Applied Optoelectronics, Inc. (NASDAQ: AAOI) (“AOI”) announced
today that it intends to offer to sell, subject to market and other
conditions, $80 million aggregate principal amount of Convertible
Senior Notes due 2026 (the “Notes”) in an offering exempt from the
registration requirements of the Securities Act of 1933, as amended
(the “Securities Act”).
Final terms for the offering of the Notes will be determined at
the time of pricing. The Notes will be our senior, unsecured
obligations and will be equal in right of payment with our existing
and future senior, unsecured indebtedness, senior in right of
payment to our existing and future indebtedness that is expressly
subordinated to the Notes and effectively subordinated to our
existing and future secured indebtedness, to the extent of the
value of the collateral securing that indebtedness. The Notes will
be convertible at the option of holders of the Notes under certain
specified circumstances, as set forth in the indenture governing
the Notes. We will settle conversions by paying or delivering, as
applicable, cash, shares of our common stock or a combination of
cash and shares of our common stock, at our election, based on the
applicable conversion rate(s). Initially, the Notes will not be
guaranteed, but the Notes will be fully and unconditionally
guaranteed, on a senior, unsecured basis, by certain of our future
domestic subsidiaries.
We intend to use the net proceeds from the offering to
repurchase or exchange our existing 5.00% Convertible Senior Notes
due 2024 (the “2024 notes”) in individual, privately negotiated
transactions with existing holders thereof, as described below.
Concurrently with the offering, we expect to enter into
separate, privately negotiated transactions with certain holders of
our 2024 notes to exchange or repurchase a portion of the
outstanding 2024 notes for a combination of cash and shares of our
common stock. Following the completion of the offering, we may
engage in additional exchanges, or we may repurchase or induce
conversions, of the 2024 notes. Holders of the 2024 notes that
participate in any of these exchanges, repurchases or induced
conversions may purchase or sell shares of our common stock in the
open market to unwind any hedge positions they may have with
respect to the 2024 notes or to hedge their exposure in connection
with these transactions. These activities may adversely affect the
trading price of our common stock and the Notes we are offering.
Moreover, market activities by holders of the 2024 notes that
participate in the concurrent exchanges or repurchases may impact
the initial conversion price of the Notes we are offering.
There can be no assurance that the offering of the Notes will be
completed. The Notes will be sold only to qualified institutional
buyers in accordance with Rule 144A under the Securities Act. The
offer and sale of the Notes and the shares, if any, issuable upon
their conversion have not been registered under the Securities Act,
and the Notes and such shares may not be offered or sold without
registration or an applicable exemption from the registration
requirements of the Securities Act and applicable state or other
jurisdictions’ securities laws, or in transactions not subject to
those registration requirements.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy the Notes or any other securities,
nor shall there be any sale of the Notes or any other securities in
any state or jurisdiction in which such offer, solicitation or sale
would be unlawful.
Forward-Looking Information
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. In some cases, you can identify forward-looking statements by
terminology such as “believe,” “may,” “estimate,” “continue,”
“anticipate,” “intend,” “should,” “could,” “would,” “target,”
“seek,” “aim,” “predicts,” “think,” “objectives,” “optimistic,”
“new,” “goal,” “strategy,” “potential,” “is likely,” “will,”
“expect,” “plan” “project,” “permit” or by other similar
expressions that convey uncertainty of future events or outcomes.
Such forward-looking statements reflect the views of management at
the time such statements are made. These forward-looking statements
involve risks and uncertainties, as well as assumptions and current
expectations, which could cause our actual results to differ
materially from those anticipated in such forward-looking
statements. These risks and uncertainties include but are not
limited to: the impact of the COVID-19 pandemic on our business and
financial results; reduction in the size or quantity of customer
orders; change in demand for our products due to industry
conditions; changes in manufacturing operations; volatility in
manufacturing costs; delays in shipments of products; disruptions
in the supply chain; change in the rate of design wins or the rate
of customer acceptance of new products; our reliance on a small
number of customers for a substantial portion of its revenues;
potential pricing pressure; a decline in demand for our customers’
products or their rate of deployment of their products; general
conditions in the internet datacenter, cable television (CATV)
broadband, telecom, or fiber-to-the-home (FTTH) markets; changes in
the world economy (particularly in the United States and China);
changes in the regulation and taxation of international trade,
including the imposition of tariffs; changes in currency exchange
rates; the negative effects of seasonality; and other risks and
uncertainties described more fully in our documents filed with or
furnished to the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2022 and
our Quarterly Reports on Form 10-Q for the quarters ended March 31,
2023, June 30, 2023 and September 30, 2023. More information about
these and other risks that may impact our business are set forth in
the “Risk Factors” section of our quarterly and annual reports on
file with the Securities and Exchange Commission. You should not
rely on forward-looking statements as predictions of future events.
All forward-looking statements in this press release are based upon
information available to us as of the date hereof, and qualified in
their entirety by this cautionary statement. Except as required by
law, we assume no obligation to update forward-looking statements
for any reason after the date of this press release to conform
these statements to actual results or to changes in our
expectations.
About Applied Optoelectronics
Applied Optoelectronics Inc. (AOI) is a leading developer and
manufacturer of advanced optical products, including components,
modules and equipment. AOI’s products are the building blocks for
broadband fiber access networks around the world, where they are
used in the CATV broadband, internet datacenter, telecom and FTTH
markets. AOI supplies optical networking lasers, components and
equipment to tier-1 customers in all four of these markets. In
addition to its corporate headquarters, wafer fab and advanced
engineering and production facilities in Sugar Land, TX, AOI has
engineering and manufacturing facilities in Taipei, Taiwan and
Ningbo, China.
Investor Relations Contacts:
The Blueshirt Group, Investor RelationsLindsay
Savarese+1-212-331-8417ir@ao-inc.com
Cassidy Fuller+1-415-217-4968ir@ao-inc.com
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