AXT Second Tranche Private Equity Investment in China Largely Complete

STAR Market IPO Process Summary Available on AXT’s Investor Relations Website

FREMONT, Calif., Jan. 06, 2021 (GLOBE NEWSWIRE) -- AXT, Inc. (NasdaqGS: AXTI), a leading manufacturer of compound semiconductor substrates, today announced that the second tranche of the private equity investment in its wafer manufacturing company in China, Beijing Tongmei Xtal Technology Co., Ltd. (“Tongmei”), was largely completed in December 2020.   The second tranche investment was originally scheduled to fund in January 2021. In December, seven private equity firms invested approximately $25 million in the second tranche. An additional $1.5 million is expected to be invested in January 2021, closing the second tranche at approximately $26.5 million. The first tranche, totaling approximately $22.5 million, funded in November 2020. Upon the completion of the final $1.5 million investment, the capital raise will total approximately $49 million in exchange for an approximately 7.28 percent minority interest in Tongmei.

AXT previously announced on November 16, 2020 a strategic plan to access China’s capital markets and progress to an initial public offering by Tongmei on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd (the “STAR Market”). To qualify for a STAR Market listing, Tongmei is required to have multiple independent shareholders. The first major step in this process is engaging reputable private equity firms in China to invest funds in Tongmei.

“We are pleased that the second tranche participants accelerated the investment schedule,” said Morris Young, CEO. “Their strong support and enthusiasm underscore the exciting applications and customer opportunities for which we are preparing this year, and their investment is an important milestone in Tongmei’s progress toward a STAR Market IPO in 2022.”

The process of going public on the STAR Market includes several periods of review and, therefore, is a lengthy process. Tongmei does not expect to accomplish this goal until mid-2022. AXT has posted on its website a brief summary of the plan and the process. The listing of Tongmei on China’s STAR Market will not change the status of AXT, Inc. as a U.S. public company headquartered in Fremont, California. It will continue to be listed on the Nasdaq Global Select Market under the symbol AXTI.