Company: AAOI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025450
Chunk: 27

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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815-40, to qualify for equity classification (or non-bifurcation, if embedded) the instrument (or embedded feature) must be both (1) indexed to the issuer’s own stock and (2) meet the requirements of the equity classification guidance. Based upon the Company’s analysis, it was determined the conversion option is indexed to its own stock and also met all the criteria for equity classification. Accordingly, the conversion option is not required to be bifurcated from the host instrument as a derivative.
    
   Pursuant to ASC 815-15, the Company further determined that the contingent redemption features in the 2030 Notes are not required to be bifurcated from the host contract and accounted for separately. Additionally, the Company then evaluated whether the conversion feature needed to be separately accounted for as an equity component under ASC 470-20, Debt with Conversion and Other Options, and determined that the additional premium was not substantial. Accordingly, that amount was recognized as a premium on the 2030 Notes.   

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   The following table sets forth interest expense information related to the 2026 Notes and 2030 Notes (in thousands):
   ​
   
       Three months ended June 30,    Six months ended June 30,  
 ​   2025    2024    2025    2024  
 Contractual interest expense  $46  $1,056  $92  $2,111 
 Amortization of debt issuance costs    350    359   701   709 
 Total interest cost  $396  $1,415  $793  $2,820 
 Effective interest rate   1.0%  5.3%  1.0%  5.3%

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   Note 13.  Accrued Liabilities​
   ​
   Accrued liabilities consisted of the following for the periods indicated (in thousands):
   ​
   
       June 30, 2025    December 31, 2024  
 Accrued payroll  $15,966  $13,136 
 Accrued employee benefits   3,853   4,014 
 Accrued state and local taxes   1,445   824 
 Accrued