Business Context and Reporting Period
This Form 8-K Current Report was filed by Applied Optoelectronics, Inc. on April 22, 2016. The filing discloses the entry into a material definitive agreement by the Company's Taiwan branch.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, or liquidity metrics. The primary financial disclosure relates to a new credit facility:
- Credit Facility Amount: USD$10 million revolving credit line.
- Counterparty: China Construction Bank, Taipei Branch.
- Term: Available from April 22, 2016, until March 25, 2017.
- Draw Term: Individual draws shall not exceed 180 days.
- Collateral: Secured by a standby letter of credit issued by the Bank's China branch; borrowings cannot exceed 97% of the standby letter of credit amount.
- Interest: Negotiated separately for each drawing; monthly payments of accrued interest required.
Material Changes
The Company renewed a revolving credit line originally dated April 1, 2015. There are no reported changes to revenue, operating expenses, or debt levels other than the availability of this new borrowing capacity.
Guidance, Outlook, and Risks
Management Commentary: Borrowings under the agreement are designated for general corporate purposes and material purchases.
Risks and Contingencies: The agreement includes customary representations, warranties, and events of default. The availability of funds is contingent upon the underlying standby letter of credit issued to the Company's China subsidiary, Global Technology Inc.
Investor Verification Checklist
- Verify the current outstanding balance of the standby letter of credit securing this facility to determine actual borrowing capacity (capped at 97%).
- Review the specific interest rate terms negotiated for any future draws, as they are not fixed in this filing.
- Confirm the financial health of the China subsidiary (Global Technology Inc.) as the source of the collateral.
- Check for any existing defaults or covenants that could restrict access to the credit line.