financing lease costs
|
1,510
|
|
|
—
|
|
||
Accrued property, plant and equipment
|
18,145
|
|
|
2,241
|
|
||
Other accrued expenses
|
4,665
|
|
|
4,270
|
|
||
|
$
|
49,841
|
|
|
$
|
28,386
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Beginning balance
|
$
|
1,866
|
|
|
$
|
1,495
|
|
|
$
|
1,957
|
|
Addition
|
(147
|
)
|
|
1,476
|
|
|
881
|
|
|||
Released
|
(1,000
|
)
|
|
(580
|
)
|
|
—
|
|
|||
Utilization
|
(184
|
)
|
|
(525
|
)
|
|
(1,343
|
)
|
|||
Ending balance
|
$
|
535
|
|
|
$
|
1,866
|
|
|
$
|
1,495
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Beginning balance
|
$
|
1,871
|
|
|
$
|
1,988
|
|
|
$
|
1,894
|
|
Addition
|
2,714
|
|
|
4,819
|
|
|
6,578
|
|
|||
Utilization
|
(2,835
|
)
|
|
(4,936
|
)
|
|
(6,484
|
)
|
|||
Ending balance
|
$
|
1,750
|
|
|
$
|
1,871
|
|
|
$
|
1,988
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Financing lease
|
$
|
60,416
|
|
|
$
|
—
|
|
Computer software
|
843
|
|
|
1,650
|
|
||
Exclusive technology rights
|
23
|
|
|
44
|
|
||
|
61,282
|
|
|
1,694
|
|
||
Less: current portion
|
(4,491
|
)
|
|
(828
|
)
|
||
Capital leases - long-term portion
|
$
|
56,791
|
|
|
$
|
866
|
|
Year ending June 30,
|
|
||
2019
|
$
|
7,837
|
|
2020
|
14,753
|
|
|
2021
|
18,467
|
|
|
2022
|
17,563
|
|
|
2023
|
12,731
|
|
|
Thereafter
|
—
|
|
|
Total minimum lease payments
|
71,351
|
|
|
Less amount representing interest
|
(10,069
|
)
|
|
Total capital lease liabilities
|
$
|
61,282
|
|
Year ending June 30,
|
|
|
|
||
2019
|
|
|
$
|
3,904
|
|
2020
|
|
|
4,177
|
|
|
2021
|
|
|
4,177
|
|
|
2022
|
|
|
4,177
|
|
|
2023
|
|
|
14,440
|
|
|
Thereafter
|
|
|
—
|
|
|
Total debt, excluding debt issuance costs
|
|
|
30,875
|
|
|
Less: debt issuance costs
|
|
|
(278
|
)
|
|
Total debt, less debt issuance costs
|
|
|
$
|
30,597
|
|
|
Short-term Debt
|
|
Long-term Debt
|
||||
Principal amount
|
$
|
3,903
|
|
|
$
|
26,972
|
|
Less: debt issuance costs
|
(92
|
)
|
|
(186
|
)
|
||
Total debt, less debt issuance costs
|
$
|
3,811
|
|
|
$
|
26,786
|
|
|
|
Total AOS Stockholders' Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||
Balance, June 30, 2017
|
|
$
|
270,770
|
|
|
$
|
27,779
|
|
|
$
|
298,549
|
|
Exercise of common stock options and release of RSUs
|
|
1,544
|
|
|
—
|
|
|
1,544
|
|
|||
Reissuance of treasury stock upon exercise of common stock options and release of RSUs
|
|
91
|
|
|
—
|
|
|
91
|
|
|||
Withholding tax on restricted stock units
|
|
(2,363
|
)
|
|
—
|
|
|
(2,363
|
)
|
|||
Issuance of shares under ESPP
|
|
3,321
|
|
|
—
|
|
|
3,321
|
|
|||
Repurchase of common shares under shares repurchase program
|
|
(15,098
|
)
|
|
—
|
|
|
(15,098
|
)
|
|||
Stock-based compensation expense
|
|
11,412
|
|
|
—
|
|
|
11,412
|
|
|||
Net income (loss)
|
|
14,263
|
|
|
(9,315
|
)
|
|
4,948
|
|
|||
Deferred tax asset related to ASU 2016-06 adoption
|
|
(5,480
|
)
|
|
—
|
|
|
(5,480
|
)
|
|||
Cumulative translation adjustment
|
|
134
|
|
|
110
|
|
|
244
|
|
|||
Contributions from noncontrolling interest
|
|
—
|
|
|
128,994
|
|
|
128,994
|
|
|||
Balance, June 30, 2018
|
|
$
|
278,594
|
|
|
$
|
147,568
|
|
|
$
|
426,162
|
|
|
|
|
|
|
Weighted
|
|
|
|||||
|
|
|
Weighted
|
|
Average
|
|
|
|||||
|
|
|
Average
|
|
Remaining
|
|
|
|||||
|
Number of
|
|
Exercise Price
|
|
Contractual
|
|
Aggregate
|
|||||
|
Shares
|
|
Per Share
|
|
Term (in years)
|
|
Intrinsic Value
|
|||||
|
|
|
|
|
|
|
|
|||||
Outstanding at June 30, 2015
|
2,836,217
|
|
|
$
|
10.77
|
|
|
4.64
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(666,445
|
)
|
|
$
|
8.36
|
|
|
|
|
$
|
1,746,173
|
|
Canceled or forfeited
|
(310,512
|
)
|
|
$
|
12.34
|
|
|
|
|
|
||
Outstanding at June 30, 2016
|
1,859,260
|
|
|
$
|
11.37
|
|
|
4.71
|
|
|
||
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(693,393
|
)
|
|
$
|
11.76
|
|
|
|
|
$
|
5,681,783
|
|
Canceled or forfeited
|
(112,500
|
)
|
|
$
|
12.72
|
|
|
|
|
|
||
Outstanding at June 30, 2017
|
1,053,367
|
|
|
$
|
10.98
|
|
|
4.43
|
|
|
|
|
Granted
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Exercised
|
(166,389
|
)
|
|
$
|
11.00
|
|
|
|
|
$
|
959,257
|
|
Canceled or forfeited
|
—
|
|
|
$
|
—
|
|
|
|
|
|
||
Outstanding at June 30, 2018
|
886,978
|
|
|
$
|
10.97
|
|
|
4.03
|
|
$
|
3,557,248
|
|
Options vested and expected to vest
|
886,975
|
|
|
$
|
10.97
|
|
|
4.03
|
|
$
|
3,557,234
|
|
Exercisable at June 30, 2018
|
886,561
|
|
|
$
|
10.98
|
|
|
4.03
|
|
$
|
3,555,092
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||
Range of Exercise Prices
|
|
Number
Outstanding |
|
Weighted-Average
Remaining Contractual Life (Years) |
|
Weighted-Average
Exercise Price |
|
Number
Exercisable |
|
Weighted-Average
Exercise Price |
||||||
$7.21 - $7.21
|
|
6,875
|
|
|
5.58
|
|
$
|
7.21
|
|
|
6,875
|
|
|
$
|
7.21
|
|
$7.44 - $7.44
|
|
331,139
|
|
|
5.71
|
|
$
|
7.44
|
|
|
331,139
|
|
|
$
|
7.44
|
|
$7.56 - $9.90
|
|
195,150
|
|
|
4.71
|
|
$
|
8.93
|
|
|
194,733
|
|
|
$
|
8.93
|
|
$10.50 - $15.00
|
|
188,814
|
|
|
2.27
|
|
$
|
13.29
|
|
|
188,814
|
|
|
$
|
13.29
|
|
$17.90 - $18.00
|
|
165,000
|
|
|
1.83
|
|
$
|
17.99
|
|
|
165,000
|
|
|
$
|
17.99
|
|
$7.21 - $18.00
|
|
886,978
|
|
|
4.03
|
|
$
|
10.97
|
|
|
886,561
|
|
|
$
|
10.98
|
|
|
|
Number of Restricted Stock
Units
|
|
Weighted Average
Grant Date Fair
Value Per Share
|
|
Weighted Average
Remaining
Recognition
Period (Years)
|
|
Aggregate Intrinsic Value
|
|||||
Nonvested at June 30, 2015
|
|
873,946
|
|
|
$
|
8.64
|
|
|
1.77
|
|
$
|
7,638,288
|
|
Granted
|
|
466,255
|
|
|
$
|
11.28
|
|
|
|
|
|
||
Vested
|
|
(301,695
|
)
|
|
$
|
10.97
|
|
|
|
|
|
||
Forfeited
|
|
(105,443
|
)
|
|
$
|
8.85
|
|
|
|
|
|
||
Nonvested at June 30, 2016
|
|
933,063
|
|
|
$
|
9.18
|
|
|
1.73
|
|
$
|
12,997,568
|
|
Granted
|
|
446,719
|
|
|
$
|
18.26
|
|
|
|
|
|
||
Vested
|
|
(364,567
|
)
|
|
$
|
8.34
|
|
|
|
|
|
||
Forfeited
|
|
(40,850
|
)
|
|
$
|
12.74
|
|
|
|
|
|
||
Nonvested at June 30, 2017
|
|
974,365
|
|
|
$
|
13.51
|
|
|
1.68
|
|
$
|
16,244,748
|
|
Granted
|
|
482,397
|
|
|
$
|
16.46
|
|
|
|
|
|
||
Vested
|
|
(468,051
|
)
|
|
$
|
13.24
|
|
|
|
|
|
||
Forfeited
|
|
(69,688
|
)
|
|
$
|
14.25
|
|
|
|
|
|
||
Nonvested at June 30, 2018
|
|
919,023
|
|
|
$
|
15.14
|
|
|
1.62
|
|
$
|
13,086,888
|
|
|
|
Number of Performance-based Restricted Stock
Units
|
|
Weighted Average
Grant Date Fair
Value Per Share
|
|
Weighted Average
Remaining
Recognition
Period (Years)
|
|
Aggregate Intrinsic Value
|
||||||
Nonvested at June 30, 2016
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Granted
|
|
170,000
|
|
|
$
|
17.58
|
|
|
|
|
|
|||
Vested
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Forfeited
|
|
—
|
|
|
—
|
|
|
|
|
|
||||
Nonvested at June 30, 2017
|
|
170,000
|
|
|
$
|
17.58
|
|
|
2.21
|
|
|
$
|
2,833,900
|
|
Granted
|
|
298,050
|
|
|
$
|
16.22
|
|
|
|
|
|
|||
Vested
|
|
(38,247
|
)
|
|
$
|
17.58
|
|
|
|
|
|
|||
Forfeited
|
|
(7,503
|
)
|
|
$
|
17.26
|
|
|
|
|
|
|||
Nonvested at June 30, 2018
|
|
422,300
|
|
|
$
|
16.63
|
|
|
2.06
|
|
|
$
|
6,013,552
|
|
|
Year Ended June 30,
|
||||
|
2018
|
|
2017
|
|
2016
|
Volatility rate
|
42.1% - 45.3%
|
|
39.1% - 44.7%
|
|
32.2% - 34.8%
|
Risk-free interest rate
|
1.4% - 2.6%
|
|
0.6% - 1.3%
|
|
0.3% - 0.9%
|
Expected term
|
1.3 years
|
|
1.3 years
|
|
1.3 years
|
Dividend yield
|
—%
|
|
—%
|
|
—%
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Cost of goods sold
|
$
|
1,641
|
|
|
$
|
1,041
|
|
|
$
|
636
|
|
Research and development
|
1,855
|
|
|
1,361
|
|
|
1,115
|
|
|||
Selling, general and administrative
|
7,916
|
|
|
4,232
|
|
|
2,562
|
|
|||
|
|
|
|
|
|
||||||
|
$
|
11,412
|
|
|
$
|
6,634
|
|
|
$
|
4,313
|
|
|
Year Ended June 30,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
United States statutory rate
|
28.1
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
State taxes, net of federal benefit
|
—
|
|
|
—
|
|
|
0.4
|
|
Stock-based compensation
|
(1.4
|
)
|
|
(0.4
|
)
|
|
(0.4
|
)
|
Foreign taxes, net
|
39.5
|
|
|
(0.7
|
)
|
|
440.3
|
|
Research and development credit
|
(17.1
|
)
|
|
(4.9
|
)
|
|
(69.3
|
)
|
Non-deductible expenses
|
7.0
|
|
|
0.2
|
|
|
1.7
|
|
U.S. Tax Act deferred tax re-measurement
|
(44
|
)
|
|
—
|
|
|
—
|
|
Other
|
0.4
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
12.5
|
%
|
|
28.3
|
%
|
|
406.6
|
%
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
|
|
(in thousands)
|
|
|
|
|||||
U.S. operations
|
$
|
4,219
|
|
|
$
|
4,016
|
|
|
$
|
4,259
|
|
Non-U.S. operations
|
1,437
|
|
|
8,896
|
|
|
(3,270
|
)
|
|||
Income before income taxes
|
$
|
5,656
|
|
|
$
|
12,912
|
|
|
$
|
989
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Accrued compensation
|
$
|
2,121
|
|
|
$
|
2,322
|
|
Net operating loss carryforwards
|
7,213
|
|
|
1,509
|
|
||
Depreciation
|
10,968
|
|
|
4,533
|
|
||
Tax credits
|
8,380
|
|
|
6,309
|
|
||
Capitalized Costs
|
2,292
|
|
|
412
|
|
||
Accruals and reserves
|
1,197
|
|
|
1,038
|
|
||
Total deferred tax assets
|
32,171
|
|
|
16,123
|
|
||
Valuation allowance
|
(17,163
|
)
|
|
(6,178
|
)
|
||
Total deferred tax assets, net of valuation allowance
|
15,008
|
|
|
9,945
|
|
||
Deferred tax liabilities:
|
|
|
|
||||
Depreciation and amortization
|
(10,819
|
)
|
|
(7,979
|
)
|
||
Accruals and reserves
|
(10
|
)
|
|
(31
|
)
|
||
Total deferred tax liabilities
|
(10,829
|
)
|
|
(8,010
|
)
|
||
Net deferred tax assets
|
$
|
4,179
|
|
|
$
|
1,935
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Long-term deferred tax assets
|
$
|
4,892
|
|
|
$
|
4,594
|
|
Long-term deferred tax liabilities
|
(713
|
)
|
|
(2,659
|
)
|
||
|
|
|
|
||||
Net deferred tax assets
|
$
|
4,179
|
|
|
$
|
1,935
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Balance at beginning of year
|
$
|
6,589
|
|
|
$
|
6,743
|
|
|
$
|
6,412
|
|
Additions based on tax positions related to the current year
|
721
|
|
|
401
|
|
|
388
|
|
|||
Reductions based on tax positions related to prior years
|
(11
|
)
|
|
(4
|
)
|
|
—
|
|
|||
Reductions due to lapse of applicable statute of limitations
|
(156
|
)
|
|
(551
|
)
|
|
(57
|
)
|
|||
|
|
|
|
|
|
||||||
Balance at end of year
|
$
|
7,143
|
|
|
$
|
6,589
|
|
|
$
|
6,743
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
|
(in thousands)
|
||||||||||
Power discrete
|
$
|
342,148
|
|
|
$
|
288,788
|
|
|
$
|
252,063
|
|
Power IC
|
67,083
|
|
|
82,389
|
|
|
69,344
|
|
|||
Packaging and testing services
|
12,322
|
|
|
12,160
|
|
|
14,254
|
|
|||
|
$
|
421,553
|
|
|
$
|
383,337
|
|
|
$
|
335,661
|
|
Year ending June 30,
|
Operating
Leases |
||
|
(in thousands)
|
||
2019
|
$
|
3,967
|
|
2020
|
3,329
|
|
|
2021
|
1,031
|
|
|
2022
|
468
|
|
|
2023
|
432
|
|
|
Thereafter
|
567
|
|
|
|
$
|
9,794
|
|
|
June 30,
|
||||||
|
2018
|
|
2017
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,738
|
|
|
$
|
12,717
|
|
Accounts receivable - Intercompany
|
3,937
|
|
|
18,253
|
|
||
Other current assets
|
362
|
|
|
402
|
|
||
Total current assets
|
9,037
|
|
|
31,372
|
|
||
Property, plant and equipment, net
|
343
|
|
|
806
|
|
||
Other long-term assets
|
339
|
|
|
100
|
|
||
Investment in subsidiaries
|
417,185
|
|
|
267,193
|
|
||
Total assets
|
$
|
426,904
|
|
|
$
|
299,471
|
|
|
|
|
|
||||
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued liabilities
|
$
|
742
|
|
|
$
|
922
|
|
Total liabilities
|
742
|
|
|
922
|
|
||
Equity:
|
|
|
|
||||
Preferred shares, par value $0.002 per share:
|
|
|
|
||||
Authorized: 10,000 shares; issued and outstanding: none at June 30, 2018 and 2017
|
—
|
|
|
—
|
|
||
Common shares, par value $0.002 per share:
|
|
|
|
||||
Authorized: 100,000 shares; issued and outstanding: 30,400 shares and 23,860 shares at June 30, 2018 and 29,600 shares and 23,992 shares at June 30, 2017
|
61
|
|
|
59
|
|
||
Treasury shares at cost; 6,540 shares at June 30, 2018 and 5,608 shares at June 30, 2017
|
(64,790
|
)
|
|
(49,836
|
)
|
||
Additional paid-in capital
|
220,244
|
|
|
206,332
|
|
||
Accumulated other comprehensive income
|
440
|
|
|
306
|
|
||
Retained earnings
|
122,639
|
|
|
113,909
|
|
||
Total Alpha and Omega Semiconductor Limited shareholder's equity
|
278,594
|
|
|
270,770
|
|
||
Noncontrolling interest
|
147,568
|
|
|
27,779
|
|
||
Total equity
|
426,162
|
|
|
298,549
|
|
||
Total liabilities and equity
|
$
|
426,904
|
|
|
$
|
299,471
|
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue
|
$
|
4,096
|
|
|
$
|
3,772
|
|
|
$
|
3,345
|
|
Cost of revenue
|
—
|
|
|
—
|
|
|
—
|
|
|||
Gross profit
|
4,096
|
|
|
3,772
|
|
|
3,345
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Selling, general and administrative
|
4,479
|
|
|
3,938
|
|
|
3,438
|
|
|||
Total operating expenses
|
4,479
|
|
|
3,938
|
|
|
3,438
|
|
|||
Operating loss
|
(383
|
)
|
|
(166
|
)
|
|
(93
|
)
|
|||
|
|
|
|
|
|
||||||
Interest income
|
7
|
|
|
20
|
|
|
7
|
|
|||
Income (loss) on equity investment in subsidiaries
|
5,324
|
|
|
9,406
|
|
|
(2,946
|
)
|
|||
Net income (loss) including noncontrolling interest
|
4,948
|
|
|
9,260
|
|
|
(3,032
|
)
|
|||
Net loss attributable to noncontrolling interest
|
(9,315
|
)
|
|
(4,569
|
)
|
|
(104
|
)
|
|||
Net income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,263
|
|
|
$
|
13,829
|
|
|
$
|
(2,928
|
)
|
|
Year ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss) including noncontrolling interest
|
$
|
4,948
|
|
|
$
|
9,260
|
|
|
$
|
(3,032
|
)
|
Other comprehensive loss, net of tax
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
244
|
|
|
(1,012
|
)
|
|
(135
|
)
|
|||
Comprehensive income (loss)
|
5,192
|
|
|
8,248
|
|
|
(3,167
|
)
|
|||
Noncontrolling interest
|
(9,205
|
)
|
|
(5,118
|
)
|
|
(103
|
)
|
|||
Comprehensive income (loss) attributable to Alpha and Omega Semiconductor Limited
|
$
|
14,397
|
|
|
$
|
13,366
|
|
|
$
|
(3,064
|
)
|
|
Year Ended June 30,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Net income (loss) including noncontrolling interest
|
$
|
4,948
|
|
|
$
|
9,260
|
|
|
$
|
(3,032
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
464
|
|
|
469
|
|
|
545
|
|
|||
Share-based compensation expense
|
503
|
|
|
428
|
|
|
190
|
|
|||
Equity in net (income) loss of subsidiaries
|
(5,324
|
)
|
|
(9,406
|
)
|
|
2,946
|
|
|||
Other
|
—
|
|
|
33
|
|
|
—
|
|
|||
Changes in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable - intercompany
|
14,316
|
|
|
(4,868
|
)
|
|
25,620
|
|
|||
Other current assets
|
(199
|
)
|
|
(134
|
)
|
|
23
|
|
|||
Accounts payable and accrued liabilities
|
(182
|
)
|
|
256
|
|
|
174
|
|
|||
Net cash provided by (used in) operating activities
|
14,526
|
|
|
(3,962
|
)
|
|
26,466
|
|
|||
Cash flows from investing activities
|
|
|
|
|
|
||||||
Purchase of property and equipment
|
—
|
|
|
—
|
|
|
(67
|
)
|
|||
Investment in subsidiaries
|
(10,000
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash used in investing activities
|
(10,000
|
)
|
|
—
|
|
|
(67
|
)
|
|||
Cash flows from financing activities
|
|
|
|
|
|
||||||
Withholding tax on restricted stock units
|
(2,363
|
)
|
|
(2,071
|
)
|
|
(1,036
|
)
|
|||
Proceeds from exercise of stock options and ESPP
|
4,956
|
|
|
10,699
|
|
|
7,371
|
|
|||
Payment for repurchase of common shares
|
(15,098
|
)
|
|
—
|
|
|
(42,080
|
)
|
|||
Net cash provided by (used in) financing activities
|
(12,505
|
)
|
|
8,628
|
|
|
(35,745
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(7,979
|
)
|
|
4,666
|
|
|
(9,346
|
)
|
|||
Cash and cash equivalents at beginning of year
|
12,717
|
|
|
8,051
|
|
|
17,397
|
|
|||
Cash and cash equivalents at end of year
|
$
|
4,738
|
|
|
$
|
12,717
|
|
|
$
|
8,051
|
|
|
Allowance
|
|
Allowance
|
|
Allowance
|
||||||
|
for Doubtful
|
|
for Price
|
|
for Deferred
|
||||||
|
Accounts
|
|
Adjustments
|
|
Tax Assets
|
||||||
June 30, 2015
|
$
|
30
|
|
|
$
|
19,438
|
|
|
$
|
2,700
|
|
Additions
|
—
|
|
|
90,967
|
|
|
194
|
|
|||
Reductions
|
—
|
|
|
(93,705
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
June 30, 2016
|
30
|
|
|
16,700
|
|
|
2,894
|
|
|||
Additions
|
—
|
|
|
113,970
|
|
|
3,284
|
|
|||
Reductions
|
—
|
|
|
(111,071
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
June 30, 2017
|
30
|
|
|
19,599
|
|
|
6,178
|
|
|||
Additions
|
—
|
|
|
124,694
|
|
|
10,985
|
|
|||
Reductions
|
—
|
|
|
(125,391
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
June 30, 2018
|
$
|
30
|
|
|
$
|
18,902
|
|
|
$
|
17,163
|
|
Number
|
Description
|
3.1
|
|
3.2
|
|
3.3
|
|
4.1
|
|
10.1
|
|
10.2
|
|
10.3(+)
|
|
10.4(+)
|
|
10.5(+)
|
|
10.6(+)
|
|
10.7††
|
|
10.8††
|
|
10.9††
|
|
10.10††
|
|
10.11
|
|
10.12††
|
|
10.13††
|
10.14
|
|
10.15
|
|
10.16††
|
|
10.17††
|
|
10.18
|
|
10.19
|
|
10.20
|
|
10.21(+)
|
|
10.22(+)
|
|
10.23(+)
|
|
10.24
|
|
10.25(+)
|
|
10.26(+)
|
|
10.27(+)
|
|
10.28(+)
|
|
10.29(+)
|
|
10.30(+)
|
10.31††
|
|
10.32 (+)
|
|
10.33 (+)
|
|
10.34 (+)
|
|
10.35††
|
|
10.36††
|
|
10.37(+)
|
|
10.38*†
|
|
10.39*†
|
|
21.1*
|
|
23.1*
|
|
31.1*
|
|
31.2*
|
|
32.1*
|
|
32.2*
|
|
101.INS
|
XBRL Instance
|
101.SCH
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
XBRL Taxonomy Extension Calculation
|
101.DEF
|
XBRL Taxonomy Extension Definition
|
101.LAB
|
XBRL Taxonomy Extension Labels
|
101.PRE
|
XBRL Taxonomy Extension Presentation
|
ALPHA AND OMEGA SEMICONDUCTOR LIMITED
|
|
|
|
By:
|
/s/ MIKE F. CHANG
|
|
Mike F. Chang
|
|
Chief Executive Officer
|
|
(Principal Executive Officer)
|
Signature
|
|
Title
|
Date
|
/s/ MIKE F. CHANG
|
|
Chairman of the Board and Chief Executive Officer
|
August 23, 2018
|
Mike F. Chang, Ph.D.
|
|
(Principal Executive Officer)
|
|
|
|
|
|
/s/ YIFAN LIANG
|
|
Chief Financial Officer and Corporate Secretary
|
August 23, 2018
|
Yifan Liang
|
|
(Principal Financial Officer and Principal Accounting Officer)
|
|
|
|
|
|
/s/ YUEH-SE HO
|
|
Director and Chief Operating Officer
|
August 23, 2018
|
Yueh-Se Ho, Ph.D.
|
|
|
|
|
|
|
|
/s/ LUCAS S. CHANG
|
|
Director
|
August 23, 2018
|
Lucas S. Chang
|
|
|
|
|
|
|
|
/s/ ROBERT I. CHEN
|
|
Director
|
August 23, 2018
|
Robert I. Chen
|
|
|
|
|
|
|
|
/s/ KING OWYANG
|
|
Director
|
August 23, 2018
|
King Owyang
|
|
|
|
|
|
|
|
/s/ MICHAEL L. PFEIFFER
|
|
Director
|
August 23, 2018
|
Michael L. Pfeiffer
|
|
|
|
|
|
|
|
/s/ MICHAEL J. SALAMEH
|
|
Director
|
August 23, 2018
|
Michael J. Salameh
|
|
|
|
|
|
|
|
Parties
|
||||||||||||||
Lessor:
Chongqing Yinhai Financing Lease Co., Ltd. (hereinafter referred to as “Party A”)
Legal Representative:
Pang Xianwei
Registered Address:
No. 2, 3/F, Tower A, Haiwangxing Technology Building, No. 62 Xingguang Road, North New District, Chongqing
|
Lessee:
[Chongqing Alpha and Omega Semiconductor Limited] (hereinafter referred to as "Party B")
Legal Representative:
[MIKE FUSHING CHANG]
Registered Address:
[No.5-407, Yuhan Avenue, Shuitu High-tech Industrial Park, Beibei District, Chongqing]
|
|||||||||||||
Leased items (see Annex I List of Leased Items for Details)
|
||||||||||||||
No.
|
Name of Leased Items
|
Seller Name
|
Specifications and Models
|
Invoice No.
|
Quantity
|
Unit Price
|
Total Price
|
Assessed Value
|
||||||
leased items use location: No.5-407, Yuhan Avenue, Shuitu High-tech Industrial Park, Beibei District, Chongqing
|
||||||||||||||
Lease Conditions
|
||||||||||||||
Assessed Value of the Leased Items (can be Omitted If Assessment is Exempted)
|
In figures: ¥ [***]. In words: [***]
|
|||||||||||||
Lease Funds
(Purchase Price of the Leased Items)
|
In figures: ¥ [475,000,000.00]. In words: [RMB four hundred and seventy-five million]
|
|||||||||||||
***
CONFIDENTIAL PORTIONS OMITTED AND FILED SEPARATELY WITH THE COMMISSION
|
Insurance Type
|
All-Risk Property Insurance
|
|||||||||||||
Policyholder
|
Party B
|
|||||||||||||
Beneficiary
|
Party A or any third party designated by Party A
|
|||||||||||||
Insured Period
|
Cover the entire lease period
|
|||||||||||||
Insured Amount
|
Cover at least the lease principal
|
|||||||||||||
Insurance
Premium
|
Subject to the approved amount of the insurance company
|
|||||||||||||
Entity to Assume the Premium
|
Party B
|
|||||||||||||
Contact Information
|
||||||||||||||
Party A’s contact information:
Contact: Liu Ying
Tel.: 18623457667
E-mail: 2851719785@qq.com
Fax: 023-67680191
Address: No. 2, 3/F, Tower A, Haiwangxing Technology Building, No. 62 Xingguang Road, North New District, Chongqing
|
Party B’s contact information:
Contact: Yang Liyan
Tel.: 13795368681
E-mail: lyla.yang@cqaos.com
Fax:
Address: No. 117, Yunhan Road, Shuitu Hi-Tech Industrial Park, Liangjiang New District, Chongqing (Room 205, Office Building, Administrative Committee of the Park)
|
|||||||||||||
Other
|
||||||||||||||
Number of Contract Counterparts
|
This Contract is made in sextuplicate with each party holding two and the rest two of which remain.
|
1.1
|
Financing Lease: refers to the trading activities that the Lessor, according to the choice or approval of the Lessee regarding the leased items and supplier, leases the leased items it acquires from the supplier to the Lessee for the Lessee to possess and use according to the contract, and collects the rents from the Lessee.
|
1.2
|
Sale and Leaseback: refers to the type of Financing Lease that the Lessee sells its own items to the Lessor, signs a Financing Lease contract with the Lessor at the same time, and then rents the items back from the Lessor.
|
1.3
|
Lease Commencement Date: refers to the date on which Party A pays Party B the first payment for the purchase price of the leased items.
|
1.4
|
Lease Funds: refers to the total price that Party A purchases the leased items from Party B.
|
1.5
|
Down Payment of Rents: refers to the one-off payment for the first-time rent paid by Party B to Party A on the lease commencement date.
|
1.6
|
Lease Principal: refers to the financing amount actually provided by Party A for Party B after deduction of the Down Payment of Rents from the Lease Funds.
|
1.7
|
Lease Costs: refers to the sum of the contract price, pre-lease interest and grace-period interest paid by Party A for purchase of the leased items, and other expenses that both Parties agree to count into costs.
|
1.8
|
Lease Interest Rate: refers to the annual interest rate used to calculate the rents within the lease term agreed upon by both Parties.
|
1.9
|
Interest-Bearing Method: The interest of the lease payments under this Contract is calculated from the Lease Commencement Date (delivery day of the Lease Funds). The calculation formula of daily accrued interest is: daily accrued interest = balance of the Lease Principal of the day × Lease Interest Rate/360.
|
1.10
|
Lease Term: refers to the lease term agreed in Part 1 of this Contract.
|
1.11
|
The Purchase Price refers to the price of the leased items repurchased by Party B after Party B pays off all the rents and other payables (including the possible overdue interest penalty and economic loss compensation, etc.) in accordance with the provisions of this Contract.
|
1.12
|
Overdue Interest: All Overdue Interest under this Contract is calculated based on 0.0005 of the overdue amount.
|
2.1
|
The leased items as stipulated in this Contract are originally owned by Party B. Party B transfers the leased items to Party A according to the Contract, and Party A leases back the equipment and other assets used by Party B. The specific content is shown in Annex I List of Leasing Items.
|
2.2
|
Party B guarantees that it has independent, complete and legal ownership of the leased items it transfers to Party A, no mortgage, pledge and other security rights have been set on the leased items in any way, and there is no priority or any other defect of right.
|
3.1
|
Party B shall transfer the leased items to Party A in the form of sale and leaseback for the purpose of financing; Party A shall accept the leased items transferred by Party B according to Party B's above-mentioned purpose and lease it back to Party B for use.
|
3.2
|
Party B shall submit to Party A an assessment report of the leased items, a capital verification report of the leased items or the purchase contract (if any) and the original copy of the invoice (if any) within ten working days after the signing of the Contract.
|
3.3
|
The leased items transferred by Party B to Party A shall be deemed to be owned by Party A on the date that Party A pays Party B the first payment of the Lease Funds in accordance with Article 4 of this Contract. Party B shall issue to Party A the Certificate of Ownership Transfer I (Lessee to Lessor) (see Annex VII for details) of the leased items within three working days after receiving the first payment of the Lease Funds. Party B’s failure of issuance will not affect Party A's ownership of the leased items.
|
3.4
|
If Party A fails to complete the second payment of the Lease Funds within 10 working days after the first payment of the Lease Funds, Party A agrees to refund the service charges and security deposit to Party B in full (without interest) after Party B returns Party A's actual payment of
the
Lease Funds (without interest) to Party A. In addition, Party A agrees that the ownership of the leased items shall be transferred to Party B after all the payments of Party A and Party B are returned.
|
4.1
|
Both Parties agreed that the Lease Funds of the leased items shall be determined in accordance with Part 1 Commercial Terms.
|
4.2
|
Way of payment of the Lease Funds: Party A and Party B agree to pay in accordance with the following (3
rd
) way upon negotiation:
|
(1)
|
One-off payment:
|
(2)
|
Installments:
|
(3)
|
Other payment methods: Party A shall pay Party B
the down payment of the Lease Funds of RMB
96,000,000.00 (in words: RMB ninety-six million) within 5 working days after the payment conditions agreed in this Contract are all satisfied; the remaining Lease Funds is RMB 379,000,000.00 (in words: RMB three hundred and seventy nine million), which shall be paid in full within 10 working days after the down payment of the Lease Funds and the payment of Party B’s security deposit are paid.
|
4.3
|
After all the following conditions of Item
(1), (2), (3), (4) and (5)
are met, Party A shall pay the down payment of the Lease Funds to Party B in accordance with the payment method stipulated in Article 4.2 of this Contract. The bank account information designated by Party B for payment collection is as follows:
|
(1)
|
All contracts required between Party A and Party B on the Financing Lease have been fully signed and become effective;
|
(2)
|
If Party B or other related parties provide Party A with any guarantee in relation to the performance of obligations of Party B under this Contract, relevant security contract has been signed and becomes effective, related procedures under the security contract (including but not limited to notarization, mortgage/pledge registration of the guarantee and insurance etc.) have been completed, and the asset lists of Party B and the guarantor and other materials have been provided in accordance with Party A's request;
|
(3)
|
Party B has remitted the Down Payment of Rents, service charges and other payables payable to Party A under this Contract to bank account designated by Party A;
|
(4)
|
Party B has provided Party A with an assessment report of the leased items, a capital verification report of the leased items or the purchase contract (if any) and the original copy of the invoice (if any);
|
(5)
|
Other conditions: a formal assessment report to acquire the leased items.
|
4.4
|
Party B shall use the Lease Funds paid by Party A according to the agreed purpose of both parties, and shall bear the taxes and expenses (if any) arising from the transfer of the leased items under this Contract.
|
5.1
|
This Contract is a sale-and-leaseback contract. The leased items originally belong to Party B and has been occupied, used, and kept by Party B. Party A and Party B do not need to go through the procedures for transfer and physical handover of the
leased items. After Party A pays Party B the down payment of the Lease Funds, it is deemed that the leased items are received and accepted by Party B (as the Lessee) in the complete state. Party B shall issue the Proof of Receipt of the Leased Items to Party A. Party B’s failure to do so will not affect the recognition of the fact that Party B has received and accepted the leased items upon acceptance check. However, Party B shall not, at any time, object to any of the accepted leased items on the ground that the Proof of Receipt of the Leased Items has not been issued.
|
5.2
|
Any quality issues or any other problems that affect the normal use of the leased items during the term of this Contract shall be the responsibility of Party B. Party A shall not bear any responsibility. Party B shall not thereby refuse to pay the rents or perform other obligations agreed in the Contract.
|
5.3
|
As Party B has purchased and used the leased items before signing of this Contract, Party B shall bear full responsibility for its own choice and decision. If the quality, specifications, technical performance and quantity etc. of the goods delivered by the original supplier are not in conformity with the contract signed by the original supplier and Party B, or any quality problem occurs within the warranty period as stipulated in the sales contract, Party B shall directly file a claim with the original supplier and Party A shall not bear any responsibility for such issues. However, Party A may provide Party B with certain assistance within a reasonable range. All costs incurred therefrom shall be borne by Party B (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) The results of the claim are enjoyed by Party B. Regardless of whether Party B can be compensated through the claim, and whether or not the claim is in progress, Party B's rent payment and other obligations under this Contract will not be affected.
|
6.1
|
After Party A pays the down payment of the Lease Funds for the leased items to Party B according to the provisions in this Contract, the owner of the leased items shall be changed to Party A (such ownership covers the auxiliary items, accessory rights and Fructus etc. of the leased items). Before all payments due under this Contract are settled, Party B shall guarantee that the proprietary applications, software, licenses and technical documents of the leased items are in a valid state and that performance and configuration standards (except for normal depreciation and wear) of the leased items are not lower than the corresponding indicators when this Contract becomes effective.
|
6.2
|
Unless prior written consent from Party A is obtained, Party B shall not transfer, mortgage and pledge the leased items, or use the leased items for investment in shares and compensation, or establish a lawsuit guarantee over the leased items, or in any way infringe Party A's ownership of the leased items. If it is really necessary for the leased items to be used by a third party due to the needs of production and operation, the third person shall be listed as a joint lessee.
|
6.3
|
If Party B upgrades the leased items during the lease term, Party B shall bear the cost of the upgrade. The components added to the leased items that are inseparable from the leased items or are separable, but the separation will lead to functional impairment of the leased items shall be owned by Party A free of charge. Party B shall guarantee that, before all payables are paid under this Contract, the production performance and configuration standards of the leased items (except for normal depreciation and wear) owned by Party A shall not be lower than the corresponding indicators when the Contract takes effect.
|
6.4
|
If Party B replaces the parts of the leased items with other replacement parts for maintenance, repair or its use needs during the lease period, related costs incurred from the replacement shall be borne by Party B. In addition, the replacement parts shall be owned by Party A from the date of replacement.
|
6.5
|
The binding of the leased items to other movable assets and real estate will not change Party A's rights over the leased items.
|
6.6
|
Without prejudice to Party B’s possession and use of the leased items, Party A may mortgage the leased items to a third party as required. However, Party A shall notify Party B ten working days in advance. Party B is obligated to assist Party A in handling the mortgage and other related procedures. When Party A transfers the ownership of the leased items to Party B according to this Contract, Party A shall be responsible for releasing the mortgage within ten working days.
|
6.7
|
During the lease period, Party B shall not express or imply its ownership or disposition right over the leased items in any form or allow any incident that makes other people reasonably think that Party B is the owner.
|
6.8
|
Before Party B clears all the debts under this Contract, the ownership of the leased items always belongs to Party A, and anyone except Party A has no right to dispose of the leased items.
|
7.1
|
Party B owns the right of possession and use of the leased items during the Lease Term. Except for Party B's major breach of contract, Party A shall not interfere with the legitimate and independent’s possession and use of the leased items of Party B. Otherwise, Party A shall be liable for the losses caused by Party B. If any third party claims any right to the leased items due to Party A's reasons, Party A shall bear full responsibility and Party B's rights to use shall not be affected.
|
7.2
|
Party B shall properly use and keep the leased items, repair, preserve and maintain the leased items and accessories through regular repairs and irregular inspections, and bear all expenses incurred therefrom. Any replaced, added, or updated parts, devices and services automatically become part of the leased items and are owned by Party A free of charge. All repairs and maintenance are included in the lease period. If Party B is negligent in performing its obligations of repairing and maintaining the leased items, Party A shall be entitled to recover the leased items from Party B without prejudice to any other claims that Party A may have against Party B under this Contract.
|
7.3
|
Party B shall, at the request of Party A, submit to Party A the maintenance schedule and repair records of the leased items so that Party A can keep abreast of the use conditions of the leased items. Both Parties shall jointly confirm the submission interval and specific format of the maintenance schedule and repair records within 30 working days after the signing of the Contract.
|
7.4
|
Party B shall use the leased items in strict accordance with the user manual or operation manual of the leased items, shall not assign unqualified personnel to operate the leased items and shall keep the leased items continuously in a good state of operation.
|
7.5
|
Party B shall bear all responsibility for the leased items and any personal injury or property damage caused to any third party by the leased items during the period of possession and use of the leased items by Party B. Party A shall not bear any responsibility. If Party A suffers any reasonable and direct economic loss, Party B shall pay full compensation.
|
7.6
|
In the event that changes in national policies result in the forced elimination of the leased items during the lease period, Party A has the right to request Party B to provide equivalent replacement equipment approved by Party A as the leased items of the Contract. If the replacement equipment is not approved by Party A, Party A has the right to request Party B to make a one-off payment with the following amount within fifteen working days after receiving the payment notice from Party A:
|
(1)
|
Total remaining Lease Principal and interest due (according to actual use period of funds), unpaid service charges (if any) that have expired and overdue interest (if any);
|
(2)
|
The Purchase Price and other payments (if any) that the Lessee shall make to the Lessor when the lease term expires;
|
(3)
|
Other payables related to this Contract (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) (if any).
|
7.7
|
During the lease period, Party A shall have the right to inspect the use and maintenance conditions of the leased items at any time during normal working hours without affecting the normal use of the leased items by Party B upon written notice (including email) provided ten working days in advance. Party B shall provide necessary conveniences for the inspections and cooperate with Party A for the inspection of the leased items.
|
7.8
|
During the lease period, Party B shall bear related expenses and losses arising from removal of the leased items from the bonded area.
|
8.1
|
Party B shall bear all risks of loss or damage to the leased items. In the event of such damage or loss, Party B’s payment obligations for rents and other payables and other obligations under this Contract are not affected.
|
8.2
|
If any damage or loss of the leased items for a single time exceeds 5% of the Lease Funds of the Contract for any reason during the lease term, but the damage or loss does not constitute total loss or constructive total loss, Party B shall promptly notify Party A and shall repair the leased items to the state of normal operation at its own expense. The repair period is included in the lease term. Therefore, Party B shall pay the rent as agreed in this Contract. Party B shall bear all risks of loss or damage to the leased items, including but not limited to risks within the insurance scope or other uninsured risks. In the event of such damage or loss, Party B’s payment obligations for rents and other payables and other obligations under this Contract are not affected.
|
8.3
|
If the leased items have actually been fully lost or if constructive total loss is formed based on reasonable judgment during the lease term, Party B is required to make a one-off payment with the following amount within five working days after receiving the payment notice from Party A. After Party B pays Party A all the following amounts, Party B's obligations under this Contract are automatically discharged and all the benefits of the leased items, including those under the insurance contract, are owned by Party B.
|
(1)
|
Total remaining Lease Principal and interest due (according to actual use period of funds), unpaid service charges (if any) that have expired, liquidated damages (due to Party B's fault) and overdue interest (if any);
|
(2)
|
The Purchase Price and other payments (if any) that the Lessee shall make to the Lessor when the lease term expires;
|
(3)
|
Other payables related to this Contract (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) (if any).
|
9.1
|
Contract Term: The term of this Contract shall be valid from the effective date of the Contract to Party A's receipt of all rents and other payables paid by Party B under this Contract. If Party B chooses to purchase the leased items after the lease term expires, the term of this Contract shall expire on the date that Party B fully pays the Purchase Price of the leased items to Party A and completes the registration of ownership change of the leased items (if any).
|
9.2
|
Lease Commencement Date: The
Lease Commencement Date of the Contract is the date on which Party A pays Party B the down payment of the Lease Funds.
|
a)
|
|
10.1
|
Rent and Payment
|
10.1.1
|
Party B shall deliver the one-off Down Payment of Rent to Party A or a third party designated by Party A in accordance with the time stipulated in Part 1 Commercial Terms. Party B shall remit rents to Party A's account on or before the date of payment on the basis of the time and amount stipulated in Annex II Rent Payment Estimates. If the Rent Payment Estimates is inconsistent with the Actual Rent Payment Table, the Actual Rent Payment Table shall prevail.
|
10.2.1
|
The rents consist of the Lease Costs and the lease interest. The Lessor will charge the rents based on the total Lease Costs from the Lease Commencement Date. The
Lease Interest Rate will be determined in accordance with the following
B
way:
|
A.
|
The fixed interest rate remains unchanged during the lease term and will not be adjusted with the changes of the benchmark interest rates for loan of the People's Bank of China for the same period.
|
B.
|
The floating interest rate will be adjusted in proportion to the benchmark interest rates for loan of the People's Bank of China for the same period.
|
10.2.2
|
With respect to the rents overdue by Party B, adjustments shall be made based on the new interest rates in case of raised interest rates or according to the original interest rates in case of lowered interest rates, regardless of any type of interest rate (fixed interest rate or floating interest rate) selected.
|
10.2.3
|
Party B's obligation to pay rents under this Contract is absolute and unconditional, and is not affected or deducted for any reason, including but not limited to the quality defects of the leased items, unusable leased items, and loss or damage of the leased items.
|
11.1
|
Lease
service charges: After Party A collects the lease service charges from Party B, the lease service charges will not be refunded unless the Contract is cancelled due to Party A's fault.
|
11.2
|
Lease Security Deposit
|
11.2.1
|
In order to ensure that the rent is paid in full and on time and other obligations are performed under this Contract, Party B shall deposit the lease security deposit into the bank account designated by Party A within seven working days after signing of this Contract in accordance with Part 1 Commercial Terms of this Contract.
|
11.2.2
|
Party A will refund the full amount of the lease security deposit to Party B within seven working days after Party B make all the payments in accordance with this Contract. When Party A refunds the lease security deposit, only the principal will be refunded and no interest will accrue.
|
11.2.3
|
Within ten working days after Party A’s written notification, if Party B fails to perform its payment obligations under this Contract, Party A is entitled to use the lease security deposit to offset the amounts that Party B shall pay to Party A in accordance with the order of other payables, overdue interest, liquidated damages, rents payable, service charges and Purchase Price. After the above offset, Party B shall promptly make up the lease security deposit according to Party A's notice. If Party B fails to do so, Party A is entitled to make up for the lease security deposit with the rents subsequently paid by Party B.
|
11.3
|
Other fees that Party B shall pay to Party A:
None
.
|
12.1
|
During the lease period, if Party A has corresponding requirements, Party B shall insure the leased items for Party A as the insured and the beneficiary with the full amount of property insurance and its additional insurance accepted by Party A, and make them valid for the duration of the Contract (if the leased items can only be insured in phases in accordance with relevant regulations of the insurance industry, Party B shall complete the renewal of the insurance 10 working days before expiration of the insurance period). In addition, the insurance amount shall cover the principal and
|
12.2
|
If Party B fails to insure the leased items or renew the insurance on time according to Party A's request, Party A shall have the right to insure the leased items or renew the insurance on behalf of Party B. Party B shall bear the costs incurred. If Party A pays for the insurance fees, Party A shall have the right to seek repayment from Party B and collect interest at the rate of 0.0005 of the amount from the date of Party A’s advance payment to the date of repayment by Party B. If Party B fails to promptly repay Party A's advance payment within ten working days after Party A's written notification in accordance with this Contract, Party A shall be entitled to deduct it from the lease deposit. In the process of insuring the leased items, Party B shall truthfully inform the insurance company in writing of the financing lease relationship between Party A and Party B and the fact that Party A is the sole owner of the leased items.
|
12.3
|
If Party B insures the leased items according to the requirements of Party A under this Contract, the original insurance copy of the policy shall be handed over by Party B to Party A for keeping. After the original insurance policy is submitted to Party A, Party B and the insurance company shall not change the insurance terms without Party A’s prior written consent.
|
12.4
|
After the occurrence of any insurance accident, Party B must immediately notify Party A and the insurance company to handle loss assessment and damage claim. Party B shall provide all necessary documents and take all necessary measures so that Party A can receive insurance compensation. If Party B fails to cooperate with Party A to handle the damage claim and causes Party A’s failure to obtain compensation from the insurance company, Party B shall bear reasonable direct economic losses.
|
12.5
|
After the occurrence of any insured accident, Party B shall take reasonable measures to reduce the loss or avoid further loss. If Party B fails to promptly notify Party A or fails to take reasonable remedial measures, Party B shall bear corresponding responsibilities and compensate Party A for reasonable direct economic losses suffered thereby.
|
12.6
|
(12.7)Party B shall ensure that the insurance coverage and amount are sufficient to cause the actual amount paid by the insurance company to be not less than the total amount of all payments payable by Party B under this Contract (including all remaining interest
of the Lease Principal and service charges) in the event that the entire leased items suffer total loss or constructive total loss.
|
12.7
|
(12.8)When any insured accident occurs, all insurance compensation shall be paid to Party A and handled in the following manner:
|
(1)
|
If the accident does not constitute a total loss of the leased items and Party B does not default on rent or other payables, the insurance compensation shall be used to compensate Party B for the expenses incurred in repairing the leased items under Article 8; if Party B has arrears of rent or other payables, the insurance compensation shall be used to offset the payment that Party B shall pay to Party A. If Party A’s insurance compensation is insufficient to pay the aforesaid amounts, Party B still has the obligation to make up for the insufficiency of Party A, including but not limited to the compensation that the insurance company refuses to pay or insufficiency of compensation. In case of any surplus after the offset, the remaining portion shall be paid to Party B.
|
(2)
|
If the accident constitutes a total loss of the leased items, the insurance compensation shall be used to offset the payment of Party A payable by Party B under Article 8.3. If Party A’s insurance compensation is insufficient to pay the aforesaid amount, Party B still has the obligation to make up for the insufficiency of Party A, including but not limited to the compensation that the insurance company refuses to pay or insufficiency of compensation. In case of any surplus after the offset, the remaining portion shall be paid to Party B.
|
12.8
|
(12.9)The risk of damage or loss of the leased items shall be borne by Party B. The occurrence of an insurance accident and whether the insurance compensation is paid will not constitute a reason for Party B to delay any payment or reduce any payment under this Contract. Party B shall still perform the obligation of paying rents and other payables in accordance with the provisions of this Contract after the occurrence of any insurance accident.
|
13.1
|
Representations and Warranties of Party A
|
13.1.1
|
Party A is a professional financing lease company that has been established in accordance with relevant laws and regulations of China and has been validly subsisting, has qualifications for engaging in financing lease business, and has the qualification and ability to sign and execute this Contract;
|
13.1.2
|
The financing lease business stipulated in this Contract does not exceed the business scope of Party A's articles of association and business license, and complies with relevant national policies and industry regulations;
|
13.1.3
|
Party A has taken all necessary internal measures for the performance of this Contract and has obtained all the necessary rights and approvals required for the signing and performance of the Contract. The representative who has signed this Contract has obtained legal authorization.
|
13.1.4
|
Party A carefully read all the terms of this Contract, has fully understood the meaning of each clause, and signed this Contract is the expression of its true meaning;
|
13.1.5
|
In terms of exempting or restricting its own responsibilities in the Contract, Party A has taken reasonable steps to bring it to the attention of Party B and explained the terms to Party B.
|
13.2
|
Representations and Warranties of Party B
|
13.2.1
|
Party B is a legal person/other organization legally established and validly existing in accordance with relevant laws and regulations of China. It has the necessary civil capacity and performance capacity to sign and perform this Contract, and can independently bear civil liabilities;
|
13.2.2
|
Party B has taken all necessary internal measures and has obtained all the necessary rights and approvals for signing and performance of this Contract. Their authorized representatives who sign this Contract have obtained legal authorization;
|
13.2.3
|
Before this transfer, Party B owns legal, complete and valid ownership of the leased items, and has the right to transfer the leased items to Party A according to the Contract; Party B guarantees that the leased items are not being seized or detained by judicial or administrative authorities during the transfer. The leased items or any part of them have not been transferred to any third party in any way and are not bound by third-party rights (including but not limited to ownership, security interest and usufructuary right, etc.); any contract, rights, and obligations between Party B and other third parties do not affect the performance effectiveness of this Contract. If any third party claims rights to the leased items and thereby causes legal disputes, Party B shall bear relevant responsibilities. If Party A suffers losses arising therefrom, Party B shall bear corresponding liability;
|
13.2.4
|
Party B's signing and performance of this Contract will not violate any laws, regulations, articles of association or any contract or agreement with any third party;
|
13.2.5
|
Before the signing of the Contract, Party B guarantees to provide Party A with true and accurate financial statements and asset lists, and guarantees to fully disclose to Party A the circumstances that involve its assets or rights and may affect the performance of the Contract including mortgage, pledge, litigation, arbitration and administrative penalty;
|
13.2.6
|
Within the validity period of this Contract, Party B shall submit a set of originals of the following statements and reports to Party A within 15 working days after completing them:
|
(1)
|
Annual financial statements;
|
(2)
|
Half-year financial statements;
|
(3)
|
Quarterly financial statements;
|
(4)
|
The year-end audit report issued by the accounting firm.
|
13.2.7
|
Before completion of all the obligations of this Contract, Party B shall obtain Party A's written consent in advance if Party B intends to carry out asset reorganization, equity acquisition, asset transfer and other activities that may affect realization of Party A’s rights and interests;
|
13.2.8
|
Party B guarantees that if it involves any major breach of contract, litigation, arbitration, administrative punishment, restrictive measures such as seizure, detention or freezing of assets, it shall notify Party A in writing within three working days from the date of occurrence of such events, and shall take corresponding measures to prevent such events from causing adverse effects on Party A's rights and interests;
|
13.2.9
|
Party B shall ensure that the leased items are used only for legitimate and rightful commercial purposes and may not be used for any illegal purpose.
|
14.1
|
During the lease period, Party B may partially or fully repay the loan in advance if Party A agrees in writing and Party B meets the following conditions:
|
(1)
|
Party B submits a written application to Party A 60 days in advance;
|
(2)
|
All service charges due have been paid;
|
(3)
|
All rents due have been paid;
|
(4)
|
The Lease Principal not yet due has been paid (applicable to all repayments in advance);
|
(5)
|
Other payables have been paid.
|
14.2
|
Party B may, within five days after Party A agrees, pay Party A a lump sum of all remaining Lease Principal, interest at maturity (calculated according to the actual life of the funds), due service charges, overdue interest (if any), and liquidated damages (if any) and other payables (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees,
|
14.3
|
If Party B makes part of the repayments in advance according to the provisions of this Article, this Contract will continue to be valid. Party A shall re-adjust the rent payment form for the outstanding principal in accordance with the Rent Adjustment Notice attached to Annex IV of this Contract and inform Party B in writing. Party B hereby confirms that Party A's above adjustments are binding on it and undertakes to pay rents to Party A according to the adjusted rent payment form. Party B confirms that its early repayments will not affect Party A's full ownership of the leased items.
|
15.1
|
Party A's Liability for Breach of Contract
|
15.2
|
Party B's Liability for Breach of Contract
|
15.2.1
|
The occurrence of any of the following circumstances during the lease period shall be deemed as Party B's breach of contract:
|
(1)
|
Party B fails to pay rents and/or other payables in accordance with the time and amount stipulated in this Contract;
|
(2)
|
Party B violates the representations and warranties made in this Contract;
|
(3)
|
Party B violates other terms of this Contract, including but not limited to failure to provide guarantees in accordance with this Contract and to complete the required registration formalities;
|
(4)
|
Party B fails to insure the leased items in accordance with this Contract and fails to perform the obligation of proper use and maintenance of the leased items, etc.;
|
(5)
|
Party B has overdue payment or breach of contract in other contracts signed with Party A or other circumstances that affect Party B's performance of this Contract;
|
15.2.2
|
In the event of Party B’s breach of Article 15.2.1, Party A has the right to take one or more of the following measures if Party B fails to make any correction within 10 working days upon Party A’s written notice:
|
(1)
|
Require Party B to pay overdue interest. If Party B fails to pay rents and/or other payables on schedule, Party A shall have the right to request Party B to pay overdue interest from the date of payment of the rents or other payables to the date of actual payment. Overdue interest is calculated at 0.0005 of the amount payable per day until the full payment date. The overdue amounts shall be paid out by Party B in the following order: other payables, overdue interest, liquidated damages, rents payable, service charges and Purchase Price;
|
(2)
|
Take other remedies permitted by law.
|
15.2.3
|
Where Party B has any behavior indicated in Paragraph (1), (2), (3) and (5) of Article 15.2.1, violates Article 13.2 Representations and Warranties (except for Article 13.2.6), and makes no correction within fifteen working days after written notice of Party A, it constitutes a major breach of contract. Party A has the right to take one or more of the following measures:
|
(1)
|
Require Party B to pay overdue interest. If Party B fails to pay rents and/or other payables on schedule, Party A shall have the right to request Party B to pay overdue interest from the date of payment of the rents or other payables to the date of actual payment. Overdue interest is calculated at 0.0005 of the amount payable per day until the full payment date. The overdue amounts shall be paid out by Party B in the following order: other payables, overdue interest (if any), liquidated damages (if any), rents payable, service charges and Purchase Price;
|
(2)
|
Require early expiry of rents and request Party B to immediately pay all remaining rents, service charges, overdue interest, liquidated damages, Purchase Price and other payables (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.);
|
(3)
|
Terminate the Contract, directly recover the leased items without judicial procedure and require Party B to compensate Party A for all losses. Party A’s losses include but are not limited to Party A’s costs for recovering the leased items, costs of realizing the leased items and the insufficient part after repayment of all rents, service charges, overdue interest (if any), Purchase Price, liquidated damages (if any) and all other payables (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) with the proceeds of realization of the leased items;
|
(4)
|
Take measures to prevent the leased items from malfunction;
|
(5)
|
Take other remedies permitted by law;
|
(6)
|
Party A agrees to negotiate with Party B on relevant payment amounts before adopting the measures in Item (2) of this Article. If they reach a new agreement, they may implement the measures according to the new agreement.
|
15.2.4
|
If Party A chooses to rescind the Contract and retrieves the leased items, Party A may request Party B to send the leased items in good condition to Party A at the time and place indicated by Party A, or Party A appoints personnel to directly enter the place of the leased items to immediately occupy and transfer them. Party B shall bear the resulting costs and reasonable direct economic losses caused to Party B or any third party arising from the transfer or recovery of the leased items.
|
15.2.5
|
After the leased items is retrieved, Party A can directly dispose of the leased items, select any appraisal agency at its own discretion to appraise the leased items, and take the appraised price as the price basis for disposal of the leased items; or directly sell the leased items according to the state of the leased items at the time of recovery. The sales target is any legal person or natural person who needs the leased items. The sales income is the value of the leased items. Party B agrees and confirms Party A's above-mentioned disposal method for the leased items and criteria for determining the value of the leased items.
|
15.2.6
|
For the proceeds from disposal of the leased items, Party A has the right to make deductions with the proceeds from disposal of the leased items in the following order:
|
(1)
|
All costs and expenses (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) incurred by Party A for repossession, transfer, safekeeping, repair or disposal of the leased items or execution of this Contract.
|
(2)
|
Any other payables to be paid by Party B to Party A pursuant to this Contract;
|
(3)
|
Overdue interest, default penalty and service charges that Party B shall pay to Party A in accordance with this Contract and any loss incurred by Party A;
|
(4)
|
The total remaining rents that Party B shall pay to Party A according to this Contract;
|
15.2.7
|
If Party A decides not to dispose of the leased items after retrieving them, or needs to determine the value of the leased items in any case, the value of the leased items shall be determined by Party A at its discretion in any of the following ways. Party B has no objection.
|
(1)
|
The appraisal agency entrusted by Party A appraises and determines the value. Relevant expenses thereby incurred shall be borne by Party B;
|
(2)
|
The Party A determines the value through other methods as chosen by Party A.
|
15.2.8
|
If the appraisal agency entrusted by Party A appraises and determines the value, relevant expenses thereby incurred shall be borne by Party B; if Party B does not approve the appraisal results of the appraisal agency entrusted by Party A, Party B may propose to conduct an additional appraisal of the value of the leased items or require the auction of the leased items. Relevant costs shall be borne by Party B. In the event that the judicial organ entrusts any appraisal agency to appraise or auction the leased items
additionally according to the request of Party B, and the value of the leased items determined by the appraisal or auction is higher than that determined by Party A through the way it selects according to the above-mentioned provisions in this Paragraph, Party B shall, within 30 days from the date of determination of the value of the leased items through additional appraisal or the auction procedure, find out a third party to purchase the leased items from Party A at a price not lower than the value of the leased items determined by the additional appraisal or auction procedure and to pay for the purchase price in full. Otherwise, the value determined by Party A shall prevail. For the avoidance of ambiguity, if the buyer of the leased items is determined through an auction procedure or other means, the purchase price paid by the buyer shall be owned by Party A. Party A shall use it to deduct the amounts owed by Party B under this Contract.
|
15.2.9
|
Party A's adoption of any of the above measures shall not affect Party A's other rights under this Contract. Before Party A takes any of the above measures and obtains full compensation, Party B will not be released from continuing to perform its obligations under this Contract.
|
15.2.10
|
If Party A finds that Party B’s operating conditions deteriorate seriously, or Party B transfers assets to evade repayment of debts, surreptitiously withdraws funds, or commits fraudulent acts in the performance of this Contract, or has any other circumstances in which Party A believes that Party B has lost or may lose its ability to perform the Contract, Party B may immediately notify Party B and request Party B to provide a guarantee approved by Party A within a reasonable period of time. Where Party B fails to do so within the time required by Party A, Party A can adopt the measures agreed in Article 15.2.2.
|
15.2.11
|
Party A’s adoption of the aforesaid measures does not therefore exempt Party B from its obligations under this Contract. At the same time, Party B shall bear the expenses incurred by Party A in taking such measures, including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.
|
15.2.12
|
If Party A pays the fees that Party B shall pay under this Contract on behalf of Party B, including but not limited to the taxes and fees related to the leased items, Party B shall reimburse Party A for the fees paid in advance by Party A and shall pay Party A the interest of such fees at the rate of 0.0005 per day from the date of advance payment made by Party A to the date of repayment made by Party B.
|
16.1
|
Without prejudice to Party B’s possession and use of the leased items, Party A has the right to transfer all or part of the rights and obligations under this Contract to a third party and has the right to pledge all or part of the rights granted to Party A under this Contract to a third party, or to mortgage the leased items to a third party. Party A's above transfer/pledge/mortgage does not affect Party B's performance of its obligations under this Contract. Once Party A's above transfer/pledge/mortgage occurs, Party B shall promptly notify Party B in writing. Party B hereby confirms that it agrees with Party A’s above transfer/pledge/mortgage and will actively cooperate with Party A’s implementation of the above transfer/pledge/mortgage.
|
16.2
|
Without Party A's prior written consent, Party B shall not transfer any of the rights and obligations under this Contract.
|
17.1
|
Party B shall notify Party A immediately if any of the following circumstances occurs. Party A is entitled to request Party B to provide a valid guarantee approved by Party A to ensure Party B's performance of its obligations under this Contract. If Party B fails to provide a valid guarantee approved by Party A, Party A may adopt the remedies agreed in Article 15 of this Contract:
|
(1)
|
Party B experiences closure, suspension of business, production suspension, merger, division, bankruptcy and major legal disputes, etc., or deterioration of business conditions;
|
(2)
|
Party B conducts asset reorganization, equity acquisition or transfer/pledge of some or all assets/rights, which may affect the normal performance of this Contract;
|
(3)
|
Party B makes major adjustments to production plans and sales plans, etc. which are sufficient to affect normal production and may affect Party B’s ability to perform this Contract;
|
(4)
|
Except for Party A's reasons, the leased items are frozen, detained, executed, seized or have other conditions affecting their normal operation;
|
(5)
|
Other major events that may affect the normal performance of the contractual debts;
|
(6)
|
Party B's failure to notify Party A in accordance with this Article does not affect Party A's immediate adoption of the remedies agreed in Article 15 of this Contract after it learns the circumstance on its own. However, Party B shall be liable for all losses caused to Party A due to time delay.
|
17.2
|
Changes in Party B’s legal address and legal representative etc. shall not affect the execution of this Contract, but Party B shall promptly notify Party A in writing.
|
17.3
|
If any of the following circumstances occurs when Party B uses the leased items or any project invested with the leased item has any of the following circumstances, Party B shall immediately terminate the use of the leased items, notify Party A of the situation in writing and correct it completely within the reasonable period required by Party A:
|
(1)
|
Any project invested with the leased items violates the national industrial policy;
|
(2)
|
The project invested with the leased items fails to obtain the approval procedures and documents approved by Party A;
|
(3)
|
There are other situations in which the use of the leased items is in violation of the mandatory or restrictive provisions of the law;
|
(4)
|
If Party B fails to completely correct the above circumstances within a reasonable period of time agreed by both Parties, Party A shall have the right to unilaterally terminate this Contract, recover the leased items, and request Party B to pay all the remaining rents, service charges, overdue interest (if any), liquidated damages (if any), Purchase Price, other payables (including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.) within five days after receiving Party A's written notice, and to make full compensation for all reasonable direct economic losses.
|
17.4
|
If the leased items are expropriated or required by a government department or damaged or lost due to a third party, the rent payment and other obligations of Party B under this Contract shall not be affected. When any of such circumstances occurs, Party A is entitled to terminate this Contract in advance and use the compensation obtained to offset all the remaining rents, service charges, overdue interest, liquidated damages, Purchase Price and other fees payable by Party B under this Contract. If the compensation received is not sufficient to make up for the aforementioned amounts payable by Party B, Party B shall be responsible for the insufficient part.
|
18.1
|
After the lease term expires and Party B completes repayment of all the rents and other payables that it shall pay to Party A under this Contract, both Parties will handle the leased items in the following
(1)
manner:
|
(1)
|
Party B shall purchase the leased items according to the Purchase Price stipulated in the “present status quo” and Commercial Terms and obtain the ownership of the leased items. As Party B has always occupied and used the leased items, Party A will make no statement or guarantee on the then-current performance and status of the leased items.
|
(2)
|
Renewal of lease: Party B may continue to rent the leased items. The parties shall negotiate the lease renewal issue and sign a written agreement.
|
(3)
|
Return of the leased items: Party B returns the leased items to Party A within 10 days after the expiry of the Contract and guarantees that the leased items are intact (except for normal wear and tear).
|
19.1
|
Party B shall implement the security contract entered into by and between relevant guarantee obligor and Party A in accordance with the Security Methods stipulated in this Contract, which at the same time shall be taken as the entry-into-force condition for this Contract.
|
19.2
|
Where the financial status of the guarantee obligor significantly deteriorates, or the value of the guarantee/pledge may be derogated or lost, Party B shall provide other guarantee measures approved by Party A separately.
|
20.1
|
“Force majeure” refers to the incidents which are beyond the control scope of the Parties to this Contract, unforeseeable, unavoidable or insurmountable, or render either party hereunder partially or wholly unable to perform this Contract. Such incidents include but are not limited to earthquakes, typhoons, floods, fires, wars, strikes, riots, government actions, legal provisions or their applicable changes.
|
20.2
|
When force majeure occurs, the party affected by force majeure shall promptly notify the other party in writing and take remedial measures to reduce losses.
|
20.3
|
The party affected by force majeure shall provide the other party with details of the force majeure, the report of losses and relevant supporting documents within seven days from the occurrence of force majeure.
|
20.4
|
If a party affected by force majeure fails to perform or delay performance of its obligations under this Contract due to force majeure, it may be exempted from liability in part or in whole within the influence scope of force majeure. However, force majeure shall not relieve the affected party of its obligations in accordance with this Contract prior to the occurrence of such events.
|
20.5
|
After the force majeure is over or the influence is eliminated, the party affected by force majeure shall notify the other party immediately. The parties shall continue to perform their contractual obligations after the force majeure is over or the influence is eliminated. At the same time, the duration of the Contract shall be extended accordingly.
|
20.6
|
If the influence of force majeure persists for more than 30 days, resulting in failure of either party to continue to perform the contractual obligations, either party has the right to notify the other party in writing to terminate the Contract.
|
21.1
|
Party B agrees that Party A has the right to exercise the following actions:
|
(1)
|
Party A announces Party B's performance of this Contract on Party A's own website;
|
(2)
|
Party B authorizes Party A to obtain the credit information of Party B and its legal representatives, actual controllers, shareholders, financial controllers and other credit information of the company or individuals from the
Basic Database of Financial Credit Information of the People's Bank of China
and other credit investigation agencies or databases, to report the Party B’s credit condition of the performance of this Contract to the above-mentioned organizations, and to complete public announcement and registration of the leased items on the financing lease system of the People's Bank;
|
(3)
|
In the event that Party B has overdue payments under the Contract and fails to make any correction within 15 days after Party A’s written reminder, Party A has the right to disclose Party B’s breaches in the
Basic Database of Financial Credit Information of the People's Bank of China
and other credit investigation agencies.
|
21.2
|
Party A agrees that Party B has the right to exercise the following actions:
|
22.1
|
This Contract and its performance are governed by the laws of the People's Republic of China and interpreted in accordance with the laws of the People's Republic of China.
|
22.2
|
Any dispute arising from this Contract or related to this Contract shall be settled by the Parties through friendly negotiation. If the negotiation fails, the Parties agree to adopt the following (2) way for resolution:
|
(1)
|
Apply to the
/
Arbitration Committee for arbitration;
|
(2)
|
File a lawsuit with the local people's court of Party A.
|
23.1
|
Any amendment, addition or change to this Contract shall be made in writing separately and shall take effect after the legal representatives of Party A and Party B or their authorized agents sign/sign and seal it. The aforementioned amendment, addition or change shall be deemed as an integral part of this Contract.
|
23.2
|
Except as otherwise provided in this Contract, neither party shall rescind or early terminate this Contract without the consent of both Parties.
|
25.1
|
This Contract shall take effect on the date on which the legal representatives of both Parties or their authorized representatives sign/sign and seal it or affix the official seal to it.
|
26.1
|
Any notice given by either party to the other party in relation to this Contract must be in writing. If the notice is delivered by hand, it will be deemed to be served after the addressee signs for receipt. If it is sent by e-mail or fax, it will be deemed to be served at the time of sending; if it is served by post, it will be deemed to be served after the other party signs for receipt or refuses to sign for receipt. If the address or name is incorrect or the other party is not notified in writing for any change, the date of indicating the cause for failure to deliver the mail shall be deemed that the notice has been served. Unless otherwise notified in writing, the Parties shall confirm the addresses for communication services (see Part 1 Commercial Terms);
|
26.2
|
Both Parties confirm that the above-mentioned domiciles of both Parties contained in this Contract is their addresses for delivery of their legal documents. A written document sent by one party to the other party to the address of the Contract (regardless of whether or not the mail is rejected or returned for any reason) will be deemed served on the third day after mailing. In case of any change in the address of either party, the party shall notify the other party in writing of the address change issue and the new address of service on the day of the change of the address. Before either party delivers
|
(1)
|
Party A shall notify Party B immediately in writing if it confronts any difficulty in raising funds which cannot be predicted. Both Parties shall, based on changes in specific circumstances, jointly confirm the adjustment plan of the mode and timing of the funds release, or confirm the suspension and termination of release of the Lease Funds, and guarantee that Parties will not raise any right claim in this condition.
|
(2)
|
If Party B fails to provide Party A with a written proof of receipt of the increased capital of US$25 million from Alpha and Omega Semiconductor Limited, Party B’s shareholder, within three months from the date of full payment of Party A's Lease Funds, Party A has the right to request early termination of the Contract and require Party B to make an one-off payment to Party A for the remaining Lease Principal, Interest Due, due service charges, Overdue Interest (if any), liquidated damages (the amount of liquidated damage is 5% of the Purchase Price of the leased items paid by Party A), other payables (if any, including but not limited to litigation fees, arbitration fees, property preservation fees, preservation guarantee fees, travel expenses, implementation fees, assessment fees, auction fees, notary fees, delivery fees, announcement fees and attorney fees, etc.). The security deposits and service charges already paid by Party B will not be refunded. In case of any other loss caused by Party A, Party B shall also bear corresponding liability for compensation.
|
Period#
|
Due Date
|
Principal
|
Interests
|
Total
|
Note
|
1
|
|
|
|
|
|
2
|
|
|
|
|
|
3
|
|
|
|
|
|
Total
|
|
|
|
|
|
Period
|
Due Date
|
Amount Due before Adjustment
|
Amount Due after Adjustment
|
|
|
|
|
…
|
|
|
|
…
|
|
|
|
…
|
|
|
|
Total
|
|
|
|
Period #
|
Amount to be Paid (RMB)
|
Due Date
|
…
|
|
|
Minimum Deposits
|
Current Available Deposits
|
Amount to be Paid
|
|
|
|
1.
|
Unless the context requires otherwise, in this Contract:
|
(1)
|
“Mortgaged Property” means all the real estates listed under Schedule 1 of this Contract of which the title or the use right regarding the real property and the land use right regarding the construction land legally owned by the Mortgagor.
|
(2)
|
“Events of Default” means any events provided under Chapter 12 of this Contract.
|
(3)
|
“Suspense Account” means pursuant to Chapter 6 of this Contract, the RMB suspense account opened by the Mortgagor at Tthe Mortgagee, Tthe supervision bank/bank branch designated by the Mortgagor, for the purposes of collecting the deposits of the Mortgaged Property, the rentals and any payments arising from any other disposals of the Mortgaged Property.
|
(4)
|
“Registration Authority” means the competent authority of buildings and land and its authorized registration agency at the place of the Mortgaged Property.
|
2.
|
The Mortgagor shall mortgage to the Mortgagee as the beneficiary the Mortgaged Property and all existing and future rights, interests and proceeds arising from the Mortgaged Property, including but not limited to any rights arising from any sale or lease contracts in connection with the Mortgaged Property and executed by the Mortgagor as a party of the contracts, and any compensations payable to the Mortgagor as a result of the seizure or expropriation of the Mortgaged Property.
|
3.
|
The claims secured by the Mortgagor under this Contract are as follows:
|
4.
|
Notwithstanding the Mortgaged Property is created under this Contract, the Mortgagee is not required to perform any obligations and liabilities of the Mortgagor in connection with the Mortgaged Property. The Mortgagor acknowledges that the Mortgagor will continue to comply with and fulfil all obligations and liabilities relating to the Mortgaged Property.
|
5.
|
The scope of the security for the Mortgagor under this Contract includes the following two items (“Secured Debt”):
|
(I)
|
All debts payable by the Debtor to the Mortgagee under the Principal Contract, including but not limited to the principal, financed funds and other accounts payable, interests (including but not limited to statutory interests, agreed interests, interests on overdue payments and default interests), handling charges, telecommunications charges, miscellaneous charges and other charges, liquidated damages, damages, expenses for the realization of the creditors’ claims (including but not limited to litigation fees, lawyers' fees, notarization fees and enforcement costs) and any other amounts payable by
|
(II)
|
All costs incurred by the Mortgagee for the realization of the security interest under this Contract (including but not limited to litigation fees, lawyers' fees, notarization fees and enforcement costs) and any other amounts payable by the Mortgagor".
|
6.
|
The evidence by the Mortgagee to demonstrate the Secured Debt or any amounts payable by the Mortgagee under this Contract, unless the Mortgagor provides sufficient and valid evidence to prove there are obvious errors, shall be the final evidence of the debtor-creditor relationship between the parties and shall be binding upon the Mortgagor.
|
7.
|
On the signing date of this Contract or no later than 30 days after the signing date of this Contract, the Mortgagor shall, together with the Mortgagee or the persons authorized by the Mortgagee, register the mortgage with Registration Authority. The certificate of other rights relating to the registration of the mortgage issued by the Registration Authority shall be placed under the control of the Mortgagee.
|
8.
|
Upon the request of the Mortgagee, the Mortgagor shall immediately take any action reasonably required by the Mortgagee (including executing any documents, securing any approvals, and completing any registrations, filings or recordings) to perfect or protect the mortgage created under this Contract or pursuant to this Contract.
|
9.
|
The Mortgagor shall ensure that
R
before the first application for the withdrawal,
T
before the first handling of relevant business, by the Debtor under the Principal Contract, the Mortgagee receives the following documents submitted by the Mortgagor:
|
(1)
|
This Contract duly executed by
T
the Mortgagor personally (applicable to an individual),
R
the legal representative or the authorized signatory of the Mortgagor (applicable to a company);
|
(2)
|
R
The articles of association of the Mortgagor and the latest annually inspected business license of the Mortgagor (applicable to a company);
|
(3)
|
R
Board Resolution,
T
Shareholders’ Resolution, in writing resolved by
R
the Board
T
the Shareholders’ (General) Meeting consenting the Mortgagor gives security to the Mortgagee by way of mortgage over the Mortgaged Property (applicable to a company);
|
(4)
|
T
Effective identity certificate of the Mortgagor and the title deed showing the Mortgagor has the title or the right to dispose of the Mortgaged Property (applicable to an individual);
|
(5)
|
T
Proof of the shares of the property possessed by the joint owners of Mortgaged Property, if any, and the written document in which the joint owners consent that the Mortgagor mortgages the Mortgaged Property (applicable to an individual);
|
(6)
|
Proof document that the mortgage under this Contract has been registered or filed with relevant authorities;
|
(7)
|
The confirmation letter issued by an insurance company in accordance with the form of Schedule 2 or the confirmation letter issued by an insurance company, accepted by the Mortgagee, conforming to the substance of Schedule 2;
|
(8)
|
Other documents to be provided by the Mortgagor as the Mortgagee may request.
|
10.
|
On the signing date of this Contract, the Mortgagor shall submit to the Mortgagee a detailed description of the Mortgaged Property (including but not limited to the lease of the Mortgaged Property). The Mortgagor confirms to the Mortgagee, other than those specified in the above list (if any), the Mortgagor does not lease, assign, grant, abandon or otherwise dispose of the Mortgaged Property in whole or in part.
|
11.
|
The Mortgagor, with the written consent of the Mortgagee, may lease, assign or otherwise dispose of the Mortgaged Property or change the lessee.
|
12.
|
All funds received arising from the lease, assignment or otherwise disposal of the Mortgaged Property by the Mortgagor with the consent of the Mortgagee shall be immediately deposited into the Suspense Account.
|
13.
|
The Mortgagor shall open a Suspense Account within [
] days after/at the signing date of this Contract.
|
14.
|
When the Mortgagor, with the prior written consent of the Mortgagee, leases, assigns or otherwise disposes of any part of the Mortgaged Property, pursuant to the provisions of Chapter 5 of this Contract, all deposits, rentals or any other funds received by the Mortgagor shall be remitted to the Suspense Account.
|
15.
|
Without the prior written consent of the Mortgagee, the Mortgagor shall not use or withdraw any funds from the Suspense Account.
|
16.
|
During the period of mortgage, if the Mortgagor with the consent of the Mortgagee assigns the Mortgaged Property, the Mortgagor shall pay off the Secured Debt in advance or lodge it with the Mortgagee using the funds received from such assignment.
|
17.
|
When any events of default under this Contract occur and the Mortgagee declares to enforce the mortgage created under this Contract, the Mortgagee may directly withdraw any funds from the Suspense Account (except for the deposit charged for the lease of the Mortgaged Property), which may be used in the order pursuant to Clause 53 to pay off the Secured Debt.
|
18.
|
Before the Mortgagee realizes the mortgage created under this Contract, the Mortgaged Property shall be possessed and administered by Mortgagor. The Mortgagor shall maintain the Mortgaged Property in proper condition, and use the Mortgaged Property for the purposes permitted by the Chinese law and by the Mortgagee under this Contract, subject to inspection by the Mortgagee at any time.
|
19.
|
Without the written consent of the Mortgagee, the Mortgagor shall not make any material or structural alterations to the Mortgaged Property, except those normal changes made during the decoration period. To the extent permitted by the law, any building, facility or fixture added to the Mortgaged Property as a result of a breach of this clause shall automatically become part of the Mortgaged Property under this Contract
|
20.
|
Any defects (significant or potential), if any, in the Mortgaged Property and any losses or damages incurred arising from such defect shall be none of the business of the Mortgagee. The Mortgagee shall not be liable for any such losses or damages. If such defects result in a reduced price of the Mortgaged Property, the Mortgagor shall, upon request, provide the Mortgagee with additional property as security for the Secured Debt. If the Mortgagee suffers losses as a result of any defects (significant or potential) in the Mortgaged Property, the Mortgagor shall immediately indemnify the Mortgagee for such losses.
|
21.
|
If the Mortgagor’s acts result in a reduced price of the Mortgaged Property, the Mortgagee is entitled to demand the Mortgagor stop its acts. For the reduced price of the Mortgaged Property, the Mortgagee is entitled to demand the restoration of the price of the Mortgaged Property, or provision of security corresponding to the reduced
|
22.
|
Where the Debtor fails to perform the due obligations under the Principal Contract, or where the mortgage is realized pursuant to this Contract, resulting in the seizure of the Mortgaged Property by the Courts according to law, from the date of seizure, the Mortgagee is entitled to collect the natural profits or civil profits arising from the Mortgaged Property, and the Mortgagor shall notify those who are obliged to pay such profits as the Mortgagee requires.
|
23.
|
If the Mortgaged Property is damaged, destructed or sized during the mortgage period, the Mortgagee has the preferential right to satisfaction of a claim for the insurance premiums, compensations or indemnities, etc., and in the event of the undue Secured Debt, may lodge the insurance premiums, compensations or indemnities, etc.
|
24.
|
The Mortgagor shall,
R
before the first application for the withdrawal,
T
before the first handling of relevant business, by the Debtor under the Principal Contract, insure the Mortgaged Property according to the insurance types required by the Mortgagee with an insurance company in China approved by the Mortgagee, and the amount of the insurance shall not be less than the price of the Mortgaged Property (as set out in Schedule 1 in detail). All insurance policies, underwriting, insurance contracts and other relevant documents or corresponding copies, as the case may be, shall be placed under the control of the Mortgagee. All insurance charges shall be borne by the Mortgagor.
|
25.
|
The Mortgagor shall urge the insurance company to specify in its insurance policy created for the Mortgaged Property that the insurance compensation shall be paid directly to the Mortgagee, and issue to Mortgagee a confirmation letter conforming to the substance of Schedule 2 of this Contract immediately upon acquring the executed insurance policy from the insurance company.
|
26.
|
If the Mortgagor delays or fails to arrange such insurance, the Mortgagee is entitled (but no obliged) to arrange the insurance in the manner described above or otherwise, provided that the Mortgagor shall indemnify the Mortgagee for all costs and interests incurred as a result of arranging for such insurance.
|
27.
|
Without the prior written consent of the Mortgagee, the Mortgagor shall not suspend, cancel or vary any insurance against the Mortgaged Property until the Secured debt is paid in full. In the event of an insured accident specified under the policy, the Mortgagor shall notify the insurance company and the Mortgagee promptly within the time specified under the policy. All losses arising from the failure of the Mortgagor to notify the insurance company timely shall be borne by the Mortgagor.
|
28.
|
The Mortgagor shall pay the premium in a timely manner until the Secured Debt is paid in full and shall take all measures to maintain such insurance valid and updated at any time. The Mortgagor shall, in accordance with the requirements of the Mortgagee, provide to the Mortgagee the payment vouchers certifying the full payment of the insurance premium. The Mortgagor shall not, by act or by omission, prejudice the rights and interests of the Mortgagee under insurance policy. If the Mortgagor breaches this clause, the Mortgagee may (but is not obliged) to take any measures as it deems necessary in its own name, in joint action with the Mortgagor or in the name of the Mortgagor according to law, to maintain such insurance updated and valid, and recognize the rights and interests of the Mortgagee under the insurance policy. The costs incurred shall be borne by the Mortgagor.
|
29.
|
Before the Secured Debt is paid in full, the insurance compensations under the aforesaid insurance policy shall be paid directly to the Mortgagee. The Mortgagee may, at its discretion, use any amounts of the compensations received under any insurance policy to repair the Mortgaged Property or to pay the Secured Debt in whole or in part. If for any reason the Mortgagor receives any insurance compensations, the Mortgagor shall immediately notify the Mortgagee and hold and keep such amounts on behalf of the Mortgagee, and dispose of and use such amounts as directed in writing by the Mortgagee.
|
30.
|
The mortgage under this Contract is a continuing security with full effect until the Secured Debt is paid in full.
|
31.
|
The security created under this Contract is independent of any other security acquired by the Mortgagee for the Secured Debt. Before exercising his rights under this Contract, the Mortgagee is not required to first enforce any other security it holds, or to first take any other relief. Subject to the applicable law, this Contract is independent of the Principal Contract, and, for any reason, the invalidity or rescission of the Principal Contract shall not prejudice the validity of this Contract or the obligations and liabilities of the Mortgagor under this Contract. And, this Contract shall not be void or rescinded by reason of the invalidity or rescission of the Principal Contract secured.
|
32.
|
The Mortgagor hereby represents and warrants to the Mortgagee as follows:
|
(1)
|
R
The Mortgagor is a company duly incorporated, validly existing as an independent person. The Mortgagor has the full authority and capacity to enter into this Contract and perform the obligations under this Contract (applicable to a company).
|
(2)
|
R
The Mortgagor has been engaged in business activities according to law and has not engaged in any acts beyond the scope of business registered with the Administration for Industry and Commerce (applicable to a company).
|
(3)
|
The Mortgagor is the sole lawful owner of the Mortgaged Property, and the Mortgagor does not create or permit the creation of any other security on the Mortgaged Property except the security created under this Contract. There is no dispute over the title of the Mortgaged Property. The Mortgaged Property is enforceable and transferrable, and has not been foreclosed, seized or placed under any preservative measures in litigation, and can be used as the subject matter of mortgage according to law.
|
(4)
|
The Mortgagor
T
together with other co-owners (if any) (applicable to an individual) has read this Contract carefully and has fully understood and accepted the contents of this Contract and the Principal Contract. The Mortgagor acts with free will to execute and perform this contract, and the whole is the manifestation of true intentions.
|
(5)
|
The Mortgagor has obtained all approvals from the government agency necessary to execute this Contract.
|
(6)
|
The Mortgagor has not entered into any agreement (other than this Contract) to sell, grant, assign or otherwise dispose of any rights or interests of the Mortgaged Property in whole or in part.
|
(7)
|
The description of the titles under Schedule 1 of this Contract relating to the Mortgaged Property is true, accurate, and not misleading.
|
(8)
|
The Mortgagor has duly paid any charges and fees payable (including but not limited to various taxes) relating to the Mortgaged Property, and has fully complied with and performed other contracts and conditions relating to the Mortgaged Property.
|
(9)
|
This Contract constitutes lawful, effective and legally binding obligations against the Mortgagor. The security created under this Contract is not subject to the preferential rights of any other person.
|
(10)
|
In order to ensure this Contract is lawful, effective, preferential, enforceable and acceptable as evidence, and to secure and perfect the interests of the Mortgagee under this Contract, the Mortgagor has completed all necessary registration or filing formalities, including but not limited to the registration with the Registration Authority by the Mortgagor against the Mortgaged Property.
|
(11)
|
The Mortgagor’s execution of this Contract and the performance of the obligations under this Contract shall not be in breach of any of the following:
|
(a)
|
R
The articles of association of the Mortgagor (applicable to a company);
|
(b)
|
Any other agreements entered into by the Mortgagor;
|
(c)
|
Any laws and regulations applicable to the Mortgagor.
|
(12)
|
No litigation, arbitration or administration proceedings is currently taking place in relating to the Mortgagor or the Mortgaged Property, which has material adverse effects on the financial standings of the Mortgagor, the price of the Mortgaged Property or the capacity of the Mortgagor to perform its obligations under this Contract.
|
(13)
|
All materials, documents and certificates provided by the Mortgagor to the Mortgagee are true, accurate, complete and effective, and photocopies of the documents provided are in conformity with the originals.
|
(14)
|
R
The Mortgagor hereby represents that he is fully aware that the Export-Import Bank of China Chongqing Branch is authorized by the Mortgagee to provide the Services under the Principal Contract and handle any matters relating to the administration of the Services and under this Contract. This Contract is directly binding upon the Mortgagor and the Mortgagee.
|
33.
|
The above representations and warranties made by the Mortgagor shall remain correct and not misleading within the term of this Contract, and the Mortgagor warrants to provide further documents at any time as the Mortgagee may request.
|
34.
|
The Mortgagor shall comply with all laws and regulations relating to this Contract, strictly perform and abide by its obligations and liabilities under this Contract, and take all necessary measures to ensure that the title of the Mortgaged Property remains lawful and effective."
|
35.
|
The Mortgagor shall obtain and complete all approvals or registration procedures and handle any other matters necessary to maintain this Contract lawful and effective.
|
36.
|
The Mortgagor shall maintain and keep the Mortgaged Property in good condition and shall not demolish, disassemble or remove any part of it, unless conducted otherwise in the course of normal use, repair, maintenance or improvement.
|
37.
|
The Mortgagor shall duly pay all taxes and charges payable incurred to the Mortgaged Property, and abide by and perform the terms and conditions provided under the title deeds of the Mortgaged Property.
|
38.
|
The Mortgagor shall inform the Mortgagee of the contents of any notice or order relating to the Mortgaged Property issued by any government agency or administrative authority within three days of the receipt of such notice or order; The Mortgagor shall, within the period specified in such notice or order, take necessary measures to comply with such provisions. And, at the request of the Mortgagee, the Mortgagor shall, on its own or jointly with the Mortgagee, raise any objection or statement in favor of the Mortgagee relating to such notice or order, and all related costs and expenses shall be borne by the Mortgagor.
|
39.
|
The Mortgagor shall allow the Mortgagee or its person to be appointed to enter the Mortgaged Property at any reasonable time and to inspect the Mortgaged Property and register such status.
|
40.
|
The Mortgagor shall submit the original certificate of other rights of the Mortgaged Property to the Mortgagee for safekeeping.
|
41.
|
The Mortgagor shall promptly notify the Mortgagee of any event that may affect the Mortgaged Property or its price.
|
42.
|
The Mortgagor shall promptly notify the Mortgagee of any of the following:
|
(1)
|
Any occurrence of Events of Default;
|
(2)
|
Any litigation, arbitration or administrative proceedings relating to the Mortgagor or the Mortgaged Property;
|
(3)
|
T
Changes in the health status, marital relationship, job duties, domicile address of the Mortgagor that may adversely affect the financial standing of the Mortgagor or the capability of the Mortgagor to perform the obligations under this Contract. (application of the individual)
|
43.
|
During the period of the Contract, the Mortgagor shall not perform any of the following acts without the written consent of the Mortgagee, until the Secured Debt has not been paid in full:
|
(1)
|
to sell, transfer, or partition the Mortgaged Property or any part of it;
|
(2)
|
to create any other mortgage or security interest over the Mortgaged Property (other than the mortgage created under this Contract);
|
(3)
|
to use of the Mortgaged Property for purposes other than such property designed for or for purposes not permitted under any insurance policy relating to the Mortgaged Property; and
|
(4)
|
to conduct any act against Mortgaged Property in breach of the existing laws and regulations, or any act which is likely to affect or reduce the value of the security interest of the Mortgagee under this Contract.
|
44.
|
As long as any Secured Debt remains unsatisfied, the Mortgagor shall not pursue or claim a right against the Debtor in respect of any Mortgaged Property that has been disposed of by the Mortgagee without the written consent of the Mortgagee.
|
45.
|
If the Mortgagee and the Debtor agree to amend the Principal Contract, the Mortgagor will undertake the security obligations within the amended scope of the security without the consent of the Mortgagor, except for the parts where the amount, term, currency and interest rate under the Principal Contract are varied by the Mortgagee and the Debtor and the liability of the Mortgagor is increased.
|
46.
|
Without the prior consent of the Mortgagor, the Mortgagee may assign the debt claim secured under this Contract to any third party and assign the mortgage under this Contract to such third party at the same time. The Mortgagor shall complete the corresponding legal formalities for such purpose.
|
47.
|
The Mortgagor hereby agrees and undertakes that where the Mortgagee allows the Debtor to assign the debts under the Principal Contract in whole or in part, the Mortgagor shall, as required by the Mortgagee, issue a written document agreeing to continue to undertake the security liability.
|
48.
|
Each of the following events or matters will constitute an “Event of Default” of the “Mortgagor” under this Contract:
|
(1)
|
The “Debtor” fails to pay any amount owed to the “Mortgagee” in full amount on time as agreed in the “Principal Contract”, any other Events of Default under the “Principal Contract” occur, or the maturity of the “Secured Debt” is accelerated for any reason.
|
(2)
|
The statement or warranty made by the “Debtor” under this Contract is recognized as incorrect, unfaithful, or misleading or the “Debtor” breaches or refuses to fulfill any covenant made hereunder.
|
(3)
|
The "Debtor" transfers, sells, leases out, or otherwise disposes the “Mortgaged Property” without consent or places any security interest on any part of the “Mortgaged Property”, or any third party claims any right to the “Mortgaged Property”.
|
(4)
|
All or any part of the “Mortgaged Property” or important assets of the “Mortgagor” have been confiscated, expropriated or acquired, no matter whether any compensation has been paid therefor.
|
(5)
|
R
The “Mortgagor” suspends its business or closes down, files for bankruptcy, liquidation, discontinuance of business, or other similar proceedings, is declared bankrupt or liquidated, or is closed down or suspended from business by the competent authority. (Applicable to corporate guarantee)
|
(6)
|
Any litigation, arbitration, or administrative proceeding, which is filed against the “Mortgagor” or the “Mortgaged Property” and will have material adverse impact on the financial status of the “Mortgagor”, the value of the “Mortgaged Property”, or the capacity of the “Mortgagor” to perform its obligations according to this Contract, occurs.
|
(7)
|
The value of the “Mortgaged Property” decreases due to the act of the “Mortgagor”, and the “Mortgaged Property” is insufficient to repay the “secured debt” as a result.
|
(8)
|
The “Mortgagor” breaches its obligations hereunder or other events that the “Mortgagee” believes will cause material adverse impact on its rights hereunder occur.
|
49.
|
When the said “Event of Breach” occurs, the “Mortgagee” has the right to:
|
(1)
|
Declare that all amounts that the “Debtor” owes to the “Mortgagee” under the “Principal Contract” immediately fall due and request the “Debtor” to immediately repay all amounts owed to the “Mortgagee” under the “Principal Contract”;
|
(2)
|
Declare abrogation of the rights of the “Debtor” to further application for the “Services”;
|
(3)
|
Declare implementation or realization of the mortgage right hereunder.
|
50.
|
In case of any event of default under this Contract, the “Mortgagee” has the right to implement and realize the mortgage right placed hereunder according to law by means it deems appropriate, including that the “Mortgagee” and the “Mortgagor” may reach an agreement on selling the “Mortgaged Property” at a discount or auction the “Mortgaged Property” and the receipt from selling of the “Mortgaged Property” shall be preferentially used for repayment of the debts. If the “Mortgagee” and the “Mortgagor” do not reach an agreement on the means to realize the mortgage right, the “Mortgagee” may request the people’s court to auction or sell off the “Mortgaged Property”.
|
51.
|
In the course of the “Mortgagee’s” disposal of the “Mortgaged Property” according to the foregoing provision, the “Mortgagee” has the right to take the following actions according to law:
|
(1)
|
Possessing all or a part of the “Mortgaged Property”;
|
(2)
|
Requesting the “Mortgagor” to reimburse the necessary expenses paid by the “Mortgagee” for exercising any right granted by this Contract or laws;
|
(3)
|
Possessing the right to sell the “Mortgaged Property” to the extent allowed by law at such market price as deemed appropriate by the “Mortgagee” at appropriate time, and assuming no responsibility for any loss caused thereby to the “Mortgagor”;
|
(4)
|
With respect to any claim made by any person in relation to the “Mortgaged Property”, resolving, reconciling, filing for arbitration or litigation, or exercising or allowing other persons to exercise any right in relation to the “Mortgaged Property” by other means it deems appropriate;
|
(5)
|
Applying to the competent authority for enforcement;
|
(6)
|
In order to realize any right hereunder, exercising or taking all the other rights or actions permitted by law.
|
52.
|
Upon the request of the “Mortgagee”, the “Mortgagor” must assist the “Mortgagee” in obtaining all necessary permits or consents in relation to the “Mortgagee’s” realization of its creditor’s rights, or assist the “Mortgagee” in going through all the other necessary formalities.
|
53.
|
Any receipt from the “Mortgagee’s” disposal of the “Mortgaged Property” hereunder shall be treated in the following order:
|
(a)
|
Any other amount payable by the “Mortgagor”;
|
(b)
|
Principal creditor’s rights under the “Principal Contract”;
|
(c)
|
Interests under the “Principal Contract”;
|
(d)
|
Other payables under the “Principal Contract”.
|
54.
|
When the “Mortgagee” exercises its rights under this Contract according to law, it will not assume any responsibility for any loss caused to the “Mortgagor” or the “Mortgaged Property” by exercise of its rights, unless such exercise of rights are unlawful.
|
55.
|
All expenses incurred for conclusion of this Contract, handling necessary record-filing or notarization formalities, and performance and enforcement of this Contract (including but not limited to attorney’s fees and legal fees paid by the “Mortgagee” therefor) shall be borne by the “Mortgagor”. Expenses on mortgage registration shall be borne by
T
the “Mortgagee”
R
the “Mortgagor”
T
/.
|
56.
|
The “Mortgagor” shall reimburse and compensate the “Mortgagee” for the following expenses and losses upon the request of the “Mortgagee”:
|
(1)
|
All expenses incurred to the “Mortgagee” for realization of the security interest under this Contract (including but not limited to legal fees, attorney’s fees, notarial fees, execution expenses, etc.); and
|
(2)
|
Any other amount payable by the “Mortgagor” to the “Mortgagee” under this Contract.
|
57.
|
T
This Contract will become effective on the day when the “Mortgagor” signs in person and the legal representative or authorized signatory of the “Mortgagee” signs and affixes its official seal onto this Contract. (Applicable to personal guarantee)
|
58.
|
When the Secured Debt is repaid in full amount, the “Mortgagor” may go through the formalities for cancellation of mortgage registration with the Registration Authority of this Contract, and the “Mortgagee” shall provide necessary assistance. All costs incurred therefrom shall be borne by the “Mortgagor”.
|
59.
|
This Contract is governed by the law of the People’s Republic of China and shall be construed in accordance with the law of the People’s Republic of China.
|
60.
|
During the performance of this Contract, any controversy or dispute arising out of performance of this Contract or in relation to this Contract may be settled by the Parties through consultation. If such consultation fails, either Party may bring an action before the people’s court according to law. The Parties agree that, the litigation initiated out of performance of this Contract or in relation to this Contract shall be brought before the people’s court with jurisdiction over the place where the “Mortgagee” is domiciled.
|
61.
|
Without the prior consent of the “Mortgagee”, the “Mortgagor” shall not transfer or otherwise dispose all or any part of its obligations hereunder.
|
62.
|
Under this Contract, the “Mortgagor” shall pay any payable in full amount without claiming for any offset or attaching any requirement.
|
63.
|
Under the precondition allowed by applicable laws, the “Mortgagee’s” granting any leniency, grace, privilege, or moratorium to the “Mortgagor” shall not affect, prejudice, or restrict any rights that the “Mortgagee” is entitled to according to this Contract and applicable laws and regulations, be deemed the “Mortgagee’s” waiver of its rights and interests hereunder, or affect any liability and obligation of the “Mortgagor” under this Contract.
|
64.
|
This Contract may be amended or supplemented upon the written consent of the Parties. Any amendment and addition hereto shall constitute an integral part of this Contract.
|
65.
|
The Parties hereto agree as follows on the address for service and legal consequences of all notices and requirements in relation to this Contract and related documents and legal documents in the case of disputes arising out of the Contract:
|
(1)
|
Notices and requirements given between the Parties hereto in relation to this Contract shall be made in writing. All notices and requirements in relation to this Contract and related documents and legal instruments in the case of disputes arising out of this Contract will be sent to
T
the addresses of the parties concerned as stated in the first page of this Contract
R
the following addresses:
|
(2)
|
Correspondence between the Parties shall be deemed as served upon delivery if they are delivered by hand; they shall be deemed as served after three (3) days of posting if they are sent by registered mail; and they shall be deemed served as served when the terminal of the sender receives the confirmation signal if they are sent by telex or facsimile. The documents sent by the “Mortgagor” to the “Mortgagee”, however, shall be deemed as served when the “Mortgagee” actually receives such documents.
|
(3)
|
If either Party hereto changes its address, it shall timely notify the other Party in writing. If the address of either Party hereto changes in the course of arbitration and civil proceedings, the Party concerned shall fulfill its obligation of notifying the arbitration organization and court of the change to the address for service within three (3) working days of such change.
|
(4)
|
When any dispute in relation to this Contract is brought into arbitration or civil proceedings, if any Party hereto directly submits confirmation of address for service to the arbitration organization or court after responding to action and such confirmed address is inconsistent with the address confirmed before the action, the service for address shall be that submitted to and confirmed with the arbitration organization or court.
|
66.
|
In accordance with the Administrative Regulations on Credit Reporting Industry and application laws and regulations of China, the “Mortgagor” acknowledges that he/she is informed of and understands the meanings agree herein and hereby irrevocably authorize the “Mortgagee” (including the branches of the “Mortgagee”) as follows:
|
a.
|
In order to timely learn about the credit status of the “Mortgagor”, rule out the “Mortgagor’s” engagement in any unlawful acts or violations, and ensure security of businesses under the Principal Contract and this Contract, the “Mortgagee” may, according to applicable provisions of the country, use the basic financial credit information database
R
and / to
R
inquire and use the related information of the “Mortgagor” (applicable to corporate guarantee) T personal information and credit information, including credit and loan information, of the “Mortgagor” that comply with applicable provisions, for assessment of the “Mortgagor” or his/her spouse as the guarantor (applicable to personal guarantee).
|
b.
|
According to applicable provisions of the country, the “Mortgagee” may provide
R
related information under all the contracts, agreements, and legal documents of any form entered into by and between the “Mortgagor” and the “Mortgagee”
|
c.
|
According to applicable laws, regulations, and regulatory requirements, the “Mortgagee” may provide
R
related information of the “Mortgagor” (applicable to corporate guarantee)
T
personal information and credit information, including the credit and loan information, of the “Mortgagor” that complies with applicable provisions (including bad record information generated when the “Mortgagor” applies for services at the “Mortgagee”) (applicable to personal guarantee) to China Banking Regulatory Commission and other competent regulatory authority and competent jurisdiction and administration authorities.
|
d.
|
For the purpose of provision of financial services, the “Mortgagee” may share within its organization
R
related information of the “Mortgagor” (applicable to corporate guarantee)
T
personal information and credit information, including the credit and loan information, of the “Mortgagor” that complies with applicable provisions (including bad record information generated when the “Mortgagor” applies for services at the “Mortgagee”) (applicable to personal guarantee), including sharing among the branches.
|
e.
|
According to the needs of collection of arrearages, transfer of creditor’s right, and financial service outsourcing, the “Mortgagee” may provide
R
related information of the “Mortgagor” (applicable to corporate guarantee)
T
personal information and credit information, including the credit and loan information, of the “Mortgagor” that complies with applicable provisions (including bad record information generated when the “Mortgagor” applies for services at the “Mortgagee”) (applicable to personal guarantee) to related third parties.
|
f.
|
This authorization will be valid from the execution date of this Contract to the date when all rights and obligations hereunder are fulfilled.
|
g.
|
The “Mortgagee” shall take the legal responsibilities arising from the “Mortgagor’s” inquiry, use, and disclosure of the related information of the “Mortgagor” beyond the scope of authorization agreed herein.
|
67.
|
The Parties hereto are obliged to keep confidential any information that is made available by each other and marked confidential. The Parties, however, has the right to the following:
|
(1)
|
disclosing the information that has become known to the public (excluding the information that is known to the public because the disclosing Party violates this provision);
|
(2)
|
disclosing the information to be disclosed in any litigation or arbitration;
|
(3)
|
disclosing such information according to any law and regulation to the extent required by such law and regulation;
|
(4)
|
disclosing such information according to the rules on trading of listed shares of the stock exchanges on which the Parties are listed;
|
(5)
|
disclosing such information to any government, financial, taxation, or other administrative organs to the extent required by such administrative organs;
|
(6)
|
disclosing such information to their directors, management, staff, or professional advisors (including but not limited to lawyers and auditors), provided that the Party to which such information is disclosed has undertaken to observe their non-disclosing obligations hereunder;
|
(7)
|
disclosing such information upon the consent of the Party providing such confidential information.
|
68.
|
Special agreements:
|
69.
|
The annexes to this Contract are an integral part of this Contract and have the same legal effect with this Contract.
|
70.
|
The original copy of this Contract is made in three copies, with each of the “Mortgagor”, the “Mortgagee”, and the Registration Authority handling mortgage registration holding one copy. The duplicate copy is made in / copies. Each copy shall have the same legal effect.
|
Nature of Title:
|
Right to the use of state-owned construction land
|
Certificate No.:
|
Yu (2017) Liang Jiang Xin Qu Bu Dong Chan Zheng No. 000207338
|
Purpose:
|
Land for industrial use
|
Land Lot No.:
|
Land lot C47-1/03 located in Section C, Shuitu Sub-Community, Liangjiang New Area
|
Drawing No.:
|
500109 202003 GB00026
|
Service life:
|
Expire on November 30, 2066
|
Total area:
|
228449 m
2
|
1.
|
Without your written consent in advance, we will not make any amendment or alteration to any content of the Policy;
|
2.
|
Once we learn of any insurance accident under this Policy, we will immediately notify you of such accident;
|
3.
|
In case of any insurance claim under the Policy, we will immediately notify you of such claim and deposit any insurance compensation payable by us under the Policy in the following bank account according to the provisions of the Policy:
|
4.
|
Once we learn that the policy holder under the Policy breaches any provision under the Policy, we will immediately notify you of such breach;
|
5.
|
We will not suspend or termination the Policy for any reason, unless we suspend or terminate the Policy according to the provisions on suspension or termination of the Policy and we have granted you a remedial period of ____ days prior to the request for suspension or termination of the Policy.
|
SUBSIDIARIES OF THE REGISTRANT
|
||||
|
|
|
|
|
Subsidiary Name
|
|
Incorporated Location
|
|
Percentage Owned
|
Alpha and Omega Semiconductor Incorporated
|
|
California, United States
|
|
100% owned by AOS
|
Alpha and Omega Semiconductor (Cayman) Ltd.
|
|
Cayman
|
|
100% owned by AOS
|
Alpha and Omega Semiconductor (Shanghai) Co., Ltd.
|
|
China
|
|
100% owned by AOS
|
Alpha & Omega Semiconductor (Shenzhen) Limited
|
|
China
|
|
100% owned by AOS
|
Alpha & Omega Semiconductor (Hong Kong) Limited
|
|
Hong Kong
|
|
100% owned by AOS
|
Alpha & Omega Semiconductor (Macau), Ltd.
|
|
Macau
|
|
100% owned by AOS
|
Alpha & Omega Semiconductor (Taiwan) Limited
|
|
Taiwan
|
|
100% owned by AOS
|
Alpha & Omega Semiconductor (Germany) GmbH
|
|
Germany
|
|
100% owned by AOS
|
Agape Package Manufacturing Ltd.
|
|
Cayman
|
|
100% owned by AOS
|
Agape Package Manufacturing (Shanghai) Ltd.
|
|
China
|
|
100% owned by AOS
|
Agape Limited
|
|
Hong Kong
|
|
100% owned by AOS
|
Jireh Semiconductor Incorporated
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Oregon, United States
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100% owned by AOS
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Chongqing Alpha and Omega Semiconductor Limited
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Chongqing, China
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51% owned by AOS
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1.
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I have reviewed this report on Form 10-K of Alpha and Omega Semiconductor Limited;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ MIKE F. CHANG
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Mike F. Chang
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Chief Executive Officer
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1.
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I have reviewed this report on Form 10-K of Alpha and Omega Semiconductor Limited;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ YIFAN LIANG
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Yifan Liang
Chief Financial Officer and Corporate Secretary |
a.
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the Annual Report of the Company on Form 10-K for the fiscal year ended
June 30, 2018
(the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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b.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ MIKE F. CHANG
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Mike F. Chang
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Chief Executive Officer
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a.
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the Annual Report of the Company on Form 10-K for the fiscal year ended
June 30, 2018
(the “Report”), fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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b.
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ YIFAN LIANG
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Yifan Liang
Chief Financial Officer and Corporate Secretary |