What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-02-26 compared with 2025-02-28 · 333 added, 355 removed, 1180 unchanged (37% of the section changed)

5 unchanged sentences

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2025 .

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered in this Form 10-K, our disclosure controls and procedures were not effective as a result of the material weakness in internal control over financial reporting discussed below.

Management’s Annual Report on Internal Control over Financial Reporting.

7 unchanged sentences

Our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of the end of the period covered by this Form 10-K based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organization ("COSO") of the Treadway Commission.

Based on this evaluation, management concluded, based on a material weakness related to operation of controls over our review of technical accounting analysis , that our internal control over financial reporting was not effective as of December 31, 2024 .

T his material weakness did not result in any material misstatement of our financial statements.

While this material weakness did not result in a material misstatement of our financial statements, there is a reasonable possibility that it could have resulted in a material misstatement in the Company's annual or interim consolidated financial statements that would not be detected.

Accordingly, we determined that it constituted a material weakness.

As a result, we performed additional analysis as deemed necessary to ensure that our consolidated financial statements were prepared in accordance with U.S.

generally accepted accounting principles.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2025 .

Accordingly, management believes that the consolidated financial statements included in this Form 10-K present fairly in all material respects our financial position, results of operations, and cash flows for the period presented.

The Company’s management, under the oversight of the Audit Committee, is undertaking steps to implement a remediation plan.

Specifically, we are expanding and improving our review process for analyses relating to complex accounting transactions.

Remediation of Material Weakness Identified in 2024

As described on our Form 10-K for the year ending December 31, 2024, management identified a material weakness related to the operation of controls over our review of technical accounting analysis.

Although this material weakness did not result in any material misstatement of our financial statements, we nevertheless concluded that our internal control over financial reporting was not effective as of December 31, 2024.

During 2025, we took steps to remediate this material weakness, including instituting additional levels of review for technical accounting analyses, additional scrutiny of externally-prepared technical accounting analyses, and personnel changes within the Accounting department that possess knowledge of technical accounting matters sufficient to allow them to perform a review of the analysis that is precise enough to detect errors in the analysis that could lead to a conclusion that would have a material impact to the Company’s financial statements.

Under the oversight of our Audit Committee, we believe that these steps have been effective in remediating the material weakness.

Grant Thornton LLP, the independent registered public accounting firm that audited the consolidated financial statements included in this Form 10-K, has issued a report, included below, on the effectiveness of our internal control over financial reporting as of December 31, 2025.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with management’s evaluation required by the Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other than the remediation steps discussed above, there was no change in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) identified in connection with management’s evaluation required by the Rules 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

4 unchanged sentences

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, because of the effect of the material weakness described in the following paragraphs on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control — Integrated Framework issued by COSO.

A material weakness is a deficiency, or combination of control deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The following material weakness has been identified and included in management’s assessment.

Management identified a material weakness in internal controls related to the operation of controls over the Company’s review of technical accounting analysis.

The material weakness identified above was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2024 consolidated financial statements, and this report does not affect our report dated February 28, 2025 which expressed an unqualified opinion on those financial statements.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 26, 2026 expressed an unqualified opinion on those financial statements.

Basis for opinion

21 unchanged sentences

Name Title Action Date Adopted Expiration Date Aggregate # of Securities to be Purchased/Sold

Hung-Lun (Fred) Chang ( 1 ) SVP/North America General Manager Adoption 11/27/2024 12/31/2025 10,258

Shu-Hua (Joshua) Yeh ( 1 ) SVP/Asia General Manager Adoption 12/09/2025 12/31/2026 50,000

( 1 ) Hung-Lun (Fred) Chang, our Senior Vice President and North America General Manager, entered into a Rule 10b5 - 1 Plan on November 27, 2024.

Chang's plan provides for the potential sale of 10,258 shares of the Company's common stock.

The Plan expires on December 31, 2025, or upon the earlier of completion of all authorized transactions under the plan.

( 1 ) Shu-Hua (Joshua) Yeh, our Senior Vice President and Asia General Manager, entered into a Rule 10b5 - 1 Plan on December 9, 2025.

31 unchanged sentences

Exhibit Description

Amended and Restated Certificate of Incorporation of the registrant, as currently in effect

November 14, 2013

Certificate of Amendment to the Amended and Restated Certificate of Incorporation of Applied Optoelectronics, Inc.

September 7, 2023

Restated Certificate of Incorporation

June 12, 2025

Amended and Restated Bylaws of the registrant, as currently in effect

November 14, 2013

Amendment No.

1 to the Amended and Restated By-laws of Applied Optoelectronics, Inc.

April 2, 2025

Common Stock Specimen

8 unchanged sentences

December 23, 2024

Indenture, dated as of December 23, 2024, between Applied Optoelectronics, Inc.

and Computershare Trust Company, N.A., as Trustee

December 23, 2024

Form of 2.750% Convertible Senior Note due 2030

December 23, 2024

First Supplemental Indenture, dated as of December 23, 2024, between Applied Optoelectronics, Inc.

and Computershare Trust Company, N.A., as Trustee

December 23, 2024

Description of Company's Common Stock

February 23, 2024

Warrant to Purchase Common Stock of Applied Optoelectronics, Inc.

by and between Applied Optoelectronics, Inc.

and Amazon.com NV Investment Holdings LLC, dated as of March 13, 2025

March 13, 2025

Description of the Company's Common Stock

Incorporated By Reference

Exhibit Description

Form of Indemnification Agreement between the registrant each of its Directors and certain of its Executive Officers

1 unchanged sentence

Amended and Restated 2021 Equity Incentive Plan

March 9, 2017

Form of Restricted Stock Award Agreement under 2013 Equity Incentive Plan

August 13, 2013

Form of Restricted Stock Unit Award Agreement under 2013 Equity Incentive Plan

August 13, 2013

Form of Stock Appreciation Right Award Agreement under 2013 Equity Incentive Plan

August 13, 2013

Form of Notice of Stock Option Award and Stock Option Award Agreement under 2013 Equity Incentive Plan

August 13, 2013

2021 Equity Incentive Plan

August 5, 2021

April 10, 2025

Form of Restricted Stock Unit Award Agreement under 2021 Equity Incentive Plan

2 unchanged sentences

August 5, 2021

Incorporated By Reference

Exhibit Description

Applied Optoelectronic, Inc.

12 unchanged sentences

February 28, 2018

Supply Agreement, effective November 8, 2017, between Applied Optoelectronics, Inc.

and Facebook, Inc.

February 24, 2018

Master Purchase Agreement, effective January 2, 2018, between Applied Optoelectronics, Inc.

and Facebook, Inc.

February 21, 2018

Translation of Lease Agreement between Global Technology, Inc.

1 unchanged sentence

February 28, 2018

Translation of Investment and Construction Agreement between Global Technology, Inc.

and the People’s Republic of China in Zhejiang Province, Ningbo City, Land Resources Bureau

February 28, 2018

Translation of Construction Agreement between Global Technology, Inc.

and Zhejiang Xinyu Construction Group Co., Ltd.

dated February 8, 2018

First Amendment to Lease, dated October 8, 2018, between Applied Optoelectronics, Inc.

and GIG VAOI Breckinridge, LLC.

October 12, 2018

Purchase Agreement, dated as of February 28, 2019 by and among Applied Optoelectronics, Inc., Raymond James & Associates, Inc.

and Cowen and Company, LLC

March 5, 2019

Translation of the Working Capital Loan Contract, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd., dated April 30, 2019

Translation of the Working Capital Loan Contract (RMB 30,000,000), between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd., dated May 7, 2019

Translation of the Working Capital Loan Contract (USD 2,000,000), between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd., dated May 8, 2019

Translation of the Financing Credit Line Agreement, dated May 24, 2019, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

Translation of the Maximum Mortgage Contract (Security Agreement), dated May 24, 2019, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

Second Amendment to Lease, dated November 11, 2019, between Applied Optoelectronics, Inc.

and ROIB2 Breckinridge, LLC.

November 18, 2019

Incorporated By Reference

Exhibit Description

Paycheck Protection Program Loan Promissory Note, dated April 17, 2020, executed by Applied Optoelectronics, Inc.

April 22, 2020

Translation of the Maximum Loan Contract between Global Technology, Inc.

and China Zheshang Bank Co., Ltd., dated June 7, 2022.

June 10, 2022

Translation of the Maximum Mortgage Contract, between Global Technology, Inc.

and China Zheshang Bank Co., Ltd., dated June 7, 2022.

June 10, 2022

Statement of Work No.

4 unchanged sentences

Exhibit Description

Third Amendment to Lease, dated June 9, 2023, between Applied Optoelectronics, Inc.

and Albany Road-Breck Exchange LLC

June 14, 2023

Statement of Work No.

4 unchanged sentences

June 21, 2023

Form of Exchange Agreement, dated as of November 30, 2023, between Applied Optoelectronics, Inc.

and the applicable Noteholders

December 1, 2023

Purchase Agreement, dated as of November 30, 2023, by and between Applied Optoelectronics, Inc.

and Raymond James & Associates, Inc.

December 5, 2023

Translation of the Asset Pool Agreement, between Global Technology, Inc.

and China Zheshang Bank Co., Ltd., dated December 21, 2023

December 27, 2023

Translation of the Pledge Contract, between Global Technology, Inc.

and China Zheshang Bank Co., Ltd., dated December 21, 2023

December 27, 2023

Translation of the Financing Credit Line Agreement, dated May 24, 2024, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

Translation of the Maximum Mortgage Contract (Security Agreement), dated May 24, 2024, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

Translation of the Land and Building Lease Agreement, dated October 7, 2024, between Prime World International Holdings Ltd., Taiwan Branch and San Ho Enterprise Co., Ltd.

3 unchanged sentences

December 20, 2024

Translation of the Construction Contract, dated December 26, 2024, between Prime World International Holdings Ltd., Taiwan Branch and Chyi Ding Technologies Co., Ltd.

Transaction Agreement, by and between Applied Optoelectronics, Inc.

and Amazon.com, Inc., dated as of March 13, 2025

March 13, 2025

Lease, dated April 3, 2025, between Applied Optoelectronics, Inc.

and Albany Road-Breck Exchange, LLC

April 9, 2025

Translation of the Land and Building Lease Agreement, dated June 7, 2025, between Prime World International Holdings Ltd., Taiwan Branch and San Ho Electric Machinery Industry Co., Ltd.

June 11, 2025

Translation of the RMB Working Capital Loan Contract (RMB 96,800,000), between Global Technology, Inc.

and China Construction Bank Co., Ltd., dated June 12, 2025

June 18, 2025

Translation of the Maximum Loan (Credit) Contract (Credit Line Agreement), dated June 26, 2025, between Global Technology, Inc.

and China Construction Bank Co., Ltd.

Translation of the Maximum Mortgage Contract (Security Agreement), dated June 26, 2025, between Global Technology, Inc.

and China Construction Bank Co., Ltd.

Translation of the Working Capital Loan Contract (RMB82,000,000), between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd., dated July 18, 2025

July 23, 2025

Incorporated By Reference

Exhibit Description

Translation of the Financing Credit Line Agreement, dated July 29, 2025, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

August 4, 2025

Translation of the Maximum Mortgage Contract (Security Agreement), dated July 29, 2025, between Global Technology, Inc.

and Shanghai Pudong Development Bank Co., Ltd.

August 4, 2025

Loan and Security Agreement, dated July 31, 2025, between Applied Optoelectronics, Inc.

and BOKF, NA dba BOK Financial

August 6, 2025

Revolving Note, dated July 31, 2025, between Applied Optoelectronics, Inc.

and BOKF, NA dba BOK Financial

August 6, 2025

Translation of the Agreement to Terminate Land and Building Lease dated August 20, 2025, between Prime World International Holdings Ltd., and San Ho Electric Machinery Industry Co., Ltd.

August 26, 2025

Translation of the Premises Lease Agreement, dated September 1, 2025, between Prime World International Holdings Ltd., Taiwan Branch and International Games System Co., Ltd.

September 4, 2025

Lease Agreement, dated September 19, 2025, by and between Applied Optoelectronics, Inc., and Coleman Logistics Assets, LLC

September 24, 2025

Translation of the Premise Lease Agreement, dated October 28, 2025, between Prime World International Holdings Ltd., Taiwan Branch and International Games System Co., Ltd.

November 3, 2025

Translation of the Approval Notice of Credit Line, dated October 20, 2025

December 3, 2025

Translation of the General Agreement for Financial Transaction, dated November 27, 2025, between Prime World International Holdings Ltd.

and Taishin International Bank

December 3, 2025

Translation of the Loan Agreement, dated November 27, 2025, between Prime World International Holdings Ltd.

and Taishin International Bank

December 3, 2025

Translation of the Promissory Note, dated November 27, 2025, between Prime World International Holdings Ltd.

and Taishin International Bank

December 3, 2025

Incorporated By Reference

Exhibit Description

Applied Optoelectronics, Inc.

Insider Trading Policy and Guidelines

February 28, 2025

Subsidiaries of the registrant

59 unchanged sentences

Consolidated Statements of Operations

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Comprehensive Loss

Consolidated Statements of Stockholders’ Equity

8 unchanged sentences

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2025 expressed an adverse opinion.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"), and our report dated February 26, 2026, expressed an unqualified opinion.

Basis for opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Inventory Reserve

As described further in Note B to the financial statements, the Company assesses the valuation of its inventory on a periodic basis and provides a reserve based on several factors including products’ life span and management’s estimates of future demand.

We identified the accounting for the inventory reserve as a critical audit matter.

The principal considerations for our determination that accounting for the inventory reserve is a critical audit matter are the judgments and estimates associated with management’s determination of inventory reserve adjustments, due to the nature of the inputs and assumptions used in the process and that the reserve is subject to estimation uncertainty and requires auditor subjectivity in evaluating reasonableness.

Management developed certain percentages that determine the extent of inventory reserves based on the age and quantity of the inventory.

Such percentages were determined through analysis of the inventory to determine each product's lifespan, a review of historical write-offs or scrapped inventory, and an assessment by product engineers of the possibility of obsolescence for each product.

Our audit procedures related to the accounting for the inventory reserve included the following:

We assessed the qualifications and competence of management and evaluated the methodologies used to determine the inventory reserve;

We tested the design and operating effectiveness of key controls related to the accounting for the inventory reserve, including controls relating to management’s development of the reserve;

We obtained the underlying inventory aging report and agreed the balances to the general ledger to test for completeness and performed the following:

recalculated the unit price and agreed such unit price to inventory details;

selected inventory items to re-age;

tested the underlying source of information and the mathematical accuracy of the calculation used in the inventory reserve;

tested the sensitivity of the inputs utilized in the reserve calculation.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

10 unchanged sentences

Restricted cash

Accounts receivable - trade, net of allowance of $ 1 and $ 3 , respectively

Accounts receivable, net

244,404 116,801

Notes receivable

183,105 88,135

Prepaid income tax

Prepaid expenses and other current assets

32,183 17,199

Total current assets

15 unchanged sentences

42,491 22,091

Unearned revenue

Current lease liability - operating

1 unchanged sentence

33,975 22,370

Current portion of convertible senior notes

Total current liabilities

3 unchanged sentences

Non-current lease liability - operating

Notes payable and long-term debt, less current portion

Long-term debt

TOTAL LIABILITIES

6 unchanged sentences

Common Stock;

80,000 shares authorized at $ 0.001 par value;

49,393 and 38,148 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively

120,000 shares authorized at $ 0.001 par value, 74,998 shares issued and outstanding at December 31, 2025;

80,000 shares authorized at $0.001 par value and, 49,393 shares issued at December 31, 2024, respectively

Additional paid-in capital

1,224,538 683,462

Accumulated other comprehensive income (loss)

Accumulated other comprehensive loss

( 617 ) ( 2,548 )

28 unchanged sentences

Interest income

1,792 874 609

Interest expense

6 unchanged sentences

( 46,704 ) ( 186,731 ) ( 56,039 )

Income tax expense

Income tax benefit (expense)

8,476 ( 2 ) ( 9 )

13 unchanged sentences

$ ( 38,228 ) $ ( 186,733 ) $ ( 56,048 )

Loss on foreign currency translation adjustment

Gain (loss) on foreign currency translation adjustment

1,931 ( 3,523 ) ( 1,208 )

10 unchanged sentences

Stockholders'

January 1, 2022

December 31, 2022

— $ — 28,622 $ 29 $ 391,526 $ 2,183 $ ( 209,068 ) $ 184,670

27 unchanged sentences

— — 23,750 24 518,891 — — 518,915

Stock options exercised, net of shares withheld for employee tax

— — — — ( 2 ) — — ( 2 )

Issuance of restricted stock, net of shares withheld for employee tax

4 unchanged sentences

— — — — — 1,931 1 1,932

Equity exchanged to shares

— — 239 — 3,500 — — 3,500

Warrants contra revenue

— — — — 17,430 — — 17,430

— — — — — — ( 38,228 ) ( 38,228 )

December 31, 2025

8 unchanged sentences

$ ( 38,228 ) $ ( 186,733 ) $ ( 56,048 )

Adjustments to reconcile net loss to net cash used in operating activities:

Allowance of bad debt

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Allowance for credit losses

4 ( 2 ) ( 24 )

Allowance for obsolete inventory

Inventory reserve adjustment

7,799 3,434 8,728

1 unchanged sentence

27,696 20,649 20,427

Amortization of debt issuance costs

1,430 2,308 902

Loss (gain) on disposal of assets

Amortization of debt issuance cost and premium

( 1,022 ) 1,430 2,308

Gain on disposal of assets

Share-based compensation

11,710 14,790 11,884

Deferred income tax

( 7,575 ) — —

Loss on debt extinguishment

Warrants contra revenue

Unrealized foreign exchange loss (gain)

3 unchanged sentences

( 127,597 ) ( 68,512 ) 13,208

Notes receivable

Prepaid income tax

( 100,722 ) ( 29,412 ) 6,790

( 29,412 ) 6,790 1,150

Other current assets

4 unchanged sentences

38,963 72,076 ( 14,953 )

Accrued income taxes

Accrued liabilities

4 unchanged sentences

41,325 5,006 ( 660 )

Net cash used in operating activities

Net cash provided by (used in) operating activities

( 174,428 ) ( 69,526 ) ( 7,929 )

3 unchanged sentences

Proceeds from disposal of equipment

Deposits and prepayment on equipment

Deposits and prepayment for equipment

( 31,082 ) ( 6,792 ) ( 5,229 )

4 unchanged sentences

Financing activities:

Principal payments of long-term debt and notes payable

( 251 ) ( 80,214 ) ( 7,336 )

Proceeds from line of credit borrowing

Proceeds from line of credit borrowings

61,198 48,676 57,626

9 unchanged sentences

Principal payments of financing lease

( 63 ) ( 19 )

Exercise of stock options

3 unchanged sentences

518,914 146,293 68,984

Cash settlement of PSU

Cash settlement of share-based compensation

— ( 2,790 ) —

12 unchanged sentences

$ 2,483 $ 4,940 $ 8,098

Income taxes paid, net of refunds

State and Local

Non-cash investing and financing activities:

72 unchanged sentences

In 2025, 2024 and 2023 , its top five customers represented 95.2 %, 92.9 % and 85.6 % of its revenue, respectively.

In 2025 , Digicomm and Microsoft represented 53.1 % and 28.8 % of its revenue, respectively.

In 2024, Microsoft, Digicomm and Oracle represented 43.7 %, 35.1 % and 12.4 % of its revenue, respectively.

In 2023, Microsoft, ATX and Digicomm represented 46.6 %, 15.6 % and 11.3 % of its revenue, respectively.

The five largest receivable balances for customers represented an aggregate of 94.0 % and 95.5 % of total accounts receivable at December 31, 2025 and 2024 , respectively.

As of December 31, 2025 , Digicomm represented 71.6 % of total accounts receivable and Microsoft represented 13.9 % of total accounts receivable.

As of December 31, 2023, Digicomm represented 35.2 % of total accounts receivable and ATX represented 21.4 % of total accounts receivable .

As of December 31, 2024, Digicomm represented 66.6 % of total accounts receivable and Microsoft represented 16.8 % of total accounts receivable .

No other customer represented greater than ten percent of revenue in 2025 or 2024 had greater than ten percent of total accounts receivable at December 31, 2025 or 2024.

80 unchanged sentences

Accrued interest and penalties are included on the related tax liability line in the consolidated balance sheet.

Government Grant

The Company receives incentives from local governments in China that encourage us to establish, maintain, or increase investment, employment, or production in the region.

Because there is no direct applicable U.S.

GAAP guidance that addresses the recognition and measurement of government assistance received by a business entity, U.S.

GAAP allows for the adoption of other analogous accounting guidance under ASC 958 - 605 ( Not -for-Profit Entities – Revenue Recognition).

The Company accounts for the grant as other income based on the substance of the incentive received when the conditions associated with the grant are substantially met and collection is reasonably assured.

Global Intangible Low-taxed Income Provisions ("GILTI")

5 unchanged sentences

Recent Accounting Pronouncements Adopted in 2025

In November 2023, the FASB issued ASU No.

2023 - 07 "Segment Reporting (Topic 280 ):

Improvements to Reportable Segment Disclosures" which expands annual and interim disclosure requirements for reportable segments, mainly through enhanced disclosures about significant segment expenses.

We adopted this ASU for our 2024 annual period with the comparable periods updated to meet additional disclosure requirements.

See Note R for additional disclosure.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures, which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The adoption is expected to enhance the Company's Notes to the Consolidated Financial Statements.

We adopted this ASU on a prospective basis effective January 1, 2025.

Refer to Note O, Income Taxes for the inclusion of new disclosures required.

Recent Accounting Pronouncements Yet to be Adopted

4 unchanged sentences

The Company is currently evaluating the impact of the new standard will have on its financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023 - 09 Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures", which requires the Company to disclose disaggregated jurisdictional and categorical information for the tax rate reconciliation, income taxes paid and other income tax related amounts.

This guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

The adoption is expected to enhance the Company's Notes to the Consolidated Financial Statements.

The Company is currently evaluating the impact the new standard will have on its financial statements and related disclosure.

In October 2023, the FASB issued ASU 2023 - 06 "Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative", which amends U.S.

GAAP to include 14 disclosure requirements that are currently required under SEC Regulation S- X or Regulation S-K.

Each amendment will be effective on the date on which the SEC removes the related disclosure requirement from SEC Regulation S- X or Regulation S-K.

The Company has evaluated the new standard and determined that it will have no material impact on its financial statements or disclosures since the Company is already subject to the relevant SEC disclosure requirements.

In September 2025, the FASB issued ASU No.

2025 - 06, Intangibles—Goodwill and Other—Internal-Use Software, which modernizes the accounting for internal-use software and clarifies capitalization criteria.

The updated standard is effective for us beginning with our interim and annual reporting periods of fiscal 2029.

Early adoption is permitted.

We are currently evaluating the impact that the updated standard will have on our Consolidated Financial Statements.

In December 2025, the FASB issued ASU 2025 - 10 to establish the accounting fo r a government grant rece ived by a business entity including guidance for ( 1 ) a grant related to an asset and ( 2 ) a grant related to income.

For public business entities, the provisions of ASU 2025 - 10 are effective for fiscal years beginning after December 15, 2028.

Early adoption is permitted.

Management is currently evaluating the requirements under this new standard and does not expect the adoption to have a material impact on the Company's results of operations or financial condition.

In December 2025, the FASB issued ASU No.

2025 - 11, Interim Reporting (Topic 270 ):

Narrow-Scope Improvements.

The ASU clarifies interim disclosure requirements and the applicability of Topic 270.

The objective of the amendments is to provide further clarity about the current interim disclosure requirements.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027.

Adoption of this ASU can be applied either a prospective or a retrospective approach.

Early adoption is permitted.

We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

In December 2025, the FASB issued ASU No.

2025 - 12, Codification Improvements.

The ASU addresses thirty-three items, representing the changes to the Codification that ( 1 ) clarify, ( 2 ) correct errors, or ( 3 ) make minor improvements.

Generally, the amendments in this Update are not intended to result in significant changes for most entities.

The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2026.

The adoption method of this ASU may vary, on an issue-by-issue basis.

Early adoption is permitted.

We are currently evaluating the provisions of this ASU and do not expect this ASU to have a material impact on our consolidated financial statements.

There have been no other recent accounting pronouncements or changes in accounting pronouncements during fiscal 2025 that are of significance or potential significance to us.

NOTE C—REVENUE RECOGNITION

30 unchanged sentences

The most common type of service obligation encountered by the Company is an arrangement involving non-recurring engineering in which service revenue is typically recognized over time under either the time and material practical expedient, as the Company has a right to consideration from a customer, in an amount that corresponds directly with the value to the customer of the Company's performance completed to date, or under the output method, for example using contract-specific milestones or other objective measures of progress.

Unearned Revenue

Unearned Revenue results from cash received or amounts billed to customers in advance of revenue recognized upon the satisfaction of performance obligations.

As of December 31, 2024, and 2023, the Company had Unearned Revenue of $ 0 and $ 1.8 million, respectively.

The following table reflects the changes in Unearned Revenue in our consolidated financial statements for the periods indicated (in thousands).

December 31, 2024

December 31, 2023

Unearned Revenue, beginning of period

$ 1,803 $ 3,000

Additional Unearned Revenue

Revenue recognized

Unearned Revenue, end of period

Disaggregation of Revenue

6 unchanged sentences

13,729 3.0 % 10,980 4.4 % 13,831 6.4 %

3 0.0 % 56 0.0 % 129 0.1 %

FTTH and other

1,211 0.3 % 2,147 0.9 % 2,660 1.2 %

1 unchanged sentence

$ 455,715 100.0 % $ 249,365 100.0 % $ 217,646 100.0 %

Customer Warrant

On March 13, 2025, the Company issued a warrant (the "Customer Warrant") to a wholly-owned subsidiary of Amazon.com, Inc.

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.

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 Warranty was estimated using the following assumptions:

At Grant Date

Expected volatility 80.00 %

Weighted-average expected term (in years) 10

Risk-free interest rate 4.23 %

Dividend yield - %

Fair Value per ordinary share at grant date 15.87

For the year ended December 31, 2025, the Company recognized approximately $ 33.1 million of revenue associated with customer arrangements that included the issuance of warrants.

The impact of these arrangements on the Company's consolidated financial statements was not material for the periods presented.

As of December 31, 2025, the Company recorded other current asset of $ 1.0 million and other noncurrent asset of $ 15.0 million, representing the aggregate grant-date fair value of 1,324,233 Warrant Shares vested at the issuance.

NOTE D— Leases

6 unchanged sentences

common-area or other maintenance costs) which are accounted for as a single lease component as the Company has elected the practical expedient to group lease and non-lease components for all leases.

Several of the leases include one or more options to renew which have been assessed and either included or excluded from the calculation of the lease liability of the ROU asset based on management’s intentions and individual fact patterns.

Several of the leases include one or more options to renew which have been assessed and either included or excluded from the calculation of the lease liability of the right-of-use ("ROU") asset based on management’s intentions and individual fact patterns.

Several warehouses and apartments have non-cancellable lease terms of less than one -year and therefore, the Company has elected the practical expedient to exclude these short-term leases from its ROU asset and lease liabilities.

On October 7, 2024, Prime World International Holdings Ltd.

(“Prime World”), a wholly owned subsidiary of Applied Optoelectronics, Inc., entered into a Land and Building Lease Agreement (the “Lease Agreement”) with San Ho Enterprise Co., Ltd.

(the “Lessor”), under which Prime World will lease approximately 3,537 square meters of two adjoining parcels of land, in New Taipei City.

The lease also includes a building on these parcels, totaling approximately 3,406 square meters.

On October 7, 2024, Prime World entered into a Land and Building Lease Agreement with San Ho Enterprise Co., Ltd.

("San Ho Enterprise"), under which Prime World will lease approximately 38,072 square feet of two adjoining parcels of land, in New Taipei City.

The lease also included a building on these parcels, totaling approximately 36,662 square feet.

The lease term is for fifteen years, commencing on December 1, 2024, and ending on November 30, 2039.

A two -month renovation period from October 1 to November 30, 2024, will precede the lease term, during which no rent will be charged by the Lessor.

A two -month renovation period from October 1 to November 30, 2024, preceded the lease term, during which no rent was charged by San Ho Enterprise.

During the lease term, the monthly rent will increase by three percent ( 3 %) every three years.

On June 7, 2025, Prime World entered into a Land and Building Lease Agreement with San Ho Electric Machinery Industry Co., Ltd.

("San Ho Electric") in Taoyuan City.

On August 20, 2025, Prime World terminated the lease with San Ho Electric and agreed to pay a termination fee in full settlement of rent, fees, damages and other amounts arising from the early termination of the lease.

On September 1, 2025, Prime World entered into a Lease Agreement with International Games System Co., Ltd., under which Prime World will lease a parcel of land with a total area of approximately 65,580 square feet, in New Taipei City.

The lease includes a building on the parcel, totaling approximately 346,212 square feet, excluding approximately 54,086 square feet of the leased property which, at the time, had previously been leased to an existing tenant.

The lease term is for fifteen years, commencing November 1, 2025, and ending October 31, 2040.

A two -month renovation period from September 1 to October 1, 2025, preceded the lease term, during which no rent was charged.

During the lease term, the monthly rent will increase by three percent ( 3 %) every five years.

On October 28, 2025, Prime World entered into a lease to include the first floor which was previously excluded in the leased entered into on September 1, 2025.

On September 19, 2025, the Company entered into a Lease Agreement with Coleman Logistics Assets LLC ("Coleman"), pursuant to which the Company will lease approximately 209,665 square feet of space located at 1111 Gillingham Lane, Sugar Land, Texas 77478.

The leased premises will be used by the Company primarily for manufacturing and related operations.

The lease has a term of 126 months, commencing on the earlier of (i) the date the Company commences manufacturing operations within the leased premises, (ii) the date on which the leasehold improvements are substantially completed, or (iii) March 31, 2026, and expiring approximately 126 months thereafter, unless earlier terminated in accordance with the lease.

Coleman has agreed to provide a construction allowance toward the cost of leasehold improvements in an amount equal to the lesser of (i) the actual aggregate cost of such improvements or (ii) $ 1,886,985 .

Base rent under the lease is abated for the first seven months of the term and thereafter increases on a scheduled basis through the end of the term, reflecting an average annual escalation of approximately 3.5 %.

Beginning in the eighth month of the term, base rent will be $ 7.44 per rentable square foot on an annual basis (approximately $ 129,992 per month), escalating periodically to $ 10.49 per rentable square foot on an annual basis (approximately $ 183,367 per month) during the final six months of the term.

Although the lease agreement was executed prior to December 31, 2025, the lease had not yet commenced as of that date, as Coleman is currently completing required improvements to the leased premises.

The lease will commence in 2026, at which time the Company will recognize a ROU asset and a corresponding lease liability on its consolidated balance sheet.

The total undiscounted lease payments over the initial lease term are approximately $ 21.9 million, which will be recognized upon lease commencement.

No ROU asset or lease liability related to this agreement has been recorded as of December 31, 2025.

As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

Based on the applicable lease terms and current economic environment, the Company applies a location approach for determining the incremental borrowing rate.

Lease expense is included under general and administrative expenses and was $ 1.4 million, $ 1.2 million, and $ 1.2 million, respectively, for the years ended December 31, 2024, 2023 and 2022 , respectively.

Lease expense is included under general and administrative expenses and was $ 4.0 million, $ 1.4 million and $ 1.2 million for the years ended December 31, 2025, 2024 and 2023 , respectively.

The Components of lease expense were as follows for the periods indicated (in thousands):

3 unchanged sentences

$ 3,036 $ 1,282

Financing lease expense

Short Term lease expense

2 unchanged sentences

Maturities of lease liabilities are as follows for the future one -year periods ending December 31, ( in thousands):

$ 1,697 $ 1,697

2031 and thereafter

Total lease payments

$ 12,264 $ 12,264

Less imputed interest

( 1,843 ) ( 1,843 )

Present value

$ 10,421 $ 10,421

The weighted average remaining lease term and discount rate for operating leases were as follows for the periods indicated:

Weighted Average Remaining Lease Term (Years) - operating leases

Weighted Average Remaining Lease Term (Years) - financing leases

Weighted Average Discount Rate - operating leases

3.40 % 3.11 %

Weighted Average Discount Rate - financing leases

Supplemental cash flow information related to operating leases was as follows for the periods indicated (in thousands):

4 unchanged sentences

$ 2,309 $ 1,286

Operating cash flows from financing lease

Financing cash flows from financing lease

Right-of-use assets obtained in exchange for new operating lease liabilities

$ 40,955 $ 5,934

NOTE E—CASH, CASH EQUIVALENTS AND RESTRICTED CASH

7 unchanged sentences

As of December 31, 2025 and 2024 , there was $ 8.7 million and $ 8.5 million of restricted cash required for bank acceptance notes issued to vendors, respectively.

There were both $ 2.5 million certificates of deposit with original maturity of 90 days or less associated with credit facilities with a bank in China as of December 31, 2024 and 2023 .

There were both $ 0.7 million guarantee deposits for customs duties as of December 31, 2024 and December 31, 2023.

There were $ 1.2 million and $ 0.7 million guarantee deposits for customs duties as of December 31, 2025 and December 31, 2024 .

NOTE F—EARNINGS PER SHARE

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As of December 31,

Employee stock options

Restricted stock units

38 unchanged sentences

For the years ended December 31, 2025, 2024 and 2023 , depreciation expense of property, plant and equipment was $ 27.2 million, $ 20.2 million and $ 19.7 million, respectively.

For the years December 31, 2024, 2023 and 2022 , the capitalized interest was $ 0 million, $ 0 million and $ 0.2 million, respectively.

For the years ended December 31, 2025, 2024 and 2023 , there was no capitalized interest.

As of December 31, 2025 , the Company concluded that its continued loss history constitutes a triggering event as described in ASC 360 - 10 - 35 - 21, Property, Plant, and Equipment .

54 unchanged sentences

December 31, 2024

Revolving line of credit with a China bank up to $ 23.6 million with interest from 4.00 % to 4.35 %, maturing May 24, 2029

$ 13,466 $ 12,608

Credit facility with a China bank up to $ 27.8 million with interest of 4.00 % to 4.35 %, maturing June 6, 2027

13,216 10,589

Revolving line of credit with a China bank up to $ 23.6 million with interest from 4.00 % to 4.35 %, terminated on June 18, 2025

Revolving line of credit with a China bank up to $ 35.6 million with interest of 2.6 %, maturing July 29, 2030

Credit facility with a China bank up to $ 27.8 million with interest of 4.00 % to 4.35 %, terminated on July 23, 2025

Revolving line of credit with a China bank up to $ 35.6 million with interest at 2.45 % to 2.95 %, maturing June 26, 2030

33,975 26,682

8 unchanged sentences

The current portion of long-term debt is the amount payable within one year of the balance sheet date of December 31, 2025 .

On May 24, 2019, the Company’s China subsidiary, Global, entered into a five -year revolving credit line agreement, totaling 180,000,000 RMB (the “SPD Credit Line”), or approximately $ 25.4 million, and a mortgage security agreement (the “Security Agreement”), with Shanghai Pudong Development Bank Co., Ltd ("SPD").

Borrowing under the SPD Credit Line will be used for general corporate and capital investment purposes, including the issuance of bank acceptance notes to Global’s vendors.

The total SPD Credit Line of 180 million RMB is inclusive of all credit facilities previously entered into with SPD including:

a 30 million RMB credit facility entered into on May 7, 2019;

and a 9.9 million RMB credit facility entered into on April 30, 2019 and $ 2 million credit facility entered into on May 8, 2019.

Global may draw upon the SPD Credit Line on an as-needed basis at any time during the 5 -year term;

however, draws under the SPD Credit Line may become due and repayable to SPD at SPD’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition.

Each draw will bear interest equal to SPD’s commercial banking interest rate effective on the day of the applicable draw.

Global’s obligations under the SPD Credit Line will be secured by real property owned by Global and mortgaged to the Bank under the terms of the Security Agreement.

On May 24, 2024, Global renewed the SPD Credit Line for a five -year revolving credit line, totaling 170,000,000 RMB (the “Renewed SPD Credit Line”) or approximately $ 23.9 million at that time, and Global also entered into a mortgage contract security agreement, with SPD.

Global may draw upon the Renewed SPD Credit Line on an as-needed basis between May 24, 2024 and May 24, 2029.

As of December 31, 2024, $ 13.5 million was outstanding under the Renewed SPD Credit Line and the outstanding balance of bank acceptance notes issued to vendors was $ 11.3 million.

On June 7, 2022, the Company's China Subsidiary, Global, entered a security agreement with China Zheshang Bank in Ningbo City, China ("CZB") for a five -year credit line agreement, totaling 200,000,000 RMB (the "¥200M Credit Facility"), or approximately $ 29.9 million.

Global may draw upon the ¥200M Credit Facility between June 7, 2022 and June 6, 2027 (" ¥200M Credit Period").

During the ¥200M Credit Period, Global may request to draw upon the ¥200M Credit Facility on an as-needed basis;

however, draws under the ¥200M Credit Facility may become due and repayable to CZB at CZB’s discretion due to changes in Chinese government regulations and/or changes in Global’s financial and operational condition.

Each draw will be facilitated by a separate credit agreement specifying the terms of each draw and will bear interest equal to CZB's commercial banking interest rate effective on the day of the applicable draw.

Global’s obligations under the ¥200M Credit Facility will be secured by real property owned by Global and mortgaged to CZB under the terms of the Real Estate Security Agreement.

On December 21, 2023, Global entered into an asset pool business cooperation agreement ("Asset Pool Agreement") and an asset pool pledge contract ("Pledge Contract") (referred to collectively as the Pledge Asset Line"), with CZB, which supplements the existing ¥200M Credit Facility.

The Pledge Asset Line does not constitute a new credit line or an increase to the existing credit limits.

Global may draw upon the Pledge Asset Line between December 21, 2023 and December 21, 2025 ( "Asset Pool Period").

During the Asset Pool Period, Global may request to draw upon the Pledge Asset Line on an as-needed bases;

however, amount of available credit under the Pledge Asset Line and approval of each draw may be reduced or declined by CZB due to changes in Chinese government regulations and/or changes in Global's financial and operational condition.

Global's obligations under the Pledge Asset Line will be secured by certain financial assets, including but not limited to, deposit receipts, domestic accounts receivable and electronic commercial paper.

As of December 31, 2024, $ 13.2 million was outstanding under the ¥200M Credit Facility and the outstanding balance of bank acceptance notes issued to vendors was $ 7.9 million.

SPD Credit Line

On May 24, 2024, Global entered into a five -year revolving credit line with Shanghai Pudong Development Bank Co., Ltd.

("SPD"), totaling 170,000,000 RMB (the "SPD Credit Line") or approximately $ 23.9 million at that time.

On June 18, 2025, Global used the CCB Credit Facility, as described hereinbelow, to repay certain amounts outstanding under the SPD Credit Line.

Upon repayment, Global terminated the SPD Credit Line effective June 18, 2025.

On July 18, 2025, Global entered into a one -year credit facility with SPD, totaling 82,000,000 RMB (the "¥82M Credit Facility"), or approximately $ 11.4 million at that time.

Borrowing under the ¥82M Credit Facility was used to repay the Company’s outstanding loans with China Zheshang Bank Co., Ltd., and for general corporate and capital investment purposes.

On July 29, 2025, Global entered into a five -year revolving credit line agreement with SPD in Ningbo City, China, totaling 250,000,000 RMB (the "¥250M SPD Credit Line"), or approximately $ 34.9 million at that time, and a mortgage contract.

Borrowing under the ¥250M SPD Credit Line will be used for general corporate and capital investment purposes.

Any credit previously extended by SPD will be applied against the available amount under the ¥250M SPD Credit Line, inclusive of the ¥82M Credit Facility.

Global's obligation under the ¥250M SPD Credit Line is secured by certain real property owned by Global.

As of December 31, 2025, $ 20.2 million was outstanding under the ¥250M SPD Credit Line, and the outstanding balance of bank acceptance notes issued to vendors was $ 19.7 million.

The unused credit was $ 1.5 million as of December 31, 2025.

On June 7, 2022, Global entered into a security agreement with China Zheshang Bank in Ningbo City, China ("CZB") for a five -year credit line agreement, totaling 200,000,000 RMB (the "¥200M Credit Facility"), or approximately $ 29.9 million at that time.

On July 23, 2025, Global used the ¥82M Credit Facility, as described hereinabove, to repay certain amounts outstanding under the ¥200M Credit Facility.

Upon repayment, Global terminated the ¥200M Credit Facility effective July 23, 2025.

As of December 31, 2025, the outstanding balance of bank acceptance notes issued to vendors was $ 2.8 million.

The unused credit was $ 0.7 million as of December 31, 2025.

On June 12, 2025, Global entered into a one -year credit facility with China Construction Bank Co., Ltd., in Ningbo, City, China ("CCB"), totaling 96,800,000 RMB (the "CCB Credit Facility"), or approximately $ 13.5 million at that time.

On June 26, 2025, Global entered into a five -year revolving credit line agreement with CCB, totaling 162,260,000 RMB (the "CCB Credit Line"), or approximately $ 22.7 million at that time.

The amount available under the CCB Credit Line is inclusive of the CCB Credit Facility previously granted by CCB on June 12, 2025.On December 19, 2025, the CCB Credit Line was increased to 250,000,000 RMB.

Global's obligation under the CCB Credit Line is secured by certain real property owned by Global.

As of December 31, 2025, $ 13.8 million outstanding under the CCB Credit Line, and the outstanding balance of bank acceptances notes issued to vendors was $ 10.8 million.

The unused credit was $ 13.2 million as of December 31, 2025.

On November 27, 2025, Prime World entered into a credit facility with Taishin International Bank in Taiwan, consisting of a NT$100,000,000 line of credit (the "NT$100M Credit Line") and a US$2,000,000 line of credit (the "US$2M Credit Line"), collectively, with the NT$100M Credit Line, the "Taishin Credit Facility").

Prime World may utilize the Taishin Credit Facility from November 27, 2025 through October 31, 2026.

Borrowings under the NT$100M Credit Line may be drawn as short-term loans, while the US$2M Credit Line is a derivatives-based facility and may be used by Prime World to entered into foreign exchange hedging transactions.

As of December 31, 2025, $ 0 was outstanding under the Taishin Credit Facility.

On July 31, 2025, the Company entered into a Loan and Security Agreement (the "BOKF Credit Facility") with BOKF, NA dba BOK Financial, as agent for secured parties.

The BOKF Credit Facility provides the Company with a three -year, $ 35 million revolving line of credit, with the ability to request additional lender commitments in an aggregate amount not to exceed $ 40 million (for a total aggregate amount of $ 75 million) pursuant to certain conditions.

As of December 31, 2025, $ 0 was outstanding under the BOKF Credit Facility.

As of December 31, 2025 and December 31, 2024, the Company had $ 60.7 million and $ 24.8 million of unused borrowing capacity, respectively.

7 unchanged sentences

On December 18, 2024, the Company entered into exchange agreements with certain holders of the 2026 Notes to exchange approximately $ 76.7 million principal amount of the 2026 Notes for aggregate consideration consisting of (i) $ 125.0 million aggregate principal amount of 2.75 % Convertible Senior Notes due 2030 (the "2030 Notes"), (ii) 1,487,874 shares of the Company’s common stock, par value $ 0.001 per share (the "Common Stock") and (iii) approximately $ 89.6 thousands of cash in aggregate, representing accrued and unpaid interest on the 2026 Notes and the value of fractional shares of Common Stock (such transactions, collectively, the "Exchanges").

There was $ 3.5 million principal amount for the 2026 Notes remaining.

The Exchanges closed on December 23, 2024.

We recorded a debt extinguishment loss of $ 112.0 million due to these Exchanges.

There was $ 3.5 million principal amount for the 2026 Notes remaining.

On July 30, 2025, the Company retired the final $ 3.5 million principal and accrued and unpaid interest on the 2026 Notes by exchanging such outstanding principal for 239,404 shares of the Company's common stock and by paying the accrued and outstanding interest in cash.

2030 Notes were issued pursuant to an Indenture, dated as of

23 unchanged sentences

and ( 2 ) the trading day immediately before the date it sends such notice.

In addition, the

2030 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or before the

40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the

2030 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of a holder of

2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date), if the “Specified Divestiture” (as defined in the Indenture) is completed.

2030 Note for redemption will constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) with respect to that

2030 Note, in which case the conversion rate applicable to the conversion of that

2030 Note will be increased in certain circumstances if i

after it is called for redemption.

In addition, if the Specified Divestiture is completed, then unless the Company has previously elected to redeem all of the

2030 Notes, each holder of

2030 Notes will have the right to require the Company to repurchase its

2030 Notes for cash on a date of the Company’s choosing, which must be a business day that is

35, nor less than

20, business days after the date the Company’s sends the related notice of Specified Divestiture.

The repurchase price for a note tendered for such repurchase will be equal to the principal amount of the

2030 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date (subject to the right of a holder of

2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date).

Moreover, if the Company undergoes a fundamental change, as described in the Indenture, holders of the

may require the Company to repurchase for cash all or part of their

2030 Notes at a repurchase price equal to

100 % of the principal amount of the

2030 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the required repurchase date.

In addition, the 2030 Notes will be redeemable, in whole or in part, at the Company’s option at any time, and from time to time, on or before the 40th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2030 Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date (subject to the right of a holder of 2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date), if the “Specified Divestiture” (as defined in the Indenture) is completed.

Calling any 2030 Note for redemption will constitute a "Make-Whole Fundamental Change" (as defined in the Indenture) with respect to that 2030 Note, in which case the conversion rate applicable to the conversion of that 2030 Note will be increased in certain circumstances if i t i s converted after it is called for redemption.

In addition, if the Specified Divestiture is completed, then unless the Company has previously elected to redeem all of the 2030 Notes, each holder of 2030 Notes will have the right to require the Company to repurchase its 2030 Notes for cash on a date of the Company’s choosing, which must be a business day that is no more than 35, nor less than 20, business days after the date the Company’s sends the related notice of Specified Divestiture.

The repurchase price for a note tendered for such repurchase will be equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the repurchase date (subject to the right of a holder of 2030 Notes as of the close of business on a record date to receive the related interest payment on the corresponding interest payment date).

Moreover, if the Company undergoes a fundamental change, as described in the Indenture, holders of the 2030 Notes may require the Company to repurchase for cash all or part of their 2030 Notes at a repurchase price equal to 100 % of the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the required repurchase date.

Additionally, the 2030 Notes are subject to customary events of default.

9 unchanged sentences

Accordingly, that amount was recognized as a premium on the 2030 Notes.

The following table sets forth interest expense information related to the 2026 Notes and the 2030 Notes (in thousands):

The following table sets forth interest expense information related to the 2026 Notes and the 2030 Notes for the periods indicated (in thousands):

Year ended December 31,

25 unchanged sentences

Year ended December 31,

Foreign exchange transaction gain (loss)

Foreign exchange transaction gain

$ 2,039 $ 144 $ 711

Government subsidy income

Gain (loss) on disposal of assets

4,866 395 937

Loss on disposal of assets

( 38 ) ( 132 ) ( 51 )

Loss on debt extinguishment

4 unchanged sentences

$ 9,603 $ ( 109,871 ) $ ( 5,871 )

( 1 ) Please see the details in Note L - Convertible Senior Notes.

NOTE O—INCOME TAXES

The sources of the Company’s loss from operations before income taxes were as follows (in thousands):

The sources of the Company’s loss from operations before income taxes were as follows for the periods indicated (in thousands):

Years ended December 31,

4 unchanged sentences

The provision for income tax expense (benefit) for the years ended December 31, was as follows (in thousands):

( 8,478 ) — —

$ ( 8,478 ) $ — $ —

Income tax (benefit) expense

$ ( 8,476 ) $ 2 $ 9

Deferred income tax assets and liabilities result principally from net operating losses, different methods of recognizing depreciation, reserves for doubtful accounts and inventory, research and development credits and foreign tax credits.

44 unchanged sentences

( 162 ) 1,145 ( 311 )

Other adjustment

Ending Balance, December 31

$ 95,753 $ 94,996 $ 78,124

A reconciliation of the U.S.

federal income tax rate of 21 % for the years ended December 31, 2024, 2023 and 2022 , respectively, to the Company’s effective income tax rate follows (in thousands):

The expense (benefit) for income taxes differs from the amount that would result by applying the applicable federal income tax rate to income before income taxes, as follows (in thousands):

Amount Percentage

federal statutory tax rate $ ( 9,808 ) 21.0 %

State and local income tax, net of federal income tax effect 2* 0.0 %

Foreign tax effects

Statutory tax rate difference ( 2,440 ) 5.2 %

Changes in valuation allowances ( 11,990 ) 25.7 %

R&D super deduction ( 2,537 ) 5.5 %

Other ( 50 ) 0.1 %

Changes in valuation allowances 1,559 ( 3.3 % )

Prior Period Adjustments ( 596 ) 1.3 %

Other 236 ( 0.5 % )

Effect of cross-border tax laws

GILTI 9,139 ( 19.6 % )

Research and development credit ( 2,366 ) 5.1 %

Changes in valuation allowances 11,194 ( 25.2 % )

Nontaxable or nondeductible items

Share-based compensation ( 1,225 ) 3.8 %

Other 146 ( 0.3 % )

Other adjustments 260 ( 0.6 % )

Effective tax rate $ ( 8,476 ) 18.2 %

*State and Local taxes includes the effects of changes in valuation allowance.

No individual state made up the majority of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to adoption of ASU 2023 - 09, the effective income tax rate differs from the statutory federal income tax rate as follows (in thousands):

Expected taxes at statutory rate

4 unchanged sentences

Foreign rate differences

( 314 ) 242 552

Foreign permanent differences

1 unchanged sentence

Changes in valuation allowance

15,727 8,755 14,196

Share-based compensation

2 unchanged sentences

Extinguishment of debt

22,602 1,580 —

Foreign other

1 unchanged sentence

Tax (benefit) expense

The Company’s provision for income taxes in 2025 was lower than 2024 primarily due to the release of Valuation Allowance on the deferred tax assets of the Company’s wholly owned subsidiary, Global Technology, Inc.

As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets.

As of December 31, 2025, in part because in the current year we achieved three years of cumulative pretax income in China, management determined that there is sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes of $ 7.6 million are realizable.

It therefore reduced the valuation allowance accordingly.

The Company's provision for income taxes in 2024 was higher than 2023 primarily due to state taxes.

The Company's provision for income taxes in 2023 was higher than 2022 primarily due to state taxes and foreign taxes.

The Company’s wholly owned subsidiary, Prime World is a tax-exempt entity under the Income Tax Code of the British Virgin Islands.

24 unchanged sentences

The Company is subject to examination for tax years 2020 forward for various foreign jurisdictions.

In response to the COVID- 19 pandemic, the CARES Act was signed into law on March 27, 2020.

The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (“QIP”).

On December 27, 2020, the Taxpayer Certainty and Disaster Tax Relief Act of 2020 was enacted as part of the Consolidated Appropriations Act, 2021, followed by the American Rescue Plan Act on March 1, 2021.

These laws, among many other provisions, expand and extend the Paycheck Protection Program (“PPP”), refundable employee retention tax credits previously made available under the CARES Act and allow a full deduction for business meals for the 2021 and 2022 tax years.

During 2021, the Company recognized a tax benefit of $ 1.3 million on the non-taxable forgiveness of the PPP loan.

However, the legislation had no material impact to income tax expense on the Company’s financial statements as a result of our valuation allowance.

On August 9, 2022, the Creating Helpful Incentives to Produce Semiconductors and Science Act, (the "CHIPS Act") was signed into law.

2 unchanged sentences

This credit is accounted for outside of ASC 740 as a reduction to the depreciable basis of the assets used in operations and will not have an impact on our effective tax rate.

On August 16, 2022, legislation commonly known as the Inflation Reduction Act was signed into law.

Among other things, the Inflation Reduction Act includes a 1% excise tax on corporate stock repurchases, applicable to repurchases after December 31, 2022, and also a new minimum tax based on book income.

We do not currently expect the Inflation Reduction Act to have a material impact on our effective tax rate.

On July 4, 2025, legislation commonly referred to as the One Big Beautiful Bill Act (the “OBBBA”) was signed into law.

Among other things, the OBBBA suspends the requirement to capitalize and amortize domestic research and development (R&D) expenditures for amounts paid or incurred in taxable years beginning after December 31, 2024 and before January 1, 2030.

The OBBBA also permits taxpayers to elect to accelerate deductions for the remaining unamortized domestic R&D expenditures paid or incurred between January 1, 2022 and December 31, 2024 over a one - or two -year period.

The Company elected to accelerated deductions with respect to unamortized domestic R&D expenditures capitalized in 2022, 2023, and 2024 as a deduction in 2025.

In addition, the OBBBA preserves a significant portion of the Inflation Reduction Act (IRA) clean energy tax credit framework but introduces certain limitations and additional diligence obligations for developers, investors, lenders, and credit purchasers, including a phaseout of the Clean Electricity Tax Credits and placed-in-service deadlines for certain wind and solar projects (Internal Revenue Code Sections 45Y and 48E ).

Based on the Company’s business profile and the limited applicability of these provisions to the Company, we do not currently expect these changes to have a material impact on our income tax provision or ETR.

The OBBBA permanently extends 100% bonus depreciation for qualifying property placed in service after January 19, 2025.

The Company does not intend to elect bonus depreciation and, as a result, does not expect this provision to have a material impact on the Company’s income tax provision or effective tax rate.

For tax years beginning after December 31, 2024, the OBBBA permanently restores the EBITDA-based calculation of adjusted taxable income (ATI) for purposes of the Section 163 (j) business interest expense limitation (i.e., allowing addbacks for depreciation, amortization, and depletion in computing ATI).

This change generally increases the amount of business interest expense that can be deducted and may reduce the amount of interest subject to carryforward.

The Company expects any earnings of foreign subsidiaries to be indefinitely invested outside the United States.

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The Company’s board of directors and stockholders approved the following equity plans:

‑ the 2013 Equity Incentive Plan ( "2013 Plan")

‑ the 2021 Equity Incentive Plan ( " 2021 Plan " )

‑ the Amended and Restated 2021 Equity Incentive Plan ( " 2021 Plan " )

‑ the 2023 Inducement Plan ( " Inducement Plan " )

The Company issued stock options, restricted stock awards (“RSAs”) and restricted stock units (“RSUs”) to employees, consultants and non-employee directors.

The Company has issued stock options, restricted stock awards ("RSAs") and restricted stock units ("RSUs") to employees, consultants and non-employee directors.

Stock option awards generally vest over a four year period and have a maximum term of ten years.

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Stock Options

Options have been granted to the Company’s employees under the 2013 Plan and generally become exercisable as to 25 % of the shares on the first anniversary date following the date of grant and 12.5 % on a semi-annual basis thereafter.

All options expire ten years after the date of grant.

The following is a summary of option activity (in thousands, except per share data):

(in thousands, except price data)

Outstanding, January 1, 2024

1 $ 13.84 $ 7.12 0.08 $ 8

— 13.84 20.70 7.12 — 2

( 1 ) 13.84 7.12 — 26

Outstanding, December 31, 2024

Exercisable, December 31, 2024

Vested and expected to vest

As of December 31, 2024 , there was no unrecognized stock option expense.

For the years 2024, 2023 and 2022, the intrinsic value of options was $ 2 thousand, $ 237 thousand and zero .

In the years ended December 31, 2025 and 2024, the Company granted no stock options under its equity plans.

As of December 31, 2025, there was no unrecognized stock-based compensation expense related to stock options.

In the years ended December 31, 2025, 2024, and 2023, the intrinsic value of stock options was $ 0 , $ 0 , and $ 0.2 million, respectively.

Performance Based Incentive Plan

Starting in 2021, certain senior executives were granted performance stock units (“PSUs”) under our 2021 Equity Incentive Plan ( “2021 Plan”), which generally vest over a three -year period subject to achievement of certain pre-established performance metrics.

Starting in 2021, certain senior executives were granted performance stock units ("PSUs") under our 2021 Plan, which generally vest over a three -year period subject to achievement of certain pre-established performance metrics.

The number of shares of common stock that would ultimately be issued to settle PSUs granted ranged from 0 % to 200 % of the target number of shares granted.

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The Company recognized stock-based compensation expense for the PSUs for the twelve months ended December 31, 2025, 2024 and 2023 of $ 4.4 million, $ 3.0 million and $ 1.7 million, respectively.

On June 12, 2024, the Compensation Committee certified the Company exceeded the maximum performance target level for each of the performance targets set for the PSUs granted in June 2021 ( the “2021 PSUs”).

On May 9, 2025, the Compensation Committee certified the Company exceeded the maximum performance level for each of the performance targets set for the PSUs granted June, 2022 ( the "2022 PSUs").

Therefore, applicable employees were entitled to payment of the 2022 PSUs at 200 % of the target shares granted under the 2021 Plan.

On June 6, 2024, at the annual meeting of stockholders, a proposal to increase the number of shares of common stock for issuance under the 2021 Plan by 2,000,000 shares was not approved, and as a result, the Company did not have enough shares of common stock available for issuance to satisfy the additional shares earned above 100 % of target shares of the 2021 PSUs (the “2021 Additional Shares”).

In lieu of shares of common stock, the Company settled the 2021 Additional Shares in cash, resulting in an additional $ 2.8 million of stock-based compensation expense in the twelve months ended December 31, 2024.

The following is a summary of PSU activity (in thousands, except per share data):

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This expense is expected to be recognized over 1.7 years.

For the years 2024, 2023 and 2022, the weighted-average grant value for PSUs was $ 16.40 , $ 8.89 and $ 0 per share.

The intrinsic values of PSUs exercised were $ 2.9 million, $ 3.6 million and $ 0 million for the years 2024, 2023 and 2022.

The total fair value of shares vested for PSUs during years 2024, 2023 and 2022 are $ 4.0 million, $ 0 and $ 0 million.

For the years ended December 31, 2025, 2024 and 2023, the weighted-average grant value for PSUs was $ 6.94 , $ 16.40 and $ 8.89 per share, respectively.

The intrinsic values of PSUs exercised were $ 14.4 million, $ 2.9 million and $ 3.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The total fair value of shares vested for PSUs during years ended December 31, 2025, 2024 and 2023 were $ 4.5 million, $ 4.0 million and $ 0 million, respectively

Restricted Stock Units

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This expense is expected to be recognized over 2.2 years.

For the years of 2024, 2023 and 2022, the weighted-average grant value for RSU are $ 10.73 , $ 6.15 and $ 2.75 per share.

The intrinsic values of RSU exercised are $ 19.0 million, $ 7.8 million and $ 2.8 million for the years of 2024, 2023 and 2022.

The total fair value of shares vested for RSU during years 2024, 2023 and 2022 are $ 8.1 million, $ 8.6 million and $ 8.8 million.

For the years ended December 31, 2025, 2024 and 2023, the weighted-average grant value for RSUs are $ 12.74 , $ 10.73 and $ 6.15 per share, respectively.

The intrinsic values of RSUs exercised are $ 30.4 million, $ 19.0 million and $ 7.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The total fair value of shares vested for RSUs during years ended December 31, 2025, 2024 and 2023 are $ 7.2 million, $ 8.1 million and $ 8.6 million, respectively.

Share-Based Compensation

The Company recognizes compensation expense on a straight-line basis over the applicable vesting term of the award and expense is adjusted as forfeitures occur.

In 2014, the Company ceased issuing stock options and began issuing RSUs and RSAs as share-based compensation to employees.

The Company estimates the fair value of RSUs and RSAs at the fair market value on the grant date.

The Company issues RSUs as share-based compensation to employees.

The Company estimates the fair value of RSUs at the fair market value on the grant date.

Employee share-based compensation expenses recognized for the years ended December 31, were as follows (in thousands):

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NOTE Q—STOCKHOLDERS’ EQUITY

The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 80,000,000 shares of common stock, all of which have been designated voting common stock.

The Company’s Restated Certificate of Incorporation authorizes the issuance of up to 120,000,000 shares of common stock, all of which have been designated voting common stock.

Preferred Stock

The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock.

The Company’s Restated Certificate of Incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock.

Public Offerings of Common Stock

January 5, 2023, the Company filed a Registration Statement on Form S-

3 with the Securities and Exchange Commission, which was declared effective on

March 21, 2023, providing for the public offer and sale of certain securities of the Company from time to time, at our discretion, up to an aggregate amount of

$ 185 million.

March 13, 2024, we entered into an Equity Distribution Agreement (the "First ATM Agreement") with Raymond James & Associates (the "Sales Agent") pursuant to which the Company could issue and sell shares of the Company’s common stock having an aggregate offering price of up to

$ 25 million (the "First ATM Offering"), from time to time through the Sales Agent.

August 6, 2024, we entered into Amendment

1 to the First ATM Agreement with the Sales Agent, to increase the aggregate offering price from

$ 25 million to

$ 60 million.

November 6, 2024, we provided notice of its termination, effective on such date, of the First ATM Agreement, as amended.

We sold approximately

5.7 million shares at a weighted average price of

$ 10.55 per share, providing proceeds of

$ 58.7 million, net of expenses and underwriting discounts and commissions, under the First ATM Offering.

November 7, 2024, we entered into another Equity Distribution Agreement (the "Second ATM Agreement") with the Sales Agent pursuant to which the Company could issue and sell shares of the Company’s common stock, par value

$ 0.001 per share (the "Shares") having an aggregate offering price of up to

$ 55 million (the "Second ATM Offering"), from time to time through the Sales Agent.

Upon delivery of a placement notice and subject to the terms and conditions of the Agreement, sales of the Shares were be made through the Sales Agent in transactions that are deemed to be “at the market” offerings as defined in Rule

415 of the Securities Act of

1933, as amended (the "Securities Act"), including sales made through the facilities of the Nasdaq Global Market, the principal trading market for the Company’s common stock, on any other existing trading market for the Company’s common stock, to or through a market maker or as otherwise agreed by the Company and the Sales Agent.

In the placement notice, the Company would designate the maximum number of Shares to be sold through the Sales Agent, the time period during which sales were requested to be made, the minimum price for the Shares to be sold, and any limitation on the number of Shares that could be sold in any

Subject to the terms and conditions of the Agreement, the Sales Agent would use its commercially reasonable efforts to sell Shares on the Company’s behalf up to the designated amount specified in the placement notice.

The Second ATM Agreement provided that the Sales Agent would be entitled to compensation of up to

2 % of the gross sales price of the Shares sold through the Sales Agent from time to time.

The Company also agreed to reimburse the Sales Agent for certain specified expenses in connection with the registration of Shares under state blue sky laws and any filing with, and clearance of the offering by, the Financial Industry Regulatory Authority Inc.,

not to exceed

$ 10,000 in the aggregate, and any associated application fees incurred.

The Company agreed to indemnify the Sales Agent against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Sales Agent could be required to make because of any of those liabilities.

November 22, 2024, the Company completed the Second ATM Offering and sold approximately

1.8 million shares at a weighted average price of

$ 31.17 per share, providing proceeds of

$ 53.9 million, net of expenses and underwriting discounts and commissions.

The details of the shares of common stock sold through the First ATM Offering and the Second ATM Offering through December 31, 2024 are as follows (in thousands, except shares and weighted average per share price):

December 18, 2024, the Company filed an automatic shelf registration statement on Form S-

3ASR (Registration File

283905 ) with the Securities and Exchange Commission, which became effective immediately upon filing.

On February 28, 2025, the Company entered into an Equity Distribution Agreement with Raymond James & Associates ("Raymond James") pursuant to which the Company could issue and sell shares of the Company’s common stock, having an aggregate offering price of up to $ 100 million (the "First ATM Offering"), from time to time through Raymond James.

On April 8, 2025, the Company completed the First ATM Offering and sold approximately 5.7 million shares at a weighted average price of $ 17.71 per share, providing proceeds of approximately $ 98 million, net of expenses and underwriting discounts and commissions.

On May 28, 2025, the Company entered into an Equity Distribution Agreement with Raymond James and Needham & Company, LLC (collectively, the "Sales Agents" and each, a "Sales Agent") pursuant to which the Company could issue and sell shares of the Company’s common stock having an aggregate offering price of up to $ 100 million (the "Second ATM Offering"), from time to time through the Sales Agents.

On June 18, 2025, the Company completed the Second ATM Offering and sold approximately 5.7 million shares at a weighted average price of $ 17.46 per share, providing proceeds of approximately $ 98 million, net of expenses and underwriting discounts and commissions.

On August 27, 2025, the Company entered into an Equity Distribution Agreement with the Sales Agents pursuant to which the Company could issue and sell shares of the Company’s common stock having an aggregate offering price of up to $ 150 million (the "Third ATM Offering"), from time to time through the Sales Agents.

On September 22, 2025, the Company completed the Third ATM Offering and sold approximately 5.7 million shares at a weighted average price of $ 26.41 per share, providing proceeds of approximately $ 147 million, net of expenses and underwriting discounts and commissions.

On November 7, 2025, the Company entered into another Equity Distribution Agreement (the "Agreement") with the Sales Agents pursuant to which the Company could issue and sell shares of the Company's common stock, par value $ 0.001 per share (the "Shares") having an aggregate offering price of up to $ 180 million (the "Fourth ATM Offering"), from time to time through the Sales Agents.

Upon delivery of a placement notice and subject to the terms and conditions of the Agreement, sales of the Shares were made through the Sales Agents in transactions that are deemed to be “at the market” offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), including sales made through the facilities of the Nasdaq Global Market, the principal trading market for the Company’s common stock, on any other existing trading market for the Company’s common stock, to or through a market maker or as otherwise agreed by the Company and the Sales Agents.

In the placement notice, the Company would designate the maximum number of Shares to be sold through the Sales Agents, the time period during which sales were requested to be made, the minimum price for the Shares to be sold, and any limitation on the number of Shares that could be sold in any one day.

Subject to the terms and conditions of the Agreement, the Sales Agents would use its commercially reasonable efforts to sell Shares on the Company’s behalf up to the designated amount specified in the placement notice.

The Agreement provided that each of the Sales Agents would be entitled to compensation of up to 2 % of the gross sales price of the Shares sold through such Sales Agent from time to time.

The Company also agreed to reimburse the Sales Agents for certain specified expenses in connection with the registration of Shares under state blue sky laws and any filing with, and clearance of the offering by, the Financial Industry Regulatory Authority Inc., not to exceed $ 10,000 in the aggregate, and any associated application fees incurred.

The Company agreed to indemnify the Sales Agents against certain liabilities, including liabilities under the Securities Act, or to contribute to payments that the Sales Agents could be required to make because of any of those liabilities.

On December 23, 2025, the Company completed the Fourth ATM Offering and sold approximately 6.698 million shares at a weighted average price of $ 26.87 per share, providing proceeds of $ 176.4 million, net of expenses and underwriting discounts and commissions.

The details of the shares of common stock sold through the First ATM Offering, the Second ATM Offering, the Third ATM Offering and the Fourth ATM Offering through December 31, 2025 are as follows (in thousands, except shares and weighted average per share price):

Distribution Agent

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12.69 2,110,057 26,245 536

Raymond James & Associates, Inc.

Raymond James & Associates and Needham & Company, LLC

17.46 5,725,948 98,000 2,000

Raymond James & Associates, Inc.

Raymond James & Associates and Needham & Company, LLC

26.41 5,680,235 147,000 3,000

Raymond James & Associates, Inc.

Raymond James & Associates and Needham & Company, LLC

23.15 2,778,564 63,050 1,287

Raymond James & Associates, Inc.

Raymond James & Associates and Needham & Company, LLC

113,350 2,313

Automatic Shelf Registration Statement

On December 18, 2024, the Company filed an automatic shelf registration statement on Form S- 3ASR (Registration File No.

333 - 283905 ) (the "Automatic Shelf Registration Statement") with the U.S.

Securities and Exchange Commission, which became effective immediately upon filing.

23,749,971 $ 519,400 $ 10,600

Registered Direct Offering

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The Company serves four primary markets, the internet data center, CATV, telecom and FTTH markets.

Of the Company’s total revenues in 2025, the Company earned $ 245.1 million, or 53.8 %, from the CATV market, $ 195.7 million, or 42.9 %, from the internet data center market, $ 13.7 million, or 3.0 %, from the telecom market and $ 1.2 million, or 0.3 %, from the FTTH and other markets.

Of the Company’s total revenues in 2024, the Company earned $ 148.5 million, or 59.5 %, from the internet data center market, $ 87.7 million, or 35.2 %, from the CATV market, $ 11.0 million, or 4.4 %, from the telecom market and $ 2.1 million, or 0.9 %, from the FTTH and other markets.

Of the Company’s total revenues in 2023, the Company earned $ 141.2 million, or 64.9 %, from the internet data center market, $ 59.9 million, or 27.5 %, from the CATV market, $ 13.8 million, or 6.4 %, from the telecom market and $ 0.1 million, or 0.0 %, from the FTTH market.

Of the Company’s total revenues in 2022 , the Company earned $ 118.2 million, or 53.0 %, from the CATV market, $ 77.1 million, or 34.6 %, from the internet data center market, $ 24.7 million, or 11.1 %, from the telecom market and $ 0.1 million, or 0.0 %, from the FTTH market.

NOTE S—EMPLOYEE BENEFIT PLANS

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NOTE U—SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date the financial statements were issued.

On February 13, 2026, the Compensation Committee of the Board of Directors of the Company approved an amendment to each of the Employment Agreements, dated as of August 5, 2016, by and between the Company and (i) Stefan J.

Murry, Chief Financial Officer and Chief Strategy Officer, (ii) Hung-Lun (Fred) Chang, Senior Vice President and North America General Manager, (iii) Shu-Hua (Joshua) Yeh, Senior Vice President and Asia General Manager, and (iv) David C.

Kuo, Senior Vice President, Chief Legal Officer, Chief Compliance Officer and Corporate Secretary to provide for enhanced severance payments and benefits.

On February 23, 2026, the Company entered into a Lease Agreement with Blue Ridge Commerce Center West LLC to lease approximately 153,928 rentable square feet of space in Building #3, located at 16851 Blue Ridge Commerce Dr., Houston, Texas 77489.

The premises may be used for office, warehouse, and light manufacturing and assembly.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures