Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events

Subsequent Events

Note 18. Subsequent Events

On January 28, 2020, AXT and Sumitomo entered into a basic agreement, pursuant to which AXT and Sumitomo agreed to execute a formal cross license and covenant agreement that will expire on December 31, 2029.  The formal agreement is a fixed-cost cross license and not a variable-cost cross license that is based on revenue or units.  Under the formal agreement, the aggregate fixed cost is $2 million, which is payable in annual installments over a 10-year period.

In November 2018, AXT entered into a credit agreement with Wells Fargo Bank (“Credit Agreement”).  The line of credit has never been drawn on.  On February 5, 2020, the Company entered into the First Amendment, which reduced the $10 million secured revolving line of credit under the Credit Agreement to $7 million. The commitments under the Credit Agreement, as amended by the First Amendment, expire on November 30, 2020 and any loans thereunder will bear interest at a rate based on the daily one-month LIBOR for the applicable interest period plus a margin of 2.5%. As of the date of this Annual Report on Form 10-K, no loans or letters of credit were outstanding under the Credit Agreement, as amended by the First Amendment.