Legal Proceedings
−Removed: From time to time, we may be subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, inquiries, investigations, audits and other regulatory proceedings, such as described below.
−Removed: Except for the lawsuit described below, we believe that there are no claims or actions pending or threatened against us, the ultimate disposition of which would have a material adverse effect on us.
−Removed: On August 5, 2017, a lawsuit was filed in the U.S.
−Removed: District Court for the Southern District of Texas against the Company and two of its officers in Mona Abouzied v.
−Removed: Applied Optoelectronics, Inc., Chih-Hsiang (Thompson) Lin, and Stefan J.
−Removed: Murry, et al.
−Removed: 4:17-cv-02399.
−Removed: The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on August 3, 2017 that “we see softer than expected demand for our 40G solutions with one of our large customers that will offset the sequential growth and increased demand we expect in 100G.”
−Removed: A second, related action was filed by Plaintiff Chad Ludwig on August 16, 2017 (Case No.
−Removed: 4:17-cv-02512) in the Southern District of Texas.
−Removed: The two cases were consolidated before Judge Vanessa D.
−Removed: On January 22, 2018, the court appointed Lawrence Rougier as Lead Plaintiff and Levi & Korsinsky LLP as Lead Counsel.
−Removed: Lead Plaintiff filed an amended consolidated class action complaint on March 6, 2018.
−Removed: The amended complaint requests unspecified damages and other relief.
−Removed: The Company filed a motion to dismiss on April 4, 2018, which was denied on March 28, 2019. 
−Removed: The Company disputes the allegations, and intends to continue to vigorously defend against these claims. 
−Removed: On May 15, 2019, Lead Plaintiff filed a motion for leave to amend the consolidated class action complaint for the purpose of adding named Plaintiffs Richard Hamilton, Kenneth X.
−Removed: Luthy, Roy H.
−Removed: Cetlin, and John Kugel (together with Lead Plaintiff Lawrence Rougier, “Plaintiffs”) to the case.
−Removed: The court granted the motion on May 16, 2019.
−Removed: The substantive allegations in the Plaintiffs’
−Removed: operative second amended consolidated class action complaint remain unchanged.
−Removed: On May 28, 2019, Plaintiffs filed a motion seeking to certify the case as a class action pursuant to Federal Rule of Civil Procedure 23 and seeking appointment of Plaintiffs as class representatives and Levi & Korsinsky as class counsel.
−Removed: On July 12, 2019, the Company filed a response in opposition to the motion for class certification, and on August 26, 2019, Plaintiffs filed their Reply Brief.
−Removed: The Court has not yet ruled on the pending motion for class certification. On November 13, 2019, the Magistrate Judge issued a Memorandum and Recommendation recommending that the Plaintiffs’
−Removed: motion for class certification be granted, to which Defendants filed written objections on November 27, 2019.
−Removed: On December 11, 2019, Plaintiffs filed a response in opposition to Defendants’
−Removed: objections, and on December 16, 2019, Defendants filed their reply brief.
−Removed: The court entered an order adopting the Magistrate Judge’s Memorandum and Recommendation over Defendants’
−Removed: objections on December 20, 2019.
−Removed: Thereafter, on January 3, 2020, Defendants filed a petition for permission to appeal the class certification order to the Fifth Circuit Court of Appeals.
−Removed: Plaintiffs filed an answer in opposition to Defendants’
−Removed: petition on January 13, 2020, and Defendants filed a reply brief in further support of the petition for permission to appeal on January 21, 2020.
−Removed: On January 23, 2020, Defendants filed an unopposed motion in the Fifth Circuit requesting that the court stay further proceedings for 90 days to allow the parties to conduct settlement negotiations.
−Removed: The Fifth Circuit entered an order granting the motion on January 24, 2020.
−Removed: The case is currently in the discovery phase, and fact discovery is scheduled to be completed by June 1, 2020. 
−Removed: At this stage, we are not yet able to determine the likelihood of loss, if any, arising from this matter.
−Removed: On August 7, 2018, Plaintiff Lei Jin filed a purported derivative action on behalf of nominal defendant Applied Optoelectronics, Inc.
−Removed: District Court for the Southern District of Texas against the Company’s chief executive officer, chief financial officer and board of directors (Case No.
−Removed: 4:18-cv-02713). 
−Removed: This case was consolidated with a later filed derivative lawsuit filed by Plaintiff Yiu Kwong Ng in the U.S.
−Removed: District Court for the Southern District of Texas (Case No.
−Removed: 4:18-cv-4751).
−Removed: The allegations in the consolidated derivative complaints are substantially similar to those underlying the Abouzied securities class action and the Taneja securities class action discussed below.
−Removed: The consolidated derivative action is stayed pending a ruling on defendants’
−Removed: forthcoming motion to dismiss in the Taneja securities class action. We dispute the allegations and intend to vigorously contest the matter.
−Removed: On October 1, 2018, a lawsuit was filed in the U.S.
−Removed: District Court for the Southern District of Texas against the Company and two of its officers in Gaurav Taneja v.
−Removed: Applied Optoelectronics, Inc., Thompson Lin, and Stefan Murry , Case No.
−Removed: 4:18-cv-03544.
−Removed: The complaint in this matter seeks class action status on behalf of the Company’s shareholders, alleging violations of Sections 10(b) and 20(a) of the Exchange Act against the Company, its chief executive officer, and its chief financial officer, arising out of its announcement on September 28, 2018 that it was revising its third quarter revenue guidance due to “an issue with a small percentage of 25G lasers within a specific customer environment.”
−Removed: This case was consolidated with two identical cases styled Davin Pokoik v.
−Removed: Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J.
−Removed: Murry , Case No.
−Removed: 4:18-cv-3722 and Stephen McGrath v.
−Removed: Applied Optoelectronics, Inc., Chih-Hsiang Lin, and Stefan J.
−Removed: Murry . 
−Removed: Mark Naglich was appointed as Lead Plaintiff on the consolidated matter on January 4, 2019. 
−Removed: Lead Plaintiff filed an amended consolidated complaint on March 5, 2019, and the Company filed a motion to dismiss the amended consolidated complaint on May 6, 2019.
−Removed: On July 5, 2019, Plaintiff filed a response in opposition to the motion to dismiss, and the Company filed its reply brief in further support of the motion on August 5, 2019. On January 29, 2020, the district court entered an order granting Defendants’
−Removed: motion to dismiss and dismissing the amended consolidated complaint with prejudice.
−Removed: The court also entered an order denying Lead Plaintiff’s request for leave to further amend the complaint, and entered a final judgment terminating the case.
−Removed: An appeal by Lead Plaintiff, if any, must be filed with the Fifth Circuit by February 28, 2020. We continue to dispute the allegations and intends to vigorously contest the matter should an appeal be filed.
+Added: The information set forth under Note T "Contingencies" included in Part II, Item 8 of this Form 10-K, is incorporated herein by reference.
+Added: For an additional discussion of certain risks associated with legal proceedings, see "Risk Factors" above.
 Mine Safety Disclosure
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