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Item 9A. Controls and Procedures

2025-03-03 compared with 2024-02-28 · 15 added, 48 removed, 173 unchanged (27% of the section changed)

3 unchanged sentences

In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

In addition, the design of disclosure controls and

procedures must reflect the fact that there are resource constraints and that our management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were designed at a reasonable assurance level and were effective to provide reasonable assurance that the information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

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The effectiveness of our internal control over financial reporting as of December 31, 2024 has been tested by Ernst & Young Hua Ming LLP, our independent registered public accounting firm, as stated in their report which is included in Part II, Item 8 of this report.

Remediation of Previously Reported Material Weaknesses

As previously reported in our Forms 10-Q for the quarters ended March 31, 2023, June 30, 2023 and September 30, 2023, and our Annual Report on Form 10-K for the year ended December 31, 2022, we previously identified the following material weaknesses in internal control over financial reporting:

(i) Management did not design and maintain effective risk assessment procedures, and monitoring activities.

These deficiencies were attributed to insufficient identification and assessment of risks impacting the design, implementation, and operating effectiveness of internal control over financial reporting, and insufficient evaluation and determination as to whether components of internal control were present and functioning;

(ii) Management did not design and maintain effective information technology controls related to (a) user access controls to ensure appropriate segregation of duties and adequately restrict user and privileged access to financial applications, programs, and data to appropriate personnel, (b) computer operations controls to ensure that critical information is monitored, and data backups are authorized and monitored, (c) appropriate controls to evaluate automated controls, and (d) appropriate controls to validate the completeness and accuracy of key reports used within controls across substantially all financial statement areas.

These material weaknesses did not result in any material misstatement of our consolidated financial statements as of and for the year ended December 31, 2022.

Our management, under the oversight of the Audit Committee, has implemented the following remediation steps to address previously disclosed material weaknesses and to improve our internal control over financial reporting:

• Engaged a third-party Sarbanes-Oxley (“SOX”) compliance firm to assist management with (i) designing and maintaining effective risk assessment procedures and monitoring activities, (ii) reviewing our current processes, procedures, and systems and assessing the design of controls to identify opportunities to enhance the design of controls that would address relevant risks identified by management to assure the operating effectiveness of internal control over financial reporting, and (iii) enhancing and implementing protocols to retain sufficient documentary evidence of operating effectiveness of such controls.

• Recruited qualified individuals for key positions within our internal audit, IT, and other support functions that have enhanced internal control capabilities, promoted segregation of duties, and provided appropriate oversight and reviews.

• Developed and delivered internal control training to management and finance/accounting personnel, focusing on a review of management and individual roles and responsibilities related to internal control over financial reporting.

• Restricted and monitored user access controls to ensure appropriate segregation of duties and adequately restricted user and privileged access of applications, programs, and data to appropriate personnel;

implemented computer operations controls to ensure that critical information is monitored, and data backups are authorized and monitored;

established appropriate controls to evaluate automated controls;

and designed and monitored appropriate controls to validate the completeness and accuracy of key reports used within controls across substantially all financial statement areas.

During the quarter ended December 31, 2023, we completed our testing of the operating effectiveness of internal controls impacted by these remediation efforts and determined that as a result of the measures described above, the material weaknesses have been remediated as of December 31, 2023.

Changes in Internal Control over Financial Reporting

Other than in connection with the remediation process described above, no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the most recent fiscal quarter ended December 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Other Information

On December 13, 2023 , Sotheara Cheav , Senior Vice President, Manufacturing of ACM Shanghai , adopted a Rule 10b5-1 trading arrangement, or the Cheav Plan, that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act.

The Cheav Plan allows for the sale of up to 10,000 shares of Class A common stock, at specific market prices, commencing on the later of March 13, 2024 or the third business day following the disclosure of the Issuer’s financial results for the completed fiscal quarter in which the Cheav Plan was adopted, and continuing until (i) all such shares are sold, (ii) December 4, 2024, or (iii) such date that the Cheav Plan is otherwise terminated according to its terms, whichever comes first.

On December 11, 2024 , Chenming Hu , a member of the Board of Directors of ACM Research , adopted a Rule 10b5-1 trading arrangement (the “Hu Plan”) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act.

The Hu Plan allows for the contemporaneous exercise of options and sale of up to 326,310 shares of Class A Common Stock, at specific market prices, commencing on March 17, 2025, and continuing until (i) all such options are exercised and the underlying shares are sold, (ii) December 11, 2026 , or (iii) such date that the Hu Plan is otherwise terminated according to its terms, whichever comes first.

On November 29, 2024 , David Wang , President, Chief Executive Officer and a member of the Board of Directors of ACM Research , adopted a Rule 10b5-1 trading arrangement (the “Wang Plan”) that is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act.

The Wang Plan allows for the contemporaneous exercise of options and sale of up to 600,002 shares of Class A Common Stock, at specific market prices, commencing on May 21, 2025, and continuing until (i) all such options are exercised and the underlying shares are sold, (ii) November 27, 2026 , or (iii) such date that the Wang Plan is otherwise terminated according to its terms, whichever comes first.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

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(incorporated herein by reference to Exhibit 3.02 to the Current Report on Form 8-K filed on November 14, 2017)

Senior Secured Promissory Note dated March 30, 2018 issued by Shengxin (Shanghai) Management Consulting Limited Partnership to ACM Research (Shanghai), Inc.

(incorporated herein by reference to Exhibit 10.03 to the Quarterly Report on Form 10-Q filed on May 14, 2018)

Intercompany Promissory Note dated March 30, 2018 issued by ACM Research (Shanghai), Inc.

1 unchanged sentence

(incorporated herein by reference to Exhibit 10.04 to the Quarterly Report on Form 10-Q filed on May 14, 2018)

Warrant Exercise Agreement dated March 30, 2018 by and among ACM Research, Inc., ACM Research (Shanghai), Inc., and Shengxin (Shanghai) Management Consulting Limited Partnership (incorporated herein by reference to Exhibit 10.02 to the Quarterly Report on Form 10-Q filed on May 14, 2018)

Warrant to Purchase Class A Common Stock issued to Shengxin (Shanghai) Management Consulting Limited Partnership dated July 29, 2020 (incorporated herein by reference to Exhibit 4.01 to the Quarterly Report on Form 10-Q filed on August 10, 2020)

Description of ACM Research, Inc.’s Securities

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(incorporated herein by reference to Exhibit 10.05 to the Amended Quarterly Report on Form 10-Q/A filed on October 15, 2018)

Securities Purchase Agreement dated March 14, 2017 by and among ACM Research, Inc., Shengxin (Shanghai) Management Consulting Limited Partnership and ACM Research (Shanghai), Inc.

(incorporated herein by reference to Exhibit 10.03 to the Registration Statement on Form S-1 filed on September 13, 2017)

Signed Purchase and Sale Agreement and Receipt for Earnest Money, dated July 30, 2024, by and among ACM Research, Inc.

and William R.

O’Neill, Lynda E.

O’Neill and Gordon A.

Harris (incorporated herein by reference to Exhibit 10.01 to the Quarterly Report on Form 10-Q filed on August 7, 2024)

Securities Purchase Agreement dated March 23, 2017 between ACM Research, Inc.

2 unchanged sentences

and Moon-Soo Choi (incorporated herein by reference to Exhibit 10.07 to the Amended Registration Statement on Form S-1/A filed on October 18, 2017)

Stock Purchase Agreement, dated October 11, 2017, by and among ACM Research, Inc., Xinxin (Shanghai) Capital Co., Limited, Xinxin (Hongkong) Capital Co., Limited and David H.

Wang (incorporated herein by reference to Exhibit 10.10 to the Amended Registration Statement on Form S-1/A filed on October 18, 2017)

Form of Capital Increase Agreement between ACM Research, Inc.

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and certain of its directors and officers (incorporated herein by reference to Exhibit 10.13 to the Registration Statement on Form S-1 filed on September 13, 2017)

Letter agreement dated June 12, 2019 between ACM Research, Inc.

and Mark McKechnie (incorporated herein by reference to Exhibit 10.02 to the Current Report on Form 8-K filed on August 13, 2019)

Employment Agreement dated September 25, 2022 between ACM Research (Shanghai), Inc.

and Lisa Feng (incorporated herein by reference to Exhibit 10.01 to the Quarterly Report on Form 10-Q filed on May 9, 2023)

Note Assignment and Cancellation Agreement dated April 30, 2020 by and among ACM Research, Inc., ACM Research (Shanghai), Inc.

and Shengxin (Shanghai) Management Consulting Limited Partnership (incorporated herein by reference to Exhibit 10.02 to the Quarterly Report Form 10-Q filed on May 8, 2020)

Share Transfer and Note Cancellation Agreement dated April 30, 2020 between ACM Research, Inc.

and Shengxin (Shanghai) Management Consulting Limited Partnership (incorporated herein by reference to Exhibit 10.03 to the Quarterly Report on Form 10-Q filed on May 8, 2020)

Amendment No.

1 to Share Transfer and Note Cancellation Agreement dated July 29, 2020 between ACM Research, Inc.

and Shengxin (Shanghai) Management Consulting Limited Partnership (incorporated herein by reference to Exhibit 10.01 to the Quarterly Report on Form 10-Q filed on November 9, 2020)

Grant Contract for State-owned Construction Land Use Right in Shanghai City (Category of R&D Headquarters and Industrial Projects) dated as of May 7, 2020 between ACM Research (Lingang), Inc.

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(incorporated herein by reference to Exhibit 10.16 to the Current Report on Form 8-K filed on June 1, 2020)

Qingdao Fortune-Tech Xinxing Capital Partnership (L.P.) Partnership Agreement, dated June 9, 2020, among China Fortune Tech Capital Co., Ltd., as general partner, and the several limited partners named therein, including ACM Research (Shanghai), Inc.

(incorporated herein by reference to Exhibit 10.01 to the Current Report on Form 8-K filed on July 7, 2020)

Supplementary Agreement to Partnership Agreement of Qingdao Fortune-Tech Xinxing Capital Partnership (L.P.), dated June 15, 2020, among China Fortune Tech Capital Co., Ltd., as general partner, and the several limited partners named therein, including ACM Research (Shanghai), Inc.

(incorporated herein by reference to Exhibit 10.02 to the Current Report on Form 8-K filed on July 7, 2020)

Form of Shanghai Public Rental Housing Overall Pre-Sale Contract (incorporated herein by reference to Exhibit 10.01 to the Current Report on Form 8-K filed on February 25, 2021)

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(incorporated herein by reference to Exhibit 10.02 to the Quarterly Report on Form 10-Q filed on August 7, 2023)

Letter from Armanino LLP dated July 27, 2023 to the Securities and Exchange Commission (incorporated herein by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on July 27, 2023)

Letter from Armanino LLP dated September 26, 2023 to the Securities and Exchange Commission (incorporated herein by reference to Exhibit 16.1 to the Current Report on Form 8-K filed on September 26, 2023)

Insider Trading Policy reference in 2024 Proxy Statement

List of Subsidiaries of ACM Research, Inc.

1 unchanged sentence

Consent of Armanino LLP

Consent of BDO China Shu Lun Pan Certified Public Accountants LLP

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, as of February 28, 2024.

ACM RESEARCH, INC.

Chief Executive Officer and President

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities indicated as of February 28, 2024:

Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities indicated as of March 3, 2025:

Signature Title

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Tracy Liu Director

/s/ Xiao Xing

Xiao Xing Director

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures