ACM Research, Inc.

Previous wording

Our principal corporate office is located in Fremont, California. We conduct a substantial majority of our product development, manufacturing, support and services in mainland China through ACM Shanghai. We perform, through a subsidiary of ACM Shanghai, additional product development and subsystem production in Korea, and we conduct, through ACM Research, sales and marketing activities focused on sales of ACM Shanghai products in North America, Europe and certain regions in Asia outside mainland China.

Current wording

Our principal corporate office is located in Fremont, California. We conduct a substantial majority of our product development, manufacturing, support and services in mainland China through ACM Shanghai. We perform, through a subsidiary of ACM Shanghai, additional product development and subsystem production in South Korea, and we conduct, through ACM Research, sales and marketing activities focused on sales of ACM Shanghai products in North America, Europe and certain regions in Asia outside mainland China.

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 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.

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 aforementioned facts 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 Report on Form 10-K for the year ended December 31, 2024.

Previous wording

In addition, in the ordinary course of business, ACM Shanghai is required to obtain certain operating permits and licenses necessary for it to operate in mainland China, including business licenses, certifications relating to quality management standards, import and export-related qualifications from customs, as well as environmental and construction permits, licenses and approvals relating to construction projects. We believe ACM Shanghai has all such required permits and licenses. However, from time to time mainland China government issues new regulations, which may require additional actions on the part of ACM Shanghai to comply. If ACM Shanghai does not, or is unable to, obtain any such additional permits or licenses, ACM Shanghai may be subjected to restrictions and penalties imposed by the relevant mainland China regulatory authorities, and it 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.

Current wording

In addition, in the ordinary course of business, ACM Shanghai is required to obtain certain operating permits and licenses necessary for us to operate in mainland China, including business licenses, certifications relating to quality management standards, import and export-related qualifications from customs, as well as environmental and construction permits, licenses and approvals relating to construction projects. We believe ACM Shanghai has all such required permits and licenses. However, from time to time mainland China government issues new regulations, which may require additional actions on the part of ACM Shanghai to comply. If ACM Shanghai does not, or is unable to, obtain any such additional permits or licenses, ACM Shanghai may be subjected to restrictions and penalties imposed by the relevant mainland China regulatory authorities, and it 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.

Previous wording

A detailed description of how cash is transferred through our organization is set forth under “Note 2 – Summary of Significant Accounting Policies – Cash and Cash Equivalents” to the Condensed Consolidated Financial Statements of this report.

Current wording

A detailed description of how cash is transferred through our organization is set forth under “Note 2 – Summary of Significant Accounting Policies – Cash and Cash Equivalents” to our condensed consolidated financial statements included in this 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 2024 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 completely investigate 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 U.S. Securities and Exchange Commission’s (“SEC”) "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 Report on Form 10-K for the year ended December 31, 2024 for more information.

Previous wording

Effective on December 2, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) promulgated a final rule naming a number of companies to the BIS Entity List (the "BIS Entity List"). Among the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in the Republic of Korea, and other related entities. In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction directly or indirectly to ACM Shanghai or ACM Korea without obtaining authorization. See “Item 1A. Risk Factors—Regulatory Risks—Our operations in mainland China and Korea, including the import of components, technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List” in our 2024 Annual Report for more information.

Current wording

Effective on December 2, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) promulgated a final rule naming a number of companies to the BIS Entity List (the "BIS Entity List"). Among the 140 companies added to the BIS Entity List were two subsidiaries of ACM Research, ACM Shanghai, located in the People’s Republic of China, and ACM Korea, a direct subsidiary of ACM Shanghai, which is located in South Korea, and other related entities. In general terms, the new BIS Entity List designations prohibit any party worldwide from furnishing hardware, software, or technologies that are subject to U.S. export controls jurisdiction, directly or indirectly to ACM Shanghai or ACM Korea without obtaining authorization. See “Item 1A. Risk Factors—Regulatory Risks—Our operations in mainland China and South Korea, including the import of components, technology, and activities of U.S. personnel therein, may be further impacted by the addition of ACM Shanghai, ACM Korea and related entities to the BIS Entity List” in our Report on Form 10-K for the year ended December 31, 2024, for more information.

Previous wording

On November 15, 2024, the U.S. Department of the Treasury published a final rule implementing a framework for the regulation of outbound foreign investment from the United States. The new program, known as the Outbound Investment Security Program (“OISP”) was codified in the United States Code of Federal Regulations at 31 C.F.R. Part 850, effective as of January 2, 2025. The OISP marks a shift in U.S. economic policy, as historically the United States government declined to restrict outbound investment from the United States for national security reasons. Going forward, the investment activities of multinational companies, including ACM Research are subject to both CFIUS and OISP requirements, which together will limit cross-border investment opportunities, especially as they relate to China. See “Item 1A. Risk Factors—Regulatory Risks—The U.S. Government has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities outside the United States that could otherwise be advantageous to our stockholders” in our 2024 Annual Report for more information.

Current wording

On November 15, 2024, the U.S. Department of the Treasury published a final rule implementing a framework for the regulation of outbound foreign investment from the United States. The new program, known as the Outbound Investment Security Program (“OISP”) was codified in the United States Code of Federal Regulations at 31 C.F.R. Part 850, effective as of January 2, 2025. The OISP marks a shift in U.S. economic policy, as historically the United States government declined to restrict outbound investment from the United States for national security reasons. Going forward, the investment activities of multinational companies, including ACM Research are subject to both Committee on Foreign Investment in the United States (“CFIUS”) and OISP requirements, which together will limit cross-border investment opportunities, especially as they relate to China. See “Item 1A. Risk Factors—Regulatory Risks—The U.S. Government has implemented an outbound investment review mechanism, which may prevent us from taking advantage of investment opportunities outside the United States that could otherwise be advantageous to our stockholders” in our Report on Form 10-K for the year ended December 31, 2024, for more information.

Previous wording

In addition to the matters discussed above, we are also subject to a number of legal and operational risks associated with our corporate structure, including as the result of a substantial portion of our operations being conducted in mainland China. Consequences of any of those risks could result in a material adverse change in our operations or cause the value of ACM Research Class A common stock to significantly decline in value or become worthless. Please carefully read the information included in “Item 1A. Risk Factors” in our 2024 Annual Report, in particular the risk factors addressing the following issues:

Current wording

In addition to the matters discussed above, we are also subject to a number of legal and operational risks associated with our corporate structure, including, as the result of a substantial portion of our operations being conducted in mainland China. Consequences of any of those risks could result in a material adverse change in our operations or cause the value of ACM Research Class A common stock to significantly decline in value or become worthless. Please carefully read the information included in “Item 1A. Risk Factors” in our Report on Form 10-K for the year ended December 31, 2024, in particular, the risk factors addressing the following issues:

Previous wording

• 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 such 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.

Current wording

• 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 such 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 operations 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.

Previous wording

Past statements and regulatory actions by mainland China central government authorities with respect to the use of VIEs and to data security and anti-monopoly concerns have not affected our ability to conduct our business operations in mainland China. For further information, see “Item 1A. Risk Factors —Risks Related to International Aspects of Our Business” in our Annual Report for more informa tion.

Current wording

Past statements and regulatory actions by mainland China central government authorities with respect to the use of VIEs and to data security and anti-monopoly concerns have not affected our ability to conduct our business operations in mainland China. For further information, see “Item 1A. Risk Factors —Risks Related to International Aspects of Our Business” in our Report on Form 10-K for the year ended December 31, 2024, for more informa tion.

Previous 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.

Current wording

Since 2009 we have delivered more than 1,255 tools to our customers, more than 1,050 of which were repeat orders or acceptances upon contractual performance obligations having been met and thereby generated revenue for 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

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).

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.

Previous wording

The governmental grants contain certain operating conditions, and we are required to complete a government due diligence process once the project is complete. The grants therefore are recorded as long-term liabilities upon receipt, although we are not required to return any funds ACM Shanghai receives.

Current wording

The governmental grants contain certain operating conditions, and we are required to complete a government due diligence process once the project is complete. The grants therefore are recorded as long-term liabilities upon receipt, although we are not required to return any funds received by ACM Shanghai.

Previous wording

Grant amounts are recognized in our statements of comprehensive income as follows:

Current wording

Grant amounts are recognized in our condensed consolidated statements of comprehensive income as follows:

Previous 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.

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. Such subsidies included in our condensed consolidated statements of comprehensive income were $0.5 million and $0.1 million, in the three months ended June 30, 2025 and 2024, respectively, and $0.8 million and $0.6 million in the six months ended June 30, 2025 and 2024, respectively.

Previous 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.

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

Previous wording

A discussion of recent accounting pronouncements is included in our Annual Report and is updated in Note 2 to the condensed consolidated financial statements included in this report.

Current wording

A discussion of recent accounting pronouncements is included in our Report on Form 10-K for the year ended December 31, 2024 and is updated in note 2 to the condensed consolidated financial statements included in this report.

Previous wording

We believe that the assumptions, judgments and estimates involved in the accounting for the following accounting policies have the greatest potential impact on our condensed consolidated financial statements, and we therefore consider these to be our critical accounting estimates. For information on our significant accounting policies, see Note 2 in the notes to condensed consolidated financial statements in Part I, Item 1 of this report and in the Notes to Condensed Consolidated Financial Statements in Part II, Item 8 of our Annual Report, describe the significant accounting policies and methods used in the preparation of the Company’s condensed consolidated financial statements. There have been no material changes to the Company’s critical accounting estimates included in our Annual Report.

Current wording

We believe that the assumptions, judgments and estimates involved in the accounting for the following accounting policies have the greatest potential impact on our condensed consolidated financial statements, and we therefore consider these to be our critical accounting estimates. For information on our significant accounting policies, see note 2 in the notes to our condensed consolidated financial statements in Part I, Item 1 of this report and in note 2 to the Consolidated Financial Statements in Part II, Item 8 in our Report on Form 10-K for the year ended December 31, 2024, which describes the significant accounting policies and methods used in the preparation of the our financial statements. There have been no material changes to the critical accounting estimates included in our Form 10-K for the year ended December 31, 2024.

Previous wording

The increase in revenue for three months ended March 31, 2025 as compared to the same period in 2024 reflects higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, and ECP (front-end and packaging), furnace and other technologies, partly offset by lower Advanced packaging (excluding ECP), services and spares. The increased demand is due in part to a longer term commitment by our mainland China-based customers to increase production capacity to achieve a greater share of the global semiconductor market.

Current wording

The increase in revenue for three months ended June 30, 2025 as compared to the same period in 2024 reflects higher sales of single wafer cleaning, Tahoe and semi-critical cleaning equipment, ECP (front-end and packaging), furnace and other technologies, and Advanced packaging (excluding ECP), services and spares. We attribute the increase to a longer term commitment by our mainland China-based customers to increase production capacity to achieve a greater share of the global semiconductor market together with the market share changes and product cycles.

Previous 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.

Current wording

Cost of revenue and gross profit increased due to the increased sales volume, and a slight increase in gross margin. The change in gross margin versus the prior-year period was primarily due to revenue mix between product categories. 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 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.

Current wording

Sales and marketing expense increaseddue to a $3.0 million increase in commissions, professional services, travel and entertainment, outside services and other expenses and a $2.9 million increase in personnel costs, offset by a $0.9 million decrease in stock-based compensation.

Previous 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.

Current wording

Research and development expense increased due to an increase of $6.1 million in costs of components for tools built for product development purposes, an increase of $2.3 million in personnel and travel and entertainment costs, and a net increase of $1.0 million in depreciation, outside services and other costs, offset by a decrease of $1.6 million in stock-based compensation.

Previous 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.

Current wording

Research and development expense represented 15.7% and 12.8% of our revenue in the three months ended June 30, 2025 and 2024, respectively. Excluding grant amounts received from mainland China governmental authorities (see "Mainland China Government Research and Development Funding’’), gross research and development expense totaled $34.3 million, or 15.9% of total revenue, in the three months ended June 30, 2025 as compared to $26.1 million, or 12.9% of revenue, in the corresponding period in 2024.

Previous 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.

Current wording

Interest income consists of interest earned on our cash and cash equivalents, restricted cash accounts, and time deposits and interest expense is incurred on our borrowings. The change in interest income is a result of changes in balances of cash, cash equivalents, time deposits, while the change in interest expense is due to borrowings, together with changes in interest rates on the respective balances.

Previous 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.

Current wording

Other (expense) income, net primarily reflects (a) loss recognized from the impact of exchange rates on our working-capital which was $(0.9) million for the three months ended June 30, 2025 compared to $2.4 million recog nized from the impact of exchange rates on our working capital for the three months ended June 30, 2024, and (b) government subsidies, as described under “Mainland China Government Research and Development Funding” above, and other factors.

Previous wording

Realized gain and unrealized loss from short-term investment, and income (loss) from equity investments.

Current wording

Realized gain on short-term investment, and income (loss) from equity method investments

Previous 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.

Current wording

The tax expense for the three months ended June 30, 2025 primarily resulted from the tax effect of a decrease in our effective income tax rate applied to a slight decrease in operating profit for the period. The decrease in our effective income tax rate for the six months ended June 30, 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

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.

Current wording

The foreign currency translation adjustment is 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

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.

Current wording

General and administrative expense decreased primarily reflecting a $3.5 million decrease in stock-based compensation, a $0.6 million decrease in allowance for credit losses, and a $0.6 million decrease in other costs related to general and administrative expenses, partially offset by a $2.6 million net increase in personnel and professional services costs.

Previous 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.

Current wording

Comprehensive income attributable to non-controlling interestsfor the six months ended June 30, 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 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.

Current wording

During the first six 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, and our loan from China CITIC Bank. Cash and cash equivalents, restricted cash, and time deposits were as follows:

Previous 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.

Current wording

The $42.0 million increase in cash and time deposits was primarily driven by $111.0 million net cash provided by financing activities, and a $2.2 million increase from the effect of exchange rate on cash, cash equivalents, restricted cash and non-cash items, offset by $39.6 million of cash used in operations, and $31.6 million of net cash used in investing activities, excluding the change in net cash related to time deposits.

Previous wording

Our future working capital needs beyond the next twelve months will depend on many factors, including the rate of our business and revenue growth, the payment schedules of our customers, the timing and magnitude of our capital expenditures, and the timing of investment in our research and development as well as sales and marketing. We believe our existing cash and cash equivalents and short-term and long-term time deposits, our cash flow from operating activities, and bank borrowings by us and ACM Shanghai will be sufficient to meet our anticipated cash needs within our longer term planning horizon.

Current wording

Our future working capital needs beyond the next twelve months will depend on many factors, including the rate of our business and revenue growth, the payment schedules of our customers, the timing and magnitude of our capital expenditures, and the timing of investment in our research and development as well as sales and marketing costs. We believe our existing cash and cash equivalents, time deposits, cash flow from operating activities, and bank borrowings will be sufficient to meet our anticipated cash needs for at least the next 12 months from the issuance of this report.

Previous wording

Restrictions under mainland China laws and regulations as well as restrictions under ACM Shanghai’s bank loan agreements, may significantly restrict ACM Shanghai’s ability to transfer a portion of ACM Shanghai’s net assets to ACM Research, other subsidiaries of ACM Research and to holders of ACM Research Class A common stock. See “Item 1A. Risk Factors – Regulatory Risks – Mainland China's currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China, which could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, otherwise fund and conduct our business, or pay dividends on our common stock” in our Annual Report.

Current wording

Restrictions under mainland China laws and regulations as well as restrictions under ACM Shanghai’s bank loan agreements, may significantly restrict ACM Shanghai’s ability to transfer a portion of ACM Shanghai’s net assets to ACM Research, other subsidiaries of ACM Research and to holders of ACM Research Class A common stock. See “Item 1A. Risk Factors – Regulatory Risks – Mainland China's currency exchange control and government restrictions on investment repatriation may impact our ability to transfer funds outside of mainland China, which could materially and adversely affect our ability to grow, make investments or acquisitions that could benefit our business, otherwise fund and conduct our business, or pay dividends on our common stock” in our Report on Form 10-K for the year ended December 31, 2024.

Previous 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.

Current wording

For the six months ended June 30, 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

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:

Current wording

Cash Flow (Used in) Provided by Operating Activities. Net cash (used in) provided by operating activities during the six months ended June 30, 2025 and 2024 consisted of:

Previous wording

• uses of cash: a $23.4 million net decrease in accounts payable, a $15.1 million increase in inventories, net (note 5), a $6.6 million decrease in income taxes payable, a $3.1 million increase in prepaid expenses and other current assets, and a $2.8 million decrease in customer advances.

Current wording

•uses of cash: a $52.9 million increase in inventories, net, a $44.5 net increase in accounts receivable, net, a $24.4 million decrease in advances from customers, a $6.4 million increase in prepaid expenses and other current assets, $2.4 million decrease in other liabilities which includes long-term operating leases, other long-term liabilities, other payables, and accrued expenses, and a $12.6 million decrease in income taxes payable.

Previous 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.

Current wording

• sources of cash: a $7.7 million increase in accounts payable, a $5.1 million increase in deferred revenue, and a $3.7 million increase in accounts payable to related parties.

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 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.

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 six months ended June 30, 2025 was ($31.6 million), primarily consisting of 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 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.

Current wording

Cash Flow Provided by Financing Activities. Net cash provided by financing activities for the six months ended June 30, 2025 was $111.0 million, primarily consisting of $134.6 million in net proceeds from short-term and long-term borrowing (note 11), and $23.6 million proceeds from exercise of stock options, partly offset by ($40.4 million) net in repayments of short-term and long-term borrowings and $7.0 million used for purchase of shares held by ACM Shanghai.