AAOI

Business Context and Reporting Period

This Form 8-K Current Report was filed by Applied Optoelectronics, Inc. on July 23, 2019. The report details a material definitive agreement entered into by Prime World International Holdings, Ltd., a wholly owned subsidiary of the registrant.

Key Financial Metrics

The filing does not provide revenue, profit, cash flow, margin, or liquidity metrics for the company. It focuses exclusively on the terms of a new credit facility:

• Total Facility Size: 100,000,000 NTD (New Taiwan Dollar) and 1,000,000 USD.
• Term: One-year revolving facility available from July 23, 2019, through July 31, 2020.
• Draw Terms: Individual draws are for 90 or 120 days.
• Interest Rates:
  • NTD Line: 2.25% for 90-day draws; 2.2% for 120-day draws.
  • USD Line: Interest equals the Bank's foreign exchange rate effective on the day of the draw.
• Collateral: Secured by a promissory note.

Material Changes

The primary material change is the establishment of the new Credit Facility with Taishin International Bank in Taiwan. This creates a direct financial obligation for the subsidiary. The filing does not provide comparative financial data against prior periods.

Guidance, Outlook, and Risks

Management Commentary and Usage:

• The NTD 100M Credit Line is designated for short-term working capital.
• The USD 1M Credit Line is strictly for spot transactions in the foreign exchange market.

• The agreement includes customary representations, warranties, and events of default.
• Full repayment of principal and accrued interest is required at the end of each draw term.

Investor Verification Checklist

• Verify the full text of the Credit Facility Agreement and Promissory Note (Exhibits 10.3 and 10.4) for specific default triggers.
• Confirm the impact of the foreign exchange rate on the USD line interest costs.
• Review subsequent filings to determine if the company has drawn upon these credit lines.
• Check the company's latest 10-K or 10-Q for overall debt levels and liquidity position, as this 8-K does not provide consolidated financial statements.