ACM Research, Inc. 10-K

Item 8. Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Consolidated Financial Statements 80 Report of Independent Registered Public Accounting Firm ( Ernst & Young Hua Ming LLP , Shanghai, China , PCAOB ID# 1408 ) 84 Report of Independent Registered Public Accounting Firm ( Armanino LLP , San Ramon, CA , PCAOB ID# 32 ) 87 Consolidated Balance Sheets as of December 31, 2024 and 2023 85 Consolidated Statements of Comprehensive Income (Loss) for the Years ended December 31, 2024, 2023, and 2022 86 Consolidated Statements of Changes in Stockholders’ Equity for the Years ended December 31, 2024, 2023, and 2022 87 Consolidated Statements of Cash Flows for the Years ended December 31, 2024, 2023, and 2022 88 Notes to Consolidated Financial Statements 89 80 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of ACM Research, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ACM Research, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in stockholders' equity and cash flows for the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 3, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.  Revenue Recognition Description of the Matter As described in Notes 2 to the consolidated financial statements, the Company recognizes revenue from tools and spare parts at a point in time, when the Company has satisfied its performance obligation. For shipments made to a customer that has not previously accepted a specific type of tool (“first tools”), revenues are recognized when the tools are accepted by the customer. For shipments made to a customer that have previously accepted a specific type of tool (“repeat shipments”), revenues are recognized upon shipment or delivery because the Company can objectively demonstrate that the tools meet all the required customer specifications. Evaluating the sufficiency of audit evidence to validate whether the Company can objectively identify repeat shipments required auditor judgment and significant audit effort because the Company’s tools are highly customized for each customer. 81 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s revenue process. For example, we tested the controls over management’s review of the Company’s analysis to determine whether the repeat shipments identified have been previously accepted by the same customer. To test whether the Company can objectively demonstrate that the highly customized tools are repeat shipments, our audit procedures, among others, included performing direct inquiries with the Company’s personnel from its sales and engineering department to understand the Company’s process of identifying repeat shipments and the quality control department to understand the quality control process. We applied auditor judgment to determine the nature and extent of procedures to be performed by testing all the sales transactions identified as repeat shipments during the year. Specifically for all repeat shipments, we inspected the quality control reports signed by the Company’s quality control department. We also identified the similar tools previously sold to and accepted by the same customer by comparing the executed contracts or purchase orders of both tools, and inspected the acceptance confirmation from the customer of the previous tools to verify that the Company was able to objectively demonstrate that repeat shipments meet all the required customer specifications with its established history of customer acceptance. We evaluated the overall sufficiency of audit evidence obtained by assessing the results of procedures performed over repeat shipments, including the appropriateness of the nature and extent of audit effort. /s/ Ernst & Young Hua Ming LLP We have served as the Company's auditor since 2023. Shanghai, the People’s Republic of China March 3, 2025 82 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of ACM Research, Inc. Opinion on Internal Control Over Financial Reporting We have audited ACM Research, Inc.’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, ACM Research, Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, changes in stockholders' equity and cash flows for the years then ended, and the related notes and our report dated March 3, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Ernst & Young Hua Ming LLP Shanghai, the People’s Republic of China March 3, 2025 83 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of ACM Research, Inc. Opinion on the Consolidated Financial Statements W e have audited the accompanying consolidated statements of comprehensive income (loss), of stockholders’ equity, and of cash flows of ACM Research, Inc. (the "Company") for the year ended December 31, 2022, including the related notes (collectively, referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the results of operations and cash flows of the Company for the year ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/Armanino LLP We served as the Company’s auditor in 2022. In 2023, we became the predecessor auditor. San Ramon, California March 1, 2023 84 Table of Contents ACM RESEARCH, INC. Consolidated Balance Sheets (In thousands, except per share data) December 31, 2024 2023 Assets Current assets: Cash and cash equivalents (note 2) $ 407,445 $ 182,090 Restricted cash 3,865 1,083 Short-term time deposits (note 2) 17,277 80,524 Short-term investments (note 14) 19,373 21,312 Account receivables, net (note 4) 387,045 283,186 Other receivables 41,859 40,065 Inventories, net (note 5) 597,984 545,395 Advances to related party (note 15) 1,024 2,432 Prepaid expenses 7,507 20,023 Total current assets 1,483,379 1,176,110 Property, plant and equipment, net (note 6) 269,272 201,848 Operating lease right-of-use assets, net (note 10) 14,038 15,393 Intangible assets, net 3,461 2,538 Long-term time deposits (note 2) 13,275 40,818 Deferred tax assets (note 18) 14,781 20,271 Long-term investments (note 13) 37,063 27,880 Other long-term assets (note 7) 20,452 6,050 Total assets $ 1,855,721 $ 1,490,908 Liabilities and Equity Current liabilities: Short-term borrowings (note 8) 32,814 31,335 Current portion of long-term borrowings (note 11) 44,472 6,783 Related party accounts payable (note 15) 16,133 11,407 Accounts payable 139,294 141,814 Advances from customers 243,949 181,368 Deferred revenue 8,537 3,687 Income taxes payable (note 18) 12,779 6,401 FIN-48 payable (note 18) 19,466 12,149 Other payables and accrued expenses (note 9) 121,657 102,951 Current portion of operating lease liabilities (note 10) 2,132 2,764 Total current liabilities 641,233 500,659 Long-term borrowings (note 11) 105,525 53,952 Long-term operating lease liabilities (note 10) 3,840 4,262 Other long-term liabilities (note 12) 9,217 5,873 Total liabilities $ 759,815 $ 564,746 Commitments and contingencies (note 20) Equity: Stockholders’ equity: Class A Common stock (note 16) 6 6 Class B Common stock (note 16) 1 1 Additional paid-in capital 677,476 629,845 Retained earnings 260,000 156,827 Statutory surplus reserve (note 2) 30,514 30,060 Accumulated other comprehensive loss ( 63,372 ) ( 49,349 ) Total ACM Research, Inc. stockholders’ equity 904,625 767,390 Non-controlling interests 191,281 158,772 Total equity 1,095,906 926,162 Total liabilities and equity $ 1,855,721 $ 1,490,908 The accompanying notes are an integral part of these consolidated financial statements. 85 Table of Contents ACM RESEARCH, INC. Consolidated Statements of Comprehensive Income (Loss) (In thousands, except per share data) Year Ended December 31, 2024 2023 2022 Revenue (note 3) $ 782,118 $ 557,723 $ 388,832 Cost of revenue, including cost of revenue from related parties of $ 39,313 , $ 31,240 , and $ 26,313 for the years ended December 31, 2024, 2023, and 2022 respectively (note 15) 390,564 281,508 205,217 Gross profit 391,554 276,215 183,615 Operating expenses: Sales and marketing 65,447 47,019 39,889 Research and development 105,473 92,709 62,226 General and administrative 69,636 40,648 22,465 Total operating expenses 240,556 180,376 124,580 Income from operations 150,998 95,839 59,035 Interest income 9,935 8,354 8,740 Interest expense ( 4,151 ) ( 2,681 ) ( 1,655 ) Realized gain from sale of short-term investments 1,788 9,047 1,116 Unrealized gain (loss) on short-term investments 973 ( 2,737 ) ( 7,855 ) Other income (expense), net 6,334 ( 1,558 ) 3,315 Income from equity method investments 423 9,952 4,666 Income before income taxes 166,300 116,216 67,362 Income tax expense (note 18) ( 35,031 ) ( 19,364 ) ( 16,798 ) Net income 131,269 96,852 50,564 Less: Net income attributable to non-controlling interests 27,642 19,503 11,301 Net income attributable to ACM Research, Inc. $ 103,627 $ 77,349 $ 39,263 Comprehensive income (loss): Net income $ 131,269 $ 96,852 $ 50,564 Foreign currency translation adjustment, net of tax ( 15,728 ) ( 10,617 ) ( 59,102 ) Unrealized gain on available-for-sale investments, net of tax 428 — — Comprehensive income (loss) 115,969 86,235 ( 8,538 ) Less: Comprehensive income attributable to non-controlling interests 26,365 17,689 1,854 Comprehensive income (loss) attributable to ACM Research, Inc. $ 89,604 $ 68,546 $ ( 10,392 ) Net income per common stock (note 2): Basic $ 1.67 $ 1.29 $ 0.66 Diluted $ 1.53 $ 1.16 $ 0.59 Weighted average common stock outstanding used in computing per share amounts (note 2): Basic 62,212,569 60,164,670 59,235,975 Diluted 66,237,424 64,870,543 65,341,771 The accompanying notes are an integral part of these consolidated financial statements. 86 Table of Contents ACM RESEARCH, INC. Consolidated Statement of Changes in Stockholders’ Equity (In thousands, except per share data) Common Stock Class A Common Stock Class B Shares Amount Shares Amount Additional Paid- in Capital Retained Earnings Statutory Surplus Reserve Accumulated Other Comprehensive Income (Loss) Non-controlling Interests Total Equity Balance at December 31, 2021 53,608,929 $ 5 5,087,814 $ 1 $ 595,045 $ 63,732 $ 8,312 $ 9,109 $ 135,461 $ 811,665 Net income - - - - - 39,263 - - 11,301 50,564 Appropriation to statutory surplus reserves - - - - - ( 8,569 ) 8,569 - - — Foreign currency translation adjustment - - - - - - - ( 49,655 ) ( 9,447 ) ( 59,102 ) Exercise of stock options 980,354 - - - 1,314 - - - - 1,314 Stock-based compensation - - - - 7,730 - - - - 7,730 Conversion of Class B common stock to Class A common stock 66,003 - ( 66,003 ) - - - - - - — Balance at December 31, 2022 54,655,286 5 5,021,811 1 604,089 94,426 16,881 ( 40,546 ) 137,315 812,171 Cumulative effect of change in accounting principle under ASC326, net of tax - - - - - ( 1,769 ) - - — ( 1,769 ) Net income - - - - - 77,349 — - 19,503 96,852 Appropriation to statutory surplus reserves - - - - - ( 13,179 ) 13,179 - - - Foreign currency translation adjustment - - - - - - - ( 8,803 ) ( 1,814 ) ( 10,617 ) Exercise of stock options 1,380,886 1 - - 2,303 - - - 3,834 6,138 Stock-based compensation - - - - 23,453 - - - 3,885 27,338 ACM Shanghai dividends - - - - - - - - ( 3,951 ) ( 3,951 ) Balance at December 31, 2023 56,036,172 6 5,021,811 1 629,845 156,827 30,060 ( 49,349 ) 158,772 926,162 Net income - - - - - 103,627 - - 27,642 131,269 Appropriation to statutory surplus reserves - - - - - ( 454 ) 454 — — — Foreign currency translation adjustment - - - - - - - ( 14,373 ) ( 1,355 ) ( 15,728 ) Exercise of stock options 1,902,713 - - - 5,990 - - - 5,109 11,099 Stock-based compensation - - - - 41,641 - - - 7,935 49,576 ACM Shanghai dividends - - - - - - - ( 6,900 ) ( 6,900 ) Unrealized gain on available-for-sale investments - - - - - - - 350 78 428 Balance at December 31, 2024 57,938,885 $ 6 5,021,811 $ 1 $ 677,476 $ 260,000 $ 30,514 $ ( 63,372 ) $ 191,281 $ 1,095,906 The accompanying notes are an integral part of these consolidated financial statements. 87 Table of Contents ACM RESEARCH, INC. Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating activities: Net income $ 131,269 $ 96,852 $ 50,564 Adjustments to reconcile net income from operations to net cash used in operating activities Non-cash operating lease cost 3,815 3,580 2,816 Depreciation and amortization 9,967 8,092 5,366 Gain on disposals of property, plant and equipment 945 ( 2 ) ( 12 ) Realized gain on short-term investments ( 1,788 ) ( 9,047 ) ( 1,116 ) Income from equity method investments ( 423 ) ( 9,952 ) ( 4,666 ) Unrealized (gain) loss on short-term investments ( 973 ) 2,737 7,855 Inventory provision 2,796 575 2,248 Provision for credit losses 13,517 2,741 — Deferred income taxes 5,286 ( 13,647 ) 4,027 Stock-based compensation 49,576 27,338 7,730 Dividends from unconsolidated affiliates 1,529 — — Net changes in operating assets and liabilities: Accounts receivable ( 123,277 ) ( 108,749 ) ( 88,655 ) Other receivables ( 3,812 ) ( 4,213 ) ( 7,331 ) Inventories ( 64,135 ) ( 164,027 ) ( 195,562 ) Advances to related party (note 15) 1,408 890 ( 939 ) Prepaid expenses 11,911 ( 5,075 ) ( 3,695 ) Other long-term assets — — 3,986 Related party accounts payable (note 15) 4,726 ( 3,061 ) 6,569 Accounts payable 1,440 42,343 17,501 Advances from customers 67,050 29,974 104,258 Deferred revenue 4,850 2,693 994 Income taxes payable 6,424 3,009 3,236 FIN-48 payable 7,316 5,463 4,404 Other payables and accrued expenses 23,203 21,375 23,406 Operating lease liabilities ( 3,514 ) ( 3,580 ) ( 2,816 ) Other long-term liabilities 3,344 ( 1,632 ) ( 2,362 ) Net cash provided by (used in) operating activities 152,450 ( 75,323 ) ( 62,194 ) Cash flows from investing activities: Purchase of property, plant and equipment ( 82,463 ) ( 61,876 ) ( 91,094 ) Purchase of intangible assets ( 3,485 ) ( 2,462 ) ( 1,426 ) Purchase of short-term investments (note 14) ( 1,391 ) ( 18,356 ) — Purchase of time deposits ( 74,730 ) ( 26,120 ) ( 172,448 ) Proceeds from maturity of time deposits 166,549 79,600 — Proceeds from sale of short-term investments (note 14) 8,434 21,735 4,577 Purchase of long-term investments (note 13) ( 24,873 ) ( 7,508 ) ( 5,279 ) Proceeds from disposal of long-term investments — 8,242 — Net cash used in investing activities ( 11,959 ) ( 6,745 ) ( 265,670 ) Cash flows from financing activities: Proceeds from short-term borrowings 33,265 31,334 56,004 Repayments of short-term borrowings ( 32,297 ) ( 55,068 ) ( 9,224 ) Proceeds from long-term borrowings 96,896 42,360 — Repayments of long-term borrowings ( 9,582 ) ( 2,283 ) ( 2,223 ) ACM Shanghai dividends ( 6,900 ) ( 3,951 ) — Proceeds from exercise of stock options 11,099 6,138 1,314 Net cash provided by financing activities 92,481 18,530 45,871 Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 4,835 ) ( 1,740 ) ( 32,623 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ 228,137 $ ( 65,278 ) $ ( 314,616 ) Cash, cash equivalents and restricted cash at beginning of period 183,173 248,451 563,067 Cash, cash equivalents and restricted cash at end of period $ 411,310 $ 183,173 $ 248,451 Supplemental disclosure of cash flow information: Interest paid, net of capitalized interest $ 4,151 $ 2,681 $ 1,655 Cash paid for income taxes $ 11,216 $ 26,103 $ 3,586 Prepayment for purchase of long-term investment $ 16,736 $ — $ — Purchase of intangible assets included in other long-term assets $ 641 $ — $ — Reconciliation of cash, cash equivalents and restricted cash in consolidated statements of cash flows: Cash and cash equivalents $ 407,445 $ 182,090 $ 247,951 Restricted cash 3,865 1,083 500 Cash, cash equivalents and restricted cash $ 411,310 $ 183,173 $ 248,451 Non-cash financing activities: Cashless exercise of stock options $ 483 $ 333 $ 221 Non-cash investing activities: Transfer from inventory to property, plant and equipment $ — $ 4,379 $ — Transfer from property, plant and equipment to inventory $ 918 $ — $ — Purchase property, plant and equipment through other payable and accrued expenses $ 29,126 $ 33,750 $ — Purchase long-term investments through other payable and accrued expenses $ 4,729 $ — $ — Transfer of prepayment for property to property, plant and equipment $ 3,348 $ — $ 41,497 The accompanying notes are an integral part of these consolidated financial statements. 88 Table of Contents ACM RESEARCH, INC. Notes to Consolidated Financial Statements (in thousands, except share and per share data) NOTE 1 – DESCRIPTION OF BUSINESS ACM Research, Inc. (“ACM” or “ACM Research”) and its subsidiaries (collectively with ACM, the “Company”) develop, manufacture and sell capital equipment to the global semiconductor industry. The Company has direct or indirect interests in the following subsidiaries: Place and date of incorporation Principal Activities Effective interest held as at December 31, Name of subsidiaries 2024 2023 ACM Research (Shanghai), Inc. ("ACM Shanghai") Mainland China, May 2005 Principal operating subsidiary 81.5 % 82.1 % ACM Research (Wuxi), Inc. ("ACM Wuxi") Mainland China, July 2011 Sales and services 81.5 % 82.1 % CleanChip Technologies Limited ("CleanChip") Hong Kong, June 2017 Trading partner between ACM Shanghai and its customers 81.5 % 82.1 % ACM Research Korea CO., LTD. Korea, December 2017 Sales, marketing, R&D, production 81.5 % 82.1 % ACM Research ( Lingang), Inc. ("ACM Lingang") (1) Mainland China, March 2019 Management of production activities 81.5 % 82.1 % ACM Research (CA), Inc. ("ACM California") USA, April 2019 Procurement for ACM Shanghai 81.5 % 82.1 % ACM Research (Cayman), Inc. Cayman Islands, April 2019 Administrative function (inactive) 100.0 % 100.0 % ACM Research (Singapore) PTE. Ltd. ("ACM Singapore") Singapore, August 2021 Sales, marketing, business development 100.0 % 100.0 % ACM Research (Beijing), Inc. ("ACM Beijing") Mainland China, February 2022 Sales and services 81.5 % 82.1 % Hanguk ACM CO., LTD Korea, March 2022 Sales, services, business development 81.5 % 100.0 % Yusheng Micro Semiconductor (Shanghai) Co., Ltd. Mainland China, June 2023 Business development 81.5 % 82.1 % ACM-Wooil Microelectronics (Shanghai) Co., Ltd. Mainland China, June 2023 Component development and production 59.0 % 59.4 % ACM Research (Chengdu), Inc. ("ACM Chengdu") Mainland China, December 2024 Component development and production 81.5 % N/A Shengyi Micro Semiconductor (Shanghai) Co., Ltd. Mainland China, December 2024 Sales and services 69.3 % N/A (1) ACM Research (Lingang) Inc. is the English name referred to by its Chinese language name Shengwei Research (Shanghai), Inc., or ACM Shengwei in prior filings. ACM Research (Lingang), Inc. and Shengwei Research (Shanghai), Inc. refer to the same entity. 89 Table of Contents NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its subsidiaries. ACM’s subsidiaries are those entities in which ACM, directly and indirectly, controls more than a majority of the voting power. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications have been made to the amounts for prior years in order to conform to the current year’s presentation. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. The Company’s significant accounting estimates and assumptions include, but are not limited to, those used for revenue recognition and deferred revenue, the valuation and recognition of fair value of certain long-term investments, stock-based compensation arrangements, realization of deferred tax assets, uncertain tax position, assessment for impairment of long-lived assets and long-term investments, allowance for credit losses, inventory valuation, useful lives of property, plant and equipment and useful lives of intangible assets. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates and assumptions. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and bank deposits that are unrestricted as to withdrawal and use, and highly liquid investments with an original maturity date of three months or less at the date of purchase. At times, cash deposits may exceed government-insured limits. The following table presents cash and cash equivalents, according to jurisdiction as of December 31, 2024 and 2023: December 31, 2024 2023 United States $ 56,308 $ 43,614 Mainland China 94,701 70,418 China Hong Kong 255,853 64,057 Korea 516 3,934 Singapore 67 67 Total $ 407,445 $ 182,090 The amounts in mainland China do not include short-term and long-term time deposits which in aggregate totaled $ 30,552 and $ 121,342 at December 31, 2024 and 2023, respectively. Cash held in the U.S. exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limits and is subject to risk of loss. No losses have been experienced to date. Cash amounts at the banks in mainland China are subject to a series of risk control regulatory standards from mainland China bank regulatory authorities. ACM’s subsidiaries in mainland China are required to obtain approval from the State Administration of Foreign Exchange (“SAFE”) to transfer funds into or out of mainland China. SAFE requires a valid agreement to approve the transfers, which are processed through a bank. Other than these mainland China foreign exchange restrictions, ACM’s subsidiaries in mainland China are not subject to any mainland China restrictions and limitations on its ability to transfer funds to ACM Research or among our other subsidiaries. However, cash held by ACM’s subsidiaries in mainland China does exceed applicable insurance limits and is subject to risk of loss, although no such losses have been experienced to date. 90 Table of Contents ACM California periodically procures goods and services on behalf of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM California in accordance with applicable transfer pricing arrangements. For the years ended December 31, 2024, 2023 and 2022 , cash payments from ACM Shanghai to ACM California for the procurement of goods and services were $ 21.3 million, $ 42.5 million and $ 30.2 million, respectively. ACM California periodically borrows funds for working capital advances from its direct parent, CleanChip. ACM California repays or renews these intercompany loans in accordance with their terms. For sales through CleanChip and ACM Research, a certain amount of sales or advance payments from customer proceeds is repatriated back to ACM Shanghai, a subsidiary, in accordance with applicable transfer pricing arrangements in the ordinary course of business. ACM Research provides services to certain customers located in the U.S., Europe and other regions outside of mainland China to support the evaluation of first tools and provide support for tools under warranty on behalf of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM Research in accordance with applicable transfer pricing arrangements. For the years ended December 31, 2024, 2023 and 2022 , ACM Shanghai paid $ 28,480 , $ 19,200 , and nil in dividends to ACM Research, respectively. Amounts held in Korea exceed the Korea Deposit Insurance Corporation (“KDIC”) insurance limits and are subject to risk of loss. No losses have been experienced to date. There is no additional restriction for the transfer of cash from bank accounts in the U.S., Korea, Singapore and Hong Kong. For the years ended December 31, 2024, 2023 and 2022 , with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, and dividends paid by ACM Shanghai to the stockholders of ACM Shanghai (including ACM Research), no transfers, or distributions have been made between ACM Research and its subsidiaries, including ACM Shanghai, or to holders of ACM Research Class A common stock. Time Deposits Time deposits are deposited with banks in mainland China with fixed terms and interest rates which cannot be withdrawn before maturity , and are presented as short-term deposits and long-term deposits in the consolidated financial statements 91 Table of Contents based on their expected time of collection . They are also subject to the risk control regulatory standards described above upon maturity. At December 31, 2024 and December 31, 2023, time deposits consisted of the following: December 31, 2024 2023 Deposit in China Merchant Bank which was redeemed on January 29, 2024 with an annual interest rate of 2.85 % $ — $ 29,797 Deposit in Bank of Ningbo which was redeemed on February 17, 2024 with an annual interest rate of 2.85 % — 44,630 Deposit in Shanghai Pudong Development Bank which was redeemed on June 20, 2024 with an annual interest rate of 3.10 % — 7,322 Deposit in Shanghai Pudong Development Bank which was redeemed on May 28, 2024 with an annual interest rate of 3.10 % — 7,307 Deposit in Shanghai Pudong Development Bank which was redeemed on March 7, 2024 with an annual interest rate of 3.10 % — 4,376 Deposit in Shanghai Pudong Development Bank which was redeemed on March 22, 2024 with an annual interest rate of 3.10 % — 4,373 Deposit in Shanghai Pudong Development Bank which was redeemed on January 29, 2024 with an annual interest rate of 3.10 % — 2,912 Deposit in China Industrial Bank which matures on January 31, 2026 with an annual interest rate of 3.15 % 13,275 14,528 Deposit in China Everbright Bank which was redeemed on January 5, 2024 with an annual interest rate of 5.38 % — 3,079 Deposit in China Everbright Bank which was redeemed on May 22, 2024 with an annual interest rate of 5.38 % — 3,018 Deposit in China Everbright Bank which matures on January 9, 2025 with an annual interest rate of 5.214 % 10,247 — Deposit in China Everbright Bank which matures on May 25, 2025 with an annual interest rate of 4.430 % 7,030 — $ 30,552 $ 121,342 For th e years ended December 31, 2024, 2023 and 2022, interest income related to time deposits was $ 1,991 , $ 3,689 and $ 3,472 , respectively. Accounts Receivable, Net Prior to adoption of Accounting Standards Update, or ASU, 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. After adoption of ASC 326, as of January 1, 2023, the Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. At December 31, 2024, and 2023, the Company, based on a review of its outstanding balances and its customers, determined the allowance for credit losses were $ 18,347 and $ 4,830 , respectively. Inventories, Net Inventory consists of raw materials and related goods, work-in-progress, finished goods, and other consumable materials such as spare parts. Inventory is recorded at the lower of cost or net realizable value. The cost of inventory is principally 92 Table of Contents determined by the weighted average cost method for raw materials. The Company assesses the recoverability of all inventories to determine if any adjustments are required for obsolete inventory or those with net realizable value lower than the cost. Property, Plant and Equipment, Net Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation begins when the asset is placed in service and is calculated by using the straight-line method over the estimated useful life of an asset (or, if shorter, over the lease term). Betterments or renewals are capitalized when incurred. Estimated useful lives of assets are as follows: Buildings and plants 30 years Computer and office equipment 3 to 5 years Furniture and fixtures 5 years Leasehold improvements shorter of lease term or estimated useful life Electronic equipment 3 to 5 years Manufacturing equipment for small to medium-sized equipment, 5 to 10 years; for large equipment, estimated by purchasing department at time of acceptance Transportation equipment 4 to 5 years Expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong the life of the property are charged to expense as incurred. Upon retirement or sale of an asset, the cost of the asset and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to income. Construction In Progress Construction in progress primarily reflects costs incurred related to the construction of ACM Shanghai’s Lingang development and production center. Intangible Assets, Net Intangible assets consist of purchase software. Assets are valued at cost at the time of acquisition and are amortized over their beneficial periods. Impairment of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstance indicate that the carrying value of the assets may not be fully recoverable or that the useful life of the assets is shorter than the Company had originally estimated. When these events or changes occur, the Company evaluates the impairment of the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value over the fair value. Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the 93 Table of Contents implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has also elected the practical expedient for the short-term lease exemption for contracts with lease terms of 12 months or less. The Company has also elected the practical expedient for the short-term lease exemption for contracts with lease terms of 12 months or less. Revenue Recognition The Company derives revenue principally from the sale of semiconductor capital equipment. Revenue from contracts with customers is recognized using the following five steps pursuant ASC Topic 606, Revenue from Contracts with Customers : 1. Identify the contract(s) with a customer; 2. Identify the performance obligations in the contract; 3. Determine the transaction price; 4. Allocate the transaction price to the performance obligations in the contract; and 5. Recognize revenue when (or as) the entity satisfies a performance obligation. Identify the contract(s) with a customer. The Company generally considers written documentation including, but not limited to, signed purchase orders, master agreements, and sales orders as contracts, provided it has approval and commitment from the customer, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collection is probable. Collectability is assessed based on management’s assessment of the customer’s creditworthiness, historical payment experience, as well as other relevant factors. Identify the performance obligations in the contract. Performance obligations are accounted for separately if they are distinct. A good or service is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and the good or service is distinct in the context of the contract. The Company’s performance obligations generally include sales of tools and spare parts. In addition, customer contracts can contain provisions for installation, training, software updates, most-favored pricing for spare parts, and other items which have been deemed immaterial in the context of the contract. Determine the transaction price. The transaction price for the Company’s contracts with customers may include fixed and variable consideration. The Company includes variable consideration in the transaction price to the extent that it is probable that a significant reversal of revenue will not occur in the future based on the Company’s historical experience with similar arrangements. Allocate the transaction price to the performance obligations in the contract. For contracts that contain multiple performance obligations, primarily those that include multiple tools, or spare parts sold together with tools, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. The Company recognizes contract liabilities associated with unsatisfied performance obligations, based on the stand-alone observable selling prices or using an expected cost-plus-margin approach when a stand-alone selling price is not directly observable, and recognizes revenue as the related performance obligations are satisfied. Recognize revenue when, or as, a performance obligation is satisfied . The Company recognizes revenue from tools and spare parts at a point in time, when the Company has satisfied its performance obligation. The Company’s sales arrangements do not include a general right of return. For shipments made to a customer that has not previously accepted a specific type of tool (“first tools”), revenues are recognized when the tools are accepted by the customer. For shipments made to a customer that has previously accepted a specific type of tool ("repeat shipment"), revenues are recognized upon shipment or delivery because the Company can objectively demonstrate that the tools meet all the required customer specifications. The Company’s warranties provide assurance that its products will function as expected and in accordance with certain specifications. The Company’s warranties are intended to safeguard the customer against existing defects and do not provide any incremental service to the customer. They are not separate performance obligations and are accounted for under FASB ASC Topic 460, Guarantees . For sales of tools, payment terms and conditions vary by customer and are based on the billing schedule established in the Company’s contracts with customers, but the contract generally requires advanced payments for a portion of transaction 94 Table of Contents price prior to delivery and payments of the remaining transaction price after the tools are accepted by customers; therefore, the Company has determined that its contracts do not include a significant financing component. For sales of spare parts, the contract generally requires payment within 30 days after delivery. Contract liabilities include advances from customers and deferred revenue. Payments received from customers prior to the transfer of control of the tools are recorded as advances from customers. Payments received from customers related to the allocated transaction price for the unsatisfied performance obligations are recorded as deferred revenue. Cost of Revenue Cost of revenue primarily consists of: direct materials, comprised principally of parts used in assembling equipment, together with crating and shipping costs; direct labor, including salaries and other labor related expenses attributable to the Company’s manufacturing department; allocated overhead cost and inventory provision. Research and Development Costs Research and development costs relating to the development of new products and processes, significant improvements and refinements to existing products or the process of supporting customer evaluations of tools, and the development of new tools for evaluation by customers during the product demonstration process, are expensed as incurred. Borrowing Costs Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets that require a substantial period of time to be ready for their intended use or sale are capitalized as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalized. All other borrowing costs are recognized in interest expense in the consolidated statements of comprehensive income (loss) in the period in which they are incurred. Warranty The Company generally provides a standard assurance type warranty ranging from 12 to 36 months and covering replacement of its product during the warranty period. The Company accounts for the estimated warranty costs at the time revenue is recognized. Warranty obligations are affected by historical failure rates and associated replacement costs. Utilizing historical warranty cost records, the Company calculates a rate of warranty expenses to revenue to determine the estimated warranty charge. The Company updates these estimated charges on a regular basis. Warranty obligations are included in other payables and accrued expenses in the consolidated balance sheets. The following table shows changes in the Company’s warranty obligations for the years ended December 31, 2024, 2023 and 2022, respectively. Year Ended December 31, 2024 2023 2022 Balance at beginning of period $ 9,834 $ 8,780 $ 6,631 Additions 11,460 7,969 5,379 Utilized ( 8,584 ) ( 6,915 ) ( 3,230 ) Balance at end of period $ 12,710 $ 9,834 $ 8,780 Employee Benefit Expenses The Company has a defined contribution 401(k) plan for eligible employees. Eligible employees have the option to participate in the plan beginning on their date of hire. Under the terms of the plan, employees may make voluntary contributions as a percentage of their compensation or a flat dollar amount. All eligible employees of the Company’s mainland China subsidiaries are entitled to staff welf are benefits including medical care, welfare grants, unemployment insurance and pension benefits through a mainland China government-mandated multi-employer defined contribution plan. The Company’s mainland China subsidiaries are required to accrue for these benefits based on certain percentages of the qualified employees’ salaries, and are required to make contributions to the plans out of the amounts accrued. The mainland China government is responsible for the medical benefits and the pension liability to be paid to these employees and the Company’s obligations are limited to the amounts contributed. The 95 Table of Contents Company has no further payment obligations once the contributions have been paid. Total contributions by the Company for such employee benefits were $ 15,312 , $ 11,618 , and $ 7,816 for the years ended December 31, 2024, 2023 and 2022, respectively. Government Subsidies ACM Shanghai has received several special government grants. The government subsidies of operating nature with no further conditions to be met are recorded as other income in the consolidated statements of comprehensive income (loss) when received. The government grants that contain certain operating conditions, and require a government due diligence process to confirm completion, are deferred and recorded as other long-term liabilities (note 12) when received, and are recognized in the consolidated statements of comprehensive income (loss) as follows: • Government subsidies relating to current expenses are recorded as reductions of those expenses in the periods in which the current expenses are recorded. For the years ended December 31, 2024, 2023 and 2022, related government subsidies recognized as reductions of relevant expenses in the consolidated statements of comprehensive income (loss) were $ 462 , $ 1,740 and $ 1,201 , respectively. • Government subsidies related to depreciable assets are credited to income over the useful lives of the related assets for which the grant was received. Government subsidies related to VAT reduction are credited to income in the period received. For the years ended December 31, 2024, 2023 and 2022, related government subsidies recognized as other income in the consolidated statements of comprehensive income (loss) w e re $ 2,018 , $ 533 , a nd $ 306 , respectively. Stock-based Compensation ACM and ACM Shanghai grants stock options to employees and non-employee consultants and directors and accounts for those stock-based awards in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. Stock-based awards granted to employees and non-employee consultants and directors are measured at the fair value of the awards on the grant date and are recognized as expenses either (a) immediately on grant, if no vesting conditions are required or (b) using the graded vesting method, net of estimated forfeitures, over the requisite service period. The fair value of stock options is determined using the Black-Scholes valuation model when there are service and performance condition attached or the Monte Carlo valuation model when there is market condition attached. Stock-based compensation is charged to the category of operating expense corresponding to the service function of the employees and non-employee consultants and directors. The Company has elected to recognize share-based compensation on a straight-line basis for awards with graded vesting that vest based solely on a service condition. The Company uses the accelerated method for all awards granted based on service conditions and performance conditions, and only if performance conditions are considered probable to be satisfied. Income Taxes The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable values. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax. 96 Table of Contents Basic and Diluted Net Income per Share of Common Stock Basic and diluted net income per share of common stock is calculated as follows: Year Ended December 31, 2024 2023 2022 Numerator: Net income $ 131,269 $ 96,852 $ 50,564 Less: Net income attributable to non-controlling interests 27,642 19,503 11,301 Net income available to common stockholders, basic $ 103,627 $ 77,349 $ 39,263 Less: Dilutive effect arising from stock-based awards by ACM Shanghai 2,227 1,841 584 Net income available to common stockholders, diluted $ 101,400 $ 75,508 $ 38,679 Weighted average shares outstanding, basic 62,212,569 60,164,670 59,235,975 Effect of dilutive securities 4,024,855 4,705,873 6,105,796 Weighted average shares outstanding, diluted 66,237,424 64,870,543 65,341,771 Net income per share of common stock: Basic $ 1.67 $ 1.29 $ 0.66 Diluted $ 1.53 $ 1.16 $ 0.59 Basic and diluted net income per share of common stock is presented using the two-class method, which allocates undistributed earnings to common stock and any participating securities according to dividend rights and participation rights on a proportionate basis. Under the two-class method, basic net income per share of common stock is computed by dividing the sum of distributed and undistributed earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. ACM did not have any participating securities outstanding during the three-year periods ended December 31, 2024. Class A and Class B common stock are substantially identical in all material respects, except for voting rights. Since ACM did not declare any dividends during the years ended December 31, 2024, 2023 and 2022, the net income per share of common stock attributable to each class is the same under the “two-class” method. As such, the two classes of common stock have been presented on a combined basis in the consolidated statements of comprehensive income (loss) and in the above computation of net income per share of common stock. Diluted net income per share of common stock reflects the potential dilution from securities, including stock options, that could share in ACM’s earnings. Certain potential dilutive securities were excluded from the net income per share calculation because the impact would be anti-dilutive. The number of potentially dilutive shares that were not included in the calculation of diluted net income per share in the periods presented where their inclusion would be anti-dilutive were 1,511,335 , 3,651,337 and 1,795,340 for the years ended December 31, 2024, 2023 and 2022, respectively. Comprehensive Income (loss) The Company applies FASB ASC Topic 220, Comprehensive Income , which establishes standards for the reporting and display of comprehensive income (loss), requiring its components to be reported in a financial statement with the same prominence as other financial statements. The Company’s comprehensive income (loss) includes net income, foreign currency translation adjustments, and unrealized gain on investments in available-for-sale debt securities and is presented in the consolidated statements of comprehensive income (loss). Restricted Net Assets The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant statutory laws and regulations of mainland China permit payments of dividends by the Company’s mainland China subsidiaries only out of its retained earnings, if any, as determined in accordance with accounting standards and regulations of mainland China. The results of operations reflected in the consolidated financial statements 97 Table of Contents prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s mainland China subsidiaries. The Company has not previously declared or paid any cash dividend or dividend in kind and has no plan to declare or pay any dividends in the near future. Under laws and regulations of mainland China, there are restrictions on the Company’s mainland China subsidiaries with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. Amounts of net assets restricted include paid-in capital and statutory surplus reserve of the Company’s mainland China subsidiaries totaling $ 686,874 as of December 31 2024. Therefore, in accordance with Rules 504 and 4.08(e)(3) of Regulation S-X, the condensed parent company only financial statements as of December 31, 2024 and 2023, and for each of the three years in the period ended December 31, 2024 are disclosed in Note 21. Furthermore, cash transfers from the Company’s mainland China subsidiaries to its subsidiaries outside of China are subject to mainland China government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the mainland China subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations. Statutory Surplus Reserve The income of ACM’s mainland China subsidiaries is distributable to their shareholders after transfers to reserves as required under relevant mainland China laws and regulations and the subsidiaries’ Articles of Association. As stipulated by the relevant laws and regulations in mainland China, mainland China subsidiaries are required to maintain reserves, including reserves for statutory surpluses and public welfare funds that are not distributable to shareholders. A mainland China subsidiary’s appropriations to the reserves are approved by its board of directors. At least 10% of annual statutory after-tax profits, as determined in accordance with mainland China accounting standards and regulations, is required to be allocated to the statutory surplus reserves. If the cumulative total of the statutory surplus reserves reaches 50% of a mainland China subsidiary’s registered capital, any further appropriation is optional. Statutory surplus reserves may be used to offset accumulated losses or to increase the registered capital of a mainland China subsidiary, subject to approval from the relevant mainland China authorities, and are not available for dividend distribution to the subsidiary’s shareholders. The mainland China subsidiaries are prohibited from distributing dividends unless any losses from prior years have been offset. Except for offsetting prior years’ losses, however, statutory surplus reserves must be maintained at a minimum of 25% of share capital after such usage. ACM Shanghai estimated a statutory surplus reserve of $ 30,514 and $ 30,060 based on an accumulated profit as of December 31, 2024 and 2023, re spectively, which is included in the statutory surplus reserve in the consolidated balance sheets. Noncontrolling Interests A noncontrolling interest is recognized to reflect the portion of subsidiaries’ equity which is not attributable, directly or indirectly, to ACM Research. Consolidated net income on the consolidated statements of comprehensive income (loss) includes the net income attributable to noncontrolling interests. The cumulative results of operations attributable to noncontrolling interests are recorded as “noncontrolling interests” in the Company’s consolidated balance sheets. Financial Instruments The Company periodically invests in equity and debt securities, and maintains an investment portfolio of various holdings, types, and maturities. For equity investments that do not have a readily determinable fair value, the Company classified them as long-term investments, and records them using either: 1) the measurement alternative which measures the equity investments at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes; or 2) the equity method whereby the Company recognizes its proportional share of the income or loss from the equity method investment. The equity method is utilized when the equity investments are common stock or in substance common stock, and the Company does not have the ability to control the investee but is deemed to have the ability to exercise significant influence over the investee’s operating or financial policies. For equity investments that have a readily determinable fair value, the Company classified them as short-term investments, and records them at fair market value on a recurring basis based upon quoted market prices. Realized and unrealized gains and losses resulting from application of the measurement alternative, the impact of the application of the equity method to the Company’s equity investments, and recognition of 98 Table of Contents changes in fair market value, as applicable, are recognized as non-operating income (expenses), net in the consolidated statements of comprehensive income (loss). The Company’s investments in debt securities have been classified and accounted for as available-for-sale. The Company classifies its debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Unrealized gains and losses on debt securities classified as available-for-sale are recognized in accumulated other comprehensive income (loss) in the consolidated balance sheets. Fair Value Measurement The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability. A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions. Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active for identical assets or liabilities, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data. The Company’s primary financial instruments include its cash, cash equivalents, short term and long term deposits, restricted cash, short-term and long-term investments, accounts receivable, other receivables, accounts payable, related party accounts payable , other payable, and short-term and long-term borrowings. The estimated fair value of cash and cash equivalents, restricted cash, short-term time deposits, accounts receivable, other receivable, accounts payable, other payable, and short-term borrowings approximates their carrying value due to the short period of time to their maturities. All transfers between fair value hierarchy levels are recognized by the Company at the end of each reporting period. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement in its entirety, requires judgment and considers factors specific to the investment. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risks associated with investment in those instruments. 99 Table of Contents Assets and liabilities measured at fair value on a recurring basis: Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of December 31, 2024 Assets Cash and cash equivalents $ 50,967 $ - $ - $ 50,967 Short-term investments 19,373 - - 19,373 Available-for-sale debt securities — - 2,584 2,584 $ 70,340 $ - $ 2,584 $ 72,924 As of December 31, 2023 Assets Cash and cash equivalents $ 37,518 $ - $ - $ 37,518 Short-term investments 21,312 - - 21,312 $ 58,830 $ - $ - $ 58,830 The Company did not have any assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2024. Assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2023 are as follows: Quoted Prices in Active Markets for Identical Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total As of December 31, 2023 Assets Investments accounted for using measurement alternative $ — $ — $ 10,378 $ 10,378 $ — $ — $ 10,378 $ 10,378 The Company recognized nil , $ 1,465 and nil (upward adjustments) resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer on the consolidated statements of comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022 , respectively. The Company did not recognize any unrealized losses (downward adjustments) resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer for its long-term investments accounted for using measurement alternatives during the years ended December 31, 2024, 2023, and 2022. The non-recurring fair value measurements to the carrying amount of equity investments accounted for using measurement alternative usually requires management to estimate a price adjustment for the different rights and obligations between a similar instrument of the same issuer with an observable price change in an orderly transaction and the investment held by the Company. These non-recurring fair value measurements were measured by using the observable transaction price and other unobservable inputs (level 3) as of the observable transaction dates. Refer to Note 11 for fair value information related to the Company’s outstanding long-term borrowings as of December 31, 2024 and December 31, 2023 . 100 Table of Contents Operating and Financial Risks Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, time deposits, and accounts receivable. The Company deposits and invests its cash with financial institutions that management believes are creditworthy. The Company is potentially subject to concentrations of credit risks in its accounts receivable and revenue. For the years ended December 31, 2024, 2023 and 2022, four customers accounted for 52.2 %, three customers accounted for 45.5 % of revenue, and three customers accounted for 43.8 % of revenue, respectively. As of December 31, 2024 and 2023, four customers accounted for 57.1 % and four customers accounted for 59.1 %, respectively, of the Company’s accounts receivables. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. Interest Rate Risk As of December 31, 2024 and 2023, the balance of the Company’s short term bank borrowings (note 8) were scheduled to mature at various dates within the following year and thus exposed the Company to modest interest rate risk. The Company is exposed to interest rate risk related to its long-term borrowings (note 12), and as certain long-term borrowings carry a fixed interest rate, the Company may be exposed to the fair value interest rate risk. Liquidity Risk The Company’s working capital at December 31, 2024 and 2023 was sufficient to meet its then-current requirements. The Company may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions the Company decides to pursue. In the long run, the Company intends to rely primarily on cash flows from operations and additional borrowings from financial institutions in order to meet its cash needs. If those sources are insufficient to meet cash requirements, the Company may seek to issue additional debt or equity. Country Risk The Company has significant investments in mainland China. The operating results of the Company may be adversely affected either directly or indirectly by changes in the political and social conditions in mainland China, by changes in mainland China government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and export controls enacted by the U.S., Japan, and the Netherlands to restrict the sale of certain technology to mainland China, among other things. Foreign Currency Risk and Translation The Company’s consolidated financial statements are presented in U.S. dollars, which is the Company’s reporting currency, while the functional currency of ACM’s subsidiaries in mainland China and Korea are the Chinese Renminbi (“RMB”), and the Korean Won, respectively. Changes in the relative values of U.S. dollars and RMB affect the Company’s reported levels of revenues and profitability as the results of its operations are translated from RMB into U.S. dollars for reporting purposes. Since the Company has not engaged in any hedging activities, it cannot predict the impact of future exchange rate fluctuations on the results of its operations, and it may experience economic losses as a result of foreign currency exchange rate fluctuations. Transactions of ACM’s subsidiaries involving foreign currencies are recorded in functional currency according to the rate of exchange prevailing on the date when the transaction occurs. The ending balances of the Company’s foreign currency accounts are converted into functional currency using the rate of exchange prevailing at the end of each reporting period. Net gains and losses resulting from foreign exchange fluctuations as marked to market at year-end are included in the consolidated statements of comprehensive income (loss). In accordance with FASB ASC Topic 830, Foreign Currency Matters , the Company translates assets and liabilities into U.S. dollars from RMB or Korean Won using the rate of exchange prevailing at the applicable balance sheet date and the consolidated statements of comprehensive income (loss) and consolidated statements of cash flows are translated at an 101 Table of Contents average rate during the reporting period. Adjustments resulting from the translation are recorded in stockholders’ equity as part of accumulated other comprehensive income (loss). Recently Adopted Accounting Pronouncements In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures . This ASU updates reportable segment disclosure requirements by requiring disclosures of significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU also requires disclosure of the title and position of the individual identified as the CODM and an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. The ASU is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of the ASU should be applied retrospectively to all prior periods presented in the financial statements. Early adoption is also permitted. The Company adopted ASU 2023-07 in the fourth quarter of 2024, and the adoption did not have a material impact on the Company’s financial position, results of operations and cash flows. Recently issued accounting pronouncements not yet adopted In December 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Retrospective application is permitted. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the provisions of this ASU. In December 2024, the FASB issued ASU 2024-03: Income Statement--Reporting Comprehensive Income--Expense Disaggregation Disclosures (Subtopic 220-40) , which requires additional disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. In January 2025, the FASB issued ASU 2025-01, which clarifies the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU should be applied prospectively with the option to apply the standard retrospectively. The Company is currently evaluating the provisions of this ASU. NOTE 3 – REVENUE FROM CONTRACTS WITH CUSTOMERS The Company assesses revenues based upon the nature or type of goods or services it provides and the geographic location of the customer facility. The following tables present disaggregated revenue information: Year Ended December 31, 2024 2023 2022 Single Wafer Cleaning, Tahoe and Semi-Critical Cleaning Equipment $ 578,887 $ 403,851 $ 272,939 ECP (front-end and packaging), Furnace and Other Technologies 151,057 103,356 77,482 Advanced Packaging (excluding ECP), Services & Spares 52,174 50,516 38,411 Total Revenue By Product Category $ 782,118 $ 557,723 $ 388,832 Year Ended December 31, 2024 2023 2022 Mainland China $ 775,752 $ 540,969 $ 377,752 Other regions 6,366 16,754 11,080 $ 782,118 $ 557,723 $ 388,832 102 Table of Contents Below are the accounts receivables and contract liabilities balances as of: December 31, 2024 December 31, 2023 Accounts receivable $ 387,045 $ 283,186 Advances from customers 243,949 181,368 Deferred revenue 8,537 3,687 During the year ended December 31, 2024, advances from customers increased by $ 62,581 primarily due to a net increase of payments made by customers for first tools under evaluation. Below are revenues recognized from amounts included in contract liabilities at the beginning of the year: Year Ended December 31, 2024 2023 2022 Revenue recognized from amounts included in contract liabilities at the beginning of the year $ 124,069 $ 97,370 $ 30,385 NOTE 4 – ACCOUNTS RECEIVABLE, NET At December 31, 2024 and 2023, accounts receivable, net consisted of the following: December 31, 2024 2023 Accounts receivable $ 405,392 $ 288,016 Less: Allowance for credit losses ( 18,347 ) ( 4,830 ) Total $ 387,045 $ 283,186 The $ 103,859 increase in accounts receivable, net for the year ended December 31, 2024 corresponds to a $ 224,395 increase in revenue for the same period. December 31, 2024 2023 Allowance for credit losses, before tax, at beginning of the year $ ( 4,830 ) $ — Cumulative effect of change in accounting principle under ASC 326, before tax, as of January 1, 2023 — ( 2,099 ) Provision for credit loss ( 13,517 ) ( 2,731 ) Allowance for credit losses, before tax, at the end of the year $ ( 18,347 ) $ ( 4,830 ) The Company assesses collectability by reviewing accounts receivable on a general basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. 103 Table of Contents NOTE 5 – INVENTORIES, NET At December 31, 2024 and 2023, inventories, net consisted of the following: December 31, 2024 2023 Raw materials $ 224,086 $ 235,062 Work-in-process 80,767 81,438 Finished goods 293,131 228,895 Total inventories, net $ 597,984 $ 545,395 At December 31, 2024 and December 31, 2023, the value of finished goods inventory, which is comprised of first-tools at customer physical locations, for which customers were contractually obligated to take ownership upon acceptance, totaled $ 206,018 and $ 123,390 , respectively. The $ 11,646 decrease in raw materials and work-in-process inventory at December 31, 2024 compared to December 31, 2023 was due in part to an increased focus on cash efficiency despite a higher level of expected total shipments for the next 12-months. The $ 64,236 increase in finished goods inventory at December 31, 2024 compared to December 31, 2023 reflects a higher value of first-tools under evaluation by existing or prospective customers, partly offset by a lower value of completed tools at the Company's facilities. The Company’s products each require a certain degree of customization, and the substantial majority of the work-in-process inventory and finished goods inventory is built to meet a specific customer order for repeat shipment or first tool delivery. At the end of each period, the Company assesses the status of each item in work-in-process and finished goods inventory. The Company recognizes a loss or impairment if in management’s judgement the inventory cannot be sold or used for production, if it has been damaged or should be considered as obsolete, or if the net realizable value is lower than the cost. At the end of each period, the Company also assesses the status of its raw materials. The Company recognizes a loss or impairment for any raw materials aged more than three years . The three-year aging is based on the Company’s assessment of technology change, its requirement to maintain stock and other factors. For raw materials aged less than three years of age, the Company recognizes a specific loss or impairment if the Company determines the item does not have future use or is otherwise impaired. During the years ended December 31, 2024, 2023, and 2022, provision for i n ventory of $ 3,100 , $ 575 , and $ 2,248 were recognized in cost of revenue, respectively. NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET At December 31, 2024 and 2023, property, plant and equipment consisted of the following: December 31, 2024 2023 Buildings and plants $ 141,410 $ 83,109 Manufacturing equipment 37,038 16,556 Office equipment 5,815 4,953 Transportation equipment 396 404 Leasehold improvement 11,579 7,889 Total cost 196,238 112,911 Less: Total accumulated depreciation and amortization ( 24,882 ) ( 17,503 ) Construction in progress 97,916 106,440 Total property, plant and equipment, net $ 269,272 $ 201,848 104 Table of Contents Depreciation expense was $ 6,573 , $ 6,912 , and $ 4,839 for the years ended December 31, 2024, 2023, and 2022, respectively. At December 31, 2024, buildings and plants comprised of $ 34,740 for Lingang housing property, $ 49,693 for Lingang development and production center, $ 49,221 for ACM Shanghai's corporate headquarters, and $ 7,756 for ACM's Oregon facilities, as compared to $ 35,264 , nil, $ 47,845 , and nil , respectively, at December 31, 2023. The Lingang housing property is pledged as security for loans from China Merchants Bank (Note 11). Construction in progress primarily reflects costs incurred for certain facilities related to the construction of ACM Shanghai’s Lingang development and production center . NOTE 7 – OTHER LONG-TERM ASSETS At December 31, 2024 and 2023, other long-term assets consisted of the following: December 31, 2024 2023 Prepayment for property, plant and equipment $ 32 $ 3,380 Lease deposit 950 834 Security deposit for land use right 686 696 Prepayment for investment in Ninebell 16,737 — Others 2,047 1,140 Total other long-term assets $ 20,452 $ 6,050 105 Table of Contents NOTE 8 – SHORT-TERM BORROWINGS At December 31, 2024 and December 31, 2023, short-term borrowings consisted of the following: December 31, 2024 2023 Line of credit up to RMB ¥ 150,000 from China Everbright Bank, 1)due on August 29, 2024 with an annual interest rate of 3.00 %. — 2,463 Line of credit up to RMB ¥ 40,000 from Bank of China, 1)due on September 7, 2024 with an annual interest rate of 2.87 %. — 5,648 2)due on March 20, 2025 with an annual interest rate of 2.75 %. 16,706 — 3)due on September 23, 2025 with an annual interest rate of 2.50 %. 5,569 — Line of credit up to RMB ¥ 200,000 from China Merchants Bank, 1)due on August 7, 2024 with an annual interest rate of 3.00 %. — 1,271 2)due on August 8, 2024 with an annual interest rate of 3.00 %. — 1,271 3)due on August 9, 2024 with an annual interest rate of 3.00 %. — 1,271 4)due on August 14, 2024 with an annual interest rate of 3.00 %. — 1,271 5)due on August 17, 2024 with an annual interest rate of 3.00 %. — 1,271 6)due on August 20, 2024 with an annual interest rate of 3.00 %. — 1,271 7)due on August 21, 2024 with an annual interest rate of 3.00 %. — 1,271 8)due on August 22, 2024 with an annual interest rate of 3.00 %. — 1,271 9)due on August 24, 2024 with an annual interest rate of 3.00 %. — 1,271 10)due on August 27, 2024 with an annual interest rate of 3.00 %. — 1,271 11)due on August 29, 2024 with an annual interest rate of 3.00 %. — 1,271 12)due on August 30, 2024 with an annual interest rate of 3.00 %. — 1,271 13)due on September 3, 2024 with an annual interest rate of 3.00 %. — 1,271 14)due on September 5, 2024 with an annual interest rate of 3.00 %. — 1,270 15)due on September 6, 2024 with an annual interest rate of 3.00 %. — 1,270 16)due on September 10, 2024 with an annual interest rate of 3.00 %. — 1,270 17)due on September 12, 2024 with an annual interest rate of 3.00 %. — 1,270 18)due on February 27, 2025 with an annual interest rate of 2.60 %. 1,322 — 19)due on February 28, 2025 with an annual interest rate of 2.60 %. 1,322 — 20)due on March 1, 2025 with an annual interest rate of 2.60 %. 1,322 — 21)due on March 5, 2025 with an annual interest rate of 2.60 %. 1,322 — 22)due on March 8, 2025 with an annual interest rate of 2.60 %. 1,253 — 23)due on August 27, 2025 with an annual interest rate of 2.60 %. 1,322 — 24)due on September 12, 2025 with an annual interest rate of 2.60 %. 1,322 — Line of credit up to KRW ₩ 500,000 from Industrial Bank of Korea, 1)due on July 12, 2024 with an annual interest rate of 6.03 %. — 77 Line of credit up to KRW ₩ 2,000,000 from Industrial Bank of Korea, 1)due on December 15, 2024 with an annual interest rate of 4.27 %. — 1,544 2)due on December 16, 2025 with an annual interest rate of 4.43 %. 1,354 — Total $ 32,814 $ 31,335 For the years ended December 31, 2024, 2023 and 2022, interest expense related to short-term borrowings amounted to $ 1,218 , $ 1,581 , and $ 810 , respectively. 106 Table of Contents NOTE 9 – OTHER PAYABLES AND ACCRUED EXPENSES At December 31, 2024 and 2023, other payables and accrued expenses consisted of the following: December 31, 2024 2023 Accrued commissions $ 20,180 $ 15,572 Accrued warranty 12,710 9,834 Accrued payroll 21,677 14,840 Accrued professional fees 896 696 Accrued machine testing fees 1,082 1,762 Accrued machine sales fees 8,840 6,010 Individual income tax payable 11,975 12,156 Accrued Lingang construction fees 28,103 33,729 Payments for investments 4,729 — Others 11,465 8,352 Total $ 121,657 $ 102,951 NOTE 10 – LEASES The Company leases space under non-cancelable operating leases for several office and manufacturing locations. These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives, or other build-out clauses. Further, the leases do not contain contingent rent provisions. Most leases include one or more options to renew. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term. The Company’s leases also include a right to use state-owned land in mainland China with lease terms of 50 years expiring in 2070, for which an upfront lump-sum payment was made during the year ended December 31, 2022. The components of lease expense were as follows: Year Ended December 31, 2024 2023 2022 Operating lease cost $ 3,815 $ 3,580 $ 2,816 Short-term lease cost 1,790 923 786 Lease cost $ 5,605 $ 4,503 $ 3,602 Supplemental cash flow information related to operating leases was as follows for the years ended December 31, 2024, 2023, and 2022: Year Ended December 31, 2024 2023 2022 Operating cash outflow from operating leases $ 3,647 $ 3,580 $ 2,816 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 1,781 $ 8,195 $ 1,054 107 Table of Contents Maturities of lease liabilities for all operating leases were as follows as of December 31, 2024: December 31, 2024 2025 2,376 2026 1,607 2027 1,462 2028 and thereafter 1,118 Total lease payments $ 6,563 Less: Interest ( 591 ) Present value of lease liabilities $ 5,972 The weighted average remaining lease terms and discount rates for all operating leases, excluding land-use right, were as follows as of December 31, 2024 and 2023: December 31, 2024 2023 Remaining lease term and discount rate: Weighted average remaining lease term (years) 3.57 3.44 Weighted average discount rate 3.58 % 3.91 % NOTE 11 – LONG-TERM BORROWINGS At December 31, 2024 and 2023, long-term borrowings consisted of the following: December 31, 2024 2023 Loan from China Merchants Bank $ 11,475 $ 13,362 Loan from Agricultural Bank of China 13,020 — Loans from Bank of China 28,258 5,013 Loan from Bank of Shanghai 13,920 14,120 Loans from China CITIC Bank 27,775 28,240 Loan from China Everbright Bank 55,549 — Less: Current portion ( 44,472 ) ( 6,783 ) $ 105,525 $ 53,952 The loan from China Merchants Bank is for the purpose of purchasing property in Lingang, Shanghai. The loan is repayable in 120 installments with the last installment due in November 2030, with an annual interest rat e of 3.65 %. Th e loan is pledged by the property of ACM Lingang and guaranteed by ACM Shanghai. The loan from Agricultural Bank of China is for the purpose of purchasing housing property in Lingang, Shanghai. The loan is repayable in 8 installments with the last installment due in April 2034, with an annual interest rate of 2.53 %- 2.78 %. Two loans from Bank of China are for the purpose of funding ACM Shanghai project expenditures. The first loan from Bank of China is for the purpose of funding ACM Shanghai's general corporate expenses and working capital. The loan bears interest at an annual rate of 2.62 % and is payable in 6 installments, with the last installment due in June 2027. The second loan from Bank of China is for the purpose of funding ACM Shanghai project expenditures. The loan bears interest at an annual rate of 2.52 % and are repayable in 6 installments, with the last installment due in August 2027. 108 Table of Contents The loan from Bank of Shanghai is for the purpose of funding ACM Shanghai project expenditures. The loan bears interest mainly based on the one-year People’s Bank of China (“PBOC”) benchmark interest rate of 3.45 % and a predetermined margin of - 0.60 basis points, resulting in an interest rate of 2.85 %, and will be fully repaid in April 2025. The first loan from China CITIC Bank is for the purpose of funding ACM Shanghai project expenditures. The loan bears interest at an annual rate of 3.10 % and are repayable in 4 installments, with the last installment due in August 2025. The second loan from China CITIC bank is for the purpose of funding ACM's general corporate operation and working capital. The loan bears interest at an annual rate of 3.40 % payable quarterly, and the principal amount is repayable in 4 installments, with the last installment due in December 2027. Th e loans from China Everbright Bank are for the purpose of funding ACM Shanghai's general corporate operation and working capital. The first loan bears interest mainly based on the one-year PBOC benchmark interest rate of 3.95 % and a predetermined margin of - 1.35 basis points, resulting in an interest rate of 2.60 %, and is payable in 6 installments, with the last installment due in June 2027. The second loan bears interest mainly based on the one-year PBOC benchmark interest rate of 3.35 % and a predetermined margin of - 0.75 basis points, resulting in an interest rate of 2.60 %, and is payable in 3 installments, with the last installment due in March 2026. The third loan bears interest mainly based on the one-year PBOC benchmark interest rate of 3.10 % and a predetermined margin of - 0.50 basis points, resulting in an interest rate of 2.60 %, and is payable in 3 installments, with the last installment due in April 2026. As of December 31, 2024 and December 31, 2023, the total carrying amount of long-term loans was $ 149,997 and $ 60,735 , compared with an estimated fair value of $ 141,264 and $ 56,638 , respectively. The fair value of the long-term loans is estimated by discounting cash flows using interest rates currently available for debts with similar terms and maturities (Level 2 fair value measurement). Refer to Note 2 for an explanation of the fair value hierarchy structure. Scheduled principal payments for the outstanding long-term loans, including the current portion, as of December 31, 2024 are as follows: Year ending December 31, 2025 $ 44,472 2026 33,758 2027 58,296 2028 7,537 Thereafter 5,934 149,997 For the years ended December 31, 2024, 2023, and 2022 respectively, $ 2,933 , $ 1,100 and $ 845 of interest expense related to long-term borrowings was incurred. NOTE 12 – O THER LONG-TERM LIABILITIES Other long-term liabilities represent government subsidies received from mainland China governmental authorities for development and commercialization of certain technology but not yet recognized (note 2). As of December 31, 2024 and 2023, other long-term liabilities consisted of the following unearned government subsidies: December 31, 2024 2023 Subsidies commenced in 2020 and prior $ 699 $ 1,107 Subsidies to Lingang R&D development in 2021 7,350 3,467 Other 1,168 1,299 Total $ 9,217 $ 5,873 NOTE 13– LONG-TERM INVESTMENTS On September 6, 2017, ACM and Ninebell Co., Ltd. (“Ninebell”), a Korean company that is one of the Company’s principal material suppliers, entered into an ordinary share purchase agreement, effective as of September 11, 2017, 109 Table of Contents pursuant to which Ninebell issued to ACM ordinary shares representing 20 % of Ninebell’s post-closing equity for a purchase price of $ 1,200 , and a common stock purchase agreement, effective as of September 11, 2017, pursuant to which ACM issued 400,002 shares of Class A common stock to Ninebell for a purchase price of $ 1,000 at $ 2.50 per share. The investment in Ninebell is accounted for under the equity method. On June 27, 2019, ACM Shanghai and Shengyi Semiconductor Technology Co., Ltd. (“Shengyi”), a company based in Wuxi, China that is one of the Company’s component suppliers, entered into an agreement pursuant to which Shengyi issued to ACM Shanghai shares representing 14 % of Shengyi’s post-closing equity for a purchase price of $ 109 . The investment in Shengyi is accounted for under the equity method. In September 2023, the Company invested additional RMB 6,100 ($ 900 ) to Shengyi. As the additional investment is not in substance common stock, the Company measures the additional investment in Shengyi at measurement alternative. On September 5, 2019, ACM Shanghai entered into a Partnership Agreement with six other investors, as limited partners, and Beijing Shixi Qingliu Investment Co., Ltd., as general partner and manager, with respect to the formation of Hefei Shixi Chanheng Integrated Circuit Industry Venture Capital Fund Partnership (LP), a Chinese limited partnership based in Hefei, China. Pursuant to such Partnership Agreement, on September 30, 2019, ACM Shanghai invested RMB 30,000 ($ 4,200 ), which represented 10 % of the partnership’s total subscribed capital. The investment in Hefei Shixi Chanheng Integrated Circuit Industry Venture Capital Fund Partnership (LP) is accounted for under the equity method in accordance with ASC 323-30-S99-1. On October 29, 2021, ACM Shanghai and Waferworks (Shanghai) Co., Ltd, or Waferworks, a company based in Shanghai, China, and one of the Company’s customers, entered into an agreement pursuant to which Waferworks issued to ACM Shanghai shares representing 0.25 % of Waferworks’ post-closing equity for a purchase price of $ 1,568 . As the investment is not in substance common stock and there is no readily determinable fair value, the Company measures the investment in Waferworks at measurement alternative. On August 17, 2022, ACM Singapore and Wooil Flucon Co., Ltd. (“Wooil”), a company based in Korea and a potential component supplier to the Company, entered into an agreement pursuant to which Wooil, on September 1, 2022, issued to ACM Singapore shares representing 20 % of Wooil’s post-closing equity for a purchase price of $ 1,000 . The investment in Wooil is accounted for under the equity method. On September 25, 2023, ACM Sh anghai entered into a partnership agreement with Company A to invest RMB 30,000 ($ 4,230 ), which represented 4.37 % of the partnership's total subscribed capital. Since there is no readily determinable fair value, the Company measures the investments at measurement alternative. On November 1, 2023, ACM Shanghai entered into a partnership agreement with Company B to invest RMB 6,600 ($ 930 ), which represented 1.19 % of the partnership's total subscribed capital. Since there is no readily determinable fair value, the Company measures the investments at measurement alternative. As of December 31, 2024, Company B issued additional shares to investors and ACM Shanghai’s ownership declined to 1.19 %. On January 12, 2024, ACM Shanghai entered into an investment agreement with Company C to invest RMB 12,500 ($ 1,760 ), which represented 5.04 % of the Company C's total equity interest. Since there is no readily determinable fair value, the Company measures the investments at measurement alternative. On January 19, 2024, ACM Shanghai entered into a limited partnership agreement with Company D to invest RMB 30,000 ($ 4,230 ), which represented 16.67 % of the partnership's total equity interest. The investment in the limited partnership with Company D is accounted for under the equity method in accordance with ASC323-30-S99-1. As of December 31, 2024, Company D issued additional shares to investors and ACM Shanghai’s ownership declined to 14.28 %. On January 22, 2024, ACM Shanghai entered into an investment agreement with Company E to invest RMB 10,000 ($ 1,430 ) which represented 0.64 % of the Company E's total equity interest. The transaction was closed in April 2024. Since there is no readily determinable fair value, the Company measures the investments at measurement alternative. On April 22, 2024, ACM Shanghai entered into an investment agreement with Ninebell to invest $ 16,737 which represented 20 % of Ninebell’s total equity interest. As of December 31, 2024, ACM Shanghai pre-paid the consideration of $ 16,737 to Ninebell, which is recorded in other long-term assets (note 7) in the consolidated balance sheets. The share certification was issued in January 2025. After the share purchase transaction is closed, the Company owns 36.4 % of Ninebell. 110 Table of Contents On December 30, 2024, ACM Shanghai entered into a limited partnership agreement with Company F to invest RMB 10,000 ($ 1,391 ), which represented 16.67 % of Company F's total equity interest. The equity interest is redeemable at the option of ACM Shanghai if Company F failed to consummate a qualified IPO within a certain period. ACM Shanghai made the first installment payment of RMB 3,000 ($ 417 ) on December 30, 2024 and the remaining RMB 7,000 ($ 974 ) will be paid on or before December 31, 2026. As agreed by investment agreement, the Company obtained the entire 16.67 % equity interest on the settlement of the first installment. Company F is a privately held company and the Company classified the investment as available-for-sale debt securities as the equity interest is redeemable. On December 30, 2024, ACM Shanghai entered into an investment agreement with Company G to invest RMB 30,000 ($ 4,173 ), which represented 2.91 % of Company G's total equity interest. ACM Shanghai made the first installment payment of RMB 3,000 ($ 417 ) on December 30, 2024 and the remaining RMB 27,000 ($ 3,756 ) will be paid on or before June 30, 2026. As agreed by investment agreement, the Company obtained the entire 2.91 % ownership when the equity transaction was approved by the shareholders’ meeting, and the share certification was issued upon the settlement of the first installment. Since there is no readily determinable fair value, the Company measures the investments at measurement alternative. Equity investee: Initial investment dates Investment entity Percent ownership by ACM and subsidiaries Investment purchase price Ninebell Co., Ltd. ("Ninebell") September 2017 ACM 20.0 % $ 1,200 Wooil Flucon Co., ("Wooil") August 2022 ACM Singapore 20.0 % $ 1,000 Hefei Shixi Chanheng Integrated Circuit Industry Venture Capital Fund Partnership (LP) (“Hefei Shixi”) September 2019 ACM Shanghai 10.0 % RMB 30,000 ($ 4,200 ) Shengyi Semiconductor Technology Co., Ltd. ("Shengyi") June 2019 ACM Shanghai 14.0 % $ 109 Company D February 2024 ACM Shanghai 16.67 % RMB 30,000 ($ 4,230 ) Investments accounted for using measurement alternative: Waferworks (Shanghai) Co., Ltd. (“Waferworks”) October 2021 ACM Shanghai 0.25 % $ 1,568,000 Shengyi September 2023 ACM Shanghai 1.00 % RMB 6,100 ($ 900 ) Company A September 2023 ACM Shanghai 4.37 % RMB 30,000 ($ 4,230 ) Company B November 2023 ACM Shanghai 1.19 % RMB 6,600 ($ 930 ) Company C February 2024 ACM Shanghai 5.04 % RMB 12,500 ($ 1,760 ) Company E April 2024 ACM Shanghai 0.64 % RMB 10,000 ($ 1,430 ) Company F December 2024 ACM Shanghai 16.67 % RMB 10,000 ($ 1,391 ) Company G December 2024 ACM Shanghai 2.91 % RMB 30,000 ($ 4,173 ) 111 Table of Contents 2024 Equity investee: 2024 2023 Ninebell $ 7,862 $ 5,632 Wooil 936 1,003 Shengyi 2,775 1,693 Hefei Shixi 4,798 9,174 Company D 4,173 — Subtotal 20,544 17,502 Investments accounted for using measurement alternative: Waferworks — 1,412 Shengyi 845 857 Company A 4,173 4,236 Company B 918 932 Company C 1,739 — Company E 1,391 — Company G 4,173 — Other 696 2,941 Subtotal 13,935 10,378 Investments accounted for under available-for-sale debt securities Company F 1,391 — Other 1,193 — Total $ 37,063 27,880 The Company recognized $ 423 , $ 9,952 , and $ 4,666 share of equity investees’ net income which amounts were included in income (loss) from equity method investments in the accompanying consolidated statements of comprehensive income (loss) for the years ended December 31, 2024, 2023, and 2022, respectively. For the years ended December 31, 2024, 2023, and 2022, the Company received $ 1,401 , nil , and nil dividends from equity investee, respectively. NOTE 14 – SHORT-TERM INVESTMENTS Pursuant to an Agreement entered into on September 19, 2022 (the ‘‘Agreement’’), ACM Shanghai became a limited partner of the Nuode Asset Fund Pujiang No. 783 Single Asset Management Plan (‘‘Nuode Asset Fund’’), a Chinese limited partnership formed by Nuode Asset Management Co., Ltd, a financial services firm based in Shanghai, China. Nuode Asset Fund was formed to establish a special fund with the purpose to participate in certain technology related investments in mainland China. Subsequent to the future purchase, any investment will be held by Nuode Asset Fund and restricted for a minimum period of nine months. The limited partners of the Nuode Asset Fund contributed a $ 22,160 to the fund, of which ACM Shanghai contributed $ 4,196 , or 18.75 % of the contribution on September 27, 2022. In December 2022, the Nuode Asset Fund purchased shares in the secondary stock offering of a publicly traded mainland China-stock listing, and was apportioned to the limited partners in proportion to their respective capital contributions. The investments were fully-disposed by Nuode Asset Fund during the year ended December 31, 2024, and the Company received net proceeds of RMB 22,478 ($ 3,167 ). Pursuant to a Share Purchase Agreement dated June 2023, ACM Shanghai acquired shares of Huahong Semiconductor Limited (“Huahong”) in July 2023 with amount of $ 13,930 . The shares held by ACM Shanghai are restricted for sale for a minimum period of twelve months. Huahong completed it STAR IPO in August 2023. Pursuant to a Share Purchase Agreement dated August 2023, ACM Shanghai acquired shares of Zhongjuxin Limited Company (“Zhongjuxin”) in September 2023 with amount of $ 4,179 . The shares held by ACM Shanghai are restricted for sale for a minimum period of twelve months. Zhongjuxin completed it STAR IPO in September 2023. The investments were partially-disposed by ACM Shanghai and net proceeds of R MB 38,464 ($ 5,267 ) were received during the year ended December 31, 2024. 112 Table of Contents Pursuant to a Share Purchase Agreement dated January 2024, ACM Shanghai acquired shares of Shanghai Syncrystalline Silicon Materials Co., Ltd. (“Syncrystalline”) in February 2024 with amount of RMB 10 million ($ 1,409 ). The shares held by ACM Shanghai are restricted for sale for a minimum period of twelve months. Syncrystalline completed its STAR IPO in February 2024. As of December 31, 2024, the Company's total investment costs in Syncrystalline were RMB 20 million ($ 2,818 ), including RMB 10 million ($ 1,409 ) invested by ACM Shanghai in 2021 and RMB 10 million ($ 1,409 ) invested by ACM Shanghai in February 2024. The components of short-term investments were as follows: December 31, 2024 2023 Short-term investments listed in Shanghai Stock Exchange Cost $ 17,731 $ 20,155 Market value $ 19,373 $ 21,312 For the years ended December 31, 2024, 2023 and 2022, the net gains (losses) recognized on equity securities were as follows: Year ended December 31 2024 2023 2022 Unrealized gains (losses) recognized during the reporting period on short-term investment still held at December 31 $ 973 $ ( 2,737 ) $ ( 7,855 ) Net realized gains on short-term investment sold during the period 1,788 9,047 1,116 Total net gains (losses) recognized at December 31 on short-term investment $ 2,761 $ 6,310 $ ( 6,739 ) For the years ended December 31, 2024, 2023 and 2022, the Company received proceeds of $ 8,434 , $ 21,735 and $ 4,577 from the sale of short-term investments, respectively, including realized gains of $ 1,788 , $ 9,047 and $ 1,116 , respectively. NOTE 15 – RELATED PARTY BALANCES AND TRANSACTIONS Ninebell Ninebell is an equity investee of ACM (Note 13) and is the Company’s principal supplier of robotic delivery system subassemblies used in our single-wafer cleaning equipment. The Company purchases inventories from Ninebell for production in the ordinary course of business. The Company pays for a portion of the inventories in advance and is obligated for the remaining amounts upon receipt of the product. Shengyi Shengyi is an equity investee of ACM Shanghai (Note 13) and is one of the Company’s component suppliers in mainland China. The Company purchases components from Shengyi for production in the ordinary course of business. The Company incurs a service fee related to installation and hook-up fees which is recorded within cost of revenue on the Company’s consolidated statements of comprehensive income (loss). The Company pays for a portion of the raw materials in advance and is obligated for the remaining amounts upon receipt of the product. All related party outstanding balances are short-term in nature and are expected to be settled in cash. The following tables represent related party transactions with the equity investees as of December 31, 2024 and 2023: December 31, Advances to related party 2024 2023 Ninebell $ 1,024 $ 2,432 113 Table of Contents December 31, Accounts payable 2024 2023 Ninebell $ 10,830 $ 7,624 Shengyi 5,303 3,783 Total $ 16,133 $ 11,407 Year Ended December 31 Purchase of materials 2024 2023 2022 Ninebell $ 53,792 $ 42,737 $ 40,985 Shengyi 6,794 5,006 5,350 Total $ 60,586 $ 47,743 $ 46,335 Year Ended December 31 Service fee charged by 2024 2023 2022 Shengyi $ 595 $ 820 $ 543 Total $ 595 $ 820 $ 543 NOTE 16 – COMMON STOCK At December 31, 2024 and 2023, ACM was authorized to issue 150,000,000 shares of Class A common stock and 5,307,816 shares of Class B common stock, each with a par value of $ 0.0001 . Each share of Class A common stock is entitled to one vote, and each share of Class B common stock is entitled to twenty votes and is convertible at any time into one share of Class A common stock. Shares of Class A common stock and Class B common stock are treated equally, identically and ratably with respect to any dividends declared by the Board of Directors unless the Board of Directors declares different dividends to the Class A common stock and Class B common stock by getting approval from a majority of common stockholders. During the year ended December 31, 2024, 2023 and 2022, ACM issued 1,902,713 , 1,380,886 and 980,354 shares of Class A common stock upon option exercises by employees and non-employees, respectively, and issued nil , nil , and 66,003 shares of Class A common stock upon conversion of an equal number of shares of Class B common stock, respectively. At December 31, 2024 and 2023, the number of shares of Class A common stock issued and outstanding was 57,938,885 and 56,036,172 , respectively. At December 31, 2024 and 2023, the number of shares of Class B common stock issued and outstanding was 5,021,811 and 5,021,811 , respectively. NOTE 17 – STOCK-BASED COMPENSATION ACM’s stock-based compensation consists of employee and non-employee awards issued under its 1998 Stock Option Plan and its 2016 Omnibus Incentive Plan. The vesting condition may consist of service period condition or certain performance conditions, as determined by the Board of Directors. The fair value of the stock options granted with a service period based condition and/or performance condition is estimated at the date of grant using the Black-Scholes option pricing model. The fair value of the stock option s granted with a market based condition is estimated at the date of grant using the Monte Carlo simulation model. 114 Table of Contents Employee Awards The following table summarizes the ACM’s employee share option activities: Number of Option Shares Weighted Average Grant Date Fair Value Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2021 8,402,247 $ 2.45 $ 5.88 6.53 years Granted 1,653,300 10.31 22.41 Exercised ( 416,546 ) 1.20 2.97 Forfeited/cancelled ( 427,360 ) 11.41 25.24 Outstanding at December 31, 2022 9,211,641 $ 3.58 $ 8.24 6.36 years Granted 2,230,500 10.38 13.91 Exercised ( 1,080,952 ) 0.90 2.28 Forfeited/cancelled ( 362,552 ) 11.24 22.92 Outstanding at December 31, 2023 9,998,637 $ 5.15 $ 9.47 6.17 years Granted 461,000 15.31 20.69 Exercised ( 1,523,619 ) 1.91 4.10 Forfeited/cancelled ( 84,423 ) 11.47 24.29 Outstanding at December 31, 2024 8,851,595 $ 6.18 $ 10.84 5.81 years Vested and exercisable at December 31, 2024 5,528,459 $ 4.73 $ 9.23 4.81 years As of December 31, 2024, $ 23,133 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to stock-based awards for ACM was expected to be recognized over a weighted-average period of 3.30 years. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures. The aggregate intrinsic value of options exercised in the years ended December 31, 2024, 2023 and 2022 was $ 35,675 , $ 15,457 , and $ 6,429 respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2024 were $ 53,004 and $ 42,841 , respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $ 26,137 , $ 18,378 and $ 13,137 , respectively. The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation model with the following assumptions: Year ended December 31, 2024 2023 2022 Fair value of common stock(1) $ 18.67 -$ 31.92 $ 11.85 -$ 17.23 $ 16.83 -$ 25.45 Expected term in years(2) 5.50 - 6.25 5.50 - 6.25 5.50 - 6.25 Volatility(3) 83.85 - 85.48 % 84.95 - 86.45 % 49.43 - 50.87 % Risk-free interest rate(4) 3.80 - 4.49 % 4.16 - 4.69 % 1.70 - 3.04 % Expected dividend(5) 0 % 0 % 0 % (1) Fair value of Class A common stock value was the closing market price of the Class A common stock on the grant date. (2) Expected term of share options is based on the average of the vesting period and the contractual term for each grant. (3) Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant. 115 Table of Contents (4) Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant. (5) Expected dividend is assumed to be 0 % as ACM has no history or expectation of paying a dividend on its common stock. Non-employee Award The following table summarizes the ACM's non-employee share option activities: Number of Option Shares (1) Weighted Average Grant Date Fair Value (1) Weighted Average Exercise Price (1) Weighted Average Remaining Contractual Term Outstanding at December 31, 2021 2,067,018 $ 0.33 $ 0.97 3.98 years Exercised ( 563,808 ) 0.21 0.51 Forfeited/cancelled ( 19,552 ) 0.21 0.48 Outstanding at December 31, 2022 1,483,658 0.38 1.15 3.68 years Exercised ( 299,934 ) 0.24 0.55 Forfeited/cancelled ( 12,929 ) 0.22 0.50 Outstanding at December 31, 2023 1,170,795 $ 0.42 $ 1.31 2.66 years Exercised ( 379,094 ) 0.22 0.57 Forfeited/cancelled ( 7,569 ) 0.22 0.50 Outstanding at December 31, 2024 784,132 $ 0.52 $ 1.68 2.12 years Vested and exercisable at December 31, 2024 784,132 $ 0.52 $ 1.68 2.12 years As of December 31, 2024, all of the non-employee share options were fully-vested. The aggregate intrinsic value of options exercised in the years ended December 31, 2024, 2023 and 2022 was $ 7,901 , $ 3,796 and $ 9,110 , respectively. The aggregate intrinsic value of options outstanding and exercisable as of December 31, 2024 were $ 10,523 and $ 10,523 , respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $ 408 , $ 479 , and $ 501 , respectively. ACM Shanghai 2019 Option Grants In January 2020, ACM Shanghai adopted a 2019 Stock Option Incentive Plan (the “2019 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain earning targets determined by the Board of Directors of ACM Shanghai. 116 Table of Contents The following table summarizes the ACM Shanghai employee stock option activities: Number of Option Shares in ACM Shanghai Weighted Average Grant Date Fair Value Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2021 5,377,500 $ 0.24 $ 2.04 2.50 years Forfeited/cancelled — — — Outstanding at December 31, 2022 5,377,500 $ 0.23 $ 1.93 1.76 years Exercised ( 2,150,309 ) 0.20 1.85 Forfeited/cancelled ( 92,308 ) 0.22 1.85 Outstanding at December 31, 2023 3,134,883 $ 0.24 $ 1.85 0.85 years Exercised ( 3,033,344 ) 0.20 1.83 Forfeited/cancelled ( 101,539 ) 0.20 1.83 Outstanding at December 31, 2024 $ — $ — $ — 0.00 years Vested and exercisable at December 31, 2024 $ — $ — $ — 0.00 years The aggregate intrinsic value of options exercised in the years ended December 31, 2024 and 2023 and 2022 was $ 25,946 , $ 31,144 and nil , respectively. There were nil options outstanding and exercisable as of December 31, 2024. The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023, and 2022 were nil , $ 99 , and $ 568 , respectively. ACM Shanghai 2023 Option Grants In June 2023, ACM Shanghai adopted a 2023 Stock Option Incentive Plan ( the "2023 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain sales and research and development progress targets determined by the Board of Directors of ACM Shanghai. The following table summarizes the ACM Shanghai 2023 Subsidiary Stock Option Plan’s stock option activities: Number of Option Shares in ACM Shanghai Weighted Average Grant Date Fair Value Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2022 — $ — $ — 0.00 years Granted 10,648,500 9.49 7.06 Forfeited/cancelled ( 73,000 ) 9.49 7.06 Outstanding at December 31, 2023 10,575,500 $ 9.49 $ 7.06 3.09 years Granted 1,391,000 6.04 7.00 Forfeited/cancelled ( 362,190 ) 9.08 7.00 Outstanding at December 31, 2024 11,604,310 $ 9.01 $ 7.00 2.48 years Vested and exercisable at December 31, 2024 2,559,435 $ 8.50 $ 6.99 0.59 years The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation with following assumptions: Year Ended December 31, 2024 Year Ended December 31, 2023 117 Table of Contents Fair value of common stock(1) $ 4.93 -$ 6.89 $ 14.87 Expected term in years(2) 1.5 - 4.5 1.5 - 4.5 Volatility(3) 45.92 %- 56.18 % 60.00 %- 60.60 % Risk-free interest rate(4) 1.50 %- 2.75 % 1.50 %- 2.75 % Expected dividend (5) — % — % (1) Equal to closing value on the grant date. (2) Expected term of share options is based on the average of the vesting period and the contractual term for each grant. (3) Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant. (4) Risk-free interest rate is based on the yields of RMB deposit in mainland China with maturities similar to the expected term of the share options in effect at the time of grant. (5) Expected dividend is assumed to be 0 % as the impact is adjusted on the value of share of common stock. The aggregate intrinsic value of options exercised in the years ended December 31, 2024 and 2023 was $ 20,712 and nil , respectively. The aggregate intrinsic value of options outstanding as of December 31, 2024 and 2023 was $ 62,244 and $ 81,981 , respectively. As of December 31, 2024, $ 40,490 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to ACM Shanghai stock-based awards were expected to be recognized over a weighted-average period of 1.5 years. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures. The aggregate fair value of the share-based awards vested during the years ended December 31, 2024, 2023 and 2022 were $ 21,748 , nil , and nil , respectively. The following table summarizes the components of stock-based compensation expense included in the consolidated statements of comprehensive income (loss): Year Ended December 31, 2024 2023 2022 Stock-Based Compensation Expense: Cost of revenue $ 2,385 $ 1,406 $ 520 Sales and marketing expense 10,552 5,684 1,877 Research and development expense 14,112 8,459 2,565 General and administrative expense 22,527 11,789 2,768 $ 49,576 $ 27,338 $ 7,730 Year Ended December 31, 2024 2023 2022 Stock-based compensation expense by type: Employee stock option plan $ 10,469 $ 6,213 $ 7,346 Non-employee stock option plan 30 46 46 2019 and 2023 Subsidiary stock option plans 39,077 21,079 338 $ 49,576 $ 27,338 $ 7,730 118 Table of Contents NOTE 18 – INCOME TAXES The following represent the U.S. and foreign components of income before income tax for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 2023 2022 U.S $ 21,282 $ 10,420 $ ( 3,456 ) Foreign 145,018 105,796 70,818 Income before income taxes $ 166,300 $ 116,216 $ 67,362 The following represent components of the income tax benefit (expense) for the years ended December 31, 2024, 2023 and 2022: Provision Year Ended December 31, 2024 2023 2022 Current: U.S. federal $ ( 483 ) $ ( 12,757 ) $ ( 479 ) U.S. state ( 2 ) ( 150 ) ( 18 ) Total U.S. current tax benefit (expense) ( 485 ) ( 12,907 ) ( 497 ) Foreign ( 29,120 ) ( 19,696 ) ( 11,139 ) Total current tax expense ( 29,605 ) ( 32,603 ) ( 11,636 ) Deferred: U.S. federal ( 5,244 ) 7,316 ( 10,927 ) U.S. state ( 63 ) 63 8 Total U.S. deferred tax benefit (expense) ( 5,307 ) 7,379 ( 10,919 ) Foreign ( 119 ) 5,860 5,757 Total deferred tax benefit ( 5,426 ) 13,239 ( 5,162 ) Total income tax expense $ ( 35,031 ) $ ( 19,364 ) $ ( 16,798 ) The Company’s effective tax rate differs from statutory rates of 21% for U.S. federal income tax purposes and 12.5 % to 25 % for mainland China income tax purpose due to the effects of the valuation allowance and certain permanent differences as they pertain to book-tax differences in employee stock-based compensation and non-US research expense. A new requirement to capitalize and amortize previously deductible research and experimental expenses resulting from a change in Section 174 made by the Tax Cuts and Jobs Act of 2017 (the “TCJA”) became effective on January 1, 2022. Under the TCJA, the Company is required to capitalize, and subsequently amortize R&D expenses over fifteen years for research activities conducted outside of the U.S. The capitalization of overseas R&D expenses resulted in a significant increase in the Company’s global intangible low-taxed income inclusion beginning in 2022. Pursuant to the Corporate Income Tax Law of mainland China, all of the Company’s mainland China subsidiaries are liable to mainland China Corporate Income Taxes at a rate of 25 %, except for ACM Shanghai and ACM Lingang. According to Guoshuihan 2009 No. 203, an entity certified as an “advanced and new technology enterprise” is entitled to a preferential income tax rate of 15 %. ACM Shanghai was certified as an “advanced and new technology enterprise” in 2012 and again in 2016, 2018, 2021 and 2024, effective until December 31, 2026.. In 2021, ACM Shanghai was certified as an eligible integrated circuit production enterprise and was entitled to a preferential income tax rate of 12.5 % from January 1, 2020 to December 31, 2022. Certain entities which meet requirements according to the Policy of the Lingang New area in China (Shanghai) Pilot Free Trade Zone are entitled to a preferential income tax rate of 15 %. ACM Lingang was certified for this in 2021, and this preferential income tax rate is valid from January 1, 2020 until December 31, 2024. The provision for mainland China corporate income tax for ACM Shanghai is calculated by applying the income tax rate of 15 % for the years ended December 31, 2024 and December 31, 2023 and 12.5 % for the year ended December 31, 2022. 119 Table of Contents Income tax expense for the years ended December 31, 2024, 2023 and 2022 differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to pretax income as a result of the following: Year Ended December 31, 2024 2023 2022 Effective tax rate reconciliation: Income tax provision at statutory rate 21.00 % 21.00 % 21.00 % Stock compensation ( 2.96 ) ( 2.00 ) ( 2.72 ) Foreign rate differential ( 3.27 ) ( 10.47 ) ( 9.43 ) Other permanent difference 0.21 0.03 ( 0.26 ) Foreign income taxed in US 3.74 7.39 19.86 Foreign research expense ( 6.42 ) ( 8.01 ) ( 4.79 ) Change in valuation allowance 8.78 8.72 1.28 Total income tax expense 21.08 % 16.66 % 24.94 % Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets at December 31, 2024 and 2023 are presented below: December 31, 2024 2023 Deferred tax assets: Net operating loss carry forwards (offshore) $ 8,106 $ 11,499 Net operating loss carry forwards (U.S.) and credit 8,653 4,930 Deferred revenue (offshore) 6,428 2,277 Accruals (U.S.) 212 3,632 Reserves and other (offshore) 6,631 4,662 Stock-based compensation (U.S.) 2,974 2,455 Stock-based compensation (offshore) 10,325 4,393 Lease liability 1,157 1,252 Total gross deferred tax assets 44,486 35,100 Less: valuation allowance ( 26,516 ) ( 11,917 ) Total deferred tax assets 17,970 23,183 Deferred tax liabilities: Property and equipment ( 1,190 ) ( 1,325 ) Equity investments and unrealized gain on short-term investments ( 1,999 ) ( 1,587 ) Total deferred tax liabilities ( 3,189 ) ( 2,912 ) Deferred tax assets, net $ 14,781 $ 20,271 The Company considers all available evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry-forward periods), and projected taxable income in assessing the realizability of deferred tax assets. In making such judgments, significant weight is given to evidence that can be objectively verified. Based on all available evidence, a partial valuation allowance has been established against some net deferred tax assets as of December 31, 2024 and 2023, based on estimates of recoverability. In order to fully realize the deferred tax assets, the Company must generate sufficient taxable income in future periods before the expiration of the deferred tax assets governed by the tax code. 120 Table of Contents As of December 31, 2024 and 2023, the Company had valuation allowances, respectively, of $ 5,467 and $ 29 for U.S. federal purposes, $ 295 and $ 279 for U.S. state purposes and $ 20,209 and $ 11,585 for mainland China income tax purposes, and $ 515 and $ 14 for Korea income tax purposes. As of December 31, 2024, the Company had operating loss carryforward amounts, or NOLs, of $ 2,030 for U.S. federal income tax purposes and $ 929 for U.S. state income tax purposes. As of December 31, 2023, the Company had NOLs, of $ 3,121 for U.S. federal income tax purposes and $ 593 for U.S. state income tax purposes. As of December 31, 2022, the Company had NOLs of $ 4,385 for U.S. federal income tax purposes and $ 545 for U.S. state income tax purposes. As of December 31, 2024 and 2023, the Company had NOLs, respectively, $ 30,481 and $ 46,467 for mainland China income tax purposes and $ 2,339 and $ 64 for Korea income tax purposes. Such losses begin expiring in 2037, 2032, 2027 and 2037 for U.S. federal, U.S. state, mainland China, and Korea income tax purposes, respectively. Under provisions of the U.S. Internal Revenue Code (the “IRC”), a limitation applies to the use of the U.S. net operating loss and credit carry-forwards that would be applicable if ACM experiences an “ownership change,” as defined in IRC Section 382. ACM conducted an analysis of its stock ownership under IRC Section 382 and $ 2,030 of the net operating loss carryforwards are subject to annual limitation as a result of the ownership change in 2017. The net operating loss carryforwards are not expected to expire before utilization. Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The aggregate changes in the balance of gross unrecognized tax benefits, for the years ended December 31, 2024, 2023 and 2022 were as follows: Year Ended December 31, 2024 2023 2022 Beginning balance $ 13,026 $ 8,448 $ 6,066 Increase of unrecognized tax benefits related to current year 2,308 4,379 2,623 Increase of unrecognized tax benefits taken in prior years 6,871 199 — Reductions for tax positions related to prior years ( 5,431 ) — ( 241 ) Ending balance $ 16,774 $ 13,026 $ 8,448 The Company is subject to taxation in the United States, state, and foreign jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits. Certain tax years are subject to foreign income tax examinations by tax authorities until the statute of limitations expire. The Company had $ 16,774 and $ 13,026 of unrecognized tax benefits as of December 31, 2024 and 2023, respectively. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2024 and 2023, respectively, the Company had $ 2,973 and $ 1,667 of accrued penalties related to uncertain tax positions, all of which was recognized in the Company’s consolidated statements of comprehensive income (loss) for the year then ended. The amount of the unrecognized tax benefit that, if recognized, would impact the effective tax rate was $ 16,638 as of December 31, 2024. There were no ongoing examinations by taxing authorities as of December 31, 2024 or 2023. Prior to the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), the Company asserted that all unremitted earnings of its foreign subsidiaries were considered indefinitely reinvested. As a result of the Tax Act, the Company reported and paid U.S. tax on the majority of its previously unremitted foreign earnings, and repatriations of foreign earnings will generally be free of U.S. federal tax, but may incur other taxes such as withholding or state taxes. As of December 31, 2024, the Company has not made a provision for U.S. or additional foreign withholding taxes on approximately $ 238,605 of undistributed earnings of its foreign subsidiaries that is indefinitely reinvested. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. 121 Table of Contents NOTE 19 – SEGMENT INFORMATION The Company identifies operating segments according to how the business activities are managed and evaluated. The Company’s chief operating decision maker (“CODM”) has been identified as ACM’s Chief Executive Officer. The Company's operating segments include ACM Research and ACM Shanghai. As the Company is engaged in the developing, manufacture and sale of capital equipment to global semiconductor manufacturers, and each of the operating segments share similar economic and other qualitative characteristics, the results of the Company’s operating segments are aggregated into one reportable segment. For geographical reporting, revenue by geographic location is determined by the location of customers’ facilities to which products were shipped. Long-lived assets consist primarily of property, plant and equipment, other long-term assets, and right-of-use assets and are attributed to the geographic location in which they are located. Long-lived assets by geographic region as of the years ended were as follows: December 31, 2024 2023 Long-lived assets by geography: Mainland China include I.A $ 287,888 $ 209,725 Korea 10,358 12,190 United States 8,973 1,276 Total $ 307,219 $ 223,191 NOTE 20 – COMMITMENTS AND CONTINGENCIES The Company leases offices and manufacturing locations under non-cancelable operating lease agreements. See note 11 for future minimum lease payments under non-cancelable operating lease agreements with initial terms of one year or more. As of December 31, 2024, the Company had $ 6,391 of op en commitments to construction contracts. Covenants in ACM Lingang’s Grant Contract for State-owned Construction Land Use Right in Shanghai City (Category of R&D Headquarters and Industrial Projects) with the China (Shanghai) Pilot Free Trade Zone Lingang Special Area Administration require, among other things, that ACM Lingang pay liquidated damages in the event that (a) it does not make a total investment (including the costs of construction, fixtures, equipment and grant fees) of at least RMB 450.0 million ($ 63,400 ) or (b) within six years after the land use right is obtained, the Company does not (i) generate a minimum specified amount of annual sales of products manufactured on the granted land or (ii) pay to mainland China at least RMB 157.6 million ($ 22,000 ) in annual total taxes (including value-added taxes, corporate income tax, personal income taxes, urban maintenance and construction taxes, education surcharges, stamp taxes, and vehicle and shipping taxes) as a result of operations in connection with the granted land. As of December 31, 2024 and December 31, 2023, the Company had incurred in tota l $ 156,205 and $ 116,932 , respectively for its Lingang-related investments. In the normal course of business, the Company is subject to contingencies, including legal proceedings and environmental claims arising out of the normal course of businesses that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter. Some of these contingencies involve claims that are subject to substantial uncertainties and unascertainable damages. The Company’s management has evaluated all such proceedings and claims that existed as of December 31, 2024 and 2023. In the opinion of management, no provision for liability nor disclosure was required as of December 31, 2024 related to any claim against the Company because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial. As of December 31, 2024, the Company had no outstanding legal proceedings. 122 Table of Contents NOTE 21 – PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION For the presentation of the parent company only condensed financial information, the Company records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Such investments are presented on the condensed balance sheets as “Investment in consolidated subsidiaries and equity method investees” and the subsidiaries’ losses and gains as “Equity in earnings of consolidated subsidiaries and equity method investees” on the condensed statements of comprehensive income (loss). Certain information and footnote disclosures generally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The footnote disclosure contains supplemental information relating to the operations of ACM separately. ACM Shanghai paid a dividend to ACM during the years ended December 31, 2024 and 2023 (Note 2). Except for long-term obligations, or guarantees, and loan borrowed by ACM Inc. from China CITIC Bank (note 12), ACM does not have significant capital or other commitments, as of December 31, 2024 or 2023. The following represents condensed unconsolidated financial information of ACM only as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022: CONDENSED BALANCE SHEETS December 31, 2024 2023 Assets Current assets: Cash and cash equivalents $ 54,764 $ 41,616 Accounts receivable 2 988 Due from intercompany 6,554 3,176 Other receivable 8,938 5,803 Prepaid expenses 479 385 Total current assets 70,737 51,968 Deferred tax assets 4,610 20,271 Property, plant and equipment, net 7,990 134 Investment in consolidated subsidiaries and equity method investees 844,507 733,382 Total assets 927,844 $ 805,755 Liabilities and Stockholders’ Equity Loan borrowings $ 13,882 $ 14,120 Accounts payable 391 524 Other payables 8,098 5,176 Income taxes payable — 6,402 FIN-48 payable 848 12,149 Total liabilities 23,219 38,371 Total stockholders’ equity 904,625 767,384 Total liabilities and stockholder’s equity $ 927,844 $ 805,755 123 Table of Contents CONDENSED STATEMENTS OF OPERATIONS Year Ended December 31, 2024 2023 2022 Revenue $ 2,576 $ 6,354 $ 569 Cost of revenue ( 132 ) ( 4,336 ) — Gross profit 2,444 2,018 569 Operating expenses: Sales and marketing expenses ( 6,909 ) ( 4,715 ) ( 3,193 ) General and administrative expenses ( 10,331 ) ( 7,840 ) ( 5,421 ) Loss from operations ( 14,796 ) ( 10,537 ) ( 8,045 ) Equity in earnings of consolidated subsidiaries and equity method investees 87,916 73,707 32,145 Interest income, net 2,094 799 57 Interest expense, net ( 560 ) ( 66 ) ( 7 ) Other income, net 34,684 18,476 2,148 Income before income taxes 109,338 82,379 26,298 Income tax (expense) benefit ( 5,711 ) ( 5,030 ) 12,965 Net income $ 103,627 $ 77,349 $ 39,263 Foreign currency translation adjustment, net of tax ( 14,373 ) ( 8,803 ) ( 49,655 ) Unrealized gain on available-for-sale investments, net of tax 350 — — Comprehensive income (loss) attributable to ACM Research, Inc. $ 89,604 $ 68,546 $ ( 10,392 ) CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 15,285 $ 1,489 $ ( 5,997 ) Net cash used in investing activities ( 7,889 ) ( 149 ) ( 1,000 ) Net cash provided by financing activities 5,752 16,423 1,314 Net increase (decrease) in cash and cash equivalents 13,148 17,763 ( 5,683 ) Cash and cash equivalents, beginning of year 41,616 23,853 29,536 Cash and cash equivalents, end of year $ 54,764 $ 41,616 $ 23,853 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None