What changed in AXT INC's 10-K — 2024 vs 2025
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Paragraph-level year-over-year comparison of AXT INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.
+327 added−274 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-14)
Top changes in AXT INC's 2025 10-K
327 paragraphs added · 274 removed · 226 edited across 1 sections
- Item 1A. Risk Factors+327 / −274 · 226 edited
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
226 edited+101 added−48 removed370 unchanged
Item 1A. Risk Factors
Risk Factors — what could go wrong, per management
226 edited+101 added−48 removed370 unchanged
2024 filing
2025 filing
Biggest changeThe following table represents Short-term bank loans as of December 31, 2024 and 2023 (in thousands, except interest rate data): Loan Interest December 31, December 31, Subsidiary Bank Detail Rate Start Date Due Date 2024 2023 Tongmei Bank of China (1) $ 1,848 3.5 % January-23 January-24 $ - $ 1,795 2,184 2.8 % March-23 March-24 - 2,118 376 2.7 % September-23 September-24 - 386 876 3.5 % November-23 November-24 - 876 1,003 3.5 % November-23 November-24 - 1,003 Bank of China (2) 2,911 3.5 % January-23 January-24 - 2,825 Bank of China (5) 1,426 2.4 % September-24 September-25 1,370 - 1,370 2.4 % November-24 November-25 1,370 - 685 2.7 % November-24 November-25 685 - Bank of Communications (1) 1,455 3.3 % January-23 January-24 - 1,414 1,380 3.8 % May-23 May-24 - 1,414 1,373 3.8 % July-23 May-24 - 1,414 1,376 3.0 % May-24 May-25 1,370 - 2,480 3.0 % June-24 May-25 2,466 - China Merchants Bank (1) 4,367 3.7 % January-23 January-24 - 4,235 1,386 3.5 % January-24 January-25 1,370 - 692 3.5 % February-24 February-25 685 - 692 3.5 % April-24 April-25 685 - Bank of Beijing (3) 2,290 4.2 % January-23 January-24 - 2,220 3,541 3.2 % June-23 May-24 - 3,626 1,380 3.2 % June-23 February-24 - 1,414 1,414 3.0 % December-23 December-24 - 1,414 3,600 3.0 % March-24 February-25 3,565 - 3,580 3.0 % June-24 June-25 3,565 - Industrial Bank (1) 2,757 4.3 % June-23 June-24 - 2,825 2,744 4.3 % July-23 July-24 - 2,825 2,744 4.3 % September-23 September-24 - 2,825 2,851 3.9 % September-24 September-25 2,740 - 2,679 3.9 % October-24 October-25 2,679 - 1,440 3.2 % November-24 November-25 1,440 - NingBo Bank (1) 2,744 4.2 % August-23 September-24 - 2,820 1,271 4.3 % November-23 November-24 - 1,271 2,825 4.3 % December-23 December-24 - 2,825 1,647 4.3 % January-24 January-25 1,630 - 1,258 4.3 % May-24 March-25 1,255 - 1,822 3.9 % November-24 November-25 1,822 - 550 3.9 % December-24 December-25 550 - Industrial and Commercial Bank of China (1) 2,744 3.3 % September-23 September-24 - 2,825 2,851 3.3 % September-24 September-25 2,740 - NanJing Bank (1) 2,752 3.8 % October-23 October-24 - 2,752 China Citic Bank (1) 2,752 2.9 % June-24 June-25 2,740 - 2,851 2.9 % July-24 July-25 2,740 - 1,426 2.9 % September-24 September-25 1,370 - Agricultural Bank of China (1) 1,235 2.6 % November-24 November-25 1,235 - 137 2.6 % December-24 December-25 137 - BoYu Industrial and Commercial Bank of China (4) 1,414 2.7 % December-23 December-24 - 1,414 Industrial and Commercial Bank of China (1) 1,426 2.8 % September-24 September-25 1,370 - Bank of China (1) 1,204 2.4 % January-23 January-24 - 849 1,145 2.3 % September-24 September-25 1,096 - 274 2.4 % December-24 December-25 274 - NingBo Bank (1) 1,414 3.3 % November-23 May-24 - 1,414 Industrial Bank (1) 688 3.6 % September-23 September-24 - 708 1,370 2.7 % November-24 November-25 1,370 - Bank of Communications (1) 1,414 3.0 % November-23 May-24 - 1,414 274 3.0 % May-24 May-25 274 - NanJing Bank (1) 1,370 2.8 % December-24 December-25 1,370 - Loan Balance $ 45,963 $ 52,921 65 Table of Contents Collateral for the above bank loans and line of credit (1) Not collateralized.
Biggest changeThe following table represents Short-term bank loans as of December 31, 2025 and 2024 (in thousands, except interest rate data): Interest December 31, December 31, Bank Rate Start Date Due Date 2025 2024 Bank of China (1) 2.3 % September-24 September-25 $ — $ 1,096 2.4 % December-24 December-25 — 274 2.7 % January-25 January-26 722 — 2.7 % March-25 March-26 605 — 2.6 % July-25 July-26 114 — 2.6 % September-25 September-26 722 — 2.4 % September-25 September-26 1,433 — 2.2 % September-25 September-26 858 — Bank of China (3) 2.4 % September-24 September-25 — 1,370 2.4 % November-24 November-25 — 1,370 2.7 % November-24 November-25 — 685 2.5 % February-25 February-26 2,582 — Bank of Communications (1) 3.0 % May-24 May-25 — 1,644 3.0 % June-24 May-25 — 2,466 2.6 % June-25 June-26 2,861 — 2.4 % December-25 June-26 1,433 — China Merchants Bank (1) 3.5 % January-24 January-25 — 1,370 3.5 % February-24 February-25 — 685 3.5 % April-24 April-25 — 685 2.9 % January-25 January-26 3,275 — 2.9 % March-25 March-26 1,022 — 2.4 % June-25 June-26 432 — 2.3 % September-25 September-26 1,003 — Bank of Beijing (2) 3.0 % March-24 February-25 — 3,565 3.0 % June-24 June-25 — 3,565 2.7 % March-25 March-26 2,295 — 2.6 % June-25 March-26 1,430 — 2.6 % June-25 June-26 3,716 — Industrial Bank (1) 3.9 % September-24 September-25 — 2,740 3.9 % October-24 October-25 — 2,679 3.2 % November-24 November-25 — 1,440 2.7 % November-24 November-25 — 1,370 3.1 % September-25 September-26 145 — 2.7 % October-25 October-26 5,474 — 2.7 % November-25 November-26 1,672 — 2.2 % November-25 November-26 1,433 — Industrial Bank (5) 3.1 % October-25 October-26 149 — 3.1 % November-25 November-26 158 — 3.1 % December-25 December-26 190 — Industrial Bank (4) 3.8 % March-25 March-26 1,433 — NingBo Bank (1) 4.3 % January-24 January-25 — 1,630 4.3 % May-24 March-25 — 1,255 3.9 % November-24 November-25 — 1,822 3.9 % December-24 December-25 — 550 3.9 % January-25 January-26 1,655 — 3.9 % March-25 March-26 722 — 3.9 % Apr-25 March-26 645 — 3.8 % June-25 June-26 593 — 3.8 % July-25 July-26 645 — 3.8 % August-25 July-26 436 — 3.2 % December-25 December-26 1,315 — Industrial and Commercial Bank of China (1) 3.3 % September-24 September-25 — 2,740 2.8 % September-24 September-25 — 1,370 2.4 % August-25 August-26 1,433 — 2.4 % September-25 August-26 1,433 — 2.2 % September-25 September-26 1,433 — 2.3 % September-25 September-26 286 — 2.3 % October-25 September-26 2,575 — China Citic Bank (1) 2.9 % June-24 June-25 — 2,740 2.9 % July-24 July-25 — 2,740 2.9 % September-24 September-25 — 1,370 2.3 % September-25 September-26 5,005 — Agricultural Bank of China (1) 2.6 % November-24 November-25 — 1,235 2.6 % December-24 December-25 — 137 2.3 % December-25 December-26 929 — Bank of Hangzhou (1) 2.5 % September-25 September-26 4,288 — NanJing Bank (1) 2.8 % December-24 December-25 — 1,370 Loan Balance $ 58,550 $ 45,963 Collateral for the above bank loans and line of credit (1) Not collateralized.
To ensure compliance in trade matters we have consulted with legal experts and incurred additional legal costs. The rapid pace of change and new regulations in trade matters results in more internal administrative review and costs. In late 2024 and early 2025, a new round of trade restrictions was announced by China and the United States.
To ensure compliance in trade matters we have consulted with legal experts and incurred additional legal costs. The rapid pace of change and new regulations in trade matters results in more internal administrative review and costs. In late 2024 and early 2025, a new round of trade restrictions was announced by China and the United States.
On December 3, 2024 China issued further rules restricting exports of materials that can typically be used in military applications including antimony, gallium, germanium and other superhard materials. The effective date was December 3, 2024, the same day as the announcement itself.
On December 3, 2024 China issued further rules restricting exports of materials that can typically be used in military applications including antimony, gallium, germanium and other superhard materials. The effective date was December 3, 2024, the same day as the announcement itself.
In the future, if our manufacturing operations were closed for a significant period or we experience difficulty in shipping our products, we could lose revenue and market share, which would depress our financial performance and could be difficult to recapture.
In the future, if our manufacturing operations were closed for a significant period or we experience difficulty in shipping our products, we could lose revenue and market share, which would depress our financial performance and could be difficult to recapture.
The PRC central government may also exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our common stock.
The PRC central government may also exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of our common stock.
Total cash, restricted cash and cash equivalents, short-term and long-term investments decreased by $18.4 million in 2024. As of December 31, 2024, our principal source of liquidity was cash, restricted cash and cash equivalents of $33.8 million. In 2024, cash, restricted cash and cash equivalents decreased by $16.3 million and short-term investments decreased by $2.1 million.
Total cash, restricted cash and cash equivalents, short-term and long-term investments decreased by $18.4 million in 2024. As of December 31, 2024, our principal source of liquidity was $33.8 million. In 2024, cash, restricted cash and cash equivalents decreased by $16.3 million and short-term investments decreased by $2.1 million.
By the terms of the Series A preferred stock, so long as any shares of Series A preferred stock are outstanding, neither the Company nor any subsidiary of the Company shall redeem, repurchase or otherwise acquire any shares of common stock, unless all accrued dividends on the Series A preferred stock have been paid.
By the terms of the Series A preferred stock, so long as any shares of Series A preferred stock are outstanding, neither the Company nor any subsidiary of the Company shall redeem, repurchase or otherwise acquire any shares of common stock, unless all accrued dividends on the Series A preferred stock have been paid.
We monitor our investments for impairment and record reductions in carrying value when events or changes in circumstances indicate that the carrying value may not be recoverable.
We monitor our investments for impairment and record reductions in carrying value when events or changes in circumstances indicate that the carrying value may not be recoverable.
Shutdowns or underutilizing our manufacturing facilities may result in declines in our gross margins. ● Escalating trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business. ● If China places restrictions on freight and transportation routes and on ports of entry and departure this could result in shipping delays or increased costs for shipping. ● Our international operations are exposed to potential adverse tax consequence in China. ● Our gross margin has fluctuated historically and may decline or increase due to several factors.
Shutdowns or underutilizing our manufacturing facilities may result in declines in our gross margins. ● Escalating and volatile trade tariffs, import restrictions, export restrictions, Chinese regulations or other trade barriers may materially harm our business. ● If China places restrictions on freight and transportation routes and on ports of entry and departure this could result in shipping delays or increased costs for shipping. ● Our international operations are exposed to potential adverse tax consequence in China. ● Our gross margin has fluctuated historically and may decline or increase due to several factors.
Our quarterly and annual revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including: ● inventory corrections within the technology sector; ● our ability to develop, manufacture and deliver high quality products in a timely and cost-effective manner; ● unforeseen disruptions at our new sites; ● disruptions in manufacturing if air pollution, other environmental hazards, or outbreaks of contagious diseases causes the Chinese government to order work stoppages; ● fluctuation of our manufacturing yields; 40 Table of Contents ● decreases in the prices of our or our competitors’ products; ● fluctuations in demand for our products; ● the volume and timing of orders from our customers, and cancellations, push-outs and delays of customer orders once booked; ● decline in general economic conditions or downturns in the industry in which we compete; ● expansion of our manufacturing capacity; ● expansion of our operations in China; ● limited availability and increased cost of raw materials; ● costs incurred in connection with any future acquisitions of businesses or technologies; and ● increases in our expenses, including expenses for research and development.
Our quarterly and annual revenue and operating results have varied significantly in the past and may vary significantly in the future due to a number of factors, including: ● inventory corrections within the technology sector; ● our ability to develop, manufacture and deliver high quality products in a timely and cost-effective manner; 39 Table of Contents ● unforeseen disruptions at our new sites; ● disruptions in manufacturing if air pollution, other environmental hazards, or outbreaks of contagious diseases causes the Chinese government to order work stoppages; ● fluctuation of our manufacturing yields; ● decreases in the prices of our or our competitors’ products; ● fluctuations in demand for our products; ● the volume and timing of orders from our customers, and cancellations, push-outs and delays of customer orders once booked; ● decline in general economic conditions or downturns in the industry in which we compete; ● expansion of our manufacturing capacity; ● expansion of our operations in China; ● limited availability and increased cost of raw materials; ● costs incurred in connection with any future acquisitions of businesses or technologies; and ● increases in our expenses, including expenses for research and development.
The political tensions between China and the U.S. remain high and tariffs and controls on exports are changing and fluid. There can be no assurances that Tongmei will receive China permits to export our wafer substrates or that China will not adopt additional export control regulations that affect our business, financial condition and results of operations.
The trade and political tensions between China and the U.S. remain high and controls on exports and tariffs are changing and fluid. There can be no assurances that Tongmei will receive China permits to export our wafer substrates or that China will not adopt additional export control regulations that affect our business, financial condition and results of operations.
Reciprocally, there can be no assurance that the U.S. will allow products to be imported into the U.S. from China or what the tariff charge rate might be. Changes in China’s political, social, regulatory or economic environments may affect our financial performance. Our financial performance may be affected by changes in China’s political, social, regulatory or economic environments.
Reciprocally, there can be no assurance that the U.S. will allow products to be imported into the U.S. from China or what the tariff charge rate might be. Changes in China ’ s political, social, regulatory or economic environments may affect our financial performance. Our financial performance may be affected by changes in China’s political, social, regulatory or economic environments.
The 883,000 shares of Series A preferred stock issued and outstanding as of December 31, 2024 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.
The 883,000 shares of Series A preferred stock issued and outstanding as of December 31, 2025 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.
For additional information regarding whether any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the risk factor entitled “Cyber-attacks, system security risks and data protection issues could disrupt our internal operations and cause a reduction in revenue, increase in expenses, negatively impact our results of operation or result in other adverse consequences.” Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
For additional information regarding whether any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K , including the risk factor entitled “Cyber-attacks, system security risks and data protection issues could disrupt our internal operations and cause a reduction in revenue, increase in expenses, negatively impact our results of operation or result in other adverse consequences.” 46 Table of Contents Governance One of the key functions of our Board of Directors is informed oversight of our risk management process, including risks from cybersecurity threats.
Although the audit report is prepared by an independent registered public accounting firm who is currently inspected fully by the PCAOB, there is no guarantee that future audit reports will be prepared by an independent registered public accounting firm that is completely inspected by the PCAOB.
Although our audit report is prepared by an independent registered public accounting firm who is currently inspected fully by the PCAOB, there is no guarantee that future audit reports will be prepared by an independent registered public accounting firm that is completely inspected by the PCAOB.
The amended complaint asserts that the Defendants breached their fiduciary duties to the Company based on the allegations asserted in the original complaint in the putative shareholder class action. On November 27, 2024, Defendants again moved to dismiss.
The amended complaint asserted that the Defendants breached their fiduciary duties to the Company based on the allegations asserted in the original complaint in the putative shareholder class action. On November 27, 2024, Defendants again moved to dismiss.
We believe these claims to be meritless and intend to vigorously defend against them. 47 Table of Contents Item 4. Mine Safety Disclosures Not applicable. 48 Table of Contents PART II Item 5.
We believe these claims to be meritless and intend to vigorously defend against them. Item 4. Mine Safety Disclosures Not applicable. 48 Table of Contents PART II Item 5.
The market price of our common stock could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions upon, as well as negative investor sentiment towards, companies with operations in China that are listed in the United States, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance. 39 Table of Contents IV.
The market price of our common stock could be adversely affected as a result of anticipated negative impacts of these executive or legislative actions upon, as well as negative investor sentiment towards, companies with operations in China that are listed in the United States, regardless of whether these executive or legislative actions are implemented and regardless of our actual operating performance. 38 Table of Contents IV.
As of December 31, 2024, we do not have any outstanding purchase orders that will incur a penalty if canceled by the Company. Recent Accounting Pronouncements Recent accounting pronouncements are detailed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K. Item 7A.
As of December 31, 2025, we do not have any outstanding purchase orders that will incur a penalty if canceled by the Company. Recent Accounting Pronouncements Recent accounting pronouncements are detailed in Note 1 to our consolidated financial statements included in this Annual Report on Form 10-K. Item 7A.
Existing or future changes in laws or regulations in the United States and China may require us to incur significant expenditures or liabilities, or may restrict our operations.
Existing or future changes in laws or regulations in the United States or China may require us to incur significant expenditures or liabilities, or may restrict our operations.
Assets held for sale are carried at the lower of carrying value or estimated net realizable value. We had no “Assets held for sale” or any impairment of long-lived assets on the consolidated balance sheets as of December 31, 2024 and 2023. Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718, Stock-based Compensation .
Assets held for sale are carried at the lower of carrying value or estimated net realizable value. We had no “Assets held for sale” or any impairment of long-lived assets on the consolidated balance sheets as of December 31, 2025 and 2024. Stock-Based Compensation We account for stock-based compensation in accordance with ASC Topic 718, Stock-based Compensation .
Unpredictable fluctuations in our operating results, changes and events in our end markets and global trends cause volatility in our stock price. ● We face litigation and legal proceedings which could adversely affect our business, financial condition, results of operations or cash flows. ● Changes in China’s political, social, regulatory or economic environments may affect our financial performance. ● The Chinese central government is increasingly aware of air pollution and other forms of environmental pollution and their reform efforts can impact our manufacturing, including intermittent mandatory shutdowns.
Unpredictable fluctuations in our operating results, export permit requirements, changes and events in our end markets and global trends cause volatility in our stock price. ● We face litigation and legal proceedings which could adversely affect our business, financial condition, results of operations or cash flows. ● Changes in China’s political, social, regulatory or economic environments may affect our financial performance. ● The Chinese central government is increasingly aware of air pollution and other forms of environmental pollution and their reform efforts can impact our manufacturing, including intermittent mandatory shutdowns.
Managing our overseas operations presents challenges, including periodic regional economic downturns, trade balance issues, threats of trade wars, varying business conditions and demands, political instability, variations in enforcement of intellectual property and contract rights in different jurisdictions, differences in the ability to develop relationships with suppliers and other local businesses, changes in U.S. and international laws and regulations, including import and export restrictions, fluctuations in interest and currency exchange rates, the ability to provide sufficient levels of technical support in different locations, cultural differences and perceptions of U.S. companies, shipping delays and terrorist acts or acts of war, natural disasters and epidemics or pandemics, such as COVID-19, among other risks.
Managing our overseas operations presents challenges, including export permit requirements, periodic regional economic downturns, trade balance issues, threats of trade wars, varying business conditions and demands, political instability, variations in enforcement of intellectual property and contract rights in different jurisdictions, differences in the ability to develop relationships with suppliers and other local businesses, changes in U.S. and international laws and regulations, including import tariffs, fluctuations in interest and currency exchange rates, the ability to provide sufficient levels of technical support in different locations, cultural differences and perceptions of U.S. companies, shipping delays and terrorist acts or acts of war, natural disasters and epidemics or pandemics, such as COVID-19, among other risks.
During 2013 and 2015, we repurchased shares of our outstanding common stock. As of December 31, 2015, the Series A preferred stock had cumulative dividends of $2.9 million and we include such cumulative dividends in “Accrued liabilities” in our consolidated balance sheets . No shares were repurchased during 2024, 2023 and 2022 under this program.
During 2013 and 2015, we repurchased shares of our outstanding common stock. As of December 31, 2015, the Series A preferred stock had cumulative dividends of $2.9 million and we include such cumulative dividends in “Accrued liabilities” in our consolidated balance sheets. No shares were repurchased during 2025, 2024 and 2023 under this program.
Other factors affecting the ability of the manufacturers downstream in our supply chain to introduce and market their products successfully, include: ● worldwide economic and political conditions and their impact on levels of business spending; ● the competition such manufacturers face in their particular industries; ● end of life obsolescence of products containing devices built on our wafers; ● the technical, manufacturing, sales, marketing and management capabilities of such manufacturers; ● the financial and other resources of such manufacturers; and ● the inability of such manufacturers to sell their products if they infringe third-party intellectual property rights.
Other factors affecting the ability of the manufacturers downstream in our supply chain to introduce and market their products successfully, include: ● worldwide economic and political conditions and their impact on levels of business spending; 25 Table of Contents ● the competition such manufacturers face in their particular industries; ● end of life obsolescence of products containing devices built on our wafers; ● the technical, manufacturing, sales, marketing and management capabilities of such manufacturers; ● the financial and other resources of such manufacturers; and ● the inability of such manufacturers to sell their products if they infringe third-party intellectual property rights.
If we, or any of our partially owned supply chain companies, fail to comply with applicable regulations, we could be subject to substantial liability for clean-up efforts, personal injury, fines or suspension or be forced to close or temporarily cease our operations, and/or suspend or terminate the development, 43 Table of Contents manufacture or use of certain of our products, the use of our facilities, or the use of our real property, each of which could have a material adverse effect on our business, financial condition and results of operations.
If we, or any of our partially owned supply chain companies, fail to comply with applicable regulations, we could be subject to substantial liability for clean-up efforts, personal injury, fines or suspension or be forced to close or temporarily cease our operations, and/or suspend or terminate the development, manufacture or use of certain of our products, the use of our facilities, or the use of our real property, each of which could have a material adverse effect on our business, financial condition and results of operations.
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2024 based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Our products are manufactured using complex crystal growth and wafer processing technologies, and the number of usable wafer substrates we produce can fluctuate as a result of many factors, including: ● poor control of furnace temperature and pressure during crystal growth; ● impurities in the materials used; 22 Table of Contents ● contamination of the manufacturing environment; ● quality control and inconsistency in quality levels; ● lack of automation and inconsistent processing requiring manual manufacturing steps; ● substrate breakage during the manufacturing process; and ● equipment failure, power outages or variations in the manufacturing process.
Our products are manufactured using complex crystal growth and wafer processing technologies, and the number of usable wafer substrates we produce can fluctuate as a result of many factors, including: ● poor control of furnace temperature and pressure during crystal growth; ● impurities in the materials used; ● contamination of the manufacturing environment; ● quality control and inconsistency in quality levels; ● lack of automation and inconsistent processing requiring manual manufacturing steps; ● substrate breakage during the manufacturing process; and ● equipment failure, power outages or variations in the manufacturing process.
The aggregate redemption amount is approximately $49 million. Tongmei submitted its IPO application to the Shanghai Stock Exchange, and it was formally accepted for review on January 10, 2022. The Shanghai Stock Exchange approved the IPO application on July 12, 2022. On August 63 Table of Contents 1, 2022, the CSRC accepted for review Tongmei’s IPO application.
The aggregate redemption amount is approximately $49 million. 65 Table of Contents Tongmei submitted its IPO application to the Shanghai Stock Exchange, and it was formally accepted for review on January 10, 2022. The Shanghai Stock Exchange approved the IPO application on July 12, 2022. On August 1, 2022, the CSRC accepted for review Tongmei’s IPO application.
The following are some examples of these provisions: ● the division of our Board of Directors into three separate classes, each with three-year terms; 41 Table of Contents ● the right of our Board of Directors to elect a director to fill a space created by a board vacancy or the expansion of the board; ● the ability of our Board of Directors to alter our amended and restated bylaws; and ● the requirement that only our Board of Directors or the holders of at least 10% of our outstanding shares may call a special meeting of our stockholders.
The following are some examples of these provisions: ● the division of our Board of Directors into three separate classes, each with three-year terms; ● the right of our Board of Directors to elect a director to fill a space created by a board vacancy or the expansion of the board; ● the ability of our Board of Directors to alter our amended and restated bylaws; and ● the requirement that only our Board of Directors or the holders of at least 10% of our outstanding shares may call a special meeting of our stockholders.
Although we have operations in China, a jurisdiction where the PCAOB was, until recently, unable to conduct inspections without the approval of the Chinese government authorities, our independent registered public accounting firm is currently inspected fully by the PCAOB.
Although we have operations in China, a jurisdiction where the PCAOB was, until 2022, unable to conduct inspections without the approval of the Chinese government authorities, our independent registered public accounting firm is currently inspected fully by the PCAOB.
Management has concluded that our internal control over financial reporting was effective as of December 31, 2024. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during our fourth quarter of fiscal 2024 that has materially affected, or is reasonably likely to materially affect, AXT’s internal control over financial reporting.
Management has concluded that our internal control over financial reporting was effective as of December 31, 2025. Changes in Internal Control over Financial Reporting There was no change in our internal control over financial reporting during our fourth quarter of fiscal 2025 that has materially affected, or is reasonably likely to materially affect, AXT’s internal control over financial reporting.
Our raw material companies experience selling price volatility and purchase price volatility in acquiring base materials. We consolidate the results of several of these raw material companies, and any reduction in their gross margins could have a significant, adverse impact on our overall gross margins.
Our raw material companies experience selling price volatility and purchase price volatility in acquiring base materials. We consolidate the results of two of these raw material companies, and any reduction in their gross margins could have a significant, adverse impact on our overall gross margins.
We believe that we do not require any permissions or approvals from the CSRC or other PRC central government authorities to complete a public offering of securities in the U.S. because we are a Delaware corporation 32 Table of Contents with our principal corporate office in Fremont, California and the PRC laws and regulations that govern the listing of securities on a U.S. securities exchange apply to PRC companies.
We believe that we do not require any permissions or approvals from the CSRC or other PRC central government authorities to complete a public offering of securities in the U.S. because we are a Delaware corporation with our principal corporate office in Fremont, California and the PRC laws and regulations that govern the listing of securities on a U.S. securities exchange apply to PRC companies.
Properties Our principal properties as of March 14, 2025 are as follows: Square Location Feet Principal Use Ownership Fremont, CA 19,467 Administration Operating lease, expires November 2028 Beijing, China 141,524 Production and Administration Owned by AXT / Tongmei DingXing, China 193,621 Production Owned by AXT / Tongmei Kazuo, China 528,390 Production Owned by AXT / Tongmei Kazuo, China 75,703 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd.* Tianjin, China 146,012 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd., * Kazuo, China 190,597 Production Owned by ChaoYang JinMei Gallium Ltd.,* * Raw material companies consolidated in our consolidated financial statements.
Properties Our principal properties as of March 17, 2026 are as follows: Square Location Feet Principal Use Ownership Fremont, CA 19,467 Administration Operating lease, expires November 2028 Beijing, China 141,524 Production and Administration Owned by AXT / Tongmei DingXing, China 193,621 Production Owned by AXT / Tongmei Kazuo, China 528,390 Production Owned by AXT / Tongmei Kazuo, China 75,703 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd.* Tianjin, China 146,012 Production and Administration Owned by Beijing BoYu Semiconductor Vessel Craftwork Technology Co., Ltd., * Kazuo, China 190,597 Production Owned by ChaoYang JinMei Gallium Ltd.,* * Raw material companies consolidated in our consolidated financial statements.
The listing of Tongmei on the STAR Market will not change the status of AXT as a U.S. public company. There can be no assurances that Tongmei will complete its IPO in 2025 or at all.
The listing of Tongmei on the STAR Market will not change the status of AXT as a U.S. public company. There can be no assurances that Tongmei will complete its IPO in 2026 or at all.
Defendants’ motion to dismiss is fully briefed and pending before the Court. Derivative Action On August 22, 2024, a derivative lawsuit was filed in the Northern District of California by an alleged shareholder against Morris S. Young, our Chief Executive Officer, Gary L. Fischer, our Chief Financial Officer, current directors David C.
Defendants’ motion to dismiss is fully briefed and pending before the Court. Derivative Action On August 22, 2024, a derivative lawsuit was filed in the Northern District of California by an alleged shareholder against Morris S. Young, our Chief Executive Officer, Gary L. Fischer, our Chief Financial Officer, then-serving directors David C.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material 33 Table of Contents inventories to continue manufacturing operations. In addition, during COVID-19, travel restrictions between China and the U.S. were disrupted and this impacted our efficiency.
If one or more of our key suppliers is required to close for an extended period, we might not have enough raw material inventories to continue manufacturing operations. In addition, during COVID-19, travel restrictions between China and the U.S. were disrupted and this impacted our efficiency.
As of December 31, 2024 and 2023, the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
As of December 31, 2025 and 2024, the net change in fair value from the placement of the hedge to settlement at each month end during the quarter had a de minimis impact to the consolidated results.
Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable assurance that the control system’s objectives will be met. 69 Table of Contents Management’s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Management’s assessment of the effectiveness of our internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable assurance that the control system’s objectives will be met. 71 Table of Contents Management ’ s Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.
Any future unexpected changes in demand or increases in costs of production that cause us to take additional charges for un-saleable, obsolete or excess inventory, or to reduce inventory values, would adversely affect our results of operations. The effect of terrorist threats and actions on the general economy could decrease our revenue.
Any future unexpected changes in demand or increases in costs of production that cause us to take additional charges for un-saleable, obsolete or excess inventory, or to reduce inventory values, would adversely affect our results of operations. 29 Table of Contents The effect of terrorist threats and actions on the general economy could decrease our revenue.
If SOI or new silicon-based technologies gain more widespread market acceptance, or are used in more applications, our sales of specialty material-based substrates could be reduced and our business and operating results could be significantly and adversely affected. 20 Table of Contents Our gross margin has fluctuated historically and may decline due to several factors.
If SOI or new silicon-based technologies gain more widespread market acceptance, or are used in more applications, our sales of specialty material-based substrates could be reduced and our business and operating results could be significantly and adversely affected. Our gross margin has fluctuated historically and may decline due to several factors.
If one of our key customers is required to close for an extended period, this may delay the placement of new orders. As a result, our revenue would decline. If we have low product yields, the shipment of our products may be delayed and our product cost and operating results may be adversely impacted.
If one of our key customers is required to close for an extended period, this may delay the placement of new orders. As a result, our revenue would decline. 22 Table of Contents If we have low product yields, the shipment of our products may be delayed and our product cost and operating results may be adversely impacted.
This is an ongoing iterative research and development process performed by our China team in collaboration with our manufacturing managers. New products must meet customer needs and compete effectively on quality, price and performance. The markets for our products are characterized by rapid technological change, changing customer needs and evolving industry standards.
This is an ongoing iterative research and development process performed by our China team in collaboration with our product marketing managers. New products must meet customer needs and compete effectively on quality, price and performance. The markets for our products are characterized by rapid technological change, changing customer needs and evolving industry standards.
Our inability or failure to do so could harm our business, consolidated results of operations or financial condition. Item 8. Consolidated Financial Statements and Supplement ary Data The consolidated financial statements, related notes thereto and financial statement schedules required by this item are listed and set forth beginning on page 72, and are incorporated by reference here. Item 9.
Our inability or failure to do so could harm our business, consolidated results of operations or financial condition. Item 8. Consolidated Financial Statements and Supplementary Data The consolidated financial statements, related notes thereto and financial statement schedules required by this item are listed and set forth beginning on page 72, and are incorporated by reference here. Item 9.
Our customers are not obligated to purchase a specified quantity of our products or to provide us with binding forecasts of product purchases. 26 Table of Contents In addition, our customers may reduce, delay or cancel orders. In the past, we have experienced a slowdown in bookings, significant push-outs and cancellation of orders from customers.
Our customers are not obligated to purchase a specified quantity of our products or to provide us with binding forecasts of product purchases. In addition, our customers may reduce, delay or cancel orders. In the past, we have experienced a slowdown in bookings, significant push-outs and cancellation of orders from customers.
Customers establish difficult to meet product specifications regarding defect densities, surface flatness, diameter size and other specifications pushing the boundaries of material science. We may not achieve these specifications. ● We are subject to foreign exchange gains and losses that materially impact our consolidated s tatements of operations.
Customers establish difficult to meet product specifications regarding defect densities, surface flatness, diameter size and other specifications pushing the boundaries of material science. We may not achieve these specifications. ● We are subject to foreign exchange gains and losses that materially impact our consolidated statements of operations.
For the years ended December 31, 2024, 2023 and 2022, the aggregate dividends paid to us, directly or to an intermediate entity within our corporate structure, by our PRC subsidiaries and PRC raw material joint ventures were approximately $2.4 million, $4.3 million and $2.9 million, respectively.
For the years ended December 31, 2025, 2024 and 2023, the aggregate dividends paid to us, directly or to an intermediate entity within our corporate structure, by our PRC subsidiaries and PRC raw material joint ventures were approximately $0.9 million, $2.4 million and $4.3 million, respectively.
Share-based awards granted include stock options and restricted stock awards. We utilize the Black-Scholes option 54 Table of Contents pricing model to estimate the grant date fair value of stock options, which requires the input of highly subjective assumptions, including estimating stock price volatility and expected term.
Share-based awards granted include stock options and restricted stock awards. We utilize the Black-Scholes option pricing model to estimate the grant date fair value of stock options, which requires the input of highly subjective assumptions, including estimating stock price volatility and expected term.
The trade and political tensions between China and the U.S. remain high and controls on exports and tariffs are changing and fluid. Silicon substrates (wafers) are significantly lower in cost compared to substrates made from specialty materials, such as those that we produce, and new silicon-based technologies could enable silicon-based substrates to replace specialty material-based substrates for certain applications.
The trade and political tensions between China and the U.S. remain high and controls on exports and tariffs are changing and fluid. 20 Table of Contents Silicon substrates (wafers) are significantly lower in cost compared to substrates made from specialty materials, such as those that we produce, and new silicon-based technologies could enable silicon-based substrates to replace specialty material-based substrates for certain applications.
This could result in the formation of new competitors that would compete against us and adversely affect our financial results. The average selling prices of our substrates may decline over relatively short periods, which may reduce our revenue and gross margins.
This could result in the formation of new competitors that would compete against us and adversely affect our financial results. 26 Table of Contents The average selling prices of our substrates may decline over relatively short periods, which may reduce our revenue and gross margins.
During the second quarter of 2023, one of our equity investments assessed one of its equity investments was fully impaired, leading to a $754,000 impairment charge in our financial results for the second quarter of 2023. In the fourth quarter of 2023, we divested another equity investment, incurring a net impairment charge of $1.1 million.
During the second quarter of 2023, one of our equity investments determined that one of its equity investments was fully impaired, leading to a $754,000 impairment charge in our financial results for the second quarter of 2023. In the fourth quarter of 2023, we divested another equity investment, incurring a net impairment charge of $1.1 million.
This required Tongmei to seek permits from the applicable Chinese authorities to export gallium arsenide and germanium substrates. Since that time, a general escalation has been underway with further increases to the tariffs from the US and additional export controls from China. The escalating requirements resulted in a new layer of administration within our company.
This required Tongmei to seek permits from the applicable Chinese authorities to export gallium arsenide and germanium substrates. Since that time, a general escalation has been underway with further increases to the tariffs from the US and additional export controls from China, including for InP wafers. The escalating requirements resulted in a new layer of administration within our company.
To manage our business effectively, we may need to implement additional management information systems, further develop our operating, administrative, financial and accounting systems and controls, add experienced senior level managers, and maintain close coordination among our executive, engineering, accounting, marketing, sales and operations organizations. Item 1B. Unresolved Staff Comments None. Item 1C.
To manage our business effectively, we may need to implement additional management information systems, further develop our operating, administrative, financial and accounting systems and controls, add experienced senior level managers, and maintain close coordination among our executive, engineering, accounting, marketing, sales and operations organizations. 45 Table of Contents Item 1B. Unresolved Staff Comments None. Item 1C.
During 2015, we repurchased approximately 908,000 shares at an average price of $2.52 per share for a total purchase price of approximately $2.3 million under the stock repurchase program. No shares were repurchased during 2024 or 2023 under this program. As of December 31, 2024 and 2023, approximately $2.7 million remained available for future repurchases under this program, respectively.
During 2015, we repurchased approximately 908,000 shares at an average price of $2.52 per share for a total purchase price of approximately $2.3 million under the stock repurchase program. No shares were repurchased during 2025 or 2024 under this program. As of December 31, 2025 and 2024, approximately $2.7 m illion remained available for future repurchases under this program, respectively.
We derive a significant portion of our revenue from international sales, and our ability to sustain and increase our international sales involves significant risks. Approximately 90% of our revenue is from international sales.
We derive a significant portion of our revenue from international sales, and our ability to sustain and increase our international sales involves significant risks. Approximately 98% of our revenue is from international sales.
For the years ended December 31, 2024 and 2023, the royalty expense under the Cross License Agreement was not considered material to our consolidated financial statements. 66 Table of Contents Land Purchase and Investment Agreement We have established a wafer processing production line in Dingxing, China.
For the years ended December 31, 2025 and 2024, the royalty expense under the Cross License Agreement was not considered material to our consolidated financial statements. 68 Table of Contents Land Purchase and Investment Agreement We have established a wafer processing production line in Dingxing, China.
Accordingly, in order to meet customer supply obligations, our supply chain may have to source materials from another independent third-party supplier, resulting in higher costs and reduced gross margin. The China central government has tightened control over hazardous chemicals and other hazardous materials.
Accordingly, in order to meet customer supply obligations, our supply chain may have to source materials from another independent third-party supplier, resulting in higher costs and reduced gross margin. 23 Table of Contents The China central government has tightened control over hazardous chemicals and other hazardous materials.
One customer accounted for more than 10% of our accounts receivable as of December 31, 2024 and no customer accounted for more than 10% of our accounts receivable as of December 31, 2023. 68 Table of Contents Equity Risk As part of our supply chain strategy, we maintain minority investments in privately held raw material companies located in China either invested directly by us and our subsidiaries or through our consolidated joint venture companies.
One customer accounted for more than 10% of our accounts receivable as of December 31, 2025 and 2024. 70 Table of Contents Equity Risk As part of our supply chain strategy, we maintain minority investments in privately held raw material companies located in China either invested directly by us and our subsidiaries or through our consolidated joint venture companies.
All of our wafer substrates are manufactured in China and in the years 2024, 2023 and 2022, approximately 8%, 10% and 14% of our revenue, respectively, were generated by sales to customers in North America, primarily in the U.S. In the years 2024, 2023 and 2022, we paid approximately $1.0 million, $1.0 million and $3.3 million, respectively, in tariffs.
All of our wafer substrates are manufactured in China and in the years 2025, 2024 and 2023, approximately 2%, 8% and 10% of our revenue, respectively, were generated by sales to customers in North America, primarily in the U.S. In the years 2025, 2024 and 2023, we paid approximately $0.3 million, $1.0 million and $1.0 million, respectively, in tariffs.
The PRC central government may also seek to significantly limit or completely hinder our ability to offer 34 Table of Contents or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
The PRC central government may also seek to significantly limit or completely hinder our ability to offer or continue to offer our securities to investors and cause the value of such securities to significantly decline or be worthless.
Total rent expenses under these operating leases charged to cost of revenue were approximately $275,000, $285,000 and $303,000 for the years ended December 31, 2024, 2023 and 2022, respectively, primarily related to the nitrogen system at our facility in Dingxing.
Total rent expenses under these operating leases charged to cost of revenue were approximately $273,000, $275,000 and $285,000 for the years ended December 31, 2025, 2024 and 2023, respectively, primarily related to the nitrogen system at our facility in Dingxing.
Warranty costs are accrued at the time revenue is recognized. As of December 31, 2024 and 2023, accrued product warranties totaled $451,000 and $703,000, respectively. The decrease in accrued product warranties is primarily attributable to decreased claims for quality issues experienced by customers.
Warranty costs are accrued at the time revenue is recognized. As of December 31, 2025 and 2024, accrued product warranties totaled $411,000 and $451,000, respectively. The decrease in accrued product warranties is primarily attributable to decreased claims for quality issues experienced by customers.
Uncertain global economic and political conditions or low or negative growth in China, Europe or the United States, along with volatility in the financial markets and U.S. financial system, increasing national debt and fiscal concerns in various regions and the adoption and availability of fiscal and monetary stimulus measures to counteract the impact of the COVID-19 pandemic, pose challenges to our industry.
Uncertain global economic and political conditions or low or negative growth in China, Europe or the United States, along with volatility in the financial markets and U.S. financial system, increasing national debt and fiscal concerns in various regions and the adoption and availability of fiscal and monetary stimulus measures, pose challenges to our industry.
Companies) and the RDG MidCap Technology Index for the period commencing December 31, 2018 and ending December 31, 2024. Pursuant to SEC rules, our performance graph must include both a broad market equity index and a published industry or line-of-business index (or a self-constructed peer index) in addition to our common stock.
Companies) and the RDG MidCap Technology Index for the period commencing December 31, 2018 and ending December 31, 2025. 49 Table of Contents Pursuant to SEC rules, our performance graph must include both a broad market equity index and a published industry or line-of-business index (or a self-constructed peer index) in addition to our common stock.
Enforcing or defending our proprietary technology is expensive, could cause us to divert resources and may not prove successful. Our protective measures may prove inadequate to protect our proprietary rights, and if we fail to enforce or protect our rights, we could lose valuable assets. VI.
Enforcing or defending our proprietary technology is expensive, could cause us to divert resources and may not prove successful. Our protective measures may prove inadequate to protect our proprietary rights, and if we fail to enforce or protect our rights, we could lose valuable assets. 43 Table of Contents VI.
Total rent expenses under these operating leases charged to selling, general and administrative were approximately $624,000, $510,000 and $458,000 for the years ended December 31, 2024, 2023 and 2022, respectively, primarily related to our Fremont facility.
Total rent expenses under these operating leases charged to selling, general and administrative were approximately $597,000, $624,000 and $510,000 for the years ended December 31, 2025, 2024 and 2023, respectively, primarily related to our Fremont facility.
Gross margin in 2024 was 24.0% as compared to 17.6% in 2023. The increase in gross profit is attributed to higher revenue resulting in fixed costs being spread over more units and a favorable change in product mix. Gross profit decreased $38.8 million in 2023 as compared to 2022.
Gross margin in 2024 was 24.0% as compared to 17.6% in 2023. The increase in gross profit is attributed to higher revenue resulting in fixed costs being spread over more units and a favorable change in product mix.
Dividends paid to the Company are subject to a 10% PRC withholding tax. The Company is required to obtain approval from SAFE to transfer funds in or out of the PRC. SAFE requires a valid agreement to approve the transfers, which are processed through a bank.
Dividends paid to the Company are subject to a 10% PRC withholding tax. The Company is required to obtain approval from the State Administration of Foreign Exchange (“SAFE”) to transfer funds in or out of the PRC. SAFE requires a valid agreement to approve the transfers, which are processed through a bank.
At quarter end and year end any foreign currency hedges not settled are netted on the consolidated balance sheet and consolidated balance sheet, respectively, and classified as Level 3 assets and 67 Table of Contents liabilities.
At quarter end and year end any foreign currency hedges not settled are netted on the consolidated balance sheet and consolidated balance sheet, respectively, and classified as Level 3 assets and liabilities.
Such matters could draw down our cash reserves, which could adversely affect our financial condition, require us to incur debt, reduce our value and possibly impinge our ability to raise debt and equity funding in the future, at a time when we might need to raise additional cash or elect to raise additional cash.
Such matters could draw down our cash reserves, which could adversely affect our financial condition, reduce the value of our common stock and possibly impinge our ability to raise debt and equity funding in the future, at a time when we might need to raise additional cash or elect to raise additional cash.
Market for Registrant’s Common Equity, Related Stockhol der Matters and Issuer Purchases of Equity Securities Our common stock has been trading publicly on the NASDAQ Global Market (NASDAQ) under the symbol “AXTI” since May 20, 1998, the date we consummated our initial public offering, and beginning on January 3, 2011, our common stock began trading on the NASDAQ Global Select Market under the same symbol.
Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock has been trading publicly on the NASDAQ Global Market (NASDAQ) under the symbol “AXTI” since May 20, 1998, the date we consummated our initial public offering, and beginning on January 3, 2011, our common stock began trading on the NASDAQ Global Select Market under the same symbol.
From time to time, sales to one or more of our tier one customers individually represent more than 10% of our revenue and if we were to lose a major customer the loss would negatively impact our revenue.
The loss of one or more of our tier one substrate customers would significantly hurt our operating results. From time to time, sales to one or more of our tier one customers individually represent more than 10% of our revenue and if we were to lose a major customer the loss would negatively impact our revenue.
Our minority investment under the fair value method as of December 31, 2024 and 2023 totaled $0.6 million and $0.6 million, respectively (see Note 6 to the consolidated financial statements). Our minority investments under the equity method as of December 31, 2024 and 2023 totaled $14.1 million and $12.5 million, respectively.
Our minority investment under the fair value method as of December 31, 2025 and 2024 totaled $0 million and $0.6 million, respectively (see Note 6 to the consolidated financial statements). Our minority investments under the equity method as of December 31, 2025 and 2024 totaled $15.0 million and $14.1 million, respectively.
Another severe or prolonged economic downturn could result in a variety of risks to our business, including: ● inventory corrections; ● increased volatility in our stock price; ● increased volatility in foreign currency exchange rates; ● delays in, or curtailment of, purchasing decisions by our customers or potential customers; ● increased credit risk associated with our customers or potential customers, particularly those that may operate in industries most affected by the economic downturn; and ● impairment of our tangible or intangible assets.
Another severe or prolonged economic downturn could result in a variety of risks to our business, including: ● inventory corrections; ● increased volatility in our stock price; ● increased volatility in foreign currency exchange rates; ● delays in, or curtailment of, purchasing decisions by our customers or potential customers; ● increased credit risk associated with our customers or potential customers, particularly those that may operate in industries most affected by an economic downturn; and ● impairment of our tangible or intangible assets. 34 Table of Contents A recent example of economic volatility is the impact of COVID.
As of March 3, 2025, there were 206 holders of record of our common stock. Because many shares of AXT’s common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock.
As of March 2, 2026, there were 203 holders of record of our common stock. Because many shares of AXT’s common stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial owners of our common stock.
Revenue from customers in Asia Pacific decreased by 8.9% as a result of decreased demand for GaAs wafer substrates used in wireless applications and refined gallium, partially offset by increased demand for InP wafer substrates and pBN crucibles sold by one of our consolidated subsidiaries.
Revenue from customers in Asia Pacific decreased by 13.4% as a result of decreased demand for GaAs and InP wafer substrates used in wireless applications and raw gallium sold by one of our consolidated subsidiaries, partially offset by increased demand for pBN crucibles sold by one of our consolidated subsidiaries.
In April 2023 and November 2023, Xiaoyi XingAn distributed a dividend of $1.8 million, and JiYa distributed dividends of $2.0 million and $0.5 million, respectively. In May 2024 and November 2024, Xiaoyi XingAn distributed a $2.1 million dividend to us, and JiYa distributed a dividend of 0.3 million.
In April 2023 and November 2023, Xiaoyi XingAn distributed a dividend of $1.8 million, and JiYa distributed dividends of $2.0 million and $0.5 million, respectively. In May 2024 and November 2024, Xiaoyi XingAn distributed a $2.1 million dividend to us, and JiYa distributed a dividend of 0.3 million. In April 2025, JiYa Semiconductor Material Co. Ltd.
Provision for Income Taxes 2023 to 2024 2022 to 2023 Years Ended Dec. 31 Increase Increase 2024 2023 2022 (Decrease) % Change (Decrease) % Change ($ in thousands) Provision for income taxes $ 1,134 $ 160 $ 2,185 $ 974 608.8 % $ (2,025) (92.7) % % of total revenue 1.1 % 0.2 % 1.5 % Provision for income taxes for 2024 and 2023 were $1.1 million and $0.2 million, respectively, which were mostly related to our consolidated wafer substrate subsidiaries in China and our two partially owned consolidated raw material companies.
Provision for Income Taxes 2024 to 2025 2023 to 2024 Years Ended Dec. 31 Increase Increase 2025 2024 2023 (Decrease) % Change (Decrease) % Change ($ in thousands) Provision for income taxes $ 1,658 $ 1,134 $ 160 $ 524 46.2 % $ 974 608.8 % % of total revenue 1.9 % 1.1 % 0.2 % Provision for income taxes for 2025 and 2024 were $1.7 million and $1.1 million, respectively, which were mostly related to our consolidated wafer substrate subsidiaries in China and our two partially owned consolidated raw material companies.
Due to our uncertainty regarding our future profitability, we recorded a valuation allowance against our net deferred tax assets of $20.7 million and $17.5 million for the years 2024 and 2023, respectively.
Due to uncertainty regarding our future profitability, we recorded a valuation allowance against our net deferred tax assets of $27.2 million and $20.7 million for the years 2025 and 2024, respectively.
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