United States securities and exchange commission logo
December 20, 2022
Gary Fischer
Chief Financial Officer
AXT, Inc.
4281 Technology Drive
Fremont, California 94538
Re: AXT, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Filed March 15,
2022
File No. 000-24085
Dear Gary Fischer:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for the Fiscal Year Ended December 31, 2021
Item 1. Business, page 3
1. At the onset of Item 1,
please revise your future annual filing to disclose prominently the
following:
whether your
auditor is subject to the determinations announced by the PCAOB on
December 16, 2021;
whether and how the
Holding Foreign Companies Accountable Act, the Accelerating
Holding Foreign
Companies Accountable Act, and related regulations will affect your
company, including
the time frame change in PCAOB inspections for two
consecutive years
instead of three years;
whether you have
been or expect to be identified by the Commission under the
HFCAA; and
a cross-reference
to your more detailed disclosure in your risk factors, including the
heading of the
risk factor.
Gary Fischer
AXT, Inc.
December 20, 2022
Page 2
2. In your future annual filing, at the onset of Item 1, provide
prominent disclosure about the
legal and operational risks associated with being based in or having
the majority of the
company s operations in China. Your disclosure should make clear
whether these risks
could result in a material change in your operations and/or the value
of your common
stock or could significantly limit or completely hinder your ability
to offer or continue to
offer securities to investors and cause the value of such securities
to significantly decline
or be worthless. Your disclosure should address how recent statements
and regulatory
actions by China s government, such as those related to data
security or anti-monopoly
concerns, have or may impact the company s ability to conduct its
business, accept
foreign investments, or list on a U.S. or other foreign exchange. Your
Item 1A disclosures
should address, but not necessarily be limited to, the risks
highlighted in Item 1.
3. In your future annual filing, at the onset of Item 1, disclose the
risks that your corporate
structure and being based in or having the majority of the company s
operations in China
poses to investors. In particular, describe the significant
regulatory, liquidity, and
enforcement risks with cross-references to the more detailed
discussion of these risks in
Item 1A. For example, specifically discuss risks arising from the
legal system in China,
including risks and uncertainties regarding the enforcement of laws
and that rules and
regulations in China can change quickly with little advance notice;
and the risk that the
Chinese government may intervene or influence your operations at any
time, or may exert
more control over offerings conducted overseas and/or foreign
investment in China-based
issuers, which could result in a material change in your operations
and/or the value of
your securities.
4. In your future annual filing, at the onset of Item 1, provide a clear
description of how cash
is transferred through your organization. Quantify any cash flows and
transfers of other
assets by type that have occurred between the holding company and its
subsidiaries, and
direction of transfer. Quantify any dividends or distributions that a
subsidiary has made to
the holding company and which entity made such transfer, and their tax
consequences.
Similarly quantify dividends or distributions made to U.S. investors,
the source, and their
tax consequences. Your disclosure should make clear if no transfers,
dividends, or
distributions have been made to date. Describe any restrictions on
foreign exchange and
your ability to transfer cash between entities, across borders, and to
U.S. investors.
Describe any restrictions and limitations on your ability to
distribute earnings from the
company, including your subsidiaries, to the parent company and U.S.
investors.
Item 1A. Risk Factors, page 16
5. Please update and/or conform the risk factor disclosures in your Form
10-K, related to
your operations in China, with the disclosures in your amended Form S-3
that was
FirstName LastNameGary Fischer
declared effective on May 17, 2022, as applicable. Please confirm your
understanding of
Comapany NameAXT,
this matter Inc.you will comply with the requisite disclosures in
your future annual
and that
filing,
December 20,as2022
applicable,
Page 2 in your response to us.
FirstName LastName
Gary Fischer
FirstName
AXT, Inc. LastNameGary Fischer
Comapany20,
December NameAXT,
2022 Inc.
December
Page 3 20, 2022 Page 3
FirstName LastName
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Dale Welcome at 202-551-3865 or Kevin Stertzel at
202-551-3723 with
any questions.
Sincerely,
Division of
Corporation Finance
Office of
Manufacturing