ACM Research Inc

Previous wording

ACM Research is not a mainland China operating company, and we do not conduct our operations in mainland China through the use of a variable interest entity, or VIE, or any other structure designed for the purpose of avoiding mainland China legal restrictions on direct foreign investments in mainland China-based companies. ACM Research has a direct ownership interest in ACM Shanghai as the result of its holding 82.0% of the outstanding shares of ACM Shanghai. Stockholders of ACM Research may never directly own equity interests in ACM Shanghai. We do not believe that our corporate structure or any other matters relating to our business operations require that we obtain any permissions or approvals from the China Securities Regulatory Commission, the Cyberspace Administration of China, or any other mainland China central government authority in order to continue to list shares of Class A common stock of ACM Research on the Nasdaq Global Select Market. This determination was based on the facts aforementioned and mainland China Company Law, mainland China Securities Law, cybersecurity regulations and other relevant laws, regulations and regulatory requirements in mainland China currently in effect. However, if this determination proves to be incorrect, then it could have a material adverse effect on ACM Research. See “Item IA. Risk Factors—Risks Related to International Aspects of Our Business—If any mainland China central government authority were to determine that existing mainland China laws or regulations require that ACM Shanghai obtain the authority’s permission or approval to continue the listing of ACM Research’s Class A common stock in the United States or if those existing mainland China laws and regulations, or interpretations thereof, were to change to require such permission or approval, or if we inadvertently conclude that permissions or approvals are not required, ACM Shanghai may be unable to obtain the required permission or approval or may only be able to obtain such permission or approval on terms and conditions that impose material new restrictions and limitations on operation of ACM Shanghai, either of which could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects and on the trading price of ACM Research Class A common stock, which could decline in value or become worthless” in our Annual Report.

Current wording

ACM Research is not a mainland China operating company, and we do not conduct our operations in mainland China through the use of a variable interest entity, or VIE, or any other structure designed for the purpose of avoiding mainland China legal restrictions on direct foreign investments in mainland China-based companies. ACM Research has a direct ownership interest in ACM Shanghai as the result of its holding 81.1% of the outstanding shares of ACM Shanghai. Stockholders of ACM Research may never directly own equity interests in ACM Shanghai. We do not believe that our corporate structure or any other matters relating to our business operations require that we obtain any permissions or approvals from the China Securities Regulatory Commission, the Cyberspace Administration of China, or any other mainland China central government authority in order to continue to list shares of Class A common stock of ACM Research on the Nasdaq Global Select Market. This determination was based on the facts aforementioned and mainland China Company Law, mainland China Securities Law, cybersecurity regulations and other relevant laws, regulations and regulatory requirements in mainland China currently in effect. However, if this determination proves to be incorrect, then it could have a material adverse effect on ACM Research. See “Item IA. Risk Factors—Risks Related to International Aspects of Our Business—If any mainland China central government authority were to determine that existing mainland China laws or regulations require that ACM Shanghai obtain the authority’s permission or approval to continue the listing of ACM Research’s Class A common stock in the United States or if those existing mainland China laws and regulations, or interpretations thereof, were to change to require such permission or approval, or if we inadvertently conclude that permissions or approvals are not required, ACM Shanghai may be unable to obtain the required permission or approval or may only be able to obtain such permission or approval on terms and conditions that impose material new restrictions and limitations on operation of ACM Shanghai, either of which could have a material adverse effect on our business, financial condition, results of operations, reputation and prospects and on the trading price of ACM Research Class A common stock, which could decline in value or become worthless” in our Annual Report.

Previous wording

The U.S. Holding Foreign Companies Accountable Act, or the HFCA Act, requires that the Public Company Accounting Oversight Board, or the PCAOB, determine whether it is unable to inspect or investigate completely registered public accounting firms located in a non-U.S. jurisdiction because of a position taken by one or more authorities in any non-U.S. jurisdiction. Under current regulations, if ACM Research were to be included on the SEC's "Conclusive list of issuers identified under the HFCA Act" for two consecutive years due to our independent auditor being located in a jurisdiction that does not allow for PCAOB inspections, the SEC would prohibit trading in our securities and this ultimately could cause our securities to be delisted in the U.S., and their value may significantly decline or become worthless. See “Item 1A. Risk Factors—Risks Related to International Aspects of Our Business—We could be adversely affected if we are unable to comply with legislation and regulations regarding improved access to audit and other information and audit inspections of accounting firms, including registered public accounting firms, such as our prior and current audit firms, operating in mainland China” in our Annual Report for more information.

Current wording

The U.S. Holding Foreign Companies Accountable Act, or the HFCA Act, requires that the Public Company Accounting Oversight Board, or the PCAOB, determine whether it is unable to inspect or investigate completely registered public accounting firms located in a non-U.S. jurisdiction because of a position taken by one or more authorities in any non-U.S. jurisdiction. Under current regulations, if ACM Research were to be included on the SEC's "Conclusive list of issuers identified under the HFCA Act" for two consecutive years due to our independent auditor being located in a jurisdiction that does not allow for PCAOB inspections, the SEC would prohibit trading in our securities and this ultimately could cause our securities to be delisted in the U.S., and their value may significantly decline or become worthless. See “Item 1A. Risk Factors—Risks Related to International Aspects of Our Business—We could be adversely affected if we are unable to comply with legislation and regulations regarding improved access to audit and other information and audit inspections of accounting firms, including registered public accounting firms, such as our prior and current audit firms, operating in mainland China” in our 2024 Annual Report for more information.

Previous wording

Since 2009 we have delivered more than 1,025 tools to our customers, more than 840 of which were repeat orders or acceptances upon contractual performance obligations having been met and thereby generated revenue to us. The balance of the delivered tools is subject to the customer's acceptance of the tool upon the tool's satisfaction of applicable contractual requirements or subject to the customer's subsequent discretionary commitment to purchase the tool. To date, substantially all of our sales of equipment for semiconductor-manufacturing have been to customers located in Asia, and we anticipate that a substantial majority of our revenue from these products will continue to come from customers located in this region for the foreseeable future. We have begun to add to our efforts to further address customers in North America, Western Europe and Southeast Asia, by expanding our direct sales teams and increasing our global marketing activities.

Current wording

Since 2009 we have delivered more than 1,180 tools to our customers, more than 980 of which were repeat orders or acceptances upon contractual performance obligations having been met and thereby generated revenue to us. The balance of the delivered tools is subject to the customer's acceptance of the tool upon the tool's satisfaction of applicable contractual requirements or subject to the customer's subsequent discretionary commitment to purchase the tool. To date, substantially all of our sales of equipment for semiconductor-manufacturing have been to customers located in Asia, and we anticipate that a substantial majority of our revenue from these products will continue to come from customers located in this region for the foreseeable future. We have begun to add to our efforts to further address customers in North America, Western Europe and Southeast Asia, by expanding our direct sales teams and increasing our global marketing activities.

Previous wording

ACM Research estimates that if consummated in full, the proposed Private Offering would generate gross proceeds of up to RMB 4.5 billion ($642.2 million) to ACM Shanghai, whose management would have broad discretion over the use of such proceeds. It is unlikely that any of such proceeds would be distributed to ACM Research. ACM Research's equity interest in ACM Shanghai, if the proposed Private Offering is consummated in full, would decline from 82.0% to approximately 74.6%. As of September 30, 2024 and the date of this report, the proposed Private Offering has not been completed.

Current wording

ACM Research estimates that if consummated in full, the proposed Private Offering would generate gross proceeds of up to RMB 4.5 billion ($642.2 million) to ACM Shanghai, whose management would have broad discretion over the use of such proceeds. It is unlikely that any of such proceeds would be distributed to ACM Research. ACM Research's equity interest in ACM Shanghai, if the proposed Private Offering is consummated in full, would decline from 81.1% to approximately 74.6%. As of March 31, 2025 and the date of this report, the proposed Private Offering has not been completed.

Previous wording

Since 2008, ACM Shanghai has received various government grants for the development and commercialization of certain technologies, and the development of the R&D and production center in the Lingang Special Area of Shanghai (note 13). The governmental grants contain certain operating conditions, in some cases require us to also invest certain amounts, and are subject to a government due-diligence review process upon completion of the project. The grants are recorded as long-term liabilities upon receipt, although we are not required to return any funds. Other subsidies are the subsidies received from government without further performance obligation.

Current wording

Since 2008, ACM Shanghai has received various government grants for the development and commercialization of certain technologies, and the development of the R&D and production center in the Lingang Special Area of Shanghai (note 12).

Previous wording

•Government subsidies are recorded as reductions of current expenses in the periods in which the qualified expenses are incurred. For the nine months ended September 30, 2024 and 2023, government subsidies recognized as reductions of relevant expenses in the condensed consolidated statements of comprehensive income were$0.7 million and $1.5 million, respectively.

Current wording

•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 three months ended March 31, 2025 and 2024, related government subsidies recognized as reductions of relevant expenses in the consolidated statements of comprehensive income were $0.3 million and $0.4 million, respectively.

Previous wording

•Other subsidies are recorded as other income in the periods as incurred. For the nine months ended September 30, 2024 and 2023, related government subsidies recognized as other income in the condensed consolidated statements of comprehensive income were $1.9 million and $0.4 million, respectively.

Current wording

•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 three months ended March 31, 2025 and 2024, related government subsidies recognized as other income in the consolidated statements of comprehensive income were $0.3 million and $1.8 million, respectively.

Previous wording

In 2019 ACM Shanghai sold a total number of shares representing 8.3% of its outstanding ACM Shanghai shares, after which ACM Research held the remaining 91.7% of ACM Shanghai’s outstanding shares. In 2021 ACM Shanghai sold a total number of shares representing an additional 10% of its outstanding ACM Shanghai shares in its STAR IPO, after which ACM Research held the remaining 82.5% of ACM Shanghai’s outstanding shares. However, in May 2023, ACM Research's ownership declined to 82.1% due to the exercise of 2,150,309 stock options related to ACM Shanghai shares. In June 2024, ACM Research's ownership further declined to 82.0% due to the exercise of 446,154 stock options related to ACM Shanghai shares. As a result, we reflect the portion of our net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Current wording

In 2019 ACM Shanghai sold a total number of shares representing 8.3% of its outstanding ACM Shanghai shares, after which ACM Research held the remaining 91.7% of ACM Shanghai’s outstanding shares. In 2021 ACM Shanghai sold a total number of shares representing an additional 10% of its outstanding ACM Shanghai shares in its STAR IPO, after which ACM Research held the remaining 82.5% of ACM Shanghai’s outstanding shares. ACM Research's ownership has since declined to 81.1% due to the exercise of stock options related to ACM Shanghai shares. As a result, we reflect the portion of our net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Previous wording

Cost of revenue and gross profit increased in the three months ended September 30, 2024 as compared to the corresponding period in 2023 due to the increased sales volume, partly offset by a slight decrease in gross margin. The decrease in gross margin versus the prior-year period was primarily due to revenue mix between product categories, net of a favorable impact from fluctuations in the RMB to U.S. dollar exchange rate. Gross margin may vary from period to period, primarily related to the level of utilization and the timing and mix of revenue. We expect gross margin to be between 40.0% and 45.0% for the foreseeable future, with direct manufacturing costs approximating 50.0% to 55.0% of revenue and overhead costs totaling 5.0% of revenue.

Current wording

Cost of revenue and gross profit increased in the three months ended March 31, 2025 as compared to the corresponding period in 2024 due to the increased sales volume, partly offset by a decrease in gross margin. The decrease in gross margin versus the prior-year period was primarily due to revenue mix between product categories, and a higher provision for inventory. Gross margin may vary from period to period, primarily related to the level of utilization and the timing and mix of revenue. We expect gross margin to be between 42.0% and 48.0% for the foreseeable future.

Previous wording

Sales and marketing expense decreased in the three months ended September 30, 2024 as compared to the corresponding period in 2023, reflecting a net decrease of $1.1 million due to costs for personnel, commissions, travel & entertainment, outside service, professional services, and other expenses, offset by a $0.1 million increase in stock-based compensation.

Current wording

Sales and marketing expense increased in the three months ended March 31, 2025 as compared to the corresponding period in 2024, reflecting an increase of $2.6 million due to personnel costs, and a net increase of $0.5 million for commissions, travel & entertainment, outside services and other expenses, offset by a $0.9 million decrease in stock-based compensation.

Previous wording

Research and development expense increased in the nine months ended September 30, 2024 as compared to the corresponding period in 2023, reflecting an increase of $7.3 million in stock-based compensation, $6.9 million in R&D-related personnel costs, $1.4 million in costs of components for tools built for product development purposes, and a $2.5 million increase in other R&D-related costs, depreciation and other expenses, offset by a $0.6 million decrease in outside services.

Current wording

Research and development expense increased in the three months ended March 31, 2025 as compared to the corresponding period in 2024, reflecting an increase of $3.9 million R&D-related personnel costs, an increase of $1.0 million in costs of components for tools built for product development purposes, and a net increase of $0.4 million in depreciation, outside services and other R&D-related costs, offset by a decrease of $1.7 million in stock-based compensation.

Previous wording

Research and development expense represented 13.6% and 15.5% of our revenue in the three months ended September 30, 2024 and 2023, respectively. Without reduction by grant amounts received from mainland China governmental authorities (see ‘–Mainland China Government Research and Development Funding’’), gross research and development expense totaled $27.9 million, or 13.7% of total revenue, in the three months ended September 30, 2024 as compared to $26.4 million, or 15.7% of revenue, in the corresponding period in 2023.

Current wording

Research and development expense represented 16.0% and 15.7% of our revenue in the three months ended March 31, 2025 and 2024, respectively. Without reduction by grant amounts received from mainland China governmental authorities (see ‘–Mainland China Government Research and Development Funding’’), gross research and development expense totaled $27.8 million, or 16.1% of total revenue, in the three months ended March 31, 2025 as compared to $24.4 million, or 16.0% of revenue, in the corresponding period in 2024.

Previous wording

General and administrative expense increased in the three months ended September 30, 2024 as compared to the corresponding period in 2023, primarily reflecting a $1.4 million increase in stock based compensation, and a $2.7 million increase in allowance for credit losses, and a $0.6 million increase in personnel and other costs related to general and administrative costs.

Current wording

General and administrative expense decreased in the three months ended March 31, 2025 as compared to the corresponding period in 2024, primarily reflecting a $0.9 million net increase in personnel and professional services costs, offset by a $1.9 million decrease in stock-based compensation, a $1.2 million decrease in allowance for credit losses, and a $0.7 million decrease in other costs related to general and administrative expenses.

Previous wording

Interest income (expense), net consists of interest earned on our cash and cash equivalents, restricted cash accounts, and short-term and long-term time deposits, offset by interest expense incurred from outstanding short-term and long-term borrowings. Interest income (expense), net increased in the three months ended September 30, 2024 as compared to the corresponding period in 2023, as a result of changes in balances of cash, cash equivalents, time deposits, and debt, together with changes in interest rates earned or expensed on the respective balances.

Current wording

Interest income, net consists of interest earned on our cash and cash equivalents, restricted cash accounts, and short-term and long-term time deposits, offset by interest expense incurred from outstanding short-term and long-term borrowings. Interest income (expense), net increased in the three months ended March 31, 2025 as compared to the corresponding period in 2024, as a result of changes in balances of cash, cash equivalents, time deposits, and debt, together with changes in interest rates earned or expensed on the respective balances.

Previous wording

Other expense, net primarily reflects (a) loss recognized from the impact of exchange rates on our working-capital which was $(5.4) million for the three months ended September 30, 2024 compared to $(1.7) million loss recognized from the impact of exchange rates on our working capital for the three months ended September 30, 2023, (b) government subsidies, as described under “—Mainland China Government Research and Development Funding” above, and other factors.

Current wording

Other income (expense), net primarily reflects (a) loss recognized from the impact of exchange rates on our working-capital which was $(0.6) million for the three months ended March 31, 2025 compared to $1.4 million recog nized from the impact of exchange rates on our working capital for the three months ended March 31, 2024, and (b) government subsidies, as described under “—Mainland China Government Research and Development Funding” above, and other factors.

Previous wording

We recorded a realized gain from sale of short term investments of $0.2 million for the three months ended September 30, 2024 as compared to $0.7 million in the prior-year period due to a sale of short-term investments (note 15).

Current wording

We recorded a realized gain from sale of short term investments of nil for the three months ended March 31, 2025 as compared to $0.3 million in the prior-year period due to a sale of short-term investments (note 14).

Previous wording

We recorded an unrealized gain on short term investments of $0.4 million for the three months ended September 30, 2024 as compared to an unrealized loss of $1.3 million for the same period in 2023, based on a change in market value of ACM Shanghai’s short-term investments (note 15).

Current wording

We recorded an unrealized loss on short term investments of $1.1 million for the three months ended March 31, 2025 as compared to an unrealized loss of $2.6 million for the same period in 2024, based on a change in market value of ACM Shanghai’s short-term investments (note 14).

Previous wording

Income from equity investments was $1.3 million for the three months ended September 30, 2024 as compared to loss from equity method investments of $0.2 million in the same period in 2023 due to an increase of net income from investments in affiliates (note 14).

Current wording

Income (loss) from equity investments was $1.0 million for the three months ended March 31, 2025 as compared to loss from equity method investments of $0.5 million in the same period in 2024 due to an increase of net income from investments in affiliates (note 13).

Previous wording

We recognized a tax expense of $4.0 million for the three months ended September 30, 2024 as compared to a tax expense of $0.7 million for the prior year period. The tax expense for the three months ended September 30, 2024 primarily resulted from the tax effect of an increase in our effective income tax rate applied to an increase in operating profit for the period. The increase in our effective income tax rate for the three months ended September 30, 2023 compared to the same period of the prior year was primarily due to an increase in capitalized R&D expenses in certain foreign jurisdictions.

Current wording

We recognized a tax expense of $2.2 million for the three months ended March 31, 2025 as compared to a tax expense of $4.4 million for the prior year period. The tax expense for the three months ended March 31, 2025 primarily resulted from the tax effect of a decrease in our effective income tax rate applied to a slight increase in operating profit for the period. The decrease in our effective income tax rate for the three months ended March 31, 2025 compared to the same period of the prior year was primarily due to a lower estimated effective tax rate for ACM Shanghai and other factors.

Previous wording

Our 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 purposes due to the effects of the valuation allowance and certain permanent differences as it pertains to book-tax differences in the treatment of stock-based compensation and non-U.S. research expenses. Our four mainland China subsidiaries, ACM Shanghai, ACM Wuxi, ACM Beijing, and ACM Lingang, are liable for mainland China corporate income taxes at the rates of 15%, 25%, 25%, and 15%, respectively. Pursuant to the Corporate Income Tax Law of mainland China, our mainland China subsidiaries generally would be liable for mainland China corporate income taxes at a rate of 25%. 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, and 2021, with an effective period of three years, and is expected to be re-certified for future years in 2024. 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. We file income tax returns in the United States and state and foreign jurisdictions.

Current wording

Our effective tax rate differs from statutory rates of 21% for U.S. federal income tax purposes and 25% for mainland China income tax purposes due to the effects of the valuation allowance and certain permanent differences as it pertains to book-tax differences in the treatment of stock-based compensation and non-U.S. research expenses. Our four mainland China subsidiaries, ACM Shanghai, ACM Wuxi, ACM Beijing, and ACM Lingang, are liable for mainland China corporate income taxes at the rates of 15%, 25%, 25%, and 25%, respectively. Pursuant to the Corporate Income Tax Law of mainland China, our mainland China subsidiaries generally would be liable for mainland China corporate income taxes at a rate of 25%. 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.

Previous wording

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.

Current wording

We file income tax returns in the United States and 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.

Previous wording

ACM Research owns 82.0% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our condensed consolidated financial statements. We reflect the portion of net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Current wording

ACM Research owns 81.1% of ACM Shanghai’s (note 1) outstanding shares which is reflected in our condensed consolidated financial statements. We reflect the portion of net income allocable to the minority holders of ACM Shanghai shares as net income attributable to non-controlling interests.

Previous wording

We recorded a gain of foreign currency translation adjustmentof $17.1 million for the three months ended September 30, 2024, as compared to a gain of $4.0 million for the same period in 2023, primarily based on the net effect of RMB to dollar exchange rate fluctuations for the period on the converted value of ACM Shanghai’s RMB-denominated balances to U.S. dollar equivalents.

Current wording

We recorded a gain of foreign currency translation adjustmentof $1.8 million for the three months ended March 31, 2025, as compared to a loss of $6.8 million for the same period in 2024, primarily based on the net effect of RMB to dollar exchange rate fluctuations for the period on the converted value of ACM Shanghai’s RMB-denominated balances to U.S. dollar equivalents.

Previous wording

Comprehensive income attributable to non-controlling interestsfor the three months ended September 30, 2024 increased by $3.1 million as compared to the same period in 2023, reflecting a change in net income attributable to the non- controlling interests for the period together with the impact of foreign exchange rate fluctuations on the cumulative balance.

Current wording

Comprehensive income attributable to non-controlling interestsfor the three months ended March 31, 2025 increased by $1.6 million as compared to the same period in 2024, reflecting a change in net income attributable to the non-controlling interests for the period together with the impact of foreign exchange rate fluctuations on the cumulative balance.

Previous wording

During the first nine months of 2024, we funded our technology development and operations principally through our beginning global cash balances, including the cash balances at ACM Shanghai, borrowings by ACM Shanghai from local financial institutions, and our loan from China CITIC Bank, and cash flow from operations.

Current wording

During the first three months of 2025, we funded our technology development and operations principally through our beginning global cash balances, including the cash balances at ACM Shanghai, borrowings by ACM Shanghai from local financial institutions, our loan from China CITIC Bank, and cash flow from operations.

Previous wording

Cashand cash equivalents, restricted cash, short-term time deposits and long-term time deposits were $369.1 million at September 30, 2024, compared to $304.5 million at December 31, 2023. The $64.6 million increase was primarily driven by $63.9 million of cash provided by operations, ($78.6 million), excluding the change in net cash related to time deposits, used in investing activities, $77.0 million net cash provided by financing activities, and a $2.3 million increase from the effect of exchange rate on cash, cash equivalents, restricted cash and non-cash items.

Current wording

Cashand cash equivalents, restricted cash, short-term time deposits and long-term time deposits were $498.4 million at March 31, 2025, compared to $441.9 million at December 31, 2024. The $56.5 million increase was primarily driven by $67.2 million net cash provided by financing activities, $5.3 million of cash provided by operations, and a $0.9 million increase from the effect of exchange rate on cash, cash equivalents, restricted cash and non-cash items, offset by a $17.1 million of net cash used in investing activities, excluding the change in net cash related to time deposits.

Previous wording

For the nine months ended September 30, 2024 and 2023, with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, and the dividend 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.

Current wording

For the three months ended March 31, 2025 and 2024, with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, 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.

Previous wording

ACM Research has never declared or paid cash dividends on our capital stock. AMC Research intends to retain all available funds and any future earnings to support the operation of and to finance the growth and development of our business and do not anticipate paying any cash dividends in the foreseeable future.

Current wording

ACM Research has never declared or paid cash dividends on our capital stock. ACM Research intends to retain all available funds and any future earnings to support the operation of and to finance the growth and development of our business and do not anticipate paying any cash dividends in the foreseeable future.

Previous wording

Cash Flow Provided by Operating Activities. Net cash provided by operating activities of $63.8 million during the nine months ended September 30, 2024 consisted of:

Current wording

Cash Flow Provided by Operating Activities. Net cash provided by operating activities of $4.9 million during the three months ended March 31, 2025 consisted of:

Previous wording

• sources of cash: a $32.8 million increase in customer advances, a $27.1 million increase in accounts payables, a $15.0 million increase in other payables and accrued expenses, a $9.6 million decrease in prepaid expenses, and a $6.5 million increase in deferred revenue.

Current wording

• sources of cash: a $7.1 million decrease in other receivables, a $2.4 million increase in other payables and accrued expenses, and a $2.2 million increase in deferred revenue.

Previous wording

Cash Flow Used in Investing Activities. Net cash used in investing activities, excluding the change in net cash related to time deposits, for the nine months ended September 30, 2024 was ($78.6 million), primarily consisting of ($73.0 million) for purchase of property, plant and equipment, and intangible assets, ($8.8 million) for purchase of short-term and long-term investments, offset by $3.2 million proceeds from sale of short-term investments.

Current wording

Cash Flow Used in Investing Activities. Net cash used in investing activities, excluding the change in net cash related to time deposits, for the three months ended March 31, 2025 was ($17.1 million), primarily consisting of ($17.1 million) for purchase of property, plant and equipment, and intangible assets.

Previous wording

Cash Flow Provided by Financing Activities. Net cash provided by financing activities for the nine months ended September 30, 2024 was $77.0 million, primarily consisting of $81.7 million proceeds from long-term borrowing (note 12), $32.8 million proceeds from short-term borrowing, and $6.5 million proceeds from exercise of stock options, offset by ($37.0 million) repayment of short-term and long-term borrowings and ($6.9 million) payment of ACM Shanghai dividend.

Current wording

Cash Flow Provided by Financing Activities. Net cash provided by financing activities for the three months ended March 31, 2025 was $67.2 million, primarily consisting of $52.2 million in net proceeds from long-term borrowing (note 11), and$22.7 million proceeds from exercise of stock options, partly offset by ($7.9 million) net in next repayments of short-term borrowings.

Previous wording

Effect of exchange rate changes on cash, cash equivalents and restricted cash. The effect of exchange rate cash, and cash equivalents was $2.3 million during the first nine months ended September 30, 2024. The impact of fluctuations of the RMB to U.S. dollar currency exchange rate on a significant balance of these items held in RMB-denominated accounts (note 2) contributed to the change.

Current wording

Effect of exchange rate changes on cash, cash equivalents and restricted cash. The effect of exchange rate cash, and cash equi valents was $0.9 million during the first three months ended March 31, 2025. The impact of fluctuations of the RMB to U.S. dollar currency exchange rate on a significant balance of these items held in RMB-denominated accounts (note 2) contributed to the change.

Previous wording

In 2020 ACM Shanghai, through its wholly-owned subsidiary ACM Lingang, entered into a Grant Contract for State-owned Construction Land Use Right in Shanghai City (Category of R&D Headquarters and Industrial Projects), or the Grant Agreement, with the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area Administration, or the Grantor. ACM Lingang obtained rights to use approximately 43,000 square meters (10.6 acres) of land in the Lingang Heavy Equipment Industrial Zone of Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone, or the Land Use Right, for a period of fifty years, commencing on the date of delivery of the land in July 2020, which we refer to as the Delivery Date.

Current wording

In 2020 ACM Shanghai, through its wholly-owned subsidiary ACM Lingang, entered into a Grant Contract for State-owned Construction Land Use Right in Shanghai City (Category of R&D Headquarters and Industrial Projects), or the Grant Agreement, with the China (Shanghai) Pilot Free Trade Zone Lin-gang Special Area Administration, or the Grantor. ACM Lingang obtained rights to use approximately 43,000 square meters (10.6 acres) of land in the East China Silicon Hub of Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone, or the Land Use Right, for a period of fifty years, commencing on the date of delivery of the land in July 2020, which we refer to as the Delivery Date.

Previous wording

In exchange for its land use rights, ACM Lingang paid aggregate grant fees of RMB 61.7 million ($9.5 million), or the Grant Fees, and a performance deposit of RMB 12.3 million ($1.9 million), which is equal to 20% of the aggregate grant fees, to secure its achievement of the following performance milestones:

Current wording

In exchange for its land use rights, ACM Lingang paid aggregate grant fees of RMB 61.7 million ($9.5 million), or the Grant Fees, and a performance deposit of RMB 12.3 million ($1.9 million), which is equal to 20% of the aggregate grant fees, to secure its achievement of the certain performance milestones. As of March 31, 2025, ACM Lingang had not yet officially achieved the Construction Completion Milestone and the Production Start Milestones, however the performance deposit has been refunded in full (note 7). ACM Lingang has been notified that the Lin-gang Special Area Administration plans to enter into supplementary land grant agreements to adjust the performance terms, including the extension of Construction Completion and Production Start Milestones. Based on current expectations, ACM Lingang believes it will meet the updated requirements and no penalties will be incurred. We cannot guarantee that ACM Lingang will achieve the missed milestones in 2025, or even if it does achieve the milestones in 2025, that it will not face penalties related to the original or updated agreements.

Previous wording

If the Grant Agreement is terminated because of breach of any terms above, the Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide ACM Lingang with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back. The total cumulative investment of land, buildings and construction in progress related to ACM Lingang amounted to $153.5 million and $116.9 million at September 30, 2024 and December 31, 2023, respectively.

Current wording

If the Grant Agreement is terminated because of breach of any terms above, the Grantor shall take back the buildings, fixtures and auxiliary facilities on the land area and provide ACM Lingang with corresponding compensation according to the residual value of the buildings, fixtures and auxiliary facilities when they are taken back.

Previous wording

Shipments in thenine months ended September 30, 2024 totaled $709.7 million, as compared to $456.1 million for the same periods in 2023. Repeat tool shipments in the nine months ended September 30, 2024 totaled $353.5 million, as compared to $232.1 million for same periods in 2023. First tool shipments in the nine months ended September 30, 2024 totaled $356.2 million, as compared to $224.0 million for the same periods in 2023.

Current wording

Shipments in thethree months ended March 31, 2025 totaled $156.7 million, as compared to $245.6 million for the same periods in 2024. Repeat tool shipments in the three months ended March 31, 2025 totaled $60.8 million, as compared to $118.6 million for same periods in 2024. First tool shipments in the three months ended March 31, 2025 totaled $95.9 million, as compared to $127.0 million for the same periods in 2024.

Previous wording

The improvement in free cash flow for the nine months ended September 30, 2024 as compared to the same period in 2023 reflected the factors driving net cash used in operating activities, an increase of purchases of property and equipment, and long-term investment. Consistent with our methodology for calculating adjusted EBITDA, we do not adjust free cash flow for the effects of mainland China government subsidies, because we take those subsidies into account in incurring expenses and capital expenditures. We do not adjust free cash flow for the effects of time-deposits, which for our internal purposes are considered as largely similar to cash.

Current wording

The improvement in free cash flow for the three months ended March 31, 2025 as compared to the same period in 2024 reflected the factors driving net cash used in operating activities, an increase of purchases of property and equipment, and long-term investment. Consistent with our methodology for calculating adjusted EBITDA, we do not adjust free cash flow for the effects of mainland China government subsidies, because we take those subsidies into account in incurring expenses and capital expenditures. We do not adjust free cash flow for the effects of time-deposits, which for our internal purposes are considered as largely similar to cash.