Company: AAOI
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001437749-25-025450
Chunk: 11

Company: APPLIED OPTOELECTRONICS, INC.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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, revenue recognized from the unearned revenue balance was $0 and $0.2 million, respectively. 

   Three months ended June 30,    Six months ended June 30,  
   2025    2024    2025    2024  
 Unearned revenue, beginning of period  $—  $1,689  $—  $1,803 
 Additional unearned revenue   —   —   —   — 
 Revenue recognized   —   119   —   233 
 Unearned revenue, end of period  $—  $1,570  $—  $1,570 

   Customer Warrant
    
   On  March 13, 2025, the Company issued a warrant (the "Customer Warrant") to a wholly-owned subsidiary of Amazon.com, Inc. ("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 the 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 or on behalf of Amazon and its affiliates of $4 billion of the Company's products over this time period. The Company accounts for the Customer Warrant as an equity classified share-based consideration to a customer and will recognize the grant-date fair value of the Customer Warrant as a reduction of revenue from Amazon as the related goods or services are transferred. As of  March 13, 2025, the Company recorded other current asset of $1.7 million and other noncurrent asset of $15.1 million, representing the aggregate grant-date fair value of 1,324,233 Warrant Shares vested at the issuance. The grant date fair value of the Customer Warrant was determined to be $12.64 per share, using the Black-Scholes-Merton option pricing model. 

     The per share grant date fair value of the Customer Warrant was estimated using the following assumptions:

      At Grant Date 
Expected volatility  80.00%
Weighted-average expected term (in years