Business Context and Reporting Period
Applied Optoelectronics, Inc. filed this Form 8-K on December 22, 2015, to disclose the entry into a material definitive agreement. The company is incorporated in Delaware and operates from Sugar Land, Texas.
Key Financial Metrics and Debt
This filing does not report revenue, profit, cash flow, or operating margins. The primary financial metric disclosed is a new debt obligation:
- Credit Facility Amount: US$2 million.
- Facility Type: One-year revolving credit facility.
- Purpose: Purchases of raw materials.
- Availability Period: November 20, 2015, to November 27, 2016.
- Term per Draw: Maximum 180 days.
- Collateral: Secured by a percentage of the Company's certificate of deposit with the Bank.
Material Changes and Interest Rates
The material change is the establishment of the new credit line with Mega International Commercial Bank Co., Ltd. in Taiwan. Interest rates are variable based on currency:
- US Dollars: 6-month LIBOR plus 1.2%, divided by 0.946.
- New Taiwan Dollars: Bank's base lending rate plus 0.76% (minimum 1.9%).
- Other Currencies: Bank's base lending rate plus 1.0%, divided by 0.946.
- Current Base Rate: The Bank's base lending rate is stated as 2.75%.
Guidance, Risks, and Unusual Items
The filing contains no forward-looking guidance, management commentary on future performance, or discussion of unusual items. Risks are limited to standard representations, warranties, and events of default customary for credit agreements of this type. The filing explicitly states that the description provided is not a complete statement of rights and obligations.
Investor Verification Checklist
- Verify the full text of the US$2 Million Credit Facility Agreement (Exhibit 10.1) for specific covenants and default triggers.
- Confirm the current balance of the certificate of deposit pledged as collateral.
- Monitor the 6-month LIBOR rate to calculate the actual cost of US Dollar borrowings.
- Review subsequent filings to determine if the company has drawn any funds against this facility.