Applied Optoelectronics Closes Exchange of 2026 Notes and Registered Direct Offering

Applied Optoelectronics, Inc. (NASDAQ: AAOI) announced on December 23, 2024, the successful completion of the transaction involving the exchange of $76.7 million principal amount of its 5.25% Convertible Senior Notes due 2026 (2026 Notes). This exchange, conducted with certain noteholders, resulted in the issuance of $125 million aggregate principal amount of 2.75% Convertible Senior Notes due 2030 (2030 Notes), along with 1,487,874 shares of common stock and approximately $89.6 thousand in cash as part of the transactions collectively referred to as the “Exchanges.”

The 2030 Notes, which were issued pursuant to an indenture dated December 23, 2024, bear interest at a rate of 2.75% per year and will mature on January 15, 2030. Holders of the 2030 Notes have the option to convert them, with an initial conversion rate of approximately 23.0884 shares of Common Stock per $1,000 principal amount of the notes. Subject to certain conditions, the holders may also require the Company to repurchase the notes for cash.

As part of these transactions, approximately 3,679,688 shares of Common Stock may be issued upon conversion of the 2030 Notes. Additionally, a Registered Direct Offering was conducted simultaneously, where Applied Optoelectronics issued 1,036,458 shares of Common Stock at a purchase price of $33.97 per share, generating net proceeds of about $33.7 million after deducting fees and expenses.

The increase in financial flexibility resulting from the removal of certain restrictive covenants in the 2026 Notes and the strengthening of the balance sheet with the proceeds are expected to benefit Applied Optoelectronics, according to Stefan Murry, the Chief Financial Officer and Chief Strategy Officer of the company.

Raymond James & Associates, Inc. acted as the sole placement agent for the Registered Direct Offering. Haynes Boone LLP and Mayer Brown LLP provided legal advice for these transactions.

These offerings and exchanges were made in compliance with the Securities Act of 1933 and relevant securities laws. The Company intends to utilize the net proceeds for general corporate purposes, potentially including capital expenditures, working capital, and acquisitions aligning with its current businesses, although no specific plans or commitments have been made.

Applied Optoelectronics reminds investors that forward-looking statements mentioned in this report are subject to risks and uncertainties, and actual results may vary from anticipated outcomes. The full text of the related report and filings can be accessed on the SEC’s website.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Applied Optoelectronics’s 8K filing here.

Applied Optoelectronics Company Profile

Applied Optoelectronics, Inc designs, manufactures, and sells fiber-optic networking products in the United States, Taiwan, and China. It offers optical modules, optical filters, lasers, laser components, subassemblies, transmitters and transceivers, turn-key equipment, headend, node, distribution equipment, and amplifiers.