{"url_path":"/sec/aaoi/8-k/2026-07-01/item-1-01","section_key":"item-1-01","section_title":"Item 1.01 **","topic":"sec","document":{"doc_type":"8-K","doc_date":"2026-07-01","source_url":"https://www.sec.gov/Archives/edgar/data/1158114/0001683168-26-005221-index.html","accession_number":"0001683168-26-005221","cik":"0001158114","ticker":"AAOI","issuer_name":"APPLIED OPTOELECTRONICS, INC.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1158114/0001683168-26-005221-index.html","primary_entity_key":"0001158114","primary_entity_name":"APPLIED OPTOELECTRONICS, INC."},"word_count":327,"has_tables":true,"body_markdown":"**Item 1.01**\n\n**Entry into a Material Definitive Agreement.**\n\n \n\nOn June 25, 2026, Applied Optoelectronics, Inc.\n(the “Company”) entered into a Standard Form of Agreement Between Owner and Design-Builder (AIA Document A141–2024),\ntogether with the related exhibits package (collectively, the “Design-Build Agreement”), with LCC3 Solution Inc. (the “Design-Builder”).\nPursuant to the Design-Build Agreement, the Design-Builder will provide design-build services for the Company’s OMD 3 (FAB4) cleanroom\nconstruction project located at 11555 North Spectrum Blvd., Houston, Texas 77047 (the “Project”).\n\n \n\nThe Project consists of the design-build of approximately\n195,591 square feet of ISO Class 6-certified cleanroom space, 36,500 square feet of office space, and 73,780 square feet of space designated\nfor shipping and receiving, quality and reliability testing, and inventory operations. The scope of the Project includes design, engineering,\nprocurement, construction, testing, commissioning, and related closeout activities.\n\n \n\nThe total contract amount for the Project is approximately\n$94.1 million, inclusive of design, construction, and related professional services, as set forth in the Design-Build Agreement. Payments\nunder the Design-Build Agreement are generally based on progress, with 10% retainage withheld from each pay application and released upon\nfinal completion, subject to final acceptance and completion of punch list items. Pay applications are submitted monthly, and payments\nare due within 15 days after the Company’s receipt of a properly completed pay application.\n\n \n\nThe Design-Build Agreement provides for liquidated\ndamages in the event of delays in achieving specified key milestones or substantial completion, subject to contractual adjustments and\nconditions, with aggregate liquidated damages capped at $4.9 million.\n\n \n\nThe Design-Build Agreement also provides that the\nDesign-Builder may be eligible to earn certain incentives, subject to the terms and conditions set forth therein, including (i) schedule-based\nincentives tied to the timely achievement of specified key milestones of up to $6.0 million and (ii) performance-based incentives, including\nup to $4.9 million tied to cleanroom validation testing and up to $4.9 million tied to warranty performance.\n\n \n\nThe Project has a targeted Substantial Completion\ndate of January 10, 2027."}