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TABLE OF CONTENTS
TABLE OF CONTENTS
Table of Contents
Filed pursuant to Rule 424(b)(5)
Registration No. 333-214211
The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer
to sell nor are we seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED MARCH 1, 2017
PRELIMINARY PROSPECTUS SUPPLEMENT
(to Prospectus dated November 4, 2016)
Shares
AXT, Inc.
Common Stock
We are offering shares of our common stock. Our common stock is
listed on The NASDAQ Global Select Market under the symbol "AXTI."
On February 28, 2017, the last reported sale price for our common stock on The NASDAQ Global Select Market was $7.10 per share.
Investing in our common stock involves risks. See "Risk Factors" beginning on page S-3 of this prospectus
supplement.
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Per Share
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Total
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Public Offering Price
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$
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$
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Underwriting Discount(1)
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$
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$
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Proceeds, Before Expenses, to us
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$
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$
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(1)
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See
"Underwriting" for additional information regarding underwriting compensation.
We
have granted the underwriters the right to purchase up to an additional shares of our common stock at the public offering price,
less the underwriting discount, for
30 days after the date of this prospectus supplement.
The
Securities and Exchange Commission and state securities regulators have not approved or disapproved of these securities or determined if this prospectus supplement or the
accompanying prospectus is truthful or complete. It is illegal for any person to tell you otherwise.
We
anticipate that delivery of the shares of common stock will be made on or about March , 2017.
Sole Book-Running Manager
Needham & Company
The date of this prospectus supplement is March , 2017.
Table of Contents
TABLE OF CONTENTS
Table of Contents
ABOUT THIS PROSPECTUS SUPPLEMENT
This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and also
adds information to, and updates information contained in, the accompanying prospectus. The second part is the accompanying prospectus, which describes more general information, some of which may not
apply to this offering. You should read both this prospectus supplement and the accompanying prospectus, together with additional information described under the heading "Where You Can Find More
Information." You should rely only on the information contained, or incorporated by reference, in this prospectus supplement and the accompanying prospectus. We have not authorized anyone to provide
any information other than that contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectus prepared by or on behalf of us or to
which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.
In
this prospectus supplement, as permitted by law, we "incorporate by reference" information from other documents that we file with the Securities and Exchange Commission, or the SEC.
This means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus supplement and
should be read with the same care. When we update the information contained in documents that have been incorporated by reference by making future filings with the SEC, the information incorporated by
reference in this prospectus supplement is considered to be automatically updated and superseded. In other words, in case of a conflict or inconsistency between information contained in this
prospectus supplement and information incorporated by reference into this prospectus supplement, you should rely on the information contained in the document that was filed with the SEC later.
We
are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus supplement, the accompanying prospectus, any issuer free writing prospectus and the documents incorporated by reference is accurate only as of their respective dates. Our
business, financial condition, results of operations and prospects may have changed since such dates. Neither this prospectus supplement nor the accompanying prospectus constitutes an offer, or an
invitation on our behalf or on behalf of the underwriters, to subscribe for and purchase any of the shares of our common stock and may not be used for or in connection with an offer or solicitation by
anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation.
Unless
otherwise indicated or unless the context otherwise requires, references in this prospectus supplement and the accompanying prospectus to "AXT," the "Company," "we," "us," "our"
and similar terms refer to AXT, Inc. and its subsidiaries.
S-ii
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SUMMARY
This summary highlights selected information contained elsewhere or incorporated by reference in this prospectus
supplement and does not contain all the information that you need to consider in making your investment decision. This summary sets forth the material terms of this offering, but does not contain all
of the information you should consider before investing in our common stock. You should carefully read this entire prospectus supplement, the accompanying prospectus and any free writing prospectus,
as well as the information to which we refer you and the information incorporated by reference herein, before deciding whether to invest in shares of our common stock. You should pay special attention
to the "Risk Factors" section of this prospectus supplement to determine whether an investment in the shares of our common stock is appropriate for you.
Our Company
We are a worldwide developer and producer of high-performance compound and single element semiconductor substrates, also known as wafers. Our
consolidated subsidiaries produce and sell certain raw materials some of which are used in our substrate manufacturing process and some of which are sold to other companies.
Our
substrate wafers are used when a typical silicon substrate wafer cannot meet the conductive requirements of a chip. The dominant substrates used in producing semiconductor chips and
other electronic circuits are made from silicon. However, certain chips may become too hot or perform their function too slowly if silicon is used as the base material. In addition, optoelectronic
applications, such as LED lighting and chip-based lasers, do not use silicon substrates because they require a wave form frequency that cannot be achieved using silicon. Alternative or specialty
materials are used to replace silicon as the preferred base in these situations. Our wafers provide such alternative or specialty materials. We have two product lines: specialty material substrates
and raw materials. Our compound substrates combine indium with phosphorous (indium phosphide: InP) or gallium with arsenic (gallium arsenide: GaAs). Our single element substrates are made from
germanium (Ge).
Our
raw materials include both raw gallium and purified gallium. We use purified gallium in producing our GaAs substrates and sell both raw gallium and purified gallium in the open
market to other companies for use in magnetic materials, high temperature thermometers and growing single crystal ingots including gallium arsenide, gallium nitride, gallium antimonide, gallium
phosphide and other materials and alloys. We also produce pyrolytic boron nitride (pBN) crucibles used in the high temperature (typically in the range 500 C to 1,500 C) growth process of single
crystal ingots and epitaxial layer growth in MBE (Molecular Beam Epitaxy) reactors. We use these pBN crucibles in our own ingot growth processes and also sell them in the open market to other
companies. Our substrate
product group generated 81%, 75% and 72% of our revenue and our raw materials product group generated 19%, 25% and 28% of our revenue for 2016, 2015 and 2014, respectively.
Corporate Information
We were incorporated in California in December 1986 and reincorporated in Delaware in May 1998. We changed our name from American Xtal
Technology, Inc. to AXT, Inc. in July 2000. Our principal corporate office is located at 4281 Technology Drive, Fremont, California 94538, and our telephone number at this address is
(510) 438-4700. We maintain a website at www.axt.com where general information about us is available. Our website, and the information contained therein, is not a part of this prospectus
supplement. The information that is contained on, or can be accessed through our website is not incorporated into this prospectus supplement, and the inclusion of our website address is an inactive
textual reference only.
The
"AXT" design logo and other trademarks or service marks of AXT appearing in this prospectus supplement and the accompanying prospectus are the property of AXT.
S-1
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THE OFFERING
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Issuer
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AXT, Inc.
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Common stock offered
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shares.
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Over-allotment option
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shares.
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Common stock to be outstanding immediately after this offering
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shares.
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Use of proceeds
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We currently intend to use the net proceeds from this offering for general corporate purposes, which may include the
relocation of our gallium arsenide product line, working capital, capital expenditures and other corporate expenses. See "Use of Proceeds."
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NASDAQ Global Select Market symbol
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"AXTI"
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Risk factors
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Before deciding to invest in shares of our common stock, you should read carefully the risks set forth under the caption
"Risk Factors" beginning on page S-3 of this prospectus supplement and the risks described in our annual and periodic reports incorporated by reference into this prospectus supplement and the accompanying prospectus.
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The
number of shares of our common stock to be outstanding immediately after this offering is based upon 33,031,479 shares outstanding as of February 27, 2017. The number of
shares does not include the
shares subject to the underwriters' over-allotment option and also excludes the following:
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883,000 shares of our outstanding shares of Series A preferred stock, $0.001 par value per share, outstanding as of December 31,
2016, which are non-voting and non-convertible preferred stock;
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3,294,000 shares of our common stock issuable upon the exercise of stock options outstanding as of December 31, 2016, with a weighted
average exercise price of $3.38 per share;
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325,000 shares of our common stock issuable upon the release of restricted stock units outstanding as of December 31, 2016, with a
weighted average grant date fair value of $3.27 per share; and
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2,785,000 shares of our common stock available for issuance or future grant pursuant to our stock plans as of December 31, 2016.
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RISK FACTORS
An investment in the shares of our common stock involves a high degree of risk. In addition to the other information
contained in this prospectus supplement, the accompanying prospectus and the documents that we incorporate by reference, you should carefully consider the risks discussed below and in Part I,
Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2016 before making a decision about investing in our securities. The risks and
uncertainties discussed below and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2016 are not the only ones facing us. Additional risks and uncertainties not
presently known to us, or that we currently see as immaterial, may also harm our business. If any of these risks occur, our business, financial condition and operating results could be harmed, the
trading price of our common stock could decline and you could lose part or all of your investment. This prospectus supplement also contains forward-looking statements that involve risks and
uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and
elsewhere in this prospectus supplement and the accompanying prospectus.
Risks Related to This Offering
The market value of our common stock may fluctuate and could be substantially affected by various factors.
The stock price of our common stock and of equity securities of technology companies has historically experienced high levels of volatility. We
expect that the trading price of our common stock will continue to fluctuate. If the trading price of our common stock declines, the per share value of the common stock you purchase will decline. Our
stock price may fluctuate as a result of a variety of factors, many of which are beyond our control. These factors include, among others:
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actual or anticipated variations in revenue, earnings, financial or operating performance or liquidity;
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disruptions in our business;
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changes in analysts' recommendations or projections;
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failure to meet analysts' projections;
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announcements of developments related to our business;
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operating and stock performance of other companies deemed to be our peers;
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general economic and capital market conditions;
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actions by government regulators; and
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news reports of trends, concerns and other issues related to us or our industry, including changes in regulations.
In
addition, if the stock market for technology companies, or the stock market generally, experiences a loss of investor confidence, the trading price of our common stock could decline
for reasons unrelated to our business, operating results or financial condition. Stock prices of many technology companies have fluctuated in a manner unrelated or disproportionate to the operating
performance of those companies. The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect
us. In the past, stockholders have filed securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to
substantial costs, divert resources and the attention of management from our business, and adversely affect our business.
S-3
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If our operating results and financial performance do not meet the guidance that we have provided to the
public, our stock price may decline.
We provide public guidance on our expected operating and financial results. Although we believe that this guidance provides our stockholders,
investors and analysts with a better understanding of our expectations for the future, such guidance is comprised of forward-looking statements which are subject to the risks and uncertainties
described in this report and in our other public filings and public statements. Our actual results may not meet the guidance we have provided. If our operating or financial results do not meet our
guidance or the expectations of investment analysts, our stock price may decline.
We may utilize our cash balances for relocation, expansion or to offset a business downturn resulting in the
decline of our existing cash, cash equivalents and investment balances, and if we need additional capital, those funds may not be available on acceptable terms, or at all.
Our liquidity is affected by many factors, including, among others, our plans to secure land use rights and construct a new facility for the
relocation of our gallium arsenide manufacturing operations, the extent to which we pursue ongoing capital expenditures, the level of our production, the level of profits or losses, and other factors
related to the uncertainties of our industry and global economies. Our relocation expenditures and any negative cash flow effects of these other factors will draw down our cash reserves, which could
adversely affect our financial condition, reduce our value and possibly impair our ability to raise debt and equity financing in the future, at a time when we might need to raise additional cash or
elect to raise additional cash. Accordingly, there can be no assurance that events will not require us to seek additional capital or, if required, that such capital would be available on terms
acceptable to us, if at all.
There may be future sales or other dilution of our equity, which may adversely affect the trading price of
our common stock.
Except as described under "Underwriting," in connection with this offering of common stock, we are not restricted from issuing additional shares
of common stock or preferred stock, including any securities that are convertible into or exchangeable for, or that represent the right to receive, common or preferred stock. The issuance of any
additional shares of common or preferred stock or convertible or exchangeable securities or rights could be substantially dilutive to holders of our common stock. The trading price of our common stock
could decline as a result of sales of shares of our common stock made after this offering or the perception that such sales could occur.
If we issue additional shares in the future, your ownership in us could be diluted.
Any issuance of equity we may undertake in the future could cause the price of our common stock to decline, or require us to issue shares at a
price that is lower than that paid by holders of our common stock in the past, which would result in those newly issued shares being dilutive.
Our common stock is equity and is subordinate to our existing and future indebtedness and preferred stock.
Shares of our common stock are equity interests and do not constitute indebtedness. As such, shares of our common stock rank junior to our
Series A preferred stock, as well as to all indebtedness and other non-equity claims on us, with respect to assets available to satisfy such claims. Additionally, holders of our common stock
are subject to the prior dividend and liquidation rights of holders of our Series A preferred stock.
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Our management will have broad discretion over the use of the net proceeds from this offering, you may not
agree with how we use the proceeds and the proceeds may not be invested successfully.
We have not designated any portion of the net proceeds from this offering to be used for any particular purpose. Our management will have broad
discretion as to the use of any net proceeds. Accordingly, you will be relying on the judgment of our management with regard to the use of these net proceeds, and you will not have the opportunity, as
part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does not yield a favorable, or any,
return for us. Moreover, our management may use the proceeds for corporate purposes that may not increase our market value or make us more profitable.
We do not intend to pay dividends for the foreseeable future.
We have never paid or declared any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Dividends accrue on our outstanding Series A preferred stock at the rate of $0.20 per annum per share of Series A preferred stock, and must be paid before any dividend is paid on our
common stock. The 883,000 shares of Series A preferred stock issued and outstanding as of December 31, 2016 are valued at $3,532,000 and are non-voting and non-convertible preferred
stock with a 5.0% cumulative annual dividend rate payable when declared by our board of directors, and a $4.00 per share liquidation preference over common stock that must be paid before any
distribution is made to the holders of our common stock. These shares of preferred stock were issued to shareholders of Lyte Optronics, Inc. in connection with the completion of our acquisition
of Lyte Optronics, Inc. on May 28, 1999.
We have adopted certain anti-takeover measures that may make it more difficult for a third party to acquire
us.
Our board of directors has the authority to issue up to 800,000 shares of preferred stock in addition to the outstanding shares of
Series A preferred stock and to determine the price, rights, preferences and privileges of those shares without any further vote or action by the stockholders. The rights of the holders of
common stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. The issuance of shares of preferred stock could
have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. We have no present intention to issue additional shares of preferred stock.
Provisions
in our restated certificate of incorporation and amended and restated bylaws may have the effect of delaying or preventing a merger, acquisition or change of control, or
changes in our management, which could adversely affect the market price of our common stock. The following are some examples of these provisions:
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the division of our board of directors into three separate classes, each with three-year terms;
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the right of our board to elect a director to fill a space created by a board vacancy or the expansion of the board;
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the ability of our board to alter our amended and restated bylaws; and
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the requirement that only our board or the holders of at least 10% of our outstanding shares may call a special meeting of our stockholders.
Furthermore,
because we are incorporated in Delaware, we are subject to the provisions of Section 203 of the Delaware General Corporation Law. These provisions prohibit us from engaging in any
business combination with any interested stockholder (a stockholder who owns 15% or more of our outstanding
S-5
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voting
stock) for a period of three years following the time that such stockholder became an interested stockholder, unless:
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2
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3
% of the shares of voting stock not owned by the interested stockholder approve the merger or combination, or
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the board of directors approves the merger or combination or the transaction which resulted in the stockholder becoming an interested
stockholder.
Our common stock may be delisted from The NASDAQ Global Select Market, which could negatively impact the
price of our common stock and our ability to access the capital markets.
Our common stock is listed on The NASDAQ Global Select Market. The bid price of our common stock has in the past closed below the $1.00 minimum
per share bid price required for continued inclusion on The NASDAQ Global Select Market under Marketplace Rule 5450(a). If the bid price of our common stock remains below $1.00 per share for
thirty consecutive business days, we could be subject to delisting from The NASDAQ Global Select Market.
Any
delisting from The NASDAQ Global Select Market could have an adverse effect on our business and on the trading of our common stock. If a delisting of our common stock were to occur,
our common stock would trade in the over-the-counter market and be quoted on a service such as those provided by OTC Markets Group, Inc. Such alternatives are generally considered to be less
efficient markets, and our stock price, as well as the liquidity of our common stock, may be adversely impacted as a result. Delisting from The NASDAQ Global Select Market could also have other
negative results, including the potential loss of confidence by customers, suppliers and employees, the loss of institutional investor interest and fewer business development opportunities, as well as
the loss of liquidity for our stockholders.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents incorporated herein by reference (including sections regarding
Management's Discussion and Analysis of Financial Condition and Results of Operations) contain forward-looking statements made pursuant to the provisions of Section 27A of the Securities Act of
1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are based on management's
current expectations and beliefs, including estimates and projections about our industry. Forward-looking statements may include, but are not limited to, statements that relate
to:
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expectations regarding our future revenue, earnings, cash flow and cash position;
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expectations regarding customer demand;
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customer qualifications of our products;
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our ability to expand our markets or increase sales;
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the development of new products, applications, enhancements or technologies;
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gross margins;
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expense levels;
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our investments in capital projects;
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our plan to relocate our gallium arsenide product line;
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our belief that we have adequate cash and investments to meet our needs over the next 12 months;
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growth of the industry and the size of our served available market;
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the timing and competitiveness of new product releases by our competitors;
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the impact of the adoption of certain accounting pronouncements;
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economic conditions in general and in our industry;
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the impact of any litigation or investigation on our operating results or financial position;
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any offering and sale of securities; and
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volatility in our stock price and any delisting of our stock from NASDAQ for the failure to maintain a minimum bid price.
Forward-looking
statements may be identified by use of terms such as "anticipates," "expects," "intends," "plans," "seeks," "estimates," "believes," "goals," "should," "continues,"
"would," "could" and similar expressions or variations of such words, although some forward-looking statements are expressed differently. Additionally, statements concerning future matters such as our
strategy, plans, industry trends and the impact of trends and economic cycles on our business are forward-looking statements These statements are not guarantees of future performance and are subject
to certain risks and uncertainties that may cause actual results to differ materially from historical results or those anticipated in such forward-looking statements. Such risks and uncertainties
include those set forth in "Risk Factors" in this prospectus supplement and the documents incorporated by reference herein, , and identify important factors that could disrupt or injure our business
or cause actual results to differ materially from those predicted in any such forward-looking statements. Our actual results could differ materially from those anticipated by these forward-looking
statements. The forward-looking statements in this prospectus supplement, the accompanying prospectus and the documents incorporated herein by
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reference
speak only as of the time they are made and do not necessarily reflect our outlook at any other point in time. These forward-looking statements are not guarantees of future performance. We
undertake no obligation to revise or update any forward-looking statements, in order to reflect any development, event or circumstance that may arise after the date of this report. Readers are
cautioned not to place undue reliance on these forward-looking statements, and should carefully review the risk factors set forth in other reports or documents we file from time to time with the SEC
and the various disclosures made therein, which attempt to advise interested parties of the risks and factors that may affect our business, financial condition, results of operations and prospects.
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USE OF PROCEEDS
We estimate the net proceeds from the sale of common stock by us in this offering will be approximately
$ million (or
approximately $ million if the underwriters' over-allotment option is exercised in full) after deducting the underwriting discount and estimated offering expenses payable by
us.
We
currently intend to use the net proceeds from this offering for general corporate purposes, which may include the relocation of our gallium arsenide product line, working capital,
capital expenditures and other corporate expenses. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of
our business. As a result, our management will have broad discretion to allocate the net proceeds of the offerings. Pending their ultimate use, we intend to invest the net proceeds in short-term,
interest-bearing instruments or U.S. government securities.
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PRICE RANGE OF OUR COMMON STOCK
Our common stock trades on The NASDAQ Global Select Market under the symbol "AXTI." The following table sets forth the range of high and low
prices for our common stock as reported on The NASDAQ Global Select Market for the periods indicated.
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High
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Low
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Year Ended December 31, 2015:
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First quarter
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$
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3.05
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$
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2.36
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Second quarter
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2.70
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2.22
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Third quarter
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2.59
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1.91
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Fourth quarter
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2.70
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1.90
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Year Ended December 31, 2016:
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First quarter
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$
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2.97
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$
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2.28
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Second quarter
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3.92
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2.49
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Third quarter
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5.21
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3.12
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Fourth quarter
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5.97
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4.35
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Year Ending December 31, 2017:
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First quarter (through February 28, 2017)
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$
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8.65
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$
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4.68
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The
last reported sale price of our common stock on The NASDAQ Global Select Market on February 28, 2017 was $7.10 per share. Past price performance is not indicative of future
price performance.
As
of February 27, 2017, there were approximately 66 holders of record of our common stock. A substantially greater number of holders of our common stock are in "street name" or
beneficial holders, whose shares are held of record by banks, brokers and other financial institutions.
DIVIDEND POLICY
We have never paid or declared any cash dividends on our common stock and do not anticipate paying cash dividends in the foreseeable future.
Dividends accrue on our outstanding Series A preferred stock at the rate of $0.20 per annum per share of Series A preferred stock, and must be paid before any dividend is paid on our
common stock. The 883,000 shares of Series A preferred stock, $0.001 par value per share, issued and outstanding as of both December 31, 2016 and 2015 are valued at $3,532,000 and are
non-voting and non-convertible preferred stock with a 5.0% cumulative annual dividend rate payable when declared by our board of directors, and a $4.00 per share liquidation preference over common
stock that must be paid before any distribution is made to holders of our common stock. These shares of preferred stock were issued to shareholders of Lyte Optronics, Inc. in connection with
the completion of our acquisition of Lyte Optronics, Inc. on May 28, 1999.
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MATERIAL U.S. TAX CONSIDERATIONS FOR NON-U.S. HOLDERS
The following is a summary of the material U.S. federal income and estate tax consequences of the ownership and disposition of our common stock
to non-U.S. holders, but does not purport to be a complete analysis of all the potential tax considerations relating thereto. This summary is based upon the provisions of the Internal Revenue Code of
1986, as amended, or the Code, Treasury regulations promulgated thereunder, administrative rulings and judicial decisions, all as of the date hereof. These authorities may be changed, possibly
retroactively, so as to result in U.S. federal income tax or estate tax consequences different from those set forth below. We have not sought any ruling from the Internal Revenue Service, or the IRS,
with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that the IRS will agree with such statements and conclusions.
This
summary also does not address the tax considerations arising under the laws of any State of the United States or any local, non-U.S. or other taxing jurisdiction or under U.S.
federal non-income tax laws, such as gift and estate tax laws, except to the limited extent set forth below, or under any applicable tax treaty. In addition, this discussion does not address any
potential application of the Medicare contribution tax on net investment income or any tax considerations applicable to an investor's particular circumstances or to investors that may be subject to
special tax rules, including, without limitation:
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banks, insurance companies or other financial institutions;
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persons subject to the alternative minimum tax;
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tax-exempt organizations or accounts;
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controlled foreign corporations, passive foreign investment companies or corporations that accumulate earnings to avoid U.S. federal income
tax;
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dealers in securities or currencies;
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traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
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persons that own, or are deemed to own, more than five percent of our capital stock (except to the extent specifically set forth below);
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certain former citizens or long-term residents of the United States;
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persons who hold our common stock as a position in a hedging transaction, "straddle," "conversion transaction" or other risk reduction
transaction;
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persons who do not hold our common stock as a capital asset within the meaning of Section 1221 of the Code (generally, for investment
purposes); or
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persons deemed to sell our common stock under the constructive sale provisions of the Code.
In
addition, if a partnership, including any entity or arrangement, domestic or foreign, classified as a partnership for U.S. federal income tax purposes, holds our common stock, the tax
treatment of a partner generally will depend on the status of the partner and the activities of the partnership. Accordingly, partnerships that hold our common stock, and partners in such
partnerships, should consult their tax advisors.
You are urged to consult your tax advisor with respect to the application of the U.S. federal income tax laws to your particular situation, as well as any tax
consequences of the purchase, ownership and disposition of our common stock arising under the U.S. federal estate or gift tax rules
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or under the laws of any State of the United States or any local, non-U.S. or other taxing jurisdiction, or under any applicable tax treaty.
Non-U.S. Holder Defined
For purposes of this discussion, you are a non-U.S. holder if you are a beneficial owner of our common stock that is not, for U.S. federal
income tax purposes, any of the following:
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an individual who is a citizen or resident of the United States;
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a corporation or other entity taxable as a corporation created or organized in the United States or under the laws of the United States, any
State thereof or the District of Columbia;
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an estate whose income is subject to U.S. federal income tax regardless of its source;
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a trust (x) the administration of which is subject to the primary supervision of a U.S. court and that has one or more U.S. persons who
have the authority to control all substantial decisions of the trust or (y) that has made an election to be treated as a U.S. person; or
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an entity or arrangement, domestic or foreign, classified as a partnership for U.S. federal income tax purposes.
Distributions
If we make distributions on our common stock, those payments will constitute dividends for U.S. tax purposes to the extent paid from our current
or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent those distributions exceed both our current and our accumulated earnings and profits, they
will constitute a return of capital and will first reduce your basis in our common stock (determined separately with respect to each share of our common stock), but not below zero, and then will be
treated as gain from the sale of that stock.
Any
dividend paid to you generally will be subject to U.S. withholding tax either at a rate of 30% of the gross amount of the dividend or such lower rate as may be specified by an
applicable income tax treaty. In order to receive a reduced treaty rate, you must provide us with an IRS Form W-8BEN or IRS Form W-8BEN-E (including, if required, a foreign or U.S.
taxpayer identification number) or other appropriate version of IRS Form W-8 certifying qualification for the reduced rate. If you hold our common stock through a financial institution or other
agent acting on your behalf, you will be required to provide appropriate documentation to the agent, who then will be required to provide the required certification to us or our paying agent, either
directly or through other intermediaries. You should consult your tax advisor regarding your entitlement to benefits under any applicable income tax treaty. If you are eligible for a reduced rate of
withholding tax pursuant to a tax treaty, you may be able to obtain a refund of any excess amounts currently withheld if you timely file an appropriate claim for refund with the IRS.
Dividends
received by you that are effectively connected with your conduct of a U.S. trade or business (and, if an income tax treaty applies, are attributable to a permanent
establishment or fixed base maintained by you in the United States) generally are exempt from such withholding tax. In order to obtain this exemption, you must provide us with an IRS
Form W-8ECI or other applicable IRS Form W-8 properly certifying such exemption. Such effectively connected dividends, although not subject to withholding tax, are taxed at the same
graduated rates applicable to U.S. persons, net of certain deductions and credits, subject to an applicable income tax treaty providing otherwise. In addition, if you are a corporate non-U.S. holder,
dividends you receive that are effectively connected with your conduct of a U.S. trade or business (and, if an income tax treaty applies, are attributable to a permanent establishment maintained by
you in the United States) may also be subject to a branch profits tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty.
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Gain on Sale or Other Disposition of Common Stock
Subject to the discussions of backup withholding and FATCA below, you generally will not be required to pay U.S. federal income tax on any gain
realized upon the sale or other disposition of our common stock unless:
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the gain is effectively connected with your conduct of a U.S. trade or business (and, if an income tax treaty applies, the gain is attributable
to a permanent establishment or fixed base maintained by you in the United States), in which case you will be required to pay tax on the net gain derived from the sale under regular graduated U.S.
federal income tax rates, and for a non-U.S. holder that is a corporation, such non-U.S. holder may be subject to the branch profits tax at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty;
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you are an individual who is present in the United States for a period or periods aggregating 183 days or more during the calendar year
in which the sale or disposition occurs and certain other conditions are met, in which case you will be required to pay a flat 30% tax on the gain derived from the sale, which tax may be offset by
certain U.S. source capital losses (even though you are not considered a resident of the United States); provided that you have timely filed U.S. federal income tax returns with respect to such
losses; or
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our common stock constitutes a "United States real property interest" by reason of our status as a "United States real property holding
corporation" for U.S. federal income tax purposes, a USRPHC, at any time within the shorter of the five-year period preceding the disposition or your holding period for our common stock. We believe
that we are not currently and will not become a USRPHC. However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. real property relative to the fair
market value of our other business assets, there can be no assurance that we will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common stock is regularly
traded on an established securities market, such common stock will be treated as United States real property interests only if you actually or constructively hold more than five percent of such
regularly traded common stock at any time during the applicable period that is specified in the Code.
U.S. Federal Estate Tax
Our common stock held (or treated as held) by an individual who is neither a U.S. citizen nor a U.S. resident (as defined for estate tax
purposes) at the time of death will be included in such holder's gross estate for U.S. federal estate tax purposes, unless an applicable estate tax treaty provides otherwise, and therefore may be
subject to U.S. federal estate tax.
Backup Withholding and Information Reporting
Generally, we must report annually to the IRS the amount of any distributions (whether or not they constitute dividends for U.S. federal income
tax purposes) paid to you, your name and address, and the amount of tax withheld, if any. A similar report will be sent to you. Pursuant to applicable income tax treaties or other agreements, the IRS
may make these reports available to tax authorities in your country of residence.
Payments
of dividends or of proceeds on the disposition of stock made to you may be subject to additional information reporting and backup withholding at a current rate of 28% unless you
establish an exemption, for example by properly certifying your non-U.S. status on an IRS Form W-8BEN, IRS Form W-8BEN-E or another appropriate version of IRS Form W-8.
Notwithstanding the foregoing, backup withholding and information reporting may apply if either we or our paying agent has actual knowledge, or reason to know, that you are a U.S. person.
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Backup
withholding is not an additional tax; rather, the U.S. income tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund or credit may generally be obtained from the IRS, provided that the required information is furnished to the IRS in a timely manner.
Legislation and Guidance Affecting Taxation of Our Common Stock Held By or Through Foreign Entities
Legislation and administrative guidance (referred to as the Foreign Account Tax Compliance Act or "FATCA") generally will impose a U.S. federal
withholding tax of 30% on any dividends paid and, after December 31, 2018, the proceeds of a sale of our common stock paid to (i) a "foreign financial institution" (as specially defined
under these rules), whether such foreign financial institution is the beneficial owner or an intermediary, unless such institution enters into an agreement with the U.S. government to withhold on
certain payments and to collect and provide to the U.S. tax authorities substantial information regarding U.S. account holders of such institution (which includes certain equity and debt holders of
such institution, as well as certain account holders that are foreign entities with U.S. owners) or (ii) a non-financial foreign entity, whether such non-financial foreign entity is the
beneficial owner or an intermediary, unless such entity provides a certification that the beneficial owner of the payment does not have any substantial U.S. owners or provides the withholding agent
with a certification identifying the direct and indirect U.S. owners of the entity. Under certain circumstances, a non-U.S. holder might be eligible for refunds or credits of such taxes from the IRS,
provided that the required information is furnished to the IRS in a timely manner. In certain cases, the relevant foreign financial institution or non-financial foreign entity may qualify for an
exemption from, or be deemed to be in compliance with, these rules. If the country in which the payee is resident has entered into an "intergovernmental agreement" with the United States regarding
FATCA, the payee may be permitted to report to that country instead of the United States, and the intergovernmental agreement may otherwise modify the requirements described in this paragraph.
Prospective investors are encouraged to consult with their own tax advisors regarding the possible implications of this legislation on their investment in our common stock.
The preceding discussion of U.S. federal tax considerations is for general information only. It is not tax advice. Each prospective investor should consult its
own tax advisor regarding the particular U.S. federal, state, local and non-U.S. tax consequences of purchasing, holding and disposing of our common stock, including the consequences of any proposed
change in applicable laws.
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UNDERWRITING
We have entered into an underwriting agreement with the underwriters named below. Needham & Company, LLC is acting as
representative of the underwriters. The underwriters' obligations are several, which means that each underwriter is required to purchase a specific number of shares, but is not responsible for the
commitment of any other underwriter to purchase shares. Subject to the terms and conditions of the underwriting agreement, each underwriter has severally agreed to purchase from the selling
stockholders the number of shares of common stock set forth opposite its name below.
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Underwriter
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Number of
Shares
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Needham & Company, LLC
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Total
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The
underwriting agreement provides that the underwriters are obligated to purchase all the shares of common stock in the offering if any are purchased, other than those shares covered
by the option described below.
The
underwriting agreement provides that we will indemnify the underwriters against certain liabilities that may be incurred in connection with this offering, including liabilities under
the Securities Act, or to contribute payments that the underwriters may be required to make in respect thereof.
We
have granted an option to the underwriters to purchase up to additional shares of common stock at the public offering price per share, less the underwriting discount,
set forth on the cover page of this prospectus supplement. This option is exercisable during the 30-day period after the date of this prospectus supplement. If this option is exercised, each of the
underwriters will purchase approximately the same percentage of the additional shares as the number of shares of common stock to be purchased by that underwriter, as shown in the table above, bears to
the total shown.
The
representative has advised us that the underwriters propose to offer the shares of common stock to the public at the public offering price per share set forth on the cover page of
this prospectus supplement. The underwriters may offer shares to securities dealers, who may include the underwriters, at that public offering price less a concession of up to
$ per
share. After the offering to the public, the offering price and other selling terms may be changed by the representative.
The
following table shows the per share and total underwriting discount to be paid to the underwriters by us. These amounts are shown assuming both no exercise and full exercise of the
underwriters' option to purchase additional shares.
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Total
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Per Share
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No Exercise
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Full Exercise
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Paid by us
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$
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$
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$
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We
estimate that the total expenses of the offering, excluding the underwriting discount, will be approximately $ . We have also agreed to reimburse the underwriters for up
to $ of fees and expenses incurred by them in connection with this offering.
We
have agreed not to (1) offer, sell, contract to sell, pledge, grant options, warrants or rights to purchase, or otherwise dispose of any of our equity securities or securities
exchangeable for or convertible into our common stock or other equity security (other than (i) the issuance of the shares contemplated by this prospectus supplement and the accompanying
prospectus hereby, (ii) the grant of options, restricted stock, restricted stock units, common stock or other securities pursuant to stock option and equity incentive plans disclosed in this
prospectus supplement and the accompanying prospectus, (iii) upon the purchase and issuance of common stock, exercise of options or vesting of
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restricted
stock or restricted stock units granted pursuant to stock option and equity incentive plans disclosed in this prospectus supplement and the accompanying prospectus, or (iv) pursuant
to the conversion of convertible securities or the exercise of warrants in each case outstanding on the date of this prospectus supplement) or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of shares of common stock, for a period of 90 days after the date of this
prospectus supplement without the prior written consent of Needham & Company, LLC.
Our
directors and executive officers have agreed, subject to certain exceptions, not to, directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any shares of common stock or any securities convertible
into or exercisable or exchangeable for common stock, or enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of
common stock, for a period of 90 days after the date of this prospectus supplement without the prior written consent of Needham & Company, LLC (the "Lock-Up Period").
Among
the exceptions are (a) issuances of securities solely made in connection with exercises of outstanding stock options, provided that any shares of common stock received upon
such exercise will be subject to the Lock-Up Period; (b) forfeitures or the sale of shares of common stock to cover actual or estimated tax obligations in connection with the vesting of
restricted stock and restricted stock units pursuant to the terms of restricted stock agreements; (c) the establishment of a written trading plan meeting the requirements of Rule 10b5-1
under the Exchange Act relating to the sale of shares of common stock, provided that the shares subject to such plan may not be sold until the expiration of the Lock-Up Period; (d) the transfer
of common stock or securities exercisable or exchangeable for common stock to (i) immediate family members, family partnerships, trusts, or other business entities whose only partners,
beneficiaries, or equity holders are the director or executive officer and/or a member of the immediate family of the director or executive officer, (ii) if such director or officers' shares
are held through a partnership, to another partnership or a limited liability company or other business entity that controls, is controlled by or is under common control with such director or officer
or (iii) if such director or officers' shares are held through trust, to a trustor or beneficiary of the trust; (e) the transfer of securities upon death of the director or executive
officer to his or her executors, administrators, legatees, or beneficiaries; (f) bona fide gifts; (g) transfer of shares of common stock or any security exercisable for common stock that
occurs by order of a court of competent jurisdiction; and (h) sale, transfer or otherwise a disposition of common stock in an amount not to exceed 250,000 shares, when aggregated with all
dispositions under this clause (h) or clause (f) (to the extent not continuing to be subject to the Lock-Up Period) by directors and officers of the Company who have executed similar
lock-up agreements with the representative in connection with this offering; provided that, in the case of any transfers pursuant to clauses (d), (e), (f) and (g) above,
(i) each transferee or donee agrees to be bound in writing by the same transfer restrictions, unless such transferee or donee is a charitable organization that cannot by law or by internal
written policy execute such an agreement and (ii) solely with respect to transfers pursuant to clauses (d) and (f) above, no filing by any party (donor, donee, transferor or
transferee) under Section 16(a) of the Exchange Act shall be required or shall be made voluntarily in connection with such transfer (other than filing on Form 5 made after the expiration
of the Lock-Up Period).
In
connection with this offering, the underwriters may engage in transactions that stabilize, maintain or otherwise affect the price of our common stock. Specifically, the underwriters
may sell more shares than are set forth on the cover page of this prospectus supplement. This creates a short position in our common stock for their own account. The short position may be either a
covered short position or a naked short position. In a covered short position, the number of shares sold by the underwriters is not greater than the number of shares that they may purchase pursuant to
their option
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to
purchase additional shares described above. In a naked short position, the number of shares involved is greater than the number of shares in that option. To close out a short position or to
stabilize the price of our common stock, the underwriters may bid for, and purchase, common stock in the open market. The underwriters may also elect to reduce any short position by exercising all or
part of their option to purchase additional shares. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares
available for purchase
in the open market as compared to the price at which they may purchase shares through their option to purchase additional shares. If the underwriters sell more shares than could be covered by their
option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that
there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
The
underwriters may also impose a penalty bid. This occurs when a particular underwriter or dealer repays selling concessions allowed to it for distributing our common stock in this
offering because the underwriters repurchase that stock in stabilizing or short covering transactions.
Finally,
the underwriters may bid for, and purchase, shares of our common stock in market making transactions, including "passive" market making transactions as described below.
These
activities may stabilize or maintain the market price of our common stock at a price that is higher than the price that might otherwise exist in the absence of these activities.
The underwriters are not required to engage in these activities, and may discontinue any of these activities at any time without notice. These transactions may be effected on The NASDAQ Global Select
Market, in the over-the-counter market, or otherwise.
In
connection with this offering, some of the underwriters or their affiliates may engage in passive market making transactions in our common stock on The NASDAQ Global Select Market
immediately prior to the commencement of sales in this offering, in accordance with Rule 103 of Regulation M under the Exchange Act. Rule 103 generally provides
that:
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a passive market maker may not effect transactions or display bids for our common stock in excess of the highest independent bid price by
persons who are not passive market makers;
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net purchases by a passive market maker on each day are generally limited to 30% of the passive market maker's average daily trading volume in
our common stock during a specified two-month prior period or 200 shares, whichever is greater, and must be discontinued when that limit is reached; and
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passive market making bids must be identified as such.
Passive
market making may stabilize or maintain the market price of our common stock at a level above that which might otherwise prevail and, if commenced, may be discontinued at any time.
The
underwriters and their respective affiliates have provided, or may in the future provide, various investment banking and other financial services to us, for which they received or
will receive customary fees and expenses.
Notice to Prospective Investors in Canada
The shares of our common stock being offered hereby may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are
accredited investors, as defined in National Instrument 45-106
Prospectus Exemptions
or subsection 73.3(1) of the Securities Act
(Ontario), and are permitted clients, as defined in National Instrument 31-103
Registration Requirements, Exemptions and Ongoing Registrant
Obligations
. Any resale of the shares must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable
securities laws.
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Securities
legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any
amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of
the purchaser's province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser's province or territory for particulars of these rights or
consult with a legal advisor.
Pursuant
to section 3A.3 (or, in the case of securities issued or guaranteed by the government of a non-Canadian jurisdiction, section 3A.4) of National
Instrument 33-105
Underwriting Conflicts
(NI 33-105), the underwriters are not required to comply with the disclosure requirements of
NI 33-105 regarding underwriter conflicts of interest in connection with this offering.
Notice to Prospective Investors in the European Economic Area
In relation to each Member State of the European Economic Area (each, a relevant member state), no offer of shares may be made to the public in
that relevant member state other than:
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to any legal entity which is a qualified investor as defined in the Prospectus Directive;
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to fewer than 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the
Prospectus Directive, subject to obtaining the prior consent of the underwriters; or
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in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided
that no such offer of shares shall require the Company or the underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive.
Each
person in a relevant member state who initially acquires any shares or to whom any offer is made will be deemed to have represented, acknowledged and agreed that (A) it is a
"qualified investor" within the meaning of the law in that relevant member state implementing Article 2(1)(e) of the Prospectus Directive, and (B) in the case of any shares acquired by
it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, the shares acquired by it in the offering have not been acquired on behalf of, nor have they
been acquired with a view to their offer or resale to, persons in any relevant member state other than "qualified investors" as defined in the Prospectus Directive, or in circumstances in which the
prior consent of the underwriters has been given to the offer or resale. In the case of any shares being offered to a financial intermediary as that term is used in Article 3(2) of the
Prospectus Directive, each such financial intermediary will be deemed to have represented, acknowledged and agreed that the shares acquired by it in the offer have not been
acquired on a non-discretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to, persons in circumstances which may give rise to an offer of any shares to the
public other than their offer or resale in a relevant member state to qualified investors as so defined or in circumstances in which the prior consent of the underwriters has been obtained to each
such proposed offer or resale.
We,
the underwriters and our and their respective affiliates will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement.
This
prospectus supplement has been prepared on the basis that any offer of shares in any relevant member state will be made pursuant to an exemption under the Prospectus Directive from
the requirement to publish a prospectus for offers of shares. Accordingly any person making or intending to make an offer in that relevant member state of shares which are the subject of the offering
contemplated in this prospectus supplement may only do so in circumstances in which no obligation arises for the Company or the underwriters to publish a prospectus pursuant to Article 3 of the
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Prospectus
Directive in relation to such offer. Neither the Company nor the underwriters have authorized, nor do they authorize, the making of any offer of shares in circumstances in which an
obligation arises for the Company or the underwriters to publish a prospectus for such offer.
For
the purpose of the above provisions, the expression "an offer to the public" in relation to any shares in any relevant member state means the communication in any form and by any
means of sufficient information on the terms of the offer and the shares to be offered so as to enable an investor to decide to purchase or subscribe the shares, as the same may be varied in the
relevant member state by any measure implementing the Prospectus Directive in the relevant member state and the expression "Prospectus Directive" means Directive 2003/71/EC (as amended) and includes
any relevant implementing measure in the relevant member state.
Notice to Prospective Investors in the United Kingdom
In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may
only be directed at persons who are "qualified investors" (as defined in the Prospectus Directive) (i) who have professional experience in
matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order") and/or
(ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together
being referred to as "relevant persons"). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or
investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.
Notice to Prospective Investors in Israel
In the State of Israel this prospectus supplement shall not be regarded as an offer to the public to purchase securities under the Israeli
Securities Law, 57281968, which requires a prospectus to be published and authorized by the Israel Securities Authority, if it complies with certain provisions of Section 15 of the
Israeli Securities Law, 57281968, including, inter alia, if: (i) the offer is made, distributed or directed to not more than 35 investors, subject to certain conditions, or the
Addressed Investors; or (ii) the offer is made, distributed or directed to certain qualified investors defined in the First Addendum of the Israeli Securities Law, 57281968,
subject to certain conditions, or the Qualified Investors. The Qualified Investors shall not be taken into account in the count of the Addressed Investors and may be offered to purchase securities in
addition to the 35 Addressed Investors. Our company has not and will not take any action that would require it to publish a prospectus in accordance with and subject to the Israeli Securities
Law, 57281968. We have not and will not distribute this prospectus supplement or make, distribute or direct an offer to subscribe for our securities to any person within the State of
Israel, other than to Qualified Investors and up to 35 Addressed Investors.
Qualified
Investors may have to submit written evidence that they meet the definitions set out in of the First Addendum to the Israeli Securities Law, 57281968. In
particular, we may request, as a condition to be offered securities, that Qualified Investors will each represent, warrant and certify to us or to anyone acting on our behalf: (i) that it is an
investor falling within one of the categories listed in the First Addendum to the Israeli Securities Law, 57281968; (ii) which of the categories listed in the First Addendum to the
Israeli Securities Law, 57281968 regarding Qualified Investors is applicable to it; (iii) that it will abide by all provisions set forth in the Israeli Securities Law,
57281968 and the regulations promulgated thereunder in connection with the offer to be issued securities; (iv) that the securities that it will be issued are, subject to exemptions
available under the Israeli Securities Law, 57281968: (a) for its own account; (b) for investment purposes only; and (c) not issued with a view to resale
within the State of Israel, other than in accordance with the provisions of the Israeli
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Securities
Law, 57281968; and (v) that it is willing to provide further evidence of its Qualified Investor status. Addressed Investors may have to submit written evidence in
respect of their identity and may have to sign and submit a declaration containing, inter alia, the Addressed Investor's name, address and passport number or Israeli identification number.
LEGAL MATTERS
Certain legal matters with respect to the validity of our shares of common stock offered by this prospectus supplement will be passed upon for
us by Wilson Sonsini Goodrich & Rosati, Professional Corporation, Palo Alto, California. Pillsbury Winthrop Shaw Pittman LLP, San Francisco, California, is acting as counsel for the
underwriters in connection with certain legal matters relating to the shares of common stock offered by this prospectus supplement.
EXPERTS
The consolidated financial statements of AXT, Inc. as of December 31, 2016 and 2015 and for each of the three years in the period
ended December 31, 2016, and the effectiveness of internal control over financial reporting as of December 31, 2016 (which is included in management's report on internal control over
financial reporting), incorporated by reference in this prospectus supplement by reference to the Annual Report on Form 10-K for the year ended December 31, 2016, have been so
incorporated in reliance on the reports of BPM LLP, an independent registered public accounting firm, given the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the common stock offered by this
prospectus supplement and the accompanying prospectus. This prospectus supplement and the accompanying prospectus, filed as part of the registration statement, do not contain all the information set
forth in the registration statement and its exhibits and schedules, portions of which have been omitted as permitted by the rules and regulations of the SEC. For further information about us, we refer
you to the registration statement and to its exhibits and schedules.
We
file annual, quarterly and other reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC's website at
www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K, including any amendments to those
reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be accessed free of charge through the Internet. These
filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus supplement and the accompanying prospectus certain information we file with
it, which means that we can disclose important information by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus supplement and
the accompanying prospectus, and information that we file later with the SEC will automatically update and supersede information contained in this prospectus supplement and the accompanying
prospectus. We incorporate by reference the documents listed below that we have previously filed with the SEC (excluding any
S-20
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portions
of any Form 8-K that are not deemed "filed" pursuant to the General Instructions of Form 8-K):
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our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed on February 27, 2017; and
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the description of our common stock contained in our Registration Statement on Form 8-A as filed with the SEC on April 24, 1998,
including any amendment or report filed for the purpose of updating such description.
We
also incorporate by reference into this prospectus supplement and the accompanying prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act prior to the completion or termination of the offering, but excluding any information deemed furnished and not filed with the SEC. Any statements contained in a previously
filed document incorporated by reference into this prospectus supplement and the accompanying prospectus is deemed to be modified or superseded for purposes of this prospectus supplement and the
accompanying prospectus to the extent that a statement contained in this prospectus supplement and the accompanying prospectus, or in a subsequently filed document also incorporated by reference
herein and therein, modifies or supersedes that statement.
We
will provide to each person to whom this prospectus supplement and the accompanying prospectus is delivered, upon written or oral request, at no cost to the requester, a copy of any
and all of the information that is incorporated by reference in this prospectus supplement and the accompanying prospectus. Requests for such documents should be directed to:
AXT, Inc.
Attn: Corporate Secretary
4281 Technology Drive,
Fremont, California 94538
(510) 438-4700
S-21
Table of Contents
PROSPECTUS
$60,000,000
AXT, Inc.
By this prospectus, AXT, Inc. may offer, from time to time:
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Common Stock
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Preferred Stock
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Depositary Shares
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Warrants
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Debt Securities
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Units
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AXT, Inc.
a Delaware corporation ("AXT") may offer and sell from time to time, in one or more series or issuances and on terms that AXT will determine at the time of the offering,
any combination of the securities described in this prospectus, up to an aggregate amount of $60,000,000.
We
will provide specific terms of any offering in a supplement to this prospectus. Any prospectus supplement may also add, update, or change information contained in this prospectus. You
should carefully read this
prospectus and the applicable prospectus supplement as well as the documents incorporated or deemed to be incorporated by reference in this prospectus before you purchase any of the securities offered
hereby.
These
securities may be offered and sold in the same offering or in separate offerings; to or through underwriters, dealers, and agents; or directly to purchasers. The names of any
underwriters, dealers, or agents involved in the sale of our securities, their compensation and any over-allotment options held by them will be described in the applicable prospectus supplement. For a
more complete description of the plan of distribution of these securities, see the section titled "Plan of Distribution" beginning on page 28 of this prospectus.
Our
common stock is listed on the Nasdaq Global Select Market under the symbol "AXTI." We will provide information in any applicable prospectus supplement regarding any listing of
securities other than shares of our common stock on any securities exchange.
Investing in our securities involves risks. See the section titled "Risk Factors" on page 4 of this prospectus, as well as the applicable
prospectus supplement, any related issuer free writing prospectus and other information contained or incorporated by reference in this prospectus and the applicable prospectus supplement before making
a decision to invest in our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is November 4, 2016
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TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we filed with the United States Securities and Exchange Commission,
or the SEC, using a "shelf" registration process. Under this shelf process, we may, from time to time, sell any combination of the securities described in this prospectus in one or more offerings up
to a total amount of $60,000,000.
This
prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific
information about the terms of that offering. The prospectus supplement may also add to, update or change information contained in the prospectus and, accordingly, to the extent inconsistent,
information in this prospectus is superseded by the information in the prospectus supplement.
The
prospectus supplement to be attached to the front of this prospectus may describe, as applicable: the terms of the securities offered; the initial public offering price; the price
paid for the securities; net proceeds; and the other specific terms related to the offering of the securities.
You
should only rely on the information contained or incorporated by reference in this prospectus and any prospectus supplement or issuer free writing prospectus relating to a particular
offering. No person has been authorized to give any information or make any representations in connection with this offering other than those contained or incorporated by reference in this prospectus,
any accompanying prospectus supplement and any related issuer free writing prospectus in connection with the offering described herein and therein, and, if given or made, such information or
representations must not be relied upon as having been authorized by us. Neither this prospectus nor any prospectus supplement nor any related issuer free writing prospectus shall constitute an offer
to sell or a solicitation of an offer to buy offered securities in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. This prospectus does not contain
all of the information included in the registration statement. For a more complete understanding of the offering of the securities, you should refer to the registration statement, including its
exhibits.
You
should read the entire prospectus and any prospectus supplement and any related issuer free writing prospectus, as well as the documents incorporated by reference into this
prospectus or any prospectus supplement or any related issuer free writing prospectus, before making an investment
decision. Neither the delivery of this prospectus or any prospectus supplement or any issuer free writing prospectus nor any sale made hereunder shall under any circumstances imply that the
information contained or incorporated by reference herein or in any prospectus supplement or issuer free writing prospectus is correct as of any date subsequent to the date hereof or of such
prospectus supplement or
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issuer
free writing prospectus, as applicable. You should assume that the information appearing in this prospectus, any prospectus supplement or any document incorporated by reference is accurate only
as of the date of the applicable documents, regardless of the time of delivery of this prospectus or any sale of securities. Our business, financial condition, results of operations and prospects may
have changed since that date.
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PROSPECTUS SUMMARY
This summary description about us and our business highlights selected information contained elsewhere in this
prospectus or incorporated in this prospectus by reference. This summary does not contain all of the information you should consider before buying securities in this offering. You should carefully
read this entire prospectus and any applicable prospectus supplement, including each of the documents incorporated herein or therein by reference, before making an investment decision. As used in this
prospectus, "we," "us," "AXT," "the Company" and "our" refer to AXT, Inc., a Delaware corporation and its subsidiaries.
AXT, Inc.
Overview
AXT is a worldwide developer and producer of high-performance compound and single element semiconductor substrates, also known as wafers. The
dominant substrates used in producing semiconductor chips and other electronic circuits are made from silicon. However, certain chips may become too hot or perform their function too slowly if silicon
is used as the base material. Alternative or specialty materials are used to replace silicon as the preferred base for the electronic circuits in these situations. We provide such alternative or
specialty materials in the form of substrates or wafers, including compound and single element substrates. Our compound substrates combine indium with phosphorous (InP) or gallium with arsenic (GaAs).
Our single element substrates are made from germanium (Ge). Historically, most of our revenue has been derived from sales of semi-insulating and semi-conducting GaAs substrates. However, in 2015, our
revenue from sales of InP substrates was greater than our revenue from our sales of each type of GaAs substrates. We currently sell the following substrate products in the sizes and for the
applications indicated:
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Substrates
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Substrate Diameter
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Applications
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InP
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2", 3", 4"
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Fiber optic lasers and
detectors
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Data center
connectivity
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Silicon
photonics
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Opto Electronics
ICs
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Terrestrial solar cells
(CPV)
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Lasers
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VCSELs (vertical cavity
surface emitting lasers)
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GaAs (semi-insulating)
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1", 2", 3", 4", 5", 6"
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Power amplifiers and radio
frequency integrated circuits for wireless handsets (cell phones)
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Direct broadcast
television
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High-performance
transistors
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Satellite
communications
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GaAs (semi-conducting)
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1", 2", 3", 4", 6"
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High brightness light
emitting diodes (LEDs)
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Lasers
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VCSELs (vertical cavity
surface emitting lasers)
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Printer heads
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Optical
couplers
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Ge
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2", 4", 6"
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Satellite and terrestrial
solar cells
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Optical sensors and
detectors
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We
manufacture all of our products in the People's Republic of China (PRC or China), which generally has favorable costs for facilities and labor compared with comparable facilities in
the United States, Europe or Japan. Our supply chain includes partial ownership of ten companies in China (joint ventures). We believe this supply chain arrangement provides us with pricing
advantages, reliable supply and enhanced sourcing lead-times for key raw materials which are central to our final manufactured products. Our subsidiaries and joint venture companies produce products
including 99.99% pure gallium (4N Ga), high purity gallium, arsenic, germanium, germanium dioxide, pyrolytic boron nitride (pBN) crucibles and boron oxide (B2O3). Our ownership and the
ownership held by our consolidated subsidiaries in these entities range from 83% to 20%. We have board representation in all
ten of these companies. We consolidate the joint ventures in which we have either a controlling financial interest, or majority financial interest combined with the ability to exercise control in
substance over the operation or financial decisions made by the investee. We use the equity method to account for joint ventures in which we have smaller financial interest and have the ability to
exercise significant influence, but not control, over the investee. We purchase portions of the materials produced by these joint venture companies for our own use and the joint venture companies sell
the remainder of their production to third parties.
Corporate Information
We were incorporated in California in December 1986 and reincorporated in Delaware in May 1998. We changed our name from American Xtal
Technology, Inc. to AXT, Inc. in July 2000. Our principal corporate office is located at 4281 Technology Drive, Fremont, California 94538, and our telephone number at this address is
(510) 438-4700. We maintain a website at www.axt.com where general information about us is available. Our website, and the information contained therein, is not a part of this prospectus. The
information that is contained on, or can be accessed through our website is not incorporated into this prospectus, and the inclusion of our website address is an inactive textual reference only.
The Securities We May Offer
We may offer up to $60,000,000 of common stock, preferred stock, depositary shares, warrants, debt securities and/or units in one or more
offerings and in any combination. This prospectus provides you with a general description of the securities we may offer. A prospectus supplement, which we will provide each time we offer securities,
will describe the specific amounts, prices and terms of the securities we determine to offer.
We may offer shares of our common stock, par value $0.001 per share, either alone or underlying other registered securities convertible or
exercisable into our common stock. Each holder of our common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders. Holders of our common stock are entitled
to receive ratably the dividends, if any, as
may be declared from time to time by our board of directors out of funds legally available therefor. If there is a liquidation, dissolution or winding up of our company, holders of our common stock
would be entitled to share in our assets remaining after the payment of liabilities and any preferential rights of any outstanding preferred stock. The holders of common stock have no preemptive
rights. Currently, we do not pay a dividend and do not anticipate paying cash dividends in the foreseeable future.
Under the terms of our amended and restated certificate of incorporation, our board of directors is authorized to issue shares of preferred
stock in one or more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions,
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including
voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.
We
may also issue fractional shares of preferred stock that will be represented by depositary shares and depositary receipts.
Each
series of preferred stock, depositary shares or depositary receipts, if issued, will be more fully described in the particular prospectus supplement that will accompany this
prospectus, including redemption provisions, rights in the event of our liquidation, dissolution or winding up, voting rights and rights to convert into common stock. We have no present plans to issue
any additional shares of preferred stock, depositary shares or depositary receipts nor are any depositary shares or depositary receipts presently outstanding. As discussed below, as of
September 30, 2016, there were 883,000 shares of our Series A Preferred Stock issued and outstanding.
We may issue warrants for the purchase of common stock, preferred stock or debt securities. We may issue warrants independently or together with
other securities.
We may offer secured or unsecured obligations in the form of one or more series of senior or subordinated debt. The senior debt securities and
the subordinated debt securities are together referred to in this prospectus as the "debt securities." The subordinated debt securities generally will be entitled to payment only after payment of our
senior debt. Senior debt generally includes all debt for money borrowed by us, except debt that is stated in the instrument governing the terms of that debt to be not senior to, or to have the same
rank in right of payment as, or to be expressly junior to, the subordinated debt securities. We may issue debt securities that are convertible into shares of our common stock.
The
senior and subordinated debt securities will be issued under separate indentures between us and a trustee. We have summarized the general features of the debt securities to be
governed by the indentures. These indentures have been filed as exhibits to the registration statement of which this prospectus forms a part. We encourage you to read these indentures.
Instructions on how you can get copies of these documents are provided in the section titled "Where You Can Find More Information."
We may issue units comprised of one or more of the other classes of securities issued by us as described in this prospectus in any combination.
Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit.
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RISK FACTORS
An investment in our securities involves a high degree of risk. The prospectus supplement applicable to each offering of our securities will
contain a discussion of the risks applicable to an investment in our securities. Prior to making a decision about investing in our securities, you should carefully consider the specific factors
discussed in the section titled "Risk Factors" in the applicable prospectus supplement, together with all of the other information contained or incorporated by reference in the prospectus supplement
or appearing or incorporated by reference in this prospectus. You should also consider the risks, uncertainties and assumptions discussed under Item 1A, "Risk Factors," in our Annual Report on
Form 10-K for the fiscal year ended December 31, 2015 and any updates discussed in our Quarterly Reports on Form 10-Q, all of which are incorporated herein by reference, and may
be amended, supplemented or superseded from time to time by other reports we file with the SEC in the future and any prospectus supplement related to a particular offering. The risks and uncertainties
we have described are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our operations. The occurrence of any
of these known or unknown risks might cause you to lose all or part of your investment in the offered securities.
FORWARD-LOOKING STATEMENTS
This prospectus, each prospectus supplement and the information incorporated by reference in this prospectus and each prospectus supplement
contain certain statements that constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. The words "anticipate," "could," "expect," "believe," "goal," "plan," "intend," "estimate," "may," "seek," "potential," "predict," "project," "should," "would," "will," and similar expressions
and variations thereof are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Those statements appear in this prospectus, any accompanying
prospectus supplement and the documents incorporated herein and therein by reference, particularly in the sections titled "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," and include statements regarding the intent, belief or current expectations of the company and management that are subject to known and
unknown risks, uncertainties and assumptions and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such
forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to those discussed in the section titled "Risk Factors" set forth above.
This
prospectus, any prospectus supplement and the information incorporated by reference in this prospectus and any prospectus supplement also contain statements that are based on
management's current expectations and beliefs, including estimates and projections about our company, industry, financial condition, results of operations and other matters. These statements are not
guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions that are difficult to predict.
Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely upon forward-looking statements
as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur and actual results could differ materially from those projected
in the forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we do not plan to publicly update
or revise any forward-looking statements contained herein after we distribute this prospectus, whether as a result of any new information, future events or otherwise.
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RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratio of earnings to combined fixed charges and preferred stock dividends for the periods indicated. The
following should be read in conjunction with our consolidated financial statements, including the notes thereto, and the other financial information included or incorporated by reference herein.
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Six
Months
Ended
June 30,
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Year Ended December 31,
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2016
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2015
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2014
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2013
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2012
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2011
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Ratio of earnings to combined fixed charges and preferred stock dividends(1)
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18.36
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N/A
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N/A
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N/A
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10.54
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69.45
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(1)
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For
the purpose of calculating such ratios, "earnings" consist of income (loss) from continuing operations before income taxes plus distributions from equity method
investments, loss from equity method investments, and loss allocated to noncontrolling interests before income taxes minus income from equity method investments and income allocated to noncontrolling
interest before income taxes plus fixed charges and "fixed charges" consist of interest expense and the portion of rental expense representative of interest expense. Earnings were insufficient to
cover the combined fixed charges and preferred stock dividends by approximately $1.9 million, $2.4 million and $8.8 million for the years ended December 31, 2015, 2014 and
2013, respectively.
USE OF PROCEEDS
Unless otherwise indicated in the prospectus supplement, we will use the net proceeds from the sale of securities offered by this prospectus for
general corporate purposes, which may include working capital, capital expenditures, other corporate expenses and acquisitions of complementary products, technologies or businesses. The timing and
amount of our actual expenditures will be based on many factors, including cash flows from operations and the anticipated growth of our business. As a result, unless otherwise indicated in the
prospectus supplement, our management will have broad discretion to allocate the net proceeds of the offerings. Pending their ultimate use, we intend to invest the net proceeds in short- and
medium-term, interest-bearing obligations; investment-grade instruments; certificates of deposit; and/or direct or guaranteed obligations of the U.S. government.
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DESCRIPTION OF CAPITAL STOCK
The following information describes our common stock and preferred stock, as well as certain provisions of our amended and restated certificate
of incorporation and amended and restated bylaws. This description is only a summary. You should also refer to our amended and restated certificate of incorporation and amended and restated bylaws,
which have been filed with the SEC as exhibits to our registration statement, of which this prospectus forms a part.
General
Our authorized capital stock consists of 70,000,000 shares of common stock with a $0.001 par value per share, and 2,000,000 shares of preferred
stock with a $0.001 par value per share, 1,000,000 shares of which are designated as "Series A Preferred Stock". Our board of directors may establish the rights and preferences of the preferred
stock from time to time. As of September 30, 2016, there were 32,559,384 shares of common stock issued and outstanding and there were 883,000 shares of our Series A Preferred Stock
issued and outstanding.
The
following is a summary of the material provisions of the common stock and preferred stock provided for in our amended and restated certificate of incorporation and amended and
restated bylaws. For additional detail about our capital stock, please refer to our certificate of incorporation and bylaws, each as amended.
Common Stock
Each holder of our common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders. Subject to any
preferential rights of any outstanding preferred stock, holders of our common stock are entitled to receive ratably the dividends, if any, as may be declared from time to time by the board of
directors out of funds legally available therefore. We have never declared or paid any cash dividend on our capital stock and do not anticipate paying any cash dividends in the foreseeable future. If
there is a liquidation, dissolution or winding up of our company, holders of our common stock would be entitled to share in our assets remaining after the payment of liabilities and any preferential
rights of any outstanding preferred stock.
Holders
of our common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to the common stock.
The outstanding shares of common stock are fully paid and non-assessable. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by,
the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
Our
common stock is listed on the NASDAQ Global Select Market under the symbol "AXTI." The transfer agent and registrar for the common stock is Registrar and Transfer Company. Its
address is 10 Commerce Drive, Cranford, NJ 07016, and its telephone number is (800) 368-5948.
Preferred Stock
Our amended and restated certificate of incorporation provides that we may issue up to 2,000,000 shares of preferred stock, $0.001 par value per
share, or preferred stock. As of September 30, 2016, 883,000 shares of our Series A Preferred Stock were issued and outstanding and are non-voting and non-convertible preferred stock
with a 5.0% cumulative annual dividend rate payable when declared by the board of directors and $4 per share liquidation preference over common stock, and must be paid before any distribution is made
to common stockholders. Other than the Series A Preferred Stock, no shares of preferred stock are currently outstanding. The following description of preferred stock and the description of the
terms of any particular series of preferred stock that we choose to issue
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hereunder
and that will be set forth in the related prospectus supplement are not complete. These descriptions are qualified in their entirety by reference to our amended and restated certificate of
incorporation and the certificate of designation relating to any series of preferred stock. The rights, preferences, privileges and restrictions of the preferred stock of each series will be fixed by
the certificate of designation relating to that series. The prospectus supplement also will contain a description of certain United States federal income tax consequences relating to the purchase and
ownership of the series of preferred stock that is described in the prospectus supplement.
Under
the terms of our amended and restated certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in one or more series without
stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights,
redemption privileges and liquidation preferences, of each series of preferred stock. There are no restrictions presently on the repurchase or redemption of any shares of our preferred stock. The
prospectus supplement for a series of preferred stock will specify:
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the maximum number of shares;
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the designation of the shares;
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the annual dividend rate, if any, whether the dividend rate is fixed or variable, the date or dates on which dividends will accrue, the
dividend payment dates, and whether dividends will be cumulative;
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the price and the terms and conditions for redemption, if any, including redemption at our option or at the option of the holders, including
the time period for redemption, and any accumulated dividends or premiums;
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the liquidation preference, if any, and any accumulated dividends upon the liquidation, dissolution or winding up of our affairs;
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any sinking fund or similar provision, and, if so, the terms and provisions relating to the purpose and operation of the fund;
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the terms and conditions, if any, for conversion or exchange of shares of any other class or classes of our capital stock or any series of any
other class or classes, or of any other series of the same class, or any other securities or assets, including the price or the rate of conversion or exchange and the method, if any, of adjustment;
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the voting rights; and
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any or all other preferences and relative, participating, optional or other special rights, privileges or qualifications, limitations or
restrictions.
The
issuance of shares of preferred stock will affect, and may adversely affect, the rights of holders of common stock. It is not possible to state the actual effect of the issuance of
any shares of preferred stock on the rights of holders of common stock until our board of directors determines the specific rights attached to that preferred stock. The effects of issuing additional
preferred stock could include one or more of the following:
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restricting dividends on the common stock;
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diluting the voting power of the common stock;
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impairing the liquidation rights of the common stock; or
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delaying or preventing changes in control or management of our company.
Preferred
stock will be fully paid and nonassessable upon issuance.
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Effect of Certain Provisions of our Amended and Restated Certificate of Incorporation and Amended and
Restated Bylaws and the Delaware Anti-Takeover Statute
Some provisions of Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws contain provisions
that could make the following transactions more difficult:
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acquisition of us by means of a tender offer;
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acquisition of us by means of a proxy contest or otherwise; or
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removal of our incumbent officers and directors.
Those
provisions, summarized below, are expected to discourage coercive takeover practices and inadequate takeover bids and to promote stability in our management. These provisions are
also designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors.
Restated Certificate of Incorporation and Amended and Restated Bylaws
Our amended and restated certificate of incorporation and our amended and restated bylaws provide for the following:
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Undesignated Preferred Stock.
The ability to authorize undesignated
preferred stock makes it possible for our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could impede the success of any attempt to
change control of our company. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.
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Stockholder Meetings.
Our amended and restated bylaws provide that in
general a special meeting of stockholders may be called only by our board of directors, its chairman or our president.
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Requirements for Advance Notification of Stockholder Nominations and
Proposals.
Our amended and restated bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of
candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee of the board of directors.
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Board Classification.
Our board of directors is divided into three classes.
The directors in each class are elected to serve for a three-year term, one class being elected each year by our stockholders. This system of electing and removing directors may tend to discourage a
third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors.
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Limits on Ability of Stockholders to Act by Written Consent.
We have
provided in our amended and restated bylaws that our stockholders may not act by written consent. This limit on the ability of our stockholders to act by written consent may lengthen the amount of
time required to take stockholder actions. As a result, a holder controlling a majority of our capital stock would not be able to amend our amended and restated bylaws or remove directors without
holding a meeting of our stockholders called in accordance with our amended and restated bylaws.
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Amendment of Certificate of Incorporation and Bylaws.
The amendment of the
above provisions of our amended and restated certificate of incorporation and amended and restated bylaws requires approval by holders of at least two-thirds of our outstanding capital stock entitled
to vote generally in the election of directors.
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We are subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. In general,
Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years
following the date the person became an interested stockholder unless:
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-
prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction
which resulted in the stockholder becoming an interested stockholder;
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-
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not for determining the
outstanding voting stock owned by the interested stockholder, (i) shares owned by persons who are directors and also officers, and (ii) shares owned by employee stock plans in which
employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
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-
at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and
authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not owned by the interested
stockholder.
Generally,
a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder
is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation's outstanding
voting stock.
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DESCRIPTION OF THE DEPOSITARY SHARES
General
At our option, we may elect to offer fractional shares of preferred stock, rather than full shares of preferred stock. If we do elect to offer
fractional shares of preferred stock, we will issue receipts for depositary shares and each of these depositary shares will represent a fraction of a share of a particular series of preferred stock,
as specified in the applicable prospectus supplement. Each owner of a depositary share will be entitled, in proportion to the applicable fractional interest in shares of preferred stock underlying
that depositary share, to all rights and preferences of the preferred
stock underlying that depositary share. These rights may include dividend, voting, redemption and liquidation rights.
The
shares of preferred stock underlying the depositary shares will be deposited with a bank or trust company selected by us to act as depositary, under a deposit agreement by and among
us, the depositary and the holders of the depositary receipts. The depositary will be the transfer agent, registrar and dividend disbursing agent for the depositary shares.
The
depositary shares will be evidenced by depositary receipts issued pursuant to the depositary agreement. Holders of depositary receipts agree to be bound by the deposit agreement,
which requires holders to take certain actions such as filing proof of residence and paying certain charges.
The
summary of terms of the depositary shares contained in this prospectus is not complete, and is subject to modification in any prospectus supplement for any issuance of depositary
shares. You should refer to the forms of the deposit agreement, our amended and restated certificate of incorporation and the certificate of designation that are, or will be, filed with the SEC for
the applicable series of preferred stock.
Dividends
The depositary will distribute cash dividends or other cash distributions, if any, received in respect of the series of preferred stock
underlying the depositary shares to the record holders of depositary receipts in proportion to the number of depositary shares owned by those holders on the relevant record date. The relevant record
date for depositary shares will be the same date as the record date for the preferred stock.
In
the event of a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary receipts that are entitled to receive the
distribution, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary, with our approval, may adopt another method for the distribution,
including selling the property and distributing the net proceeds to the holders.
Liquidation Preference
If a series of preferred stock underlying the depositary shares has a liquidation preference, in the event of our voluntary or involuntary
liquidation, dissolution or winding up, holders of depositary shares will be entitled to receive the fraction of the liquidation preference accorded each share of the applicable series of preferred
stock, as set forth in the applicable prospectus supplement.
Redemption
If a series of preferred stock underlying the depositary shares is subject to redemption, the depositary shares will be redeemed from the
proceeds received by the depositary resulting from the redemption, in whole or in part, of the preferred stock held by the depositary. Whenever we redeem any preferred stock held by the depositary,
the depositary will redeem, as of the same redemption date,
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the
number of depositary shares representing the preferred stock so redeemed. The depositary will mail the notice of redemption to the record holders of the depositary receipts promptly upon receiving
the notice from us and not fewer than 20 or more than 60 days, unless otherwise provided in the applicable prospectus supplement, prior to the date fixed for redemption of the preferred stock.
Voting
Upon receipt of notice of any meeting at which the holders of preferred stock are entitled to vote, the depositary will mail the information
contained in the notice of meeting to the record holders of the depositary receipts underlying the preferred stock. Each record holder of those depositary receipts on the record date will be entitled
to instruct the depositary as to the exercise of the voting rights pertaining to the amount of preferred stock underlying that holder's depositary shares. The record date for the depositary will be
the same date as the record date for the preferred stock. The depositary will, to the extent practicable, vote the preferred stock underlying the depositary shares
in accordance with these instructions. We will agree to take all action that may be deemed necessary by the depositary in order to enable the depositary to vote the preferred stock in accordance with
these instructions. The depositary will not vote the preferred stock to the extent that it does not receive specific instructions from the holders of depositary receipts.
Withdrawal of Preferred Stock
Owners of depositary shares will be entitled to receive upon surrender of depositary receipts at the principal office of the depositary and
payment of any unpaid amount due to the depositary, the number of whole shares of preferred stock underlying their depositary shares.
Partial
shares of preferred stock will not be issued. Holders of preferred stock will not be entitled to deposit the shares under the deposit agreement or to receive depositary receipts
evidencing depositary shares for the preferred stock.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement may be amended by agreement between
the depositary and us. However, any amendment which materially and adversely alters the rights of the holders of depositary shares, other than fee changes, will not be effective unless the amendment
has been approved by at least a majority of the outstanding depositary shares. The deposit agreement may be terminated by the depositary or us only if:
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-
all outstanding depositary shares have been redeemed; or
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-
there has been a final distribution of the preferred stock in connection with our dissolution and such distribution has been made to all the
holders of depositary shares.
Charges of Depositary
We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangement. We will also
pay charges of the depositary in connection with:
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-
the initial deposit of the preferred stock;
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-
the initial issuance of the depositary shares;
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-
any redemption of the preferred stock; and
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-
all withdrawals of preferred stock by owners of depositary shares.
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Holders
of depositary receipts will pay transfer, income and other taxes and governmental charges and other specified charges as provided in the deposit agreement for their accounts. If
these charges have not been paid, the depositary may:
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-
refuse to transfer depositary shares;
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-
withhold dividends and distributions; and
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-
sell the depositary shares evidenced by the depositary receipt.
Miscellaneous
The depositary will forward to the holders of depositary receipts all reports and communications we deliver to the depositary that we are
required to furnish to the holders of the preferred stock. In addition, the depositary will make available for inspection by holders of depositary receipts at the principal office of the depositary,
and at such other places as it may from time to time deem advisable, any reports and communications we deliver to the depositary as the holder of preferred stock.
Neither
the depositary nor we will be liable if either the depositary or we are prevented or delayed by law or any circumstance beyond the control of either the depositary or us in
performing our respective obligations under the deposit agreement. Our obligations and the depositary's obligations will be limited to the performance in good faith of our or the depositary's
respective duties under the deposit agreement. Neither the depositary nor we will be obligated to prosecute or defend any legal proceeding in respect of any depositary shares or preferred stock unless
satisfactory indemnity is furnished. The depositary and we may rely on:
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-
written advice of counsel or accountants;
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-
information provided by holders of depositary receipts or other persons believed in good faith to be competent to give such information; and
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-
documents believed to be genuine and to have been signed or presented by the proper party or parties.
Resignation and removal of depositary
The depositary may resign at any time by delivering a notice to us. We may remove the depositary at any time. Any such resignation or removal
will take effect upon the appointment of a successor depositary and its acceptance of such appointment. The successor depositary must be appointed within 60 days after delivery of the notice
for resignation or removal. The successor depositary must be a bank and trust company having its principal office in the United States of America and having a combined capital and surplus of at least
$100,000,000.
Federal income tax consequences
Owners of the depositary shares will be treated for U.S. federal income tax purposes as if they were owners of the preferred stock underlying
the depositary shares. As a result, owners will be entitled to take into account for U.S. federal income tax purposes and deductions to which they would be entitled if they were holders of such
preferred stock. No gain or loss will be recognized for U.S. federal income tax purposes upon the withdrawal of preferred stock in exchange for depositary shares. The tax basis of each share of
preferred stock to an exchanging owner of depositary shares will, upon such exchange, be the same as the aggregate tax basis of the depositary shares exchanged. The holding period for preferred stock
in the hands of an exchanging owner of depositary shares will include the period during which such person owned such depositary shares.
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DESCRIPTION OF THE WARRANTS
General
We may issue warrants for the purchase of our debt securities, preferred stock or common stock, or any combination thereof. Warrants may be
issued independently or together with our debt securities, preferred stock or common stock and may be attached to or separate from any offered securities. Each series of warrants will be issued under
a separate warrant agreement to be entered into between us and a bank or trust company, as warrant agent. The warrant agent will act solely as our agent in connection with the warrants. The warrant
agent will not have any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. This summary of certain provisions of the warrants is not complete. For
the terms of a particular series of warrants, you should refer to the prospectus supplement for that series of warrants and the warrant agreement for that particular series.
Debt warrants
The prospectus supplement relating to a particular issue of warrants to purchase debt securities will describe the terms of the debt warrants,
including the following:
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-
the title of the debt warrants;
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-
the offering price for the debt warrants, if any;
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the aggregate number of the debt warrants;
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the designation and terms of the debt securities, including any conversion rights, purchasable upon exercise of the debt warrants;
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-
if applicable, the date from and after which the debt warrants and any debt securities issued with them will be separately transferable;
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-
the principal amount of debt securities that may be purchased upon exercise of a debt warrant and the exercise price for the warrants, which
may be payable in cash, securities or other property;
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-
the dates on which the right to exercise the debt warrants will commence and expire;
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-
if applicable, the minimum or maximum amount of the debt warrants that may be exercised at any one time;
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whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants
will be issued in registered or bearer form;
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information with respect to book-entry procedures, if any; the currency or currency units in which the offering price, if any, and the exercise
price are payable;
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-
if applicable, a discussion of material U.S. federal income tax considerations;
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-
the antidilution provisions of the debt warrants, if any;
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-
the redemption or call provisions, if any, applicable to the debt warrants;
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-
any provisions with respect to the holder's right to require us to repurchase the debt warrants upon a change in control or similar event; and
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-
any additional terms of the debt warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the debt
warrants.
Debt
warrant certificates will be exchangeable for new debt warrant certificates of different denominations. Debt warrants may be exercised at the corporate trust office of the warrant
agent or
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any
other office indicated in the prospectus supplement. Prior to the exercise of their debt warrants, holders of debt warrants will not have any of the rights of holders of the debt securities
purchasable upon exercise and will not be entitled to payment of principal or any premium, if any, or interest on the debt securities purchasable upon exercise.
Equity warrants
The prospectus supplement relating to a particular series of warrants to purchase our common stock or preferred stock will describe the terms of
the warrants, including the following:
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-
the title of the warrants;
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-
the offering price for the warrants, if any;
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-
the aggregate number of warrants;
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-
the designation and terms of the common stock or preferred stock that may be purchased upon exercise of the warrants;
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-
if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each
security;
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-
if applicable, the date from and after which the warrants and any securities issued with the warrants will be separately transferable;
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-
the number of shares of common stock or preferred stock that may be purchased upon exercise of a warrant and the exercise price for the
warrants;
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-
the dates on which the right to exercise the warrants shall commence and expire;
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-
if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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-
the currency or currency units in which the offering price, if any, and the exercise price are payable;
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-
if applicable, a discussion of material U.S. federal income tax considerations;
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-
the antidilution provisions of the warrants, if any;
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-
the redemption or call provisions, if any, applicable to the warrants;
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-
any provisions with respect to the holder's right to require us to repurchase the warrants upon a change in control or similar event; and
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-
any additional terms of the warrants, including procedures, and limitations relating to the exchange, exercise and settlement of the warrants.
Holders
of equity warrants will not be entitled:
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-
to vote, consent or receive dividends;
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-
receive notice as stockholders with respect to any meeting of stockholders for the election of our directors or any other matter; or
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exercise any rights as stockholders of us.
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DESCRIPTION OF THE DEBT SECURITIES
The debt securities may be either secured or unsecured and will either be our senior debt securities or our subordinated debt securities. The
debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus supplement. Senior debt securities will be issued under a
senior indenture and subordinated debt securities will be issued under a subordinated indenture. Together, the senior indenture and the subordinated indenture are called indentures in this
description. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series of debt securities.
The
following is a summary of selected provisions and definitions of the indentures and debt securities to which any prospectus supplement may relate. The summary of selected provisions
of the indentures and the debt securities appearing below is not complete and is subject to, and qualified entirely by reference to, all of the provisions of the applicable indenture and certificates
evidencing the applicable debt securities. For additional information, you should look at the applicable indenture and the
certificate evidencing the applicable debt security that is filed as an exhibit to the registration statement that includes the prospectus. In this description of the debt securities, the words "we,"
"us," or "our" refer only to AXT, Inc. and not to any of our subsidiaries, unless we expressly state or the context otherwise requires.
The
following description sets forth selected general terms and provisions of the applicable indenture and debt securities to which any prospectus supplement may relate. Other specific
terms of the applicable indenture and debt securities will be described in the applicable prospectus supplement. If any particular terms of the indenture or debt securities described in a prospectus
supplement differ from any of the terms described below, then the terms described below will be deemed to have been superseded by that prospectus supplement.
General
Debt securities may be issued in separate series without limitation as to aggregate principal amount. We may specify a maximum aggregate
principal amount for the debt securities of any series.
We
are not limited as to the amount of debt securities we may issue under the indentures. Unless otherwise provided in a prospectus supplement, a series of debt securities may be
reopened to issue additional debt securities of such series.
The
prospectus supplement relating to a particular series of debt securities will set forth:
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whether the debt securities are senior or subordinated;
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the offering price;
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the title;
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any limit on the aggregate principal amount;
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the person who shall be entitled to receive interest, if other than the record holder on the record date;
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the date or dates the principal will be payable;
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-
the interest rate or rates, which may be fixed or variable, if any, the date from which interest will accrue, the interest payment dates and
the regular record dates, or the method for calculating the dates and rates;
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the place where payments may be made;
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any mandatory or optional redemption provisions or sinking fund provisions and any applicable redemption or purchase prices associated with
these provisions;
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if issued other than in denominations of U.S. $1,000 or any multiple of U.S. $1,000, the denominations in which the debt securities shall be
issuable;
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if applicable, the method for determining how the principal, premium, if any, or interest will be calculated by reference to an index or
formula;
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if other than U.S. currency, the currency or currency units in which principal, premium, if any, or interest will be payable and whether we or
a holder may elect payment to be made in a different currency;
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-
the portion of the principal amount that will be payable upon acceleration of maturity, if other than the entire principal amount;
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-
if the principal amount payable at stated maturity will not be determinable as of any date prior to stated maturity, the amount or method for
determining the amount which will be deemed to be the principal amount;
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-
if applicable, whether the debt securities shall be subject to the defeasance provisions described below under "Satisfaction and discharge;
defeasance" or such other defeasance provisions specified in the applicable prospectus supplement for the debt securities;
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any conversion or exchange provisions;
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-
whether the debt securities will be issuable in the form of a global security;
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the deletion, addition or change in any event of default;
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-
any change or modification to the subordination provisions applicable to the subordinated debt securities if different from those described
below under "Subordinated debt securities;"
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-
any deletion, addition or change in the covenants set forth in the indenture;
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-
any paying agents, authenticating agents, security registrars or other agents for the debt securities, if other than the trustee;
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-
any provisions relating to any security provided for the debt securities, including any provisions regarding the circumstances under which
collateral may be released or substituted;
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-
any provisions relating to guaranties for the securities and any circumstances under which there may be additional obligors;
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-
any provisions granting special rights to holders when a specified event occurs;
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-
any special tax provisions that apply to the debt securities;
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-
with respect to any debt securities that do not bear interest, the dates for certain required reports to the applicable trustee;
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-
any and all additional, eliminated or changed terms that will apply to the debt securities; and
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-
any other terms of such debt securities.
Unless
otherwise specified in the prospectus supplement, the debt securities will be registered debt securities. Debt securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at time of issuance is below market rates. The U.S. federal income tax considerations applicable to debt securities sold at a discount
will be described in the applicable prospectus supplement.
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Exchange and Transfer
Debt securities may be transferred or exchanged at the office of the security registrar or at the office of any transfer agent designated by us.
We
will not impose a service charge for any transfer or exchange, but we may require holders to pay any tax or other governmental charges associated with any transfer or exchange.
In
the event of any partial redemption of debt securities of any series, we will not be required to:
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-
issue, register the transfer of, or exchange, any debt security of that series during a period beginning at the opening of business
15 days before the day of mailing of a notice of redemption and ending at the close of business on the day of the mailing; or
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-
register the transfer of or exchange any debt security of that series selected for redemption, in whole or in part, except the unredeemed
portion being redeemed in part.
We
will appoint the trustee as the initial security registrar. Any transfer agent, in addition to the security registrar initially designated by us, will be named in the prospectus
supplement. We may designate additional transfer agents or change transfer agents or change the office of the transfer agent. However, we will be required to maintain a transfer agent in each place of
payment for the debt securities of each series.
Global Securities
The debt securities of any series may be represented, in whole or in part, by one or more global securities. Each global security
will:
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-
be registered in the name of a depositary, or its nominee, that we will identify in a prospectus supplement;
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be deposited with the depositary or nominee or custodian; and
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bear any required legends.
No
global security may be exchanged in whole or in part for debt securities registered in the name of any person other than the depositary or any nominee
unless:
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the depositary has notified us that it is unwilling or unable to continue as depositary or has ceased to be qualified to act as depositary;
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an event of default is continuing with respect to the debt securities of the applicable series; or
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any other circumstance described in a prospectus supplement has occurred permitting or requiring the issuance of any such security.
As
long as the depositary, or its nominee, is the registered owner of a global security, the depositary or nominee will be considered the sole owner and holder of the debt securities
represented by the global security for all purposes under the indentures. Except in the above limited circumstances, owners of beneficial interests in a global security will not
be:
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entitled to have the debt securities registered in their names;
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-
entitled to physical delivery of certificated debt securities; or
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-
considered to be holders of those debt securities under the indenture.
Payments
on a global security will be made to the depositary or its nominee as the holder of the global security. Some jurisdictions have laws that require that certain purchasers of
securities take
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physical
delivery of such securities in definitive form. These laws may impair the ability to transfer beneficial interests in a global security.
Institutions
that have accounts with the depositary or its nominee are referred to as "participants." Ownership of beneficial interests in a global security will be limited to
participants and to persons that may hold beneficial interests through participants. The depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of debt securities represented by the global security to the accounts of its participants.
Ownership
of beneficial interests in a global security will be shown on and effected through records maintained by the depositary, with respect to participants' interests, or any
participant, with respect to interests of persons held by participants on their behalf.
Payments,
transfers and exchanges relating to beneficial interests in a global security will be subject to policies and procedures of the depositary. The depositary policies and
procedures may change from time to time. Neither any trustee nor we will have any responsibility or liability for the depositary's or any participant's records with respect to beneficial interests in
a global security.
Payment and Paying Agents
Unless otherwise indicated in a prospectus supplement, the provisions described in this paragraph will apply to the debt securities. Payment of
interest on a debt security on any interest payment date will be made to the person in whose name the debt security is registered at the close of business on the regular record date. Payment on debt
securities of a particular series will be payable at the office of a paying agent or paying agents designated by us. However, at our option, we may pay interest by mailing a check to the record
holder. The trustee will be designated as our initial paying agent.
We
may also name any other paying agents in a prospectus supplement. We may designate additional paying agents, change paying agents or change the office of any paying agent. However, we
will be required to maintain a paying agent in each place of payment for the debt securities of a particular series.
All
moneys paid by us to a paying agent for payment on any debt security that remain unclaimed for a period ending the earlier of:
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-
10 business days prior to the date the money would be turned over to the applicable state; or
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-
at the end of two years after such payment was due,
will
be repaid to us thereafter. The holder may look only to us for such payment.
No Protection in the Event of a Change of Control
Unless otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will not
contain any provisions that may afford holders of the debt securities protection in the event we have a change in control or in the event of a highly leveraged transaction, whether or not such
transaction results in a change in control.
Covenants
Unless otherwise indicated in a prospectus supplement with respect to a particular series of debt securities, the debt securities will not
contain any financial or restrictive covenants.
Consolidation, Merger and Sale of Assets
Unless we indicate otherwise in a prospectus supplement with respect to a particular series of debt securities, we may not consolidate with or
merge into any other person (other than one of our
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subsidiaries),
in a transaction in which we are not the surviving corporation, or convey, transfer or lease our properties and assets substantially as an entirety to, any person (other than one of our
subsidiaries), unless:
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-
the successor entity, if any, is a U.S. corporation, limited liability company, partnership, trust or other business entity;
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-
the successor entity assumes our obligations on the debt securities and under the indentures;
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-
immediately after giving effect to the transaction, no default or event of default shall have occurred and be continuing; and
-
-
certain other conditions specified in the indenture are met.
Events of Default
Unless we indicate otherwise in a prospectus supplement, the following will be events of default for any series of debt securities under the
indentures:
-
(1)
-
we
fail to pay principal of or any premium on any debt security of that series when due;
-
(2)
-
we
fail to pay any interest on any debt security of that series for 30 days after it becomes due;
-
(3)
-
we
fail to deposit any sinking fund payment when due;
-
(4)
-
we
fail to perform any other covenant in the indenture and such failure continues for 90 days after we are given the notice required in the indentures; and
-
(5)
-
certain
events involving our bankruptcy, insolvency or reorganization.
Additional
or different events of default applicable to a series of debt securities may be described in a prospectus supplement. An event of default of one series of debt securities is
not necessarily an event of default for any other series of debt securities.
The
trustee may withhold notice to the holders of any default, except defaults in the payment of principal, premium, if any, interest, any sinking fund installment on, or with respect to
any conversion right of, the debt securities of such series. However, the trustee must consider it to be in the interest of the holders of the debt securities of such series to withhold this notice.
Unless
we indicate otherwise in a prospectus supplement, if an event of default, other than an event of default described in clause (5) above, shall occur and be continuing with
respect to any series of debt securities, either the trustee or the holders of at least 25 percent in aggregate principal amount of the outstanding securities of that series may declare the
principal amount and premium, if any, of the debt securities of that series, or if any debt securities of that series are original issue discount securities, such other amount as may be specified in
the applicable prospectus supplement, in each case together with accrued and unpaid interest, if any, thereon, to be due and payable immediately.
Unless
we indicate otherwise in a prospectus supplement, if an event of default described in clause (5) above shall occur, the principal amount and premium, if any, of all the
debt securities of that series, or if any debt securities of that series are original issue discount securities, such other amount as may be specified in the applicable prospectus supplement, in each
case together with accrued and unpaid interest, if any, thereon, will automatically become immediately due and payable. Any payment by us
on the subordinated debt securities following any such acceleration will be subject to the subordination provisions described below under "Subordinated debt securities."
Notwithstanding
the foregoing, each indenture will provide that we may, at our option, elect that the sole remedy for an event of default relating to our failure to comply with our
obligations described under the section titled "Reports" below or our failure to comply with the requirements of
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Section 314(a)(1)
of the Trust Indenture Act will for the first 270 days after the occurrence of such an event of default consist exclusively of the right to receive additional interest
on the relevant series of debt securities at an annual rate equal to (i) 0.25% of the principal amount of such series of debt securities for the first 270 days after the occurrence of
such event of default and (ii) 0.50% of the principal amount of such series of debt securities from the 181st day to, and including, the 270th day after the occurrence of such
event of default, which we call "additional interest." If we so elect, the additional interest will accrue on all outstanding debt securities from and including the date on which such event of default
first occurs until such violation is cured or waived and shall be payable on each relevant interest payment date to holders of record on the regular record date immediately preceding the interest
payment date. On the 271st day after such event of default (if such violation is not cured or waived prior to such 271st day), the debt securities will be subject to acceleration as
provided above. In the event we do not elect to pay additional interest upon any such event of default in accordance with this paragraph, the debt securities will be subject to acceleration as
provided above.
In
order to elect to pay the additional interest as the sole remedy during the first 270 days after the occurrence of any event of default relating to the failure to comply with
the reporting obligations in accordance with the preceding paragraph, we must notify all holders of debt securities and the trustee and paying agent of such election prior to the close of business on
the first business day following the date on which such event of default occurs. Upon our failure to timely give such notice or pay the additional interest, the debt securities will be immediately
subject to acceleration as provided above.
After
acceleration, the holders of a majority in aggregate principal amount of the outstanding securities of that series may, under certain circumstances, rescind and annul such
acceleration if all events of default, other than the non-payment of accelerated principal, or other specified amounts or interest, have been cured or waived.
Other
than the duty to act with the required care during an event of default, the trustee will not be obligated to exercise any of its rights or powers at the request of the holders
unless the holders shall have offered to the trustee reasonable indemnity. Generally, the holders of a majority in aggregate principal amount of the outstanding debt securities of any series will have
the right to direct the time,
method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee.
A
holder of debt securities of any series will not have any right to institute any proceeding under the indentures, or for the appointment of a receiver or a trustee, or for any other
remedy under the indentures, unless:
-
(1)
-
the
holder has previously given to the trustee written notice of a continuing event of default with respect to the debt securities of that series;
-
(2)
-
the
holders of at least 25 percent in aggregate principal amount of the outstanding debt securities of that series have made a written request and have
offered reasonable indemnity to the trustee to institute the proceeding; and
-
(3)
-
the
trustee has failed to institute the proceeding and has not received direction inconsistent with the original request from the holders of a majority in aggregate
principal amount of the outstanding debt securities of that series within 60 days after the original request.
Holders
may, however, sue to enforce the payment of principal, premium or interest on any debt security on or after the due date or to enforce the right, if any, to convert any debt
security (if the debt security is convertible) without following the procedures listed in (1) through (3) above.
We
will furnish the trustee an annual statement from our officers as to whether or not we are in default in the performance of the conditions and covenants under the indenture and, if
so, specifying all known defaults.
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Modification and Waiver
Unless we indicate otherwise in a prospectus supplement, the applicable trustee and we may make modifications and amendments to an indenture
with the consent of the holders of a majority in aggregate principal amount of the outstanding securities of each series affected by the modification or amendment.
We
may also make modifications and amendments to the indentures for the benefit of holders without their consent, for certain purposes including, but not limited
to:
-
-
to evidence the succession of another person to AXT, or successive successions, and the assumption by any such successor of the covenants of
AXT in the indentures;
-
-
adding covenants under the indentures;
-
-
adding events of default under the indentures;
-
-
making certain changes to facilitate the issuance of the debt securities;
-
-
to add to, change or eliminate any of the provisions of the indentures or more series of securities, provided that any such addition, change or
elimination (A) shall neither (i) apply to any security of any series created prior to the execution of such supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the holder of any such security with respect to such provision or (B) shall become effective only when there is no such security outstanding;
-
-
securing the debt securities;
-
-
providing for guaranties of, or additional obligors on, the debt securities;
-
-
to establish the form or term of debt securities as permitted by the indentures;
-
-
providing for a successor trustee or additional trustees;
-
-
conforming the indenture to the description of the debt securities set forth in this prospectus or the accompanying prospectus supplement;
-
-
curing any ambiguity, defect or inconsistency; provided that such action shall not adversely affect the interest of the holders in any material
respect;
-
-
permitting or facilitating the defeasance and discharge of the debt securities;
-
-
make such other provisions in regard to matters or questions arising under the indentures or under any supplemental indentures as our board of
directors may deem necessary or desirable, and which does not in each case adversely affect the interests of the holders of the debt securities of a series; and
-
-
comply with requirements of the SEC in order to effect or maintain the qualifications of the indentures under the Trust Indenture Act of 1939,
as amended.
However,
neither the trustee nor we may make any modification or amendment without the consent of the holder of each outstanding security of that series affected by the modification or
amendment if such modification or amendment would:
-
-
change the stated maturity of the principal of, or any installment of principal or interest on, any debt security;
-
-
reduce the principal, premium, if any, or interest on any debt security or any amount payable upon redemption or repurchase, whether at our
option or the option of any holder, or reduce the amount of any sinking fund payments;
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-
-
reduce the principal of an original issue discount security or any other debt security payable on acceleration of maturity;
-
-
change the place of payment or the currency in which any debt security is payable;
-
-
impair the right to enforce any payment after the stated maturity or redemption date;
-
-
if subordinated debt securities, modify the subordination provisions in a materially adverse manner to the holders;
-
-
adversely affect the right to convert any debt security if the debt security is a convertible debt security; or
-
-
change the provisions in the indenture that relate to modifying or amending the indenture.
Satisfaction and Discharge; Defeasance
We may be discharged from our obligations on the debt securities, subject to limited exceptions, of any series that have matured or will mature
or be redeemed within one year if we deposit enough money with the trustee to pay all the principal, interest and any premium due to the stated maturity date or redemption date of the debt securities.
Each
indenture contains a provision that permits us to elect either or both of the following:
-
-
We may elect to be discharged from all of our obligations, subject to limited exceptions, with respect to any series of debt securities then
outstanding. If we make this election, the holders of the debt securities of the series will not be entitled to the benefits of the indenture, except for the rights of holders to receive payments on
debt securities or the registration of transfer and exchange of debt securities and replacement of lost, stolen or mutilated debt securities.
-
-
We may elect to be released from our obligations under some or all of any financial or restrictive covenants applicable to the series of debt
securities to which the election relates and from the consequences of an event of default resulting from a breach of those covenants.
To
make either of the above elections, we must irrevocably deposit in trust with the trustee enough money to pay in full the principal, interest and premium on the debt securities. This
amount may be made in cash and/or U.S. government obligations or, in the case of debt securities denominated in a currency other than U.S. dollars, cash in the currency in which such series of
securities is denominated and/or foreign government obligations. As a condition to either of the above elections, for debt securities denominated in U.S. dollars we must deliver to the trustee an
opinion of counsel that the holders of the debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the action.
With
respect to debt securities of any series that are denominated in a currency other than United States dollars, "foreign government obligations"
means:
-
-
direct obligations of the government that issued or caused to be issued the currency in which such securities are denominated and for the
payment of which obligations its full faith and credit is pledged, or, with respect to debt securities of any series which are denominated in Euros, direct obligations of certain members of the
European Union for the payment of which obligations the full faith and credit of such members is pledged, which in each case are not callable or redeemable at the option of the issuer thereof; or
-
-
obligations of a person controlled or supervised by or acting as an agency or instrumentality of a government described in the bullet above the
timely payment of which is unconditionally guaranteed as a full faith and credit obligation by such government, which are not callable or redeemable at the option of the issuer thereof.
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Reports
The indentures provide that any reports or documents that we file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act will
be filed with the trustee within 15 days after the same is filed with the SEC. Documents filed by us with the SEC via the EDGAR system will be deemed filed with the trustee as of the time such
documents are filed with the SEC.
Notices
Notices to holders will be given by mail to the addresses of the holders in the security register.
Governing Law
The indentures and the debt securities will be governed by, and construed under, the laws of the State of New York.
No Personal Liability of Directors, Officers, Employees and Stockholders
No incorporator, stockholder, employee, agent, officer, director or subsidiary of ours will have any liability for any obligations of ours, or
because of the creation of any indebtedness under the debt securities, the indentures or supplemental indentures. The indentures provide that all such liability is expressly waived and released as a
condition of, and as a consideration for, the execution of such indentures and the issuance of the debt securities.
Regarding the Trustee
The indentures limit the right of the trustee, should it become our creditor, to obtain payment of claims or secure its claims.
The
trustee will be permitted to engage in certain other transactions with us. However, if the trustee acquires any conflicting interest, and there is a default under the debt securities
of any series for which it is trustee, the trustee must eliminate the conflict or resign.
Subordinated Debt Securities
The following provisions will be applicable with respect to each series of subordinated debt securities, unless otherwise stated in the
prospectus supplement relating to that series of subordinated debt securities.
The
indebtedness evidenced by the subordinated debt securities of any series is subordinated, to the extent provided in the subordinated indenture and the applicable prospectus
supplement, to the prior payment in full, in cash or other payment satisfactory to the holders of senior debt, of all senior debt, including any senior debt securities.
Upon
any distribution of our assets upon any dissolution, winding up, liquidation or reorganization, whether voluntary or involuntary, marshalling of assets, assignment for the benefit
of creditors, or in bankruptcy, insolvency, receivership or other similar proceedings, payments on the subordinated debt securities will be subordinated in right of payment to the prior payment in
full in cash or other payment satisfactory to holders of senior debt of all senior debt.
In
the event of any acceleration of the subordinated debt securities of any series because of an event of default with respect to the subordinated debt securities of that series, holders
of any senior debt would be entitled to payment in full in cash or other payment satisfactory to holders of senior debt of all senior debt before the holders of subordinated debt securities are
entitled to receive any payment or distribution.
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In
addition, the subordinated debt securities will be structurally subordinated to all indebtedness and other liabilities of our subsidiaries, including trade payables and lease
obligations. This occurs because our right to receive any assets of our subsidiaries upon their liquidation or reorganization, and your right to participate in those assets, will be effectively
subordinated to the claims of that subsidiary's creditors, including trade creditors, except to the extent that we are recognized as a creditor of such subsidiary. If we are recognized as a creditor
of that subsidiary, our claims would still be subordinate to any security interest in the assets of the subsidiary and any indebtedness of the subsidiary senior to us.
We
are required to promptly notify holders of senior debt or their representatives under the subordinated indenture if payment of the subordinated debt securities is accelerated because
of an event of default.
Under
the subordinated indenture, we may also not make payment on the subordinated debt securities if:
-
-
a default in our obligations to pay principal, premium, if any, interest or other amounts on our senior debt occurs and the default continues
beyond any applicable grace period, which we refer to as a payment default; or
-
-
any other default occurs and is continuing with respect to designated senior debt that permits holders of designated senior debt to accelerate
its maturity, which we refer to as a non-payment default, and the trustee receives a payment blockage notice from us or some other person permitted to give the notice under the subordinated indenture.
We
will resume payments on the subordinated debt securities:
-
-
in case of a payment default, when the default is cured or waived or ceases to exist, and
-
-
in case of a nonpayment default, the earlier of when the default is cured or waived or ceases to exist or 179 days after the receipt of
the payment blockage notice.
No
new payment blockage period may commence on the basis of a nonpayment default unless 365 days have elapsed from the effectiveness of the immediately prior payment blockage
notice. No nonpayment default that existed or was continuing on the date of delivery of any payment blockage notice to the trustee shall be the basis for a subsequent payment blockage notice.
As
a result of these subordination provisions, in the event of our bankruptcy, dissolution or reorganization, holders of senior debt may receive more, ratably, and holders of the
subordinated debt securities may receive less, ratably, than our other creditors. The subordination provisions will not prevent the occurrence of any event of default under the subordinated indenture.
The
subordination provisions will not apply to payments from money or government obligations held in trust by the trustee for the payment of principal, interest and premium, if any, on
subordinated debt securities pursuant to the provisions described under the section titled "Satisfaction and discharge; defeasance," if the subordination provisions were not violated at the time the
money or government obligations were deposited into trust.
If
the trustee or any holder receives any payment that should not have been made to them in contravention of subordination provisions before all senior debt is paid in full in cash or
other payment satisfactory to holders of senior debt, then such payment will be held in trust for the holders of senior debt.
Senior
debt securities will constitute senior debt under the subordinated indenture.
Additional
or different subordination provisions may be described in a prospectus supplement relating to a particular series of debt securities.
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"Designated senior debt" means our obligations under any particular senior debt in which the instrument creating or evidencing the same or the
assumption or guarantee thereof, or related agreements or documents to which we are a party, expressly provides that such indebtedness shall be designated senior debt for purposes of the subordinated
indenture. The instrument, agreement or other document evidencing any designated senior debt may place limitations and conditions on the right of such senior debt to exercise the rights of designated
senior debt.
"Indebtedness"
means the following, whether absolute or contingent, secured or unsecured, due or to become due, outstanding on the date of the indenture for such series of securities or
thereafter created, incurred or assumed:
-
-
our indebtedness evidenced by a credit or loan agreement, note, bond, debenture or other written obligation;
-
-
all of our obligations for money borrowed;
-
-
all of our obligations evidenced by a note or similar instrument given in connection with the acquisition of any businesses, properties or
assets of any kind;
-
-
our obligations:
-
-
as lessee under leases required to be capitalized on the balance sheet of the lessee under generally accepted accounting
principles, or
-
-
as lessee under leases for facilities, capital equipment or related assets, whether or not capitalized, entered into or leased for
financing purposes;
-
-
all of our obligations under interest rate and currency swaps, caps, floors, collars, hedge agreements, forward contracts or similar agreements
or arrangements;
-
-
all of our obligations with respect to letters of credit, bankers' acceptances and similar facilities, including reimbursement obligations with
respect to the foregoing;
-
-
all of our obligations issued or assumed as the deferred purchase price of property or services, but excluding trade accounts payable and
accrued liabilities arising in the ordinary course of business;
-
-
all obligations of the type referred to in the above clauses of another person, the payment of which, in either case, we have assumed or
guaranteed, for which we are responsible or liable, directly or indirectly, jointly or severally, as obligor, guarantor or otherwise, or which are secured by a lien on our property; and
-
-
renewals, extensions, modifications, replacements, restatements and refundings of, or any indebtedness or obligation issued in exchange for,
any such indebtedness or obligation described in the above clauses of this definition.
"Senior
debt" means the principal of, premium, if any, and interest, including all interest accruing subsequent to the commencement of any bankruptcy or similar proceeding, whether or
not a claim for post-petition interest is allowable as a claim in any such proceeding, and rent payable on or in connection with, and all fees and other amounts payable in connection with, our
indebtedness. However, senior debt shall not include:
-
-
any debt or obligation if its terms or the terms of the instrument under which or pursuant to which it is issued expressly provide that it
shall not be senior in right of payment to the subordinated debt securities or expressly provide that such indebtedness is on the same basis or "junior" to the subordinated debt securities; or
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-
-
debt to any of our subsidiaries, a majority of the voting stock of which is owned, directly or indirectly, by us.
"Subsidiary"
means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by us or by one or more of our other subsidiaries or by a
combination of us and our other subsidiaries. For purposes of this definition, "voting stock" means stock or other similar interests which ordinarily has or have voting power for the election of
directors, or persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by reason of any contingency.
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DESCRIPTION OF THE UNITS
We may issue units comprised of one or more of the other classes of securities described in this prospectus in any combination. Each unit will
be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included
security. The units may be issued under unit agreements to be entered into between us and a unit agent, as detailed in the prospectus supplement relating to the units being offered. The prospectus
supplement will describe:
-
-
the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances the
securities comprising the units may be held or transferred separately;
-
-
a description of the terms of any unit agreement governing the units;
-
-
a description of the provisions for the payment, settlement, transfer or exchange of the units;
-
-
a discussion of material federal income tax considerations, if applicable; and
-
-
whether the units if issued as a separate security will be issued in fully registered or global form.
The
descriptions of the units in this prospectus and in any prospectus supplement are summaries of the material provisions of the applicable agreements. These descriptions do not restate
those agreements in their entirety and may not contain all the information that you may find useful. We urge you to read the applicable agreements because they, and not the summaries, define your
rights as holders of the units. For more information, please review the forms of the relevant agreements, which will be filed with the SEC promptly after the offering of units and will be available as
described in the section titled "Where You Can Find More Information."
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PLAN OF DISTRIBUTION
We may sell the securities offered through this prospectus (1) to or through underwriters or dealers, (2) directly to purchasers,
including our affiliates, (3) through agents, or (4) through a combination of any these methods. The securities may be distributed at a fixed price or prices, which may be changed,
market prices prevailing at the time of sale, prices related to the prevailing market prices, or negotiated prices. The prospectus supplement will include the following
information:
-
-
the terms of the offering;
-
-
the names of any underwriters or agents;
-
-
the name or names of any managing underwriter or underwriters;
-
-
the purchase price of the securities;
-
-
the net proceeds from the sale of the securities;
-
-
any delayed delivery arrangements;
-
-
any underwriting discounts, commissions and other items constituting underwriters' compensation;
-
-
any initial public offering price;
-
-
any discounts or concessions allowed or reallowed or paid to dealers; and
-
-
any commissions paid to agents.
Sale through Underwriters or Dealers
If underwriters are used in the sale, the underwriters will acquire the securities for their own account, including through underwriting,
purchase, security lending or repurchase agreements with us. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions. Underwriters
may sell the securities in order to facilitate transactions in any of our other securities (described in this prospectus or otherwise), including other public or private transactions and short sales.
Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless
otherwise indicated in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions, and the underwriters will be obligated to
purchase all the offered securities if they purchase any of them. The underwriters may change from time to time any initial public offering price and any discounts or concessions allowed or reallowed
or paid to dealers. The prospectus supplement will include the names of the principal underwriters the respective amount of securities underwritten, the nature of the obligation of the underwriters to
take the securities and the nature of any material relationship between an underwriter and us.
If
dealers are used in the sale of securities offered through this prospectus, we will sell the securities to them as principals. They may then resell those securities to the public at
varying prices determined by
the dealers at the time of resale. The prospectus supplement will include the names of the dealers and the terms of the transaction.
Direct Sales and Sales through Agents
We may sell the securities offered through this prospectus directly. In this case, no underwriters or agents would be involved. Such securities
may also be sold through agents designated from time to time. The prospectus supplement will name any agent involved in the offer or sale of the offered securities and will describe any commissions
payable to the agent by us. Unless otherwise indicated in
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the
prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.
We
may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of those
securities. The terms of any such sales will be described in the prospectus supplement.
Market Making, Stabilization and Other Transactions
Unless the applicable prospectus supplement states otherwise, each series of offered securities will be a new issue and will have no established
trading market. We may elect to list any series of offered securities on an exchange. Any underwriters that we use in the sale of offered securities may make a market in such securities, but may
discontinue such market making at any time without notice. Therefore, we cannot assure you that the securities will have a liquid trading market.
Any
underwriter may also engage in stabilizing transactions, syndicate covering transactions and penalty bids in accordance with Rule 104 under the Securities Exchange Act of
1934, as amended. Stabilizing
transactions involve bids to purchase the underlying security in the open market for the purpose of pegging, fixing or maintaining the price of the securities. Syndicate covering transactions involve
purchases of the securities in the open market after the distribution has been completed in order to cover syndicate short positions.
Penalty
bids permit the underwriters to reclaim a selling concession from a syndicate member when the securities originally sold by the syndicate member are purchased in a syndicate
covering transaction to cover syndicate short positions. Stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the securities to be higher than it would be
in the absence of the transactions. The underwriters may, if they commence these transactions, discontinue them at any time.
Derivative Transactions and Hedging
We, the underwriters or other agents may engage in derivative transactions involving the securities. These derivatives may consist of short sale
transactions and other hedging activities. The underwriters or agents may acquire a long or short position in the securities, hold or resell securities acquired and purchase options or futures on the
securities and other derivative instruments with returns linked to or related to changes in the price of the securities. In order to facilitate these derivative transactions, we may enter into
security lending or repurchase agreements with the underwriters or agents. The underwriters or agents may effect the derivative transactions through sales of the securities to the public, including
short sales, or by lending the securities in order to facilitate short sale transactions by others. The underwriters or agents may also use the securities purchased or borrowed from us or others (or,
in the case of derivatives, securities received from us in settlement of those derivatives) to directly or indirectly settle sales of the securities or close out any related open borrowings of the
securities.
Electronic Auctions
We may also make sales through the Internet or through other electronic means. Since we may from time to time elect to offer securities directly
to the public, with or without the involvement of agents, underwriters or dealers, utilizing the Internet or other forms of electronic bidding or ordering systems for the pricing and allocation of
such securities, you should pay particular attention to the description of that system we will provide in a prospectus supplement.
Such
electronic system may allow bidders to directly participate, through electronic access to an auction site, by submitting conditional offers to buy that are subject to acceptance by
us, and which may directly affect the price or other terms and conditions at which such securities are sold. These
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bidding
or ordering systems may present to each bidder, on a so-called "real-time" basis, relevant information to assist in making a bid, such as the clearing spread at which the offering would be
sold, based on the bids submitted, and whether a bidder's individual bids would be accepted, prorated or rejected. For example, in the case of a debt security, the clearing spread could be indicated
as a number of "basis points" above an index treasury note. Of course, many pricing methods can and may also be used.
Upon
completion of such an electronic auction process, securities will be allocated based on prices bid, terms of bid or other factors. The final offering price at which securities would
be sold and the allocation of securities among bidders would be based in whole or in part on the results of the Internet or other electronic bidding process or auction.
General Information
Agents, underwriters, and dealers may be entitled, under agreements entered into with us, to indemnification by us against certain liabilities,
including liabilities under the Securities Act.
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LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed upon by Wilson Sonsini Goodrich & Rosati, Professional
Corporation, Palo Alto, California.
EXPERTS
The consolidated financial statements of AXT, Inc. as of December 31, 2015 and 2014 and for each of the three years in the period
ended December 31, 2015, and the effectiveness of control over financial reporting, incorporated in this Registration Statement on Form S-3 by reference to the Annual Report on
Form 10-K for the year ended December 31, 2015, have been so incorporated in reliance on the reports of Burr Pilger Mayer, Inc., an independent registered public accounting firm,
given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports, proxy statements and other information with the SEC. Our SEC filings are available to the public
over the Internet at the SEC's website at http://www.sec.gov. You may also read and copy any document we file at the SEC's Public Reference Room at 100 F Street, NE, Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on
Form 8-K, including any amendments to those reports, and other information that we file with or furnish to the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act can also be
accessed free of charge through the Internet. These filings will be available as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
We
have filed with the SEC a registration statement under the Securities Act of 1933 relating to the offering of these securities. The registration statement, including the attached
exhibits, contains additional relevant information about us and the securities. This prospectus does not contain all of the information set forth in the registration statement. You can obtain a copy
of the registration statement, at prescribed rates, from the SEC at the address listed above. The registration statement and the documents referred to below under "Incorporation by Reference" are also
available on our Internet website, www.axt.com. We have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be a part of this
prospectus.
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INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to incorporate by reference into this prospectus certain information we file with it, which means that we can disclose
important information by referring you to those documents. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will
automatically update and supersede information contained in this prospectus and any accompanying prospectus supplement. We incorporate by reference the documents listed below that we have previously
filed with the SEC (excluding any portions of any Form 8-K that are not deemed "filed" pursuant to the General Instructions of Form 8-K):
-
-
our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed on March 11, 2016, including the
information specifically incorporated by reference into the Annual Report on Form 10-K from our definitive proxy statement on Schedule 14A, filed on April 13, 2016;
-
-
our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2016 and June 30, 2016, filed on May 6,
2016 and August 5, 2016, respectively;
-
-
our Current Reports on Form 8-K filed on January 6, 2016, February 26, 2016 and May 27, 2016; and
-
-
the description of our common stock contained in our Registration Statement on Form 8-A, including any amendment or report filed for the
purpose of updating such description.
We
also incorporate by reference into this prospectus additional documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
completion or termination of the offering, including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration
statement, but excluding any information deemed furnished and not filed with the SEC. Any statements contained in a previously filed document incorporated by reference into this prospectus is deemed
to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus, or in a subsequently filed document also incorporated by reference herein,
modifies or supersedes that statement.
This
prospectus may contain information that updates, modifies or is contrary to information in one or more of the documents incorporated by reference in this prospectus. You should rely
only on the information incorporated by reference or provided in this prospectus. We have not authorized anyone else to provide you with different information. You should not assume that the
information in this prospectus is accurate as of any date other than the date of this prospectus or the date of the documents incorporated by reference in this prospectus.
We
will provide to each person, including any beneficial owner, to whom this prospectus is delivered, upon written or oral request, at no cost to the requester, a copy of any and all of
the information that is incorporated by reference in this prospectus.
Requests
for such documents should be directed to:
AXT, Inc.
4281 Technology Drive
Fremont, California 94538
Attn: Investor Relations
You
may also access the documents incorporated by reference in this prospectus through our website at www.axt.com. Except for the specific incorporated documents listed above, no
information available on or through our website shall be deemed to be incorporated in this prospectus or the registration statement of which it forms a part. The information that is contained
on, or can be accessed through our website is not incorporated into this prospectus, and the inclusion of our website address is an inactive textual reference only.
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PRELIMINARY PROSPECTUS SUPPLEMENT
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