Applied Optoelectronics, Inc. (NASDAQ:AAOI) Files An 8-K Entry into a Material Definitive Agreement

Applied Optoelectronics, Inc. (NASDAQ:AAOI) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01Entry into a Material Definitive Agreement.

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On December 29, 2017, Global Technology, Inc. (“Global Technology”) a wholly owned Chinese subsidiary of Applied Optoelectronics, Inc. (the “Company”) entered into a long-term Lease Agreement (the “Lease Agreement”) for real property with the People’s Republic of China in Zhejiang Province, Ningbo City, Land Resources Bureau, as named in the Lease Agreement (the “Owner”), located at V-03-1 plot of Wangchun Industrial Park, Ningbo (the “Site”), for a lease term of fifty (50) years (the “Term”). The Lease Agreement provides that Global Technology may use the land for the design and manufacture of optical fiber and cable communication equipment during the Term. The Company intends to build a facility on the Site for manufacturing capabilities. The Company is in the process of gathering information regarding the construction of the proposed facility and cannot yet accurately predict the cost or when such facility will be completed. In connection with the Lease Agreement, Global Technology has agreed to pay the Owner a lease fee of 32,583,200 RMB, equivalent to approximately $5 million USD, in the aggregate. The Lease Agreement may be terminated prior to the end of the Term upon the occurrence of certain specified events.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Lease Agreement, a copy of which will be attached as an exhibit to the Company’s Annual Report on Form10-K for the period ending December 31, 2017.

Item 2.03.Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 above is incorporated by reference into this Item 2.03.

About Applied Optoelectronics, Inc. (NASDAQ:AAOI)

Applied Optoelectronics, Inc. is a vertically integrated provider of fiber-optic networking products. The Company offers its products for approximately three networking end markets, such as Internet data center; cable television (CATV), and fiber-to-the-home (FTTH). The Company designs and manufactures a range of optical communications products at varying levels of integration, from components, subassemblies and modules to turnkey equipment. The Company’s customers in the Internet data center market include Internet-based (Web 2.0) data center operators, to whom it supplies optical transceivers that plug into switches and servers within the data center, and allow these network devices to send and receive data over fiber optic cables. To the CATV market, it supplies a range of products, including lasers, transmitters and turnkey equipment, as well as headend, node and distribution equipment. Its manufacturing sites are located at Sugar Land, Texas; Ningbo, China, and Taipei, Taiwan.

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