Company: AAOI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015518
Chunk: 62

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 62
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 construction of the building shell is complete, and approximately $27.4 million of this total cost has been paid and the remaining portion will be paid in yearly installments for three years after final inspection. We anticipate additional expenses for building improvements to the factory and we are in the process of evaluating the timing of these expenditures and obtaining bids for any such work. Based on forecasts, we believe the factory will be placed in full service in the year 2025 after the construction is completed for the building interior work. Property has been transferred from construction in progress to building and improvement in 2024.

Warrants

On March 13, 2025, we issued a warrant (the "Customer Warrant") to an Amazon affiliate (“Warrant Holder”) to purchase up to an aggregate of 7,945,399 shares of the Company's common stock ("Warrant Shares") at an exercise price of $23.6956 per share. The Customer Warrant has a contractual term of 10 years. At the time of issuance, the Customer Warrant is exercisable to purchase 1,324,233 Warrant Shares. The remaining 6,621,166 Warrant Shares may vest over the next 10 years, dependent on aggregate purchases by Amazon of $4 billion of our products over this time period.

Future liquidity needs

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We had cash, cash equivalents and restricted cash of $66.8 million as of March 31, 2025, a decrease of approximately $12.3 million compared to December 31, 2024. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support our research and development efforts, the expansion of our sales and marketing activities, the introduction of new and enhanced products, the building improvement of a new factory in Taiwan or U.S., changes in our manufacturing capacity and the continuing market acceptance of our products. 

As of March 31, 2025, we had a total loan balance (excluding convertible notes) of $22.1 million from various lenders in China and had $29.4 million available borrowing capacity on existing credit lines. Should additional liquidity be needed, our Board may authorize issuance of additional common stock under an at-the-market offering in the future (see the discussion of "Liquidity and Capital Resources" in Item 2). 

In the event we need additional liquidity, we will explore additional sources of liquidity. These additional sources of liquidity could include