QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or Other Jurisdiction of Incorporation or Organization)
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(I.R.S. Employer Identification No.)
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on which Registered
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Accelerated filer
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☐
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Non-accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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Class
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Number of Shares Outstanding
|
Class A Common Stock, $0.0001 par value
|
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Class B Common Stock, $0.0001 par value
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PART I.
|
4
|
||
Item 1.
|
4
|
||
4
|
|||
5
|
|||
6
|
|||
8
|
|||
9
|
|||
Item 2.
|
29
|
||
Item 3.
|
50
|
||
Item 4.
|
50
|
||
PART II.
|
51
|
||
Item 1.
|
51
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||
Item 1A.
|
52
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||
Item 2.
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52
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||
Item 5.
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Other Information
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||
Item 6.
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52
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||
53
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PART I. |
FINANCIAL INFORMATION
|
Item 1. |
Financial Statements
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September 30,
2021
|
December 31,
2020
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
||||
Trading securities (note 16)
|
|
|
||||||
Accounts receivable, less allowance for doubtful accounts of $
|
|
|
||||||
Other receivables
|
|
|
||||||
Inventories (note 5)
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|
|
||||||
Prepaid expenses
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|
|
||||||
Total current assets
|
|
|
||||||
Property, plant and equipment, net (note 6)
|
|
|
||||||
Land use right, net (note 7)
|
|
|
||||||
Operating lease right-of-use assets, net (note 11)
|
|
|
||||||
Intangible assets, net
|
|
|
||||||
Deferred tax assets (note 21)
|
|
|
||||||
Long-term investments (note 14)
|
|
|
||||||
Other long-term assets (note 8)
|
|
|
||||||
Total assets
|
|
|
||||||
Liabilities and Stockholders’ Equity
|
||||||||
Current liabilities:
|
||||||||
Short-term borrowings (note 9)
|
|
|
||||||
Current portion of long-term borrowings (note 12)
|
|
|
||||||
Accounts payable
|
|
|
||||||
Advances from customers
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Income taxes payable (note 21)
|
|
|
||||||
FIN-48 payable (note 21)
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|
|
||||||
Other payables and accrued expenses (note 10)
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|
|
||||||
Current portion of operating lease liability (note 11)
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term borrowings (note 12)
|
|
|
||||||
Long-term operating lease liability (note 11)
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|
|
||||||
Deferred tax liability (note 21)
|
|
|
||||||
Other long-term liabilities (note 13)
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies (note 21)
|
|
|
||||||
Stockholders’ equity:
|
||||||||
Common stock – Class A, par value $
|
|
|
||||||
Common stock–Class B, par value $
|
|
|
||||||
Additional paid in capital
|
|
|
||||||
Accumulated surplus
|
|
|
||||||
Accumulated other comprehensive income
|
|
|
||||||
Total ACM Research, Inc. stockholders’ equity
|
|
|
||||||
Non-controlling interests
|
|
|
||||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue (note 3)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Cost of revenue
|
|
|
|
|
||||||||||||
Gross profit
|
|
|
|
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
|
|
|
|
||||||||||||
Research and development
|
|
|
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|
||||||||||||
General and administrative
|
|
|
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|
||||||||||||
Total operating expenses, net
|
|
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|
||||||||||||
Income from operations
|
|
|
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|
||||||||||||
Interest income
|
|
|
|
|
||||||||||||
Interest expense
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Change in fair value of financial liability
|
|
(
|
)
|
|
(
|
)
|
||||||||||
Unrealized gain (loss) on trading securities
|
(
|
)
|
|
|
|
|||||||||||
Other income (expenses), net
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||
Equity income in net income of affiliates
|
|
|
|
|
||||||||||||
Income before income taxes
|
|
|
|
|
||||||||||||
Income tax benefit (expense) (note 21)
|
|
|
|
(
|
)
|
|||||||||||
Net income
|
|
|
|
|
||||||||||||
Less: Net income attributable to non-controlling interests and redeemable non-controlling
interests
|
|
|
|
|
||||||||||||
Net income attributable to ACM Research, Inc.
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Comprehensive income:
|
||||||||||||||||
Net income
|
|
|
|
|
||||||||||||
Foreign currency translation adjustment
|
(
|
)
|
|
|
|
|||||||||||
Comprehensive Income
|
|
|
|
|
||||||||||||
Less: Comprehensive income attributable to non-controlling interests and redeemable
non-controlling interests
|
|
|
|
|
||||||||||||
Comprehensive income attributable to ACM Research, Inc.
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income attributable to ACM Research, Inc. per common share (note 2):
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
|
$
|
|
$
|
|
|||||||
Diluted
|
$
|
|
$
|
|
|
$
|
|
$
|
|
|||||||
Weighted average common shares outstanding used in computing per share amounts (note 2):
|
||||||||||||||||
Basic
|
|
|
|
|
||||||||||||
Diluted
|
|
|
|
|
|
Common
Stock Class A
|
Common
Stock Class B
|
||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-
in Capital
|
Accumulated
Surplus
|
Accumulated
Other
Comprehensive
Income
|
Non-controlling
interests
|
Total
Stockholders’
Equity
|
|||||||||||||||||||||||||||
Balance at December 31, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Exercise of warrants
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Common
Stock Class A
|
Common
Stock Class B
|
||||||||||||||||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-
in Capital
|
Accumulated Surplus
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Non-controlling
interests
|
Total
Stockholders’
Equity
|
|||||||||||||||||||||||||||
Balance at December 31, 2019
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Conversion of class
B common shares to Class A common shares
|
|
|
(
|
)
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Share cancellation
|
(
|
)
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||||||||||
Issuance of warrants (note 15) |
- | - | ||||||||||||||||||||||||||||||||||
Exercise of stock warrants
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Reclassification of redeemable non-controlling interest
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance at September 30, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Common
Stock Class A
|
Common
Stock Class B
|
|||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-
in Capital
|
Accumulated
Surplus
|
Accumulated
Other
Comprehensive
Income
|
Non-controlling
interests
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||||||||
Balance at June 30, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
-
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Balance at September 30, 2021
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Common
Stock Class A
|
Common
Stock Class B
|
|||||||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Additional Paid-
in Capital
|
Accumulated
Surplus
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Non-controlling
interests
|
Total
Stockholders’
Equity
|
||||||||||||||||||||||||||||
Balance at June 30, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||||||||||||||||
Net income
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Foreign currency translation adjustment
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Stock-based compensation
|
-
|
|
-
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Issuance of warrants (note 15)
|
- | - | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2020
|
|
$
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Nine
Months Ended September 30,
|
|||||||
|
2021
|
2020
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
|
$
|
|
||||
Adjustments to reconcile net income from operations to net cash used in operating activities
|
||||||||
Depreciation and amortization
|
|
|
||||||
Loss on disposals of property, plant and equipment
|
|
|
||||||
Equity income in net income of affiliates
|
(
|
)
|
(
|
)
|
||||
Unrealized gain on trading securities
|
(
|
)
|
(
|
)
|
||||
Deferred income taxes
|
(
|
)
|
(
|
)
|
||||
Stock-based compensation
|
|
|
||||||
Change in fair value of financial liability
|
|
|
||||||
Net changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Other receivables
|
(
|
)
|
(
|
)
|
||||
Inventory
|
(
|
)
|
(
|
)
|
||||
Prepaid expenses
|
(
|
)
|
(
|
)
|
||||
Other long-term assets
|
(
|
)
|
(
|
)
|
||||
Accounts payable
|
|
|
||||||
Advances from customers
|
|
(
|
)
|
|||||
Income tax payable
|
|
|
||||||
Other payables and accrued expenses
|
|
|
||||||
Deferred revenue
|
|
|
||||||
Other long-term liabilities
|
(
|
)
|
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(
|
)
|
(
|
)
|
||||
Purchase of intangible assets
|
(
|
)
|
(
|
)
|
||||
Purchase of land-use-right
|
( |
) | ||||||
Prepayment for property |
( |
) | ||||||
Purchase of trading securities
|
( |
) | ||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Proceeds from short-term borrowings
|
|
|
||||||
Repayments of short-term borrowings
|
(
|
)
|
(
|
)
|
||||
Proceeds from long-term borrowings
|
|
|
||||||
Repayments of long-term borrowings
|
(
|
)
|
|
|||||
Repayments of notes payable
|
|
(
|
)
|
|||||
Proceeds from stock option exercise to common stock
|
|
|
||||||
Proceeds from warrant exercise to common stock
|
|
|
||||||
Net cash provided by (used in) financing activities
|
(
|
)
|
|
|||||
|
||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
Net (decrease) in cash, cash equivalents and restricted cash
|
$
|
(
|
)
|
$
|
(
|
)
|
||
|
||||||||
Cash, cash equivalents and restricted cash at beginning of period
|
|
|
||||||
Cash, cash equivalents and restricted cash at end of period
|
$
|
|
$
|
|
||||
|
||||||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid, net of capitalized interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes
|
$
|
|
$
|
|
||||
|
||||||||
Reconciliation of cash, cash equivalents and restricted cash in condensed
consolidated statements of cash flows:
|
||||||||
Cash and cash equivalents
|
|
|
||||||
Restricted cash
|
|
|
||||||
Cash, cash equivalents and restricted cash
|
$
|
|
$
|
|
||||
Non-cash used in financing activities:
|
||||||||
Warrant conversion to common stock
|
$
|
|
$
|
|
||||
Share cancellation
|
$
|
|
$
|
|
||||
Cashless exercise of stock options
|
$
|
|
$
|
|
||||
Issuance of warrant for settlement of financial liability and cancellation of note receivable |
$ | $ |
|
|
Effective interest held as at
|
|||||||
Name of subsidiaries
|
Place and date of incorporation
|
September 30,
2021
|
December 31,
2020
|
||||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
|
|
|
%
|
|
%
|
||||
% | % |
|
Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Less: Net income attributable to non-controlling interests and redeemable non-controlling
interests
|
|
|
|
|
||||||||||||
Net income available to common stockholders, basic and diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Weighted average shares outstanding, basic
|
|
|
|
|
||||||||||||
Effect of dilutive securities
|
|
|
|
|
||||||||||||
Weighted average shares outstanding, diluted
|
|
|
|
|
||||||||||||
Net income per common share:
|
||||||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
ECP (front-end and packaging), furnace and other technologies
|
|
|
|
|
||||||||||||
Advanced packaging (excluding ECP), services & spares
|
|
|
|
|
||||||||||||
Total Revenue By Product Category
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Wet cleaning and other front-end processing tools
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Advanced packaging, other processing tools, services and spares
|
|
|
|
|
||||||||||||
Total Revenue Front-end and Back-End
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Mainland China
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Other Regions
|
|
|
|
|
||||||||||||
$
|
|
$
|
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Accounts receivable
|
$
|
|
$
|
|
||||
Less: Allowance for doubtful accounts
|
|
|
||||||
Total
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Raw materials
|
$
|
|
$
|
|
||||
Work in process
|
|
|
||||||
Finished goods
|
|
|
||||||
Total inventory
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Manufacturing equipment
|
$
|
|
$
|
|
||||
Office equipment
|
|
|
||||||
Transportation equipment
|
|
|
||||||
Leasehold improvement
|
|
|
||||||
Total cost
|
|
|
||||||
Less: Total accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Construction in progress
|
|
|
||||||
Total property, plant and equipment, net
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Land use right purchase amount
|
$
|
|
$
|
|
||||
Less: Accumulated amortization
|
(
|
)
|
(
|
)
|
||||
Land use right, net
|
$
|
|
$
|
|
Year ending December 31,
|
||||
2021
|
$
|
|
||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Prepayment for property - Lingang
|
$
|
|
$
|
|
||||
Prepayment for property, plant and equipment and other non-current assets
|
|
|
||||||
Prepayment for property - lease deposit
|
|
|
||||||
Security deposit for land use right
|
|
|
||||||
Others
|
|
|
||||||
Total other long-term assets
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Line of credit up to RMB
|
||||||||
1)due on April 1, 2021 with an annual interest rate of
|
$
|
|
$
|
|
||||
2)due on June 27, 2021 with an annual interest rate of
|
|
|
||||||
3)due on April 29, 2021 with an annual interest rate of
|
|
|
||||||
4)due on June 27, 2021 with an annual interest rate of
|
|
|
||||||
Line of credit up to RMB
|
||||||||
1)due on April 12, 2021 with an annual interest rate of
|
|
|
||||||
2)due on May 24, 2021 with an annual interest rate of
|
|
|
||||||
Line of credit up to RMB
|
||||||||
1)due on May 27, 2021 with an annual interest rate of
|
|
|
||||||
2)due on June 27, 2021 with an annual interest rate of
|
|
|
||||||
3)due on May 28, 2021 with an annual interest rate of
|
|
|
||||||
4)due on June 7, 2021 with an annual interest rate of
|
|
|
||||||
5)due on June 16, 2021 with an annual interest rate of
|
|
|
||||||
Line of credit up to RMB
|
||||||||
1)due on August 10, 2021 with annual interest rate of
|
|
|
||||||
2)due on August 25, 2021 with annual interest rate of
|
|
|
||||||
3)due on
|
|
|
||||||
4)due on
|
|
|
||||||
5)due on
|
|
|
||||||
6)due on
|
|
|
||||||
7)due on
|
|
|
||||||
Line of credit up to RMB
|
||||||||
1)due on
|
|
|
||||||
Line of credit up to RMB
|
||||||||
1)due on
|
|
|
||||||
Line of credit up to KRW |
||||||||
1)due on |
||||||||
Total
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Accrued commissions
|
|
|
||||||
Accrued warranty
|
|
|
||||||
Accrued payroll
|
|
|
||||||
Accrued professional fees
|
|
|
||||||
Accrued machine testing fees
|
|
|
||||||
Others
|
|
|
||||||
Total
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Operating lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Short-term lease cost
|
|
|
|
|
||||||||||||
Lease cost
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||||||||||
Operating cash outflow from operating leases
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31,
|
|||
2021
|
|
|||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
Total lease payments
|
|
|||
Less: Interest
|
(
|
)
|
||
Present value of lease liabilities
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Remaining lease term and discount rate:
|
||||||||
Weighted average remaining lease term (years)
|
|
|
||||||
Weighted average discount rate
|
|
%
|
|
%
|
September 30,
2021
|
December 31,
2020
|
|||||||
Loan from China Merchants Bank
|
$
|
|
$
|
|
||||
Loans from Bank of China
|
$
|
|
|
|||||
Less: Current portion
|
(
|
)
|
(
|
)
|
||||
$
|
|
$
|
|
Year ending December 31
|
||||
2021
|
$
|
|
||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025 and onwards
|
|
|||
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Subsidies to Stress Free Polishing project, commenced in 2008 and 2017
|
$
|
|
$
|
|
||||
Subsidies to Electro Copper Plating project, commenced in 2014
|
|
|
||||||
Subsidies to Polytetrafluoroethylene, commenced in 2018
|
|
|
||||||
Subsidies to Tahoe-Single Bench Clean, commenced in 2020
|
|
|
||||||
Subsidies to Backside Clean-YMTC National Project, commenced in 2020
|
|
|
||||||
Other
|
|
|
||||||
Total
|
$
|
|
$
|
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Ninebell
|
$
|
|
$
|
|
||||
Shengyi
|
|
|
||||||
Hefei Shixi
|
|
|
||||||
Total
|
$
|
|
$
|
|
July 29,
2020
|
||||
Fair value of common share(1)
|
$
|
|
||
Expected term in years(2)
|
|
|||
Volatility(3)
|
|
%
|
||
Risk-free interest rate(4)
|
|
%
|
||
Expected dividend(5)
|
|
%
|
(1) |
|
(2) |
|
(3) |
|
(4) |
|
(5) |
|
|
September 30,
2021
|
December 31,
2020
|
||||||
Trading securities listed in Shanghai Stock Exchange
|
||||||||
Cost
|
$
|
|
$
|
|
||||
Market value
|
$
|
|
$
|
|
Prepaid expenses
|
September 30,
2021
|
December 31, 2020
|
||||||
Ninebell
|
$
|
|
$
|
|
Accounts payable
|
September 30,
2021
|
December 31, 2020
|
||||||
Ninebell
|
$
|
|
$
|
|
||||
Shengyi
|
|
|
||||||
Total
|
$
|
|
$
|
|
Three Months
Ended September 30,
|
Nine Months
Ended September 30,
|
|||||||||||||||
Purchase of materials
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Ninebell
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Shengyi
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months
Ended September 30,
|
Nine
Months
Ended September 30,
|
|||||||||||||||
Service fee charged by
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Shengyi
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Ninebell
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Balance at December 31, 2019
|
$
|
|
||
Net income attributable to redeemable non-controlling interests
|
|
|||
Effect of foreign currency translation gain attributable to redeemable non-controlling
interests
|
(
|
)
|
||
Reclassification of redeemable non-controlling interest
|
(
|
)
|
||
Balance at September 30, 2020
|
$
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Stock-Based Compensation Expense:
|
||||||||||||||||
Cost of revenue
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Sales and marketing expense
|
|
|
|
|
||||||||||||
Research and development expense
|
|
|
|
|
||||||||||||
General and administrative expense
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Stock-based compensation expense by type:
|
||||||||||||||||
Employee stock purchase plan
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Non-employee stock purchase plan
|
|
|
|
|
||||||||||||
Subsidiary option grants
|
|
|
|
|
||||||||||||
|
$
|
|
$
|
|
$
|
|
$
|
|
|
Number of
Option Share
|
Weighted
Average Grant
Date Fair Value
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
|
|||||||||
Outstanding at December 31, 2020
|
|
$
|
|
$
|
|
|
|||||||
Granted
|
|
|
|
||||||||||
Exercised
|
(
|
)
|
|
|
|
||||||||
Forfeited/cancelled
|
(
|
)
|
|
|
|
||||||||
Outstanding at September 30, 2021
|
|
$
|
|
$
|
|
|
|||||||
Vested and exercisable at September 30, 2021
|
|
|
Nine Months
Ended
|
||||
September 30,
2021
|
||||
Fair value of common share(1)
|
$
|
|
||
Expected term in years(2)
|
|
|||
Volatility(3)
|
|
|
||
Risk-free interest rate(4)
|
|
|
||
Expected dividend(5)
|
|
%
|
(1)
|
|
(2)
|
|
(3)
|
|
(4)
|
|
(5)
|
|
|
Number of
Option Shares
|
Weighted
Average Grant
Date Fair Value
|
Weighted
Average
Exercise Price
|
Weighted Average
Remaining
Contractual Term
|
|||||||||
Outstanding at December 31, 2020
|
|
$
|
|
$
|
|
|
|||||||
Granted
|
|
|
|
||||||||||
Exercised
|
(
|
)
|
|
|
|
||||||||
Expired
|
|
|
|
|
|||||||||
Forfeited/cancelled
|
(
|
)
|
|
|
|
||||||||
Outstanding at September 30, 2021
|
|
$
|
|
$
|
|
|
|||||||
Vested and exercisable at September 30, 2021
|
|
|
|
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, 2020
|
|
$
|
|
$
|
|
_
|
|||||||
Granted
|
|
|
|
|
|||||||||
Exercised
|
|
|
|
|
|||||||||
Expired
|
|
|
|
|
|||||||||
Forfeited/cancelled
|
(
|
)
|
|
|
|
||||||||
Outstanding at September 30, 2021
|
|
$
|
|
$
|
|
|
|||||||
Vested and exercisable at September 30, 2021
|
|
|
|
Three Months Ended
September 30,
|
Nine
Months Ended
September 30,
|
||||||||||||||
|
2021
|
2020
|
2021
|
2020
|
||||||||||||
Total income tax benefit (expense)
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
• |
Space Alternated Phase Shift, or SAPS, technology for flat and patterned (deep via or deep trench with stronger structure) wafer surfaces. SAPS
technology employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level. We have shown SAPS technology to be more effective than conventional megasonic and jet spray
technologies in removing random defects across an entire wafer, with increasing relative effectiveness at more advanced production nodes.
|
• |
Timely Energized Bubble Oscillation, or TEBO, technology for patterned wafer surfaces at advanced process nodes. TEBO technology has been
developed to provide effective, damage-free cleaning for 2D and 3D patterned wafers with fine feature sizes. We have demonstrated the damage-free cleaning capabilities of TEBO technology on patterned wafers for feature nodes as small as
1xnm (16 to 19 nanometers, or nm), and we have shown TEBO technology can be applied in manufacturing processes for patterned chips with 3D architectures having aspect ratios as high as 60‑to‑1.
|
• |
Tahoe technology for cost and environmental savings. Tahoe technology delivers high cleaning performance using significantly less sulfuric acid
and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools.
|
• |
ECP technology for advanced metal plating. Our Ultra ECP ap, or Advanced Packaging, technology was developed for back-end assembly processes to
deliver a more uniform metal layer at the notch area of wafers prior to packaging. Our Ultra ECP map, or Multi-Anode Partial Plating, technology was developed for front-end wafer fabrication processes to deliver advanced electrochemical
copper plating for copper interconnect applications. Ultra ECP map offers improved gap-filling performance for ultra-thin seed layer applications, which is critical for advanced nodes at 14nm and beyond.
|
• |
In 2009 we introduced SAPS megasonic technology, which can be applied in wet wafer cleaning at numerous steps during the chip fabrication
process.
|
• |
In 2016 we introduced TEBO technology, which can be applied at numerous steps during the fabrication of small node conventional two-dimensional
and three-dimensional patterned wafers.
|
• |
In August 2018 we introduced the Ultra C Tahoe wafer cleaning tool, which delivers high cleaning performance with significantly less sulfuric
acid than typically consumed by conventional high temperature single-wafer cleaning tools.
|
• |
In March 2019 we introduced (a) the Ultra ECP AP or Advanced Wafer Level Packaging tool, a back-end assembly tool used for bumping, or applying
copper, tin and nickel to wafers at the die-level prior to packaging, and (b) the Ultra ECP MAP or Multi Anode Plating tool, a front-end process tool that utilizes our proprietary technology to
deliver world-class electrochemical copper planting for copper interconnect applications.
|
• |
In April 2020 we introduced the Ultra Furnace, our first system developed for multiple dry processing applications.
|
• |
In May 2020 we introduced the Ultra C Family of semi-critical cleaning systems, including the Ultra C b
for backside clean, the Ultra C wb automated wet bench, and the Ultra C s scrubber.
|
• |
In 2011 we formed a wholly owned subsidiary in the PRC, ACM Research (Wuxi), Inc., which now is a wholly owned subsidiary of ACM Shanghai, to
manage sales and service operations.
|
• |
In June 2017 we formed a subsidiary in Hong Kong, CleanChip Technologies Limited, which now is a wholly owned subsidiary of ACM Shanghai, to act
on our behalf in Asian markets outside the PRC by, for example, serving as a trading partner between ACM Shanghai and its customers, procuring raw materials and components, performing sales and marketing activities, and making strategic
investments.
|
• |
In December 2017 we formed a subsidiary in the Republic of Korea, ACM Research Korea CO., LTD., which now is a wholly owned subsidiary of ACM
Shanghai, to serve our customers based in the Republic of Korea and perform sales, marketing, and research and development activities.
|
• |
In March 2019 ACM Shanghai formed a wholly owned subsidiary in the PRC, Shengwei Research (Shanghai), Inc., to manage activities related to
addition of future long-term production capacity.
|
•
|
In August 2021 we formed a wholly owned subsidiary in Singapore, ACM Research (Singapore) PTE, Ltd. to perform sales,
marketing, and other business development activities.
|
• |
Our initial factory is located in the Pudong Region of Shanghai and has a total of 36,000 square feet of available floor space.
|
• |
Our second production facility is located in the Chuansha district of Pudong, approximately 11 miles from our initial factory. In September 2018 we announced the opening of the first
building of our second production facility. The first building initially had a total of 50,000 square feet of available floor space for production capacity, which was increased by 50,000 square feet in the second quarter of 2020. In
February 2021, we leased a second building immediately adjacent to our second factory, which increased our available floor space for production by another 100,000 square feet, bringing to total available floor space for production capacity
of second production facility to 200,000 square feet.
|
• |
In July 2020 ACM Shanghai began a multi-year construction project to build a development and production center in the Lingang region of Shanghai. The new facility is expected to have a
total of 1,000,000 square feet of available floor space for production. capacity.
|
• |
a listing, which we refer to as the STAR Listing, of shares of ACM Shanghai on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd, known as the STAR Market; and
|
• |
a concurrent initial public offering, which we refer to as the STAR IPO, of ACM Shanghai shares in the PRC, at a pre-offering valuation of not less than RMB 5.15 billion ($747.1 million).
|
• |
the land lease for, and construction of, ACM Shanghai’s proposed development and production center in the Lingang region of Shanghai;
|
• |
product development to upgrade and expand our process equipment targeted at more advanced process nodes, including technical improvement and development of TEBO megasonic cleaning
equipment, Tahoe single wafer wet bench combined cleaning equipment, front-end brush scrubbing equipment, auto bench cleaning equipment, front end process electroplating equipment, Stress Free Polish equipment and vertical furnace
equipment, additional new products to expand our product portfolio; and
|
• |
working capital.
|
• |
Operations: We conduct substantially all of our product development, manufacturing, support and services in the PRC, and those activities have been directly impacted
by the COVID–19 outbreak and related restrictions on transportation and public appearances. In February 2020 our ACM Shanghai headquarters were closed for an additional six days beyond the normal Lunar New Year Holiday in accordance with
Shanghai government restrictions related to the outbreak. We took steps before and after the Lunar New Year to ensure no employees took unreasonable risks to rush back to work. Currently substantially all of our staff have returned to work
at both of our Shanghai facilities. To date we have not experienced absenteeism of management or other key employees, other than certain of our executive officers being delayed in traveling back to the PRC after working from our California
office in February 2021. Our corporate headquarters are located in Alameda County in the San Francisco Bay Area of California and are the subject of a number of state and county public health directives and orders. These actions have not
negatively impacted our business to date, however, because of the limited number of employees at our headquarters and the nature of the work they generally perform.
|
• |
Customers: Our customers’ business operations have been, and are continuing to be, subject to business interruptions arising from the COVID–19 outbreak. Historically a
majority of our revenue from sales of single-wafer wet cleaning equipment for front-end manufacturing has been derived from customers located in the PRC and surrounding areas that have been impacted by COVID–19. Three customers that
accounted for 75.8% of our revenue in 2020, 73.8% in 2019 and 87.6% of our revenue in 2018 are based in the PRC and South Korea. One of those customers, Yangtze Memory Technologies Co., Ltd. — which accounted for 26.8% of our 2020 revenue,
27.5% of our 2019 revenue and 39.6% of our 2018 revenue — is based in Wuhan. While Yangtze Memory Technologies Co., Ltd. and other key customers continued to operate their fabrication facilities without interruption during and after the
first quarter of 2020, they were forced to restrict access of service personnel and deliveries to and from their facilities. A portion of the shipments we previously had expected to deliver in the first quarter of 2020 were postponed due to
these factors, and were subsequently delivered in the second quarter of 2020.
|
• |
Suppliers: Our global supply chain includes components sourced from the PRC, Japan, Taiwan, the United States and Europe. While the COVID–19 outbreak has resulted in
significant governmental measures being implemented to control the spread of COVID–19 around the world, to date we have not experienced material issues with our supply chain. As with our customers, we continue to be in close contact with
our key suppliers to help ensure we are able to identify any potential supply issues that may arise.
|
• |
Projects: Our strategy includes a number of plans to support the growth of our core business, including the STAR Listing and STAR IPO with respect to shares of ACM
Shanghai described above as well as ACM Shanghai’s recent acquisition of a land use right in the Lingang area of Shanghai where we began construction of a new research and development center and factory in July 2020. The extent to which
COVID–19 impacts these projects will depend on future developments that are highly uncertain, but to date, the timing of these ongoing projects has not been delayed or disrupted by COVID–19 or related government measures.
|
• |
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 nine months ended
September 30, 2021 and 2020, related government subsidies recognized as reductions of relevant expenses in the consolidated statements of operations and comprehensive income were $7.1 million and $0.8 million, 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. For the nine months ended September
30, 2021 and 2020, related government subsidies recognized as other income in the consolidated statements of operations and comprehensive income were $136,000 and $110,000, respectively.
|
• |
We define “shipments” of tools to include (a) a “repeat” delivery to a customer of a type of tool that the customer has
previously accepted, for which we recognize revenue upon delivery, and (b) a “first-time” delivery of a “first tool” to a customer on an approval basis, for which we may recognize revenue in the future if contractual conditions are met,
or if a purchase order is received.
|
• |
We define “adjusted EBITDA” as our net income excluding interest expense (net), income tax benefit (expense), depreciation and amortization, and stock-based compensation. We define adjusted EBITDA to also
exclude restructuring costs, although we have not incurred any such costs to date.
|
• |
We define “free cash flow” as net cash provided by operating activities less purchases of property and equipment (net of proceeds from disposals) and of intangible assets.
|
• |
We define “adjusted operating income (loss)” as our income (loss) from operations excluding stock-based compensation.
|
• |
a shipment to a customer of a type of tool that the customer has previously accepted, for which we recognize revenue when the tool is delivered; and
|
• |
a shipment to a customer of a type of tool that the customer is receiving and evaluating for the first time, in each case a
“first tool,” for which we may recognize revenue at a later date, 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.
|
• |
adjusted EBITDA excludes depreciation and amortization and, although these are non-cash expenses, the assets being depreciated or amortized may have to be replaced in the future;
|
• |
we exclude stock-based compensation expense from adjusted EBITDA and adjusted operating income (loss), although (a) it has been, and will continue to be for the foreseeable future, a significant recurring
expense for our business and an important part of our compensation strategy and (b) if we did not pay out a portion of our compensation in the form of stock-based compensation, the cash salary expense included in operating expenses would be
higher, which would affect our cash position;
|
• |
the expenses and other items that we exclude in our calculation of adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from adjusted EBITDA when they report
their operating results;
|
• |
adjusted EBITDA does not reflect changes in, or cash requirements for, working capital needs;
|
• |
adjusted EBITDA does not reflect interest expense, or the requirements necessary to service interest or principal payments on debt;
|
• |
adjusted EBITDA does not reflect income tax expense (benefit) or the cash requirements to pay taxes;
|
• |
adjusted EBITDA does not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
|
• |
although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect any cash
requirements for such replacements; and
|
• |
adjusted EBITDA includes expense reductions and non-operating other income attributable to PRC governmental grants, which may mask the effect of underlying developments in net income, including trends in
current expenses and interest expense, and free cash flow includes the PRC governmental grants, the amount and timing of which can be difficult to predict and are outside our control.
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(in thousands)
|
||||||||
Adjusted EBITDA Data:
|
||||||||
Net Income
|
$
|
24,306
|
$
|
12,479
|
||||
Interest expense (income), net
|
461
|
(223
|
)
|
|||||
Income tax expense (benefit)
|
(3,021
|
)
|
416
|
|||||
Depreciation and amortization
|
1,597
|
774
|
||||||
Stock based compensation
|
3,823
|
4,323
|
||||||
Change in fair value of financial liability
|
-
|
11,964
|
||||||
Unrealized gain on trading securities
|
(1,817
|
)
|
(8,970
|
)
|
||||
Adjusted EBITDA
|
$
|
25,349
|
$
|
20,763
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(in thousands)
|
||||||||
Free Cash Flow Data:
|
||||||||
Net cash used in operating activities
|
$
|
(3,822
|
)
|
$
|
(8,036
|
)
|
||
Purchase property and equipment
|
(5,059
|
)
|
(3,583
|
)
|
||||
Purchase of intangible assets
|
(418
|
)
|
(81
|
)
|
||||
Purchase of land-use-right
|
-
|
(9,331
|
)
|
|||||
Purchase of trading securities
|
-
|
(14,680
|
)
|
|||||
Free cash flow
|
$
|
(9,299
|
)
|
$
|
(35,711
|
)
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
2021
|
2020
|
|||||||||||||||||||||||
Actual
(GAAP)
|
SBC
|
Adjusted
(Non-GAAP)
|
Actual
(GAAP)
|
SBC
|
Adjusted
(Non-GAAP)
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Revenue
|
$
|
164,609
|
$
|
-
|
$
|
164,609
|
$
|
111,062
|
$
|
-
|
$
|
111,062
|
||||||||||||
Cost of revenue
|
(95,199
|
)
|
(289
|
)
|
(94,910
|
)
|
(61,137
|
)
|
(132
|
)
|
(61,005
|
)
|
||||||||||||
Gross profit
|
69,410
|
(289
|
)
|
69,699
|
49,925
|
(132
|
)
|
50,057
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
Sales and marketing
|
(17,460
|
)
|
(1,400
|
)
|
(16,060
|
)
|
(11,524
|
)
|
(495
|
)
|
(11,029
|
)
|
||||||||||||
Research and development
|
(21,293
|
)
|
(801
|
)
|
(20,492
|
)
|
(13,241
|
)
|
(568
|
)
|
(12,673
|
)
|
||||||||||||
General and administrative
|
(11,081
|
)
|
(1,333
|
)
|
(9,748
|
)
|
(9,100
|
)
|
(3,128
|
)
|
(5,972
|
)
|
||||||||||||
Income from operations
|
19,576
|
(3,823
|
)
|
23,399
|
16,060
|
(4,323
|
)
|
20,383
|
Three Months Ended September 30,
|
Nine Months Ended September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
Revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of revenue
|
55.7
|
57.3
|
57.8
|
55.0
|
||||||||||||
Gross margin
|
44.3
|
42.7
|
42.2
|
45.0
|
||||||||||||
Operating expenses:
|
||||||||||||||||
Sales and marketing
|
9.5
|
8.2
|
10.6
|
10.4
|
||||||||||||
Research and development
|
11.7
|
9.1
|
12.9
|
11.9
|
||||||||||||
General and administrative
|
5.5
|
9.6
|
6.7
|
8.2
|
||||||||||||
Total operating expenses, net
|
26.7
|
26.9
|
30.3
|
30.5
|
||||||||||||
Income from operations
|
17.6
|
15.8
|
11.9
|
14.5
|
||||||||||||
Interest income (expense), net
|
(0.2
|
)
|
(0.2
|
)
|
(0.3
|
)
|
0.2
|
|||||||||
Change in fair value of financial liability
|
-
|
(13.7
|
)
|
-
|
(10.8
|
)
|
||||||||||
Unrealized gain (loss) on trading securities
|
(1.4
|
)
|
18.8
|
1.1
|
8.1
|
|||||||||||
Other income (expense), net
|
(0.4
|
)
|
(3.7
|
)
|
(0.4
|
)
|
(0.8
|
)
|
||||||||
Equity income in net income of affiliates
|
0.6
|
0.4
|
0.6
|
0.5
|
||||||||||||
Income before income taxes
|
16.2
|
17.4
|
12.9
|
11.6
|
||||||||||||
Income tax benefit (expense)
|
0.4
|
3.7
|
1.8
|
(0.4
|
)
|
|||||||||||
Net income
|
16.6
|
21.1
|
14.8
|
11.2
|
||||||||||||
Less: Net income attributable to non-controlling interests and redeemable non-controlling interests
|
1.5
|
2.9
|
1.3
|
2.0
|
||||||||||||
Net income attributable to ACM Research, Inc.
|
15.1
|
%
|
18.2
|
%
|
13.5
|
%
|
9.2
|
%
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
`
|
(in thousands)
|
|||||||||||
Revenue
|
$
|
67,013
|
$
|
47,665
|
40.6
|
%
|
||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment
|
$
|
49,448
|
$
|
38,344
|
29.0
|
%
|
||||||
ECP (front-end and packaging), furnace and other technologies
|
8,200
|
4,850
|
69.1
|
%
|
||||||||
Advanced packaging (excluding ECP), services & spares
|
9,365
|
4,471
|
109.5
|
%
|
||||||||
Total Revenue by Product Category
|
$
|
67,013
|
$
|
47,665
|
40.6
|
%
|
||||||
Wet cleaning and other front-end processing tools
|
$
|
49,448
|
$
|
38,344
|
29.0
|
%
|
||||||
Advanced packaging, other processing tools, services and spares
|
17,565
|
9,321
|
88.4
|
%
|
||||||||
Total Revenue Front and Back-End
|
$
|
67,013
|
$
|
47,665
|
40.6
|
%
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenue
|
$
|
37,328
|
$
|
27,324
|
36.6
|
%
|
||||||
Gross profit
|
29,685
|
20,341
|
45.9
|
%
|
||||||||
Gross margin
|
44.3
|
%
|
42.7
|
%
|
1.5
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Sales and marketing expense
|
$
|
6,363
|
$
|
3,924
|
62.2
|
%
|
||||||
Research and development expense
|
7,856
|
4,343
|
80.9
|
%
|
||||||||
General and administrative expense
|
3,671
|
4,568
|
-19.6
|
%
|
||||||||
Total operating expenses
|
$
|
17,890
|
$
|
12,835
|
39.4
|
%
|
• |
compensation of personnel associated with pre- and after-sale support and other sales and marketing activities, including stock-based compensation;
|
• |
sales commissions paid to independent sales representatives;
|
• |
fees paid to sales consultants;
|
• |
shipping and handling costs for transportation of products to customers;
|
• |
cost of trade shows;
|
• |
travel and entertainment; and
|
• |
allocated overhead for rent and utilities.
|
• |
compensation of personnel associated with our research and development activities, including stock based compensation;
|
• |
costs of components and other research and development supplies;
|
• |
travel expense associated with customer support;
|
• |
amortization of costs of software used for research and development purposes; and
|
• |
allocated overhead for rent and utilities.
|
• |
compensation of executive, accounting and finance, human resources, information technology, and other administrative personnel, including stock-based compensation;
|
• |
professional fees, including accounting and corporate legal and defense fees;
|
• |
other corporate expenses including insurance; and
|
• |
allocated overhead for rent and utilities.
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Unrealized gain (loss) on trading securities
|
(919
|
)
|
8,970
|
-110.2
|
%
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Interest Income
|
$
|
33
|
$
|
179
|
-81.6
|
%
|
||||||
Interest Expense
|
(191
|
)
|
(272
|
)
|
-29.8
|
%
|
||||||
Interest Income (expense), net
|
$
|
(158
|
)
|
$
|
(93
|
)
|
69.9
|
%
|
||||
Other income (expense), net
|
$
|
(255
|
)
|
$
|
(1,759
|
)
|
-85.5
|
%
|
Three Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(in thousands)
|
||||||||
Total income tax benefit
|
$
|
266
|
$
|
1,747
|
Three Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Net income attributable to non-controlling interests
|
$
|
995
|
$
|
1,393
|
-28.6
|
%
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
`
|
(in thousands)
|
|||||||||||
Revenue
|
$
|
164,609
|
$
|
111,062
|
48.2
|
%
|
||||||
Single wafer cleaning, Tahoe and semi-critical cleaning equipment
|
$
|
127,322
|
$
|
94,468
|
34.8
|
%
|
||||||
ECP (front-end and packaging), furnace and other technologies
|
13,750
|
9,340
|
47.2
|
%
|
||||||||
Advanced packaging (excluding ECP), services & spares
|
23,537
|
7,254
|
224.5
|
%
|
||||||||
Total Revenue By Product Category
|
$
|
164,609
|
$
|
111,062
|
48.2
|
%
|
||||||
Wet cleaning and other front-end processing tools
|
$
|
127,322
|
$
|
98,958
|
28.7
|
%
|
||||||
Advanced packaging, other processing tools, services and spares
|
37,287
|
12,104
|
208.1
|
%
|
||||||||
Total Revenue Front-end and Back-End
|
$
|
164,609
|
$
|
111,062
|
48.2
|
%
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Cost of revenue
|
$
|
95,199
|
$
|
61,137
|
55.7
|
%
|
||||||
Gross profit
|
69,410
|
49,925
|
39.0
|
%
|
||||||||
Gross margin
|
42.2
|
%
|
45.0
|
%
|
-2.8
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Sales and marketing expense
|
$
|
17,460
|
$
|
11,524
|
51.5
|
%
|
||||||
Research and development expense
|
21,293
|
13,241
|
60.8
|
%
|
||||||||
General and administrative expense
|
11,081
|
9,100
|
21.8
|
%
|
||||||||
Total operating expenses
|
$
|
49,834
|
$
|
33,865
|
47.2
|
%
|
• |
compensation of personnel associated with pre- and after-sale support and other sales and marketing activities, including stock-based compensation;
|
• |
sales commissions paid to independent sales representatives;
|
• |
fees paid to sales consultants;
|
• |
shipping and handling costs for transportation of products to customers;
|
• |
cost of trade shows;
|
• |
travel and entertainment; and
|
• |
allocated overhead for rent and utilities.
|
• |
compensation of personnel associated with our research and development activities, including stock based compensation;
|
• |
costs of components and other research and development supplies;
|
• |
travel expense associated with customer support;
|
• |
amortization of costs of software used for research and development purposes; and
|
• |
allocated overhead for rent and utilities.
|
• |
compensation of executive, accounting and finance, human resources, information technology, and other administrative personnel, including stock-based compensation;
|
• |
professional fees, including accounting and corporate legal and defense fees;
|
• |
other corporate expenses including insurance; and
|
• |
allocated overhead for rent and utilities.
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Unrealized gain on trading securities
|
1,817
|
8,970
|
-79.7
|
%
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Interest Income
|
$
|
113
|
$
|
834
|
-86.5
|
%
|
||||||
Interest Expense
|
(574
|
)
|
(611
|
)
|
-6.1
|
%
|
||||||
Interest Income (expense), net
|
$
|
(461
|
)
|
$
|
223
|
-306.7
|
%
|
|||||
Other income, net
|
$
|
(683
|
)
|
$
|
(933
|
)
|
-26.8
|
%
|
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(in thousands)
|
||||||||
Total income tax benefit (expense)
|
$
|
3,021
|
$
|
(416
|
)
|
Nine Months Ended September 30,
|
||||||||||||
2021
|
2020
|
% Change
2021 v 2020
|
||||||||||
(in thousands)
|
||||||||||||
Net income attributable to non-controlling interests
|
$
|
2,114
|
$
|
2,228
|
-5.1
|
%
|
• |
the start of construction within 6 months after the Delivery Date (60% of the performance deposit);
|
• |
the completion of construction within 30 months after the Delivery Date (20% of the performance deposit); and
|
• |
the start of production within 42 months after the Delivery Date (20% of the performance deposit.
|
Lender
|
Agreement Date
|
Maturity Date
|
Annual
Interest Rate
|
Maximum
Borrowing
Amount(1)
|
Amount
Outstanding
at September 30,
2021
|
|||||||||||
(in thousands)
|
||||||||||||||||
Bank of Shanghai Pudong Branch
|
June 2021
|
June 2022
|
2.70
|
%
|
RMB100,000
|
RMB29,946
|
||||||||||
$
|
15,420
|
$
|
4,618
|
|||||||||||||
China Everbright Bank
|
July 2021
|
June 2024
|
RMB150,000
|
$
|
0
|
|||||||||||
$
|
23,130
|
$
|
0
|
|||||||||||||
China Merchants Bank
|
August 2020
|
February 2022 -
May 2022
|
3.85%-3.95
|
%
|
RMB80,000
|
RMB46,000
|
||||||||||
$
|
12,336
|
$
|
7,093
|
|||||||||||||
Bank of China
|
June 2021
|
June 2022
|
3.86
|
%
|
RMB40,000
|
RMB19,900
|
||||||||||
$
|
6,168
|
$
|
3,068
|
|||||||||||||
China Merchants Bank
|
November 2020
|
Repayable by installments and the last installments repayable in November 2030
|
4.65
|
%
|
RMB128,500
|
RMB119,920
|
||||||||||
$
|
19,815
|
$
|
18,492
|
|||||||||||||
Bank of China
|
June 2021
|
Repayable by installments and the last installments repayable in June 2024
|
2.60
|
%
|
RMB10,000
|
RMB10,000
|
||||||||||
$
|
1,542
|
$
|
1,542
|
|||||||||||||
Bank of China
|
September 2021
|
Repayable by installments and the last installments repayable in September 2024
|
2.60
|
%
|
RMB35,000
|
RMB35,000
|
||||||||||
$
|
5,397
|
$
|
5,397
|
|||||||||||||
Industrial Bank of Korea
|
July 2021
|
July 2022
|
5.40
|
%
|
KRW500,000
|
KRW500,000
|
||||||||||
$
|
422
|
$
|
422
|
|||||||||||||
$
|
84,230
|
$
|
40,632
|
(1) |
Converted from RMB to dollars as of September 30, 2021. All of the amounts owing under the line of credit with China Everbright Bank are guaranteed by Dr. David Wang, our Chief Executive
Officer, President and Chair of the Board. All of the amounts owing under the line of credit with Bank of Shanghai Pudong Branch are guaranteed by CleanChip Technologies LTD, a wholly owned subsidiary of ACM Shanghai. All of the amounts
owing under the line of credit with Industrial Bank of Korea are guaranteed by YY Kim, Chief Executive Officer of ACM Research (Korea).
|
September 30, 2021
|
||||
(in thousands)
|
||||
Cash and cash equivalents
|
$
|
65,036
|
||
Accounts receivable, less allowance for doubtful amounts
|
84,787
|
|||
Inventory
|
176,609
|
|||
Working capital
|
$
|
326,432
|
Exhibit
No.
|
Description
|
|
Certificate of Incorporation:
|
||
3.01(a) |
Restated Certificate of Incorporation of ACM Research, Inc. dated November 7, 2017 (incorporated by reference to Exhibit 3.01 to Current Report on
Form 8-K filed on November 14, 2017)
|
|
Certificate of Amendment to Restated Certificate of Incorporation of ACM Research, Inc., dated July 13, 2021 (incorporated by reference to Exhibit 3.01 to Current Report on Form 8-K filed on July 13, 2021)
|
||
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
||
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
||
101.INS
|
Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)
|
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
Inline XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|
104
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in exhibit 101)
|
ACM RESEARCH, INC.
|
|||
Date: November 5, 2021
|
By:
|
/s/ Mark McKechnie
|
|
Mark McKechnie
|
|||
Chief Financial Officer, Executive Vice President and Treasurer
(Principal Financial Officer)
|
Date: November 5, 2021
|
/s/ David H. Wang
|
David H. Wang
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
Date: November 5, 2021
|
/s/ Mark McKechnie
|
Mark McKechnie
|
|
Chief Financial Officer, Executive Vice President and Treasurer
|
|
(Principal Financial Officer)
|
Date: November 5, 2021
|
/s/ David H. Wang
|
David H. Wang
|
|
Chief Executive Officer and President
|
|
(Principal Executive Officer)
|
|
Date: November 5, 2021
|
/s/ Mark McKechnie
|
Mark McKechnie
|
|
Chief Financial Officer, Executive Vice President and Treasurer
|
|
(Principal Financial Officer)
|
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Current assets: | ||
Accounts receivable, allowance for doubtful accounts | $ 0 | $ 0 |
Class A Common Stock [Member] | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 17,798,740 | 16,896,693 |
Common stock, shares outstanding (in shares) | 17,798,740 | 16,896,693 |
Class B Common Stock [Member] | ||
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 5,307,816 | 2,409,738 |
Common stock, shares issued (in shares) | 1,707,605 | 1,802,606 |
Common stock, shares outstanding (in shares) | 1,707,605 | 1,802,606 |
DESCRIPTION OF BUSINESS |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DESCRIPTION OF BUSINESS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DESCRIPTION OF BUSINESS |
NOTE 1 – DESCRIPTION OF BUSINESS
ACM Research, Inc. (“ACM”) and its subsidiaries (collectively
with ACM, the “Company”) develop, manufacture and sell wet cleaning and other equipment used to improve the manufacturing process and yield for advanced integrated chips. The Company markets and sells its wet-cleaning equipment under the brand name
“Ultra C,” based on the Company’s proprietary Space Alternated Phase Shift (“SAPS”), Timely Energized Bubble Oscillation (“TEBO”), and Tahoe technologies. These tools are designed to remove random defects from a wafer surface efficiently, without
damaging the wafer or its features, even at increasingly advanced process nodes.
ACM was incorporated in California in 1998, and it initially focused on developing tools for manufacturing process steps involving the
integration of ultra low-K materials and copper. The Company’s early efforts focused on stress-free copper-polishing technology, and it sold tools based on that technology in the early 2000s.
In 2006 the Company established its operational center in Shanghai in the People’s Republic of China (the “PRC”), where it operates through
ACM’s subsidiary ACM Research (Shanghai), Inc. (“ACM Shanghai”). ACM Shanghai was formed to help establish and build relationships with integrated circuit manufacturers in the PRC, and the Company initially financed its Shanghai operations in part
through sales of non-controlling equity interests in ACM Shanghai.
In 2007 the Company began to focus its development efforts on single-wafer wet-cleaning solutions for the front-end chip fabrication
process. The Company introduced its SAPS megasonic technology, which can be applied in wet wafer cleaning at numerous steps during the chip fabrication process, in 2009. It introduced its TEBO technology, which can be applied at numerous steps during
the fabrication of small node two-dimensional conventional and three-dimensional patterned wafers, in March 2016. The Company has designed its equipment models for SAPS and TEBO solutions using a modular configuration that enables it to create a
wet-cleaning tool meeting the specific requirements of a customer, while using pre-existing designs for chamber, electrical, chemical delivery and other modules. In August 2018, the Company introduced its Ultra-C Tahoe wafer cleaning tool, which can
deliver high cleaning performance with significantly less sulfuric acid than typically consumed by conventional high-temperature single-wafer cleaning tools. Based on its electro-chemical plating (“ECP”) technology, in 2019 the Company introduced its
Ultra ECP ap, or “Advanced Packaging,” tool for bumping, or applying copper, tin and nickel to semiconductor wafers at the die-level, and its Ultra ECP map, or “Multi-Anode Partial Plating,” tool to deliver advanced electrochemical copper plating for
copper interconnect applications in front-end wafer fabrication processes. The Company also offers a range of custom-made equipment, including cleaners, coaters and developers, to back-end wafer assembly and packaging factories, principally in the
PRC.
In 2011 ACM Shanghai formed a wholly owned subsidiary in the PRC, ACM Research (Wuxi), Inc. (“ACM Wuxi”), to manage sales and service
operations.
In November 2016 ACM redomesticated from California to Delaware pursuant to a merger in which ACM Research, Inc., a California corporation,
was merged into a newly formed, wholly owned Delaware subsidiary, also named ACM Research, Inc.
In June 2017 ACM formed a wholly owned subsidiary in Hong Kong, CleanChip Technologies Limited (“CleanChip”), to act on the Company’s
behalf in Asian markets outside the PRC by, for example, serving as a trading partner between ACM Shanghai and its customers, procuring raw materials and components, performing sales and marketing activities, and making strategic investments.
In August 2017 ACM purchased 18.77% of ACM Shanghai’s equity interests held by Shanghai Science and
Technology Venture Capital Co., Ltd. On November 8, 2017, ACM purchased the remaining 18.36% of ACM Shanghai’s equity interest held by third parties, Shanghai Pudong High-Tech Investment Co., Ltd. (“PDHTI”) and Shanghai Zhangjiang Science & Technology Venture Capital Co., Ltd. (“ZSTVC”).
At December 31, 2017, ACM owned all of the outstanding equity interests of ACM Shanghai, and indirectly through ACM Shanghai, owned all of the outstanding equity interests of ACM Wuxi.
On September 13, 2017, ACM effectuated a reverse stock split of Class A and Class B common stock. Unless
otherwise indicated, all share numbers, per share amount, share prices, exercise prices and conversion rates set forth in these notes and the accompanying consolidated financial statements have been adjusted retrospectively to reflect the reverse
stock split.
On November 2, 2017, the Registration Statement on Form S-1 (File No. 333- 220451) for ACM’s initial public offering of Class A common
stock was declared effective by the U.S. Securities and Exchange Commission. Shares of Class A common stock began trading on the Nasdaq Global Market on November 3, 2017, and the closing for the offering was held on November 7, 2017.
In December 2017 ACM formed a wholly owned subsidiary in the Republic of Korea, ACM Research Korea CO., LTD. (“ACM Korea”), to serve
customers based in Republic of Korea and perform sales, marketing, research and development activities for new products and solutions.
In March 2019 ACM Shanghai formed a wholly owned subsidiary in the PRC, Shengwei Research (Shanghai), Inc. (“ACM Shengwei”), to manage
activities related to addition of future long-term production capacity.
In April 2019 CleanChip formed a wholly owned subsidiary in
California, ACM Research (CA), Inc. (“ACM California”), to provide procurement services on behalf of ACM Shanghai.
In June 2019 ACM announced plans to complete, over the following three years, a listing (the “STAR Listing”) of shares of ACM Shanghai on the Shanghai Stock Exchange’s new Sci-Tech innovAtion boaRd, known as the STAR Market, and a concurrent initial public
offering (the “STAR IPO”) of ACM Shanghai shares in the PRC. ACM Shanghai is currently ACM’s primary operating subsidiary, and at the time of announcement, was wholly owned by ACM. To meet a STAR Listing requirement that it have multiple independent
stockholders in the PRC, ACM Shanghai completed private placements of its shares in June and November 2019, following which, as of September 30, 2020, the private placement investors held a total of 8.3% of the outstanding shares of ACM Shanghai and ACM Research held the remaining 91.7%.
As part of the STAR Listing process, in June 2020 the ownership interests held by the private investors were reclassified from redeemable non-controlling interests to non-controlling interests as the redemption feature was terminated (note 19).
In preparation for the STAR IPO, ACM completed a
reorganization in December 2019 that included the sale of all of the shares of CleanChip by ACM to ACM Shanghai for $3,500. The
reorganization and sale had no impact on ACM’s consolidated financial statements.
In August 2021 ACM formed a wholly owned subsidiary Singapore, ACM
research (Singapore) PTE, Ltd. to perform sales, marketing, and other business development activities.
The Company has direct or indirect interests in the following subsidiaries:
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Company’s condensed consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its
subsidiaries, which include ACM Wuxi, ACM Shengwei and CleanChip (the subsidiaries of which include ACM California and ACM Korea). ACM’s subsidiaries are those entities in which ACM, directly or indirectly, controls a majority of the voting power.
All significant intercompany transactions and balances have been eliminated upon consolidation.
The accompanying condensed consolidated financial statements
of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission for
reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The
accompanying condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements of the Company for the year ended December 31, 2020 included in ACM’s Annual Report on Form 10-K for the year ended December 31, 2020.
The accompanying condensed consolidated balance sheet as of
September 30, 2021, condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of changes in stockholders’ equity for
the three and nine months ended September 30,
2021 and 2020, and condensed consolidated statements of
cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. In the opinion of management, these unaudited condensed consolidated financial statements of the Company reflect
all adjustments that are necessary for a fair presentation of the Company’s financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2021 and the results of operations for the three and nine months ended September 30, 2021 are not necessarily
indicative of the results to be expected for any future period.
COVID-19 Assessment
The outbreak of COVID-19, the coronavirus, has grown both in the United States and globally, and related government and private sector responsive actions have adversely affected the Company’s business
operations. In December 2019 a series of emergency quarantine measures taken by the PRC government disrupted domestic business activities during
the weeks after the initial outbreak of COVID-19. Since that time, an increasing number of countries, including the United States, have imposed
restrictions on travel to and from the PRC and elsewhere, as well as general movement restrictions, business closures and other measures imposed to slow the spread of COVID-19 and its variants. The situation continues to develop, and it is impossible to predict the effect and ultimate impact of the COVID-19 outbreak on the Company’s business operations and results. While the quarantine, social distancing and other regulatory measures instituted or recommended in response to COVID-19 are expected to be temporary, the duration of the business disruptions and related financial impact cannot be estimated at this time. The COVID-19 outbreak has been declared a worldwide health pandemic that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn and changes in global
economic policy that could reduce demand for the Company’s products and its customers’ chips and have a material adverse impact on the Company’s business, operating results and financial condition. Through September 30, 2021 the Company had not experienced a significant negative impact of COVID-19 on its operations, capital and financial resources, including overall liquidity position. The Company continues to monitor the impact of the COVID-19 pandemic on all aspects of its business.
The Company conducts substantially all of its product
development, manufacturing, support and services in the PRC, and those activities have been directly impacted by the COVID-19 outbreak and related
restrictions on transportation and public appearances. In February 2020 ACM Shanghai’s headquarters were closed for an additional six days beyond the normal Lunar New Year Holiday in
accordance with Shanghai government restrictions related to the outbreak. The Company cannot assure that further closures or reductions of its PRC operations or production may not be necessary in upcoming months as the result of business
interruptions arising from protective measures being taken by the PRC and other governmental agencies or of other consequences of the COVID-19
outbreak.
The Company’s corporate headquarters are located in Alameda
County in the San Francisco Bay Area of California. The effects of any future actions by the State of California, the San Francisco Department of
Public Health, health officers of the San Francisco Bay Area counties or other local health officials that intended to mitigate the COVID-19 pandemic may negatively impact productivity, disrupt the business of the Company and delay timelines, the
magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct its business in the ordinary course.
The prolonged and broad-based shift to a remote working
environment continues to create inherent productivity, connectivity, and oversight challenges and could affect our ability to enhance, develop and support existing products and services, detect and prevent spam and problematic content, hold product
sales and marketing events, and generate new sales leads, among others. In addition, the changed environment under which the Company is operating could have an effect on its internal controls over financial reporting as well as the Company’s
ability to meet a number of its compliance requirements in a timely or quality manner. Additional and/or extended, governmental lockdowns, restrictions or new regulations could significantly impact the ability of our employees and vendors to work
productively. Governmental restrictions have been globally inconsistent and it remains unclear when a return to worksite locations or travel will be permitted or what restrictions will be in place in those environments. As the Company continues to
return its workforce in more office locations in 2021, it may experience increased costs as it prepares its facilities for a safe return to work
environment and experiment with hybrid work models, in addition to potential effects on its ability to compete effectively and maintain its corporate culture. Employees of the Company may be exposed to COVID-19 or other variants of the
virus, and as a result the Company may experience reduction in productivity or exposure to potential claims from employees or regulatory authorities regarding the adequacy of the Company’s protections with respect to the spread of COVID-19 at its
physical locations, which may affect the Company’s business, results of operations and reputation.
Extended periods of interruption to the Company’s corporate,
development or manufacturing facilities due to the COVID-19 outbreak could cause the Company to lose revenue and market share, which would depress
its financial performance and could be difficult to recapture. The Company’s business may also be harmed if travel to or from the PRC or the United States continues to be restricted or inadvisable or if members of management and other employees are
absent because they contract the coronavirus, they elect not to come to work due to the illness affecting others in the Company’s office or laboratory facilities, or they are subject to quarantines or other governmentally imposed restrictions.
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 the valuation and recognition of fair value of trading securities, stock-based compensation arrangements and warrant
liability, realization of deferred tax assets, assessment for impairment of long-lived assets, allowance for doubtful accounts, inventory valuation for excess and obsolete inventories, lower of cost and market value or net realizable value of
inventories, depreciable lives of property and equipment and useful life of intangible assets.
Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates and assumptions.
Basic and Diluted Net Income per Common Share
Basic and diluted net income per common share are calculated as follows:
ACM has been authorized to issue Class A and Class B common
stock since redomesticating in Delaware in November 2016. The two classes of common stock are substantially identical in all material respects, except for voting rights. Since ACM did not declare any dividends during the three and nine months ended September 30, 2021 and 2020, the net income per common share 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 condensed consolidated statements of operations and comprehensive income and in the above computation of net income per common share.
Diluted net income per common share reflects the potential
dilution from securities, including stock options and issued warrants, 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.
ACM’s potential dilutive securities consist of warrants and stock options for the nine months ended September 30, 2021, and stock options for the three and nine months ended September 30,
2021. ACM’s potential dilutive securities consist of warrants and stock options for the three and nine months ended September 30, 2020.
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents 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. For the nine months ended September 30, 2021 and 2020, the Company’s three
largest customers accounted for 65.6% and 79.8%,
respectively, of revenue. For the three months ended September 30, 2021 and 2020, the Company’s three largest customers accounted for
77.1% and 72.1%,
respectively, of revenue. As of September 30, 2021 and December 31, 2020, the Company’s three largest customers accounted for 73.8% and 75.8%, 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.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions
to the general principles in Topic 740. It also improves
consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on
Financial Reporting. ASU 2020-04 provide
optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The Company adopted ASU 2020-04 on January 1, 2021. The adoption of ASU 2020-04 did not have a material impact on the Company’s condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments. ASU 2016-13 replaced the pre-existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader
range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted.
In October 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the U.S. Securities and Exchange
Commission (“SEC”) to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company was eligible to be an SRC based on its SRC determination as of November 15, 2019 (which is the issuance date of ASU 2019-10) in accordance with SEC regulations, the Company will adopt the standards for the year beginning January 1, 2023. Adoption of the standard requires using a modified
retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company is evaluating the impact of this standard on its consolidated
financial statements, including accounting policies, processes and systems and expects the standard will have a minor impact on its consolidated financial statements.
|
REVENUE FROM CONTRACTS WITH CUSTOMERS |
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REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE FROM CONTRACTS WITH CUSTOMERS |
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 related
businesses. The following tables present disaggregated revenue information:
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ACCOUNTS RECEIVABLE |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE [Abstract] | |||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE |
NOTE 4 – ACCOUNTS RECEIVABLE
At September 30, 2021 and December 31, 2020 accounts
receivable consisted of the following:
The Company reviews accounts receivable on a periodic basis
and makes general and specific allowances when there is doubt as to the collectability of individual balances. No allowance for doubtful accounts was considered necessary at September 30, 2021 and December 31, 2020.
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INVENTORIES |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES |
NOTE 5 – INVENTORIES
At September 30, 2021 and December 31, 2020 inventory consisted of the following:
At September 30, 2021 and December 31, 2020, the Company held an inventory reserve of $1,112 and $1,140, respectively. At September 30, 2021 and December
31, 2020, finished goods inventory included system shipments of first-tools to existing or prospective customers, for which ownership does not transfer until customer acceptance or customer purchase, totaling $81,898 and $32,275, respectively. Those tools are carried at cost
until ownership is transferred. At September 30, 2021 and December 31, 2020, finished goods inventory included tools for which customers are contractually obligated to take ownership upon acceptance totaling $58,928 and $20,834, respectively.
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PROPERTY, PLANT AND EQUIPMENT, NET |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET |
NOTE 6 – PROPERTY, PLANT AND EQUIPMENT, NET
At September 30, 2021 and December 31, 2020, property, plant and equipment consisted of the following:
Depreciation expense was $501 and $195 for the three months ended September 30, 2021 and 2020, respectively, and $1,407 and $569 for the nine months ended September 30, 2021 and 2020, respectively.
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LAND USE RIGHT, NET |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LAND USE RIGHT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LAND USE RIGHT, NET |
NOTE 7 – LAND USE RIGHT, NET
A summary of land use right is as follows:
In 2020 ACM Shanghai, through its wholly owned subsidiary ACM Shengwei, entered into an agreement for a 50-year land use right in the Lingang region of Shanghai. In July 2020 ACM Shengwei began a multi-year construction project for a new 1,000,000 square foot development and production center that will incorporate new manufacturing systems and automation technologies, and will provide floor space to support
significantly increase production capacity and related research and development activities.
Amortization expense was $49 for the three
months ended September 30, 2021, and $147 for the nine months ended September 30, 2021.
The remaining amortization of land use right for each of the five succeeding years is as follows:
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OTHER LONG-TERM ASSETS |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM ASSETS |
NOTE 8 – OTHER LONG-TERM ASSETS
At September 30, 2021 and December 31, 2020, other long-term assets consisted of the following:
The prepayment for property - Lingang is for the housing in
Lingang, Shanghai, which consists of (1) the contractual amount to acquire the property and (2) capitalized interest charges on the long-term loan related to acquisition of the property, which amounted to $757 as of September 30, 2021. The property is pledged for a long-term loan
from China Merchants Bank (note 12).
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SHORT-TERM BORROWINGS |
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SHORT-TERM BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHORT-TERM BORROWINGS |
NOTE 9 – SHORT-TERM BORROWINGS
At September 30, 2021 and December 31, 2020, short-term borrowings consisted of the following:
*1 Guaranteed by ACM’s
Chief Executive Officer
*2 Guaranteed by ACM’s
Chief Executive Officer and CleanChip
*3 Guaranteed by CleanChip
*4 Guaranteed by ACM Korea’s Chief Executive Officer
For the three months ended September
30, 2021 and 2020, interest expense related to short-term borrowings amounted to $176 and $272, respectively, and $556 and $611 for the nine months ended September 30, 2021 and 2020.
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OTHER PAYABLE AND ACCRUED EXPENSES |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER PAYABLE AND ACCRUED EXPENSES |
NOTE 10 – OTHER PAYABLE AND ACCRUED EXPENSES
At September 30, 2021 and December 31, 2020, other payable and accrued expenses consisted of the following:
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LEASES |
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LEASES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES |
NOTE 11 – 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 exercise of lease renewal options is typically at the Company’s sole discretion;
therefore, the majority of renewals to extend the lease terms are not included in the Company’s right-of-use assets and lease liabilities as they are not reasonably certain of exercise. 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.
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 the lease commencement date in determining the present value of the lease payments. The Company has a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, it applies a
portfolio approach for determining the incremental borrowing rate.
The components of lease expense were as follows:
Supplemental cash flow information related to operating leases was as follows for the three and nine months ended September 30, 2021 and 2020:
Maturities of lease liabilities for all operating leases were as follows as of September 30, 2021:
The weighted average remaining lease terms and discount rates
for all operating leases were as follows as of September 30, 2021 and December 31, 2020:
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LONG-TERM BORROWINGS |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM BORROWINGS |
NOTE 12 – LONG-TERM BORROWINGS
At September 30, 2021 and December 31, 2020, long-term borrowings consisted of the following:
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 , with an annual interest rate of 4.65%. The loan is pledged by the property of ACM Shengwei and guaranteed by ACM Shanghai. As of September 30, 2021, the right certificate of the pledged property has not been obtained and the procedures of the formal pledge
registration in the bank had not been completed.
The loans from Bank of China are for the purpose of funding
ACM Shanghai research activities. The loans bear interest at an annual rate of 2.6% and is repayable in 6 installments, with the last installments due in and .
Scheduled principal payments for the outstanding long-term
loan as of September 30, 2021 are as follows:
For the three months ended September 30, 2021, interest related to long-term borrowings of $232 was incurred, of which $15 was charged to interest expenses and $217 was capitalized as other long-term assets. For the nine months ended
September 30, 2021, interest related to long-term borrowings of $776 was incurred, of which $18 was charged to interest expenses and $758 was capitalized as other long-term assets.
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OTHER LONG-TERM LIABILITIES |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM LIABILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM LIABILITIES |
NOTE 13 – OTHER LONG-TERM LIABILITIES
Other long-term liabilities represent government subsidies
received from PRC governmental authorities for development and commercialization of certain technology but not yet recognized. As of September 30, 2021 and December 31, 2020, other long-term liabilities consisted of the following unearned government subsidies:
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LONG-TERM INVESTMENT |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENT |
NOTE 14 – LONG-TERM INVESTMENT
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, 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 133,334
shares of Class A common stock to Ninebell for a purchase price of $1,000 at $7.50 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 15% of Shengyi’s
post-closing equity for a purchase price of $109. The investment in Shengyi is accounted for under the equity method.
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.
The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the
investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted
for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.
The Company’s share of equity investees’ net income was $421 and $182, for the three months ended September 30, 2021 and 2020, respectively, and $1,036 and $539 for the nine months ended September 30, 2021 and 2020, respectively, which amounts were included in equity income in net income of affiliates in the accompanying condensed consolidated statements of
operations and comprehensive income.
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FINANCIAL LIABILITY CARRIED AT FAIR VALUE |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
FINANCIAL LIABILITY CARRIED AT FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||
FINANCIAL LIABILITY CARRIED AT FAIR VALUE |
NOTE 15 – FINANCIAL LIABILITY CARRIED AT FAIR VALUE
In December 2016 Shengxin (Shanghai) Management Consulting Limited Partnership (“SMC”) paid 20,123,500 RMB ($2,981 as of the date of funding) (the “SMC
Investment”) to ACM Shanghai as an investment pursuant to terms to be subsequently negotiated. SMC is a PRC limited partnership partially owned by employees of ACM Shanghai.
In March 2017 (a) ACM issued to SMC a warrant (the “2017 Warrant”) exercisable to purchase 397,502 shares of Class A common stock at a price of $7.50 per
share, for a total exercise price of $2,981, and (b) ACM Shanghai agreed to repay the SMC Investment within 60 days after the exercise of the 2017 Warrant. In March 2018 SMC exercised the 2017 Warrant in full, as a result of which (1) ACM issued 397,502 shares of Class A common stock to SMC (the “2017 Warrant Shares”), (2) SMC borrowed the funds to pay the 2017 Warrant exercise price pursuant to a
senior secured promissory note (the “SMC Note”) in the principal amount of $2,981 issued to ACM Shanghai, which in turn issued to ACM a
promissory note (the “Intercompany Note”) in the principal amount of $2,981 in payment of the 2017 Warrant exercise price. Each of the SMC
Note and the Intercompany Note bore interest at a rate of 3.01% per annum and matured on August 17, 2023. The SMC Note was secured by a pledge of the 2017 Warrant Shares.
In connection with its follow-on public offering of Class A common stock in August 2019, ACM agreed to purchase a total of 154,821 of the 2017 Warrant Shares from SMC at a per share price of $13.195, of which (a) $1,161 was applied to reduce SMC’s obligations to ACM Shanghai under the SMC
Note, and which ACM then withheld for its own account and applied to reduce ACM Shanghai’s obligations to ACM under the Intercompany Note, and (b) the remaining $882 was paid to SMC. In a separate transaction, ACM Shanghai repaid $1,161 of the SMC Investment in cash,
which reduced the amount of the SMC Investment due to SMC to $1,820.
The SMC Note and SMC Investment were offsetting items in the Company’s consolidated balance sheet in accordance with ASC 210-20-45-1 up to
April 30, 2020.
In preparation for the STAR IPO, ACM Shanghai was required to terminate its financial relationship with SMC. In order to facilitate such
termination, on April 30, 2020, ACM entered into two agreements relating to outstanding obligations among ACM Research, ACM Shanghai and
SMC. Pursuant to such agreements: (i) ACM Shanghai assigned to ACM its rights under the SMC Note, including the right to receive payment of the $1,820
payable thereunder; (ii) ACM cancelled the outstanding $1,820 obligation of ACM Shanghai under the Intercompany Note; (iii) SMC surrendered
its remaining 242,681 2017 Warrant Shares to ACM Research; and (iv) in exchange for such 242,681 2017 Warrant Shares, ACM agreed to deliver to SMC certain consideration (“SMC Consideration”) agreed upon by ACM Research and SMC, subject to obtaining certain PRC
regulatory approvals. Under the agreements, if the required approvals were not obtained by December 31, 2023, ACM would cancel the SMC Note as consideration for the 242,681 2017 Warrant Shares. In a separate transaction in April 2020, ACM Shanghai repaid the remaining $1,820
of the SMC Investment in cash.
Beginning April 30, 2020, the SMC Consideration was accounted for as a financial liability, and the Company applied the fair value
measurement option to value the SMC Consideration in accordance with ASC 825-10-15-4a. On April 30, 2020, the SMC Consideration was $9,715,
which reflected cancellation of the 2017 Warrant Shares and was recorded in equity. The financial liability was remeasured to fair value as of the end of each subsequent reporting period.
On July 29, 2020, ACM and SMC entered into an amended agreement under which, in settlement of the SMC Consideration, ACM issued to SMC a
warrant (the “2020 Warrant”) to purchase 242,681 shares of Class A common stock at a purchase price of $7.50 per share, and ACM cancelled the SMC Note. The financial liability was remeasured to fair value of $21,679 as of July 29, 2020, and was retired with the issuance of the 2020 Warrant. The Company recognized a change in fair value of financial liability of $11,964 for the year ended December 31, 2020, which was reflected in the consolidated statement of operations. The Company recorded the difference of $19,859 between the 2020 Warrant of $21,679
and the SMC Note of $1,820 into equity.
The 2020 Warrant was initially measured at fair value at the issuance date and classified as equity permanently in accordance with ASC 815.
The fair value of the 2020 Warrant amounted to $21,679, based on the grant date using the Black-Scholes valuation model with the following
assumptions:
On June 9, 2021, subsequent to its obtaining the necessary PRC
approvals, SMC exercised the 2020 Warrant by paying the $1,820 exercise price to ACM and surrendering the 2020 Warrant to ACM. In return, ACM delivered 242,681 shares of ACM Class A common stock to SMC.
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TRADING SECURITIES |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
TRADING SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||
TRADING SECURITIES |
NOTE 16 – TRADING SECURITIES
Pursuant to a Partnership Agreement dated June 9, 2020 (the “Partnership Agreement”) and a Supplementary Agreement thereto dated June 15, 2020
(the “Supplementary Agreement”), ACM Shanghai became a limited partner of Qingdao Fortune-Tech Xinxing Capital Partnership (L.P.), a Chinese limited partnership based in Shanghai, China (the “Partnership”) of which China Fortune-Tech Capital Co.,
Ltd serves as general partner and thirteen unaffiliated entities serve, with ACM Shanghai, as limited partners. The Partnership was formed to establish a special
fund that would purchase, in a strategic placement, shares of Semiconductor Manufacturing International Corporation, (“SMIC”) to be listed on the STAR Market. SMIC is a Shanghai-based foundry that has been a customer of the Company’s single-wafer
wet-cleaning tools. The limited partners of the Partnership contributed to the fund a total of RMB 2.224 billion ($315,000), of which ACM Shanghai contributed RMB 100 million ($14.2 million), or 4.3% of the total contribution, on June 18, 2020.
Upon the closing of the SMIC offering in July 2020, the initial number of SMIC shares owned by the Partnership was apportioned to all of the limited partners in proportion to their respective capital contributions (4.3% in the case of ACM Shanghai). All of the SMIC shares acquired by the
Partnership are subject, under applicable Chinese laws, to lock-up restrictions that prevent sales of the shares for one year after the shares were acquired.
Thereafter an individual limited partner will be able to instruct the general partner to sell, on behalf of the limited partner, all or a portion of the limited partner’s apportioned shares, subject to compliance with all laws, regulations, trading
rules, the Partnership Agreement and the Supplementary Agreement. Alternatively, following the lock-up period, limited partners holding at least thirty percent of the total SMIC shares held by the Partnership will be able, pursuant to a call auction in accordance with the Supplementary Agreement, to
cause the general partner to arrange to sell all of the shares desired to be offered by each of the limited partners that complies with procedural requirements provided in the Supplementary Agreement.
As SMIC was listed on the STAR Market in July 2020, ACM
Shanghai’s investment is accounted for as trading securities and is stated at fair market value. At December 31, 2020, the fair market value is classified as Level 2 of the hierarchy established under ASC 820 with valuations based on quoted prices for identical securities in active markets, less a discount applied to
reflect the remaining lock-up
period.
Following the expiration of the lock-up period in July 2021, the trading securities are stated at fair market value, which is classified as Level 1 of the hierarchy established under ASC 820 with valuations based on quoted prices for identical
securities in active markets at September 30, 2021.
The components of trading securities were as follows:
Unrealized gain (loss) on trading securities, net of ($919) and $8,970 for the three months ended
September 30, 2021 and 2020, respectively, and $1,817 and $8,970 for the nine months ended September 30, 2021 and 2020. respectively.
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RELATED PARTY BALANCES AND TRANSACTIONS |
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RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY BALANCES AND TRANSACTIONS |
NOTE 17 – RELATED PARTY BALANCES AND TRANSACTIONS
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COMMON STOCK |
9 Months Ended |
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Sep. 30, 2021 | |
COMMON STOCK [Abstract] | |
COMMON STOCK |
NOTE 18 – COMMON STOCK
At December 31, 2020, ACM was authorized to issue 50,000,000 shares of Class A common stock and 2,409,738 shares of Class B common stock, each with a par value of $0.0001. On July 13, 2021, the Company filed a certificate of amendment to its restated certificate of incorporation with the Secretary of State of the State of Delaware. The amendment i) increased the
authorized number of shares of Class A common stock from 50,000,000 to 150,000,000 with 60,000,000 of the 100,000,000 additional authorized shares of Class A common stock reserved for issuance only as dividends on outstanding shares of Class A common
stock; ii) increased the authorized number of shares of Class B common stock from 2,409,738 to 5,307,816, with all of the authorized but unissued shares of Class B common stock being available for issuance only as dividends on outstanding shares
of Class B common stock; and iii) removed a now obsolete provision related to the automatic conversion of Class B common stock into Class A common stock.
The amendment to ACM’s certificate of incorporation that increased the number of authorized Class A common stock and Class B common stock was approved by
ACM’s stockholders on June 2, 2021. As a result, at September 30, 2021, ACM is 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 three months ended September 30, 2021, ACM issued 130,331 shares of Class A common stock upon option exercises by employees and non-employees.
During the nine months ended September 30, 2021, ACM issued 564,365 shares of Class A common stock upon option exercises by employees and non-employees, and an additional 95,001 shares of Class A common stock upon conversion of an equal number of shares of Class B common stock.
During the nine months ended September 30, 2021, ACM issued 242,681 shares of Class A common stock upon the warrant exercise by SMC (Note 15).
During the three months ended September 30, 2020, ACM issued 407,043 shares of Class A common stock upon option exercises by employees and non-employees.
During the nine months ended September 30, 2020, ACM issued
592,946 shares of Class A common
stock upon option exercises by employees and non-employees, and an additional 60,002 shares of Class A common stock upon conversion of an equal number of shares of Class B common stock. During the nine months ended September 30, 2020, ACM issued 64,717 shares of Class A common stock upon a cashless warrant exercise by a
non-employee.
During the nine months ended September 30, 2020, SMC transferred its ownership of 242,681 shares of Class A common stock to ACM in exchange for the SMC Consideration. The 242,681 shares were cancelled during the nine months ended September 30, 2020. (Note 15)
At September 30, 2021 and December 31, 2020, the number of shares of Class A common stock issued and outstanding was 17,798,740, and 16,896,693,
respectively.
At September 30, 2021 and December 31, 2020, the number of shares of Class B common stock issued and outstanding was 1,707,605 and 1,802,606,
respectively.
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REDEEMABLE NON-CONTROLLING INTERESTS |
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Sep. 30, 2021 | ||||||||||||||||||||||||||
REDEEMABLE NON-CONTROLLING INTERESTS [Abstract] | ||||||||||||||||||||||||||
REDEEMABLE NON-CONTROLLING INTERESTS |
NOTE 19 – REDEEMABLE NON-CONTROLLING INTERESTS
During the second quarter of 2020, the redemption feature of the private placement funding terminated and the aggregate proceeds of the
funding therefore were reclassified from redeemable non-controlling interests to non-controlling interests. At September 30, 2020, the balance of redeemable non-controlling interest was
.The components of the change in the redeemable non-controlling interests for the nine months ended September 30, 2020 are presented in the
following table:
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STOCK-BASED COMPENSATION |
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STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCK-BASED COMPENSATION |
NOTE 20 – STOCK-BASED COMPENSATION
In January 2020 ACM Shanghai adopted a 2019 Stock Option Incentive Plan (the “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 fair value of the stock options granted is estimated at the date of grant based on the Black-Scholes option pricing model
using assumptions generally consistent with those used for ACM’s stock options. Because ACM Shanghai shares are not publicly traded, the expected volatility is estimated with reference to the average historical volatility of a group of publicly
traded companies that are believed to have similar characteristics to ACM Shanghai.
ACM’s stock-based compensation consists of employee and non-employee awards issued under its 1998 Stock Option Plan, its 2016 Omnibus
Incentive Plan, and as standalone options. ACM granted stock options to employees under the 2016 Omnibus Incentive Plan during the three and nine months ended September 30, 2021. The vesting condition may consist of a service period determined by the
Board of Directors for a grant or certain performance conditions determined by the Board of Directors for a grant. The fair value of the stock options granted with service period based condition is estimated at the date of grant using the
Black-Scholes option pricing model. The fair value of the stock options granted with market based condition is estimated at the date of grant using the Monte Carlo simulation model.
The following table summarizes the components of stock-based compensation expense included in the consolidated statements of operations:
The following table summarizes the Company’s employee share option activities during the nine months ended September 30, 2021:
As of September 30, 2021 and December 31, 2020, $10,677 and $8,733, respectively, of total unrecognized employee stock-based compensation expense, net of estimated forfeitures,
related to stock-based awards for ACM were expected to be recognized over a weighted-average period of 1.82 years and 1.89 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
The fair value of options granted to employee with a service
period based condition is estimated on the grant date using the Black-Scholes valuation.
Non-employee Awards
The following table summarizes the Company’s non-employee share option activities during the nine months ended September 30, 2021:
As of September 30, 2021 and December 31, 2020, $113 and $195, respectively, of total unrecognized non-employee stock-based compensation expense, net of estimated
forfeitures, related to stock-based awards were expected to be recognized over a weighted-average period of 0.07 years and 0.09 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
ACM Shanghai Option Grants
The following table summarizes the ACM Shanghai employee stock option activities during the nine months ended September 30, 2021:
As of September 30, 2021 and December 31, 2020, $605 and $822, respectively, of total unrecognized non-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 1.75 years and 2.50 years, respectively. Total recognized compensation cost may
be adjusted for future changes in estimated forfeitures.
|
INCOME TAXES |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES |
NOTE 21 – INCOME TAXES
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized
in income in the period during which such rates are enacted.
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.
As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future
realization of deferred tax assets. Prior to September 30, 2019, the Company had recorded a valuation allowance for the full amount of net deferred tax assets in the United States, as the realization of deferred tax assets was uncertain. Since
September 30, 2019, the Company has not maintained a valuation allowance except for a partial valuation allowance on certain U.S. deferred tax assets. In order to recognize the remaining U.S. deferred tax assets that continue to be subject to a
valuation allowance, the Company will need to generate sufficient U.S. taxable income in future periods before the expiration of the deferred tax assets governed by the tax code.
ACM Shanghai has shown a three-year historical cumulative profit and has projections of future income. As a result, the Company does not
maintain a valuation allowance.
The Company accounts for uncertain tax positions in accordance with the authoritative guidance on income taxes under which the Company may
only recognize or continue to recognize tax positions that meet a more likely than not threshold. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as a component of the provision for income taxes.
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 Chinese income tax purposes due to the effects of the valuation allowance and certain permanent differences from book-tax differences. As a
result, the Company recorded income tax benefit (expense) of $3,021 and $(416) during the nine months ended September 30, 2021 and 2020, respectively.
As of September 30, 2021, the Company’s total unrecognized tax benefits were $570 of which $422 would affect the effective tax rate if
recognized. The Company will recognize interest and penalties, when they occur, related to uncertain tax provisions as a component of tax expense. No
interest or penalties were recognized for the nine months ended September 30, 2021.
The Company files income tax returns in the United States and state and foreign jurisdictions. The federal, state and foreign income tax
returns are under the statute of limitations subject to tax examinations for the tax years ended December 31, 2002 through December 31, 2020. To the extent the Company has tax attribute carry-forwards, the tax years in which the attribute was
generated may still be adjusted upon examination by the U.S. Internal Revenue Service, state or foreign tax authorities to the extent utilized in a future period.
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 Chinese 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-US research expenses. The Company’s three PRC subsidiaries, ACM Shanghai, ACM Wuxi and ACM Shengwei, are liable for PRC
corporate income taxes at the rates of 12.5%, 25% and 16.5%, respectively. Pursuant to the Corporate Income Tax Law
of the PRC, ACM’s PRC subsidiaries generally would be liable for PRC corporate income taxes as 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 and 2018, with an effective period of three years. In 2021,
ACM Shanghai was certified as an eligible integrated circuit production enterprise and is entitled to a preferential income tax rate of 12.5% from January 1, 2020 to December 31, 2022.
ACM files income tax returns in the United States and state and foreign jurisdictions. Those federal, state and foreign income tax returns
are under the statute of limitations subject to tax examinations for 2002 through 2020. To the extent ACM has tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the U.S. Internal
Revenue Service or state or foreign tax authorities to the extent utilized in a future period.
In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which enhances
and simplifies various aspects of the income tax accounting guidance, including requirements such as the elimination of exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim
period, the recognition of deferred tax liabilities for outside basis differences, ownership changes in investments, and tax basis step-up in goodwill obtained in a transaction that is not a business combination. The guidance is effective for public
companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. The impact of the adoption by the Company on its condensed consolidated financial statements and disclosures is immaterial.
Income tax benefit (expense) was as follows:
|
COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES |
NOTE 22 – COMMITMENTS AND CONTINGENCIES
The Company leases offices 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 September 30, 2021, the Company had $2,663 of open capital commitments.
Covenants in ACM Shengwei’s Grant Contract for State-owned Construction Land Use Right in Shanghai City with the China (Shanghai) Pilot
Free Trade Zone Lingang Special Area Administration require, among other things, that ACM Shengwei 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 the PRC 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 September 30, 2021, the Company had paid in total $10,977 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 September 30, 2021 and December 31, 2020. In
the opinion of management, no provision for liability nor disclosure was required as of September 30, 2021 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 September 30, 2021, the Company had one
outstanding legal proceeding. On December 21, 2020, a putative class action lawsuit against ACM and three
of its officers was filed in the U.S. District Court for the Northern District of California under the caption Kain v. ACM Research, Inc., et al., No. 3:20-cv-09241. The complaint alleges claims under
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and seeks monetary damages in an unspecified amount as well as costs and expenses incurred in the litigation. On April 15, 2021, the court
appointed Mr. Kain as lead plaintiff, finding that no better-suited candidates emerged during the statutory sixty-day period following public notice of the lawsuit. On May 27, 2021, defendants filed a motion to dismiss Mr. Kain’s complaint. On
September 9, 2021, the court granted defendants’ motion to dismiss with leave to amend. On October 7, 2021, Mr. Kain filed a second amended complaint. On October 21, 2021, defendants filed a motion to dismiss Mr. Kain’s second amended complaint.
Defendants’ motion to dismiss currently scheduled to be heard by the court on December 2, 2021. ACM’s management believes the claims are without merit and intends to vigorously defend this litigation. The Company is currently unable to predict the
outcome of this lawsuit and therefore cannot determine the likelihood of loss or estimate a range of possible loss.
|
SUBSEQUENT EVENT |
9 Months Ended |
---|---|
Sep. 30, 2021 | |
SUBSEQUENT EVENT [Abstract] | |
SUBSEQUENT EVENT |
NOTE 23 – SUBSEQUENT EVENT
On November 1, 2021, ACM announced that the Shanghai Stock Exchange had published ACM Shanghai's updated STAR IPO prospectus and STAR IPO timetable
on its website.
On November 4, 2021, ACM advised that the Shanghai Stock Exchange had announced the pricing of the STAR IPO shares of ACM Shanghai. In the
IPO, ACM Shanghai proposes to issue 43,355,753 shares, which will represent 10% of the total 433,557,100 shares to be outstanding after the IPO. Of the
shares issued in the IPO, 7,699,357 shares will be issued via direct placement to private equity investors. The proposed offering price of shares in the IPO is RMB 85.00 per share, which, if completed, would result in total gross proceeds of the IPO to ACM Shanghai of approximately RMB 3.685 billion (approximately $575,000 as of November 4, 2021).
After the IPO, ACM will own approximately 82.5% of the outstanding shares of ACM Shanghai.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Principles of Consolidation |
Basis of Presentation and Principles of Consolidation
The Company’s condensed consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its
subsidiaries, which include ACM Wuxi, ACM Shengwei and CleanChip (the subsidiaries of which include ACM California and ACM Korea). ACM’s subsidiaries are those entities in which ACM, directly or indirectly, controls a majority of the voting power.
All significant intercompany transactions and balances have been eliminated upon consolidation.
The accompanying condensed consolidated financial statements
of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and the rules and regulations of the Securities and Exchange Commission for
reporting on Form 10-Q. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. The
accompanying condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements of the Company for the year ended December 31, 2020 included in ACM’s Annual Report on Form 10-K for the year ended December 31, 2020.
The accompanying condensed consolidated balance sheet as of
September 30, 2021, condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2021 and 2020, condensed consolidated statements of changes in stockholders’ equity for
the three and nine months ended September 30,
2021 and 2020, and condensed consolidated statements of
cash flows for the nine months ended September 30, 2021 and 2020 are unaudited. In the opinion of management, these unaudited condensed consolidated financial statements of the Company reflect
all adjustments that are necessary for a fair presentation of the Company’s financial position and results of operations. Such adjustments are of a normal recurring nature, unless otherwise noted. The balance sheet as of September 30, 2021 and the results of operations for the three and nine months ended September 30, 2021 are not necessarily
indicative of the results to be expected for any future period.
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COVID-19 Assessment |
COVID-19 Assessment
The outbreak of COVID-19, the coronavirus, has grown both in the United States and globally, and related government and private sector responsive actions have adversely affected the Company’s business
operations. In December 2019 a series of emergency quarantine measures taken by the PRC government disrupted domestic business activities during
the weeks after the initial outbreak of COVID-19. Since that time, an increasing number of countries, including the United States, have imposed
restrictions on travel to and from the PRC and elsewhere, as well as general movement restrictions, business closures and other measures imposed to slow the spread of COVID-19 and its variants. The situation continues to develop, and it is impossible to predict the effect and ultimate impact of the COVID-19 outbreak on the Company’s business operations and results. While the quarantine, social distancing and other regulatory measures instituted or recommended in response to COVID-19 are expected to be temporary, the duration of the business disruptions and related financial impact cannot be estimated at this time. The COVID-19 outbreak has been declared a worldwide health pandemic that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn and changes in global
economic policy that could reduce demand for the Company’s products and its customers’ chips and have a material adverse impact on the Company’s business, operating results and financial condition. Through September 30, 2021 the Company had not experienced a significant negative impact of COVID-19 on its operations, capital and financial resources, including overall liquidity position. The Company continues to monitor the impact of the COVID-19 pandemic on all aspects of its business.
The Company conducts substantially all of its product
development, manufacturing, support and services in the PRC, and those activities have been directly impacted by the COVID-19 outbreak and related
restrictions on transportation and public appearances. In February 2020 ACM Shanghai’s headquarters were closed for an additional six days beyond the normal Lunar New Year Holiday in
accordance with Shanghai government restrictions related to the outbreak. The Company cannot assure that further closures or reductions of its PRC operations or production may not be necessary in upcoming months as the result of business
interruptions arising from protective measures being taken by the PRC and other governmental agencies or of other consequences of the COVID-19
outbreak.
The Company’s corporate headquarters are located in Alameda
County in the San Francisco Bay Area of California. The effects of any future actions by the State of California, the San Francisco Department of
Public Health, health officers of the San Francisco Bay Area counties or other local health officials that intended to mitigate the COVID-19 pandemic may negatively impact productivity, disrupt the business of the Company and delay timelines, the
magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct its business in the ordinary course.
The prolonged and broad-based shift to a remote working
environment continues to create inherent productivity, connectivity, and oversight challenges and could affect our ability to enhance, develop and support existing products and services, detect and prevent spam and problematic content, hold product
sales and marketing events, and generate new sales leads, among others. In addition, the changed environment under which the Company is operating could have an effect on its internal controls over financial reporting as well as the Company’s
ability to meet a number of its compliance requirements in a timely or quality manner. Additional and/or extended, governmental lockdowns, restrictions or new regulations could significantly impact the ability of our employees and vendors to work
productively. Governmental restrictions have been globally inconsistent and it remains unclear when a return to worksite locations or travel will be permitted or what restrictions will be in place in those environments. As the Company continues to
return its workforce in more office locations in 2021, it may experience increased costs as it prepares its facilities for a safe return to work
environment and experiment with hybrid work models, in addition to potential effects on its ability to compete effectively and maintain its corporate culture. Employees of the Company may be exposed to COVID-19 or other variants of the
virus, and as a result the Company may experience reduction in productivity or exposure to potential claims from employees or regulatory authorities regarding the adequacy of the Company’s protections with respect to the spread of COVID-19 at its
physical locations, which may affect the Company’s business, results of operations and reputation.
Extended periods of interruption to the Company’s corporate,
development or manufacturing facilities due to the COVID-19 outbreak could cause the Company to lose revenue and market share, which would depress
its financial performance and could be difficult to recapture. The Company’s business may also be harmed if travel to or from the PRC or the United States continues to be restricted or inadvisable or if members of management and other employees are
absent because they contract the coronavirus, they elect not to come to work due to the illness affecting others in the Company’s office or laboratory facilities, or they are subject to quarantines or other governmentally imposed restrictions.
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Use of Estimates |
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 the valuation and recognition of fair value of trading securities, stock-based compensation arrangements and warrant
liability, realization of deferred tax assets, assessment for impairment of long-lived assets, allowance for doubtful accounts, inventory valuation for excess and obsolete inventories, lower of cost and market value or net realizable value of
inventories, depreciable lives of property and equipment and useful life of intangible assets.
Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates and assumptions.
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Basic and Diluted Net Income per Common Share |
Basic and Diluted Net Income per Common Share
Basic and diluted net income per common share are calculated as follows:
ACM has been authorized to issue Class A and Class B common
stock since redomesticating in Delaware in November 2016. The two classes of common stock are substantially identical in all material respects, except for voting rights. Since ACM did not declare any dividends during the three and nine months ended September 30, 2021 and 2020, the net income per common share 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 condensed consolidated statements of operations and comprehensive income and in the above computation of net income per common share.
Diluted net income per common share reflects the potential
dilution from securities, including stock options and issued warrants, 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.
ACM’s potential dilutive securities consist of warrants and stock options for the nine months ended September 30, 2021, and stock options for the three and nine months ended September 30,
2021. ACM’s potential dilutive securities consist of warrants and stock options for the three and nine months ended September 30, 2020.
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Concentration of Credit Risk |
Concentration of Credit Risk
Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents 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. For the nine months ended September 30, 2021 and 2020, the Company’s three
largest customers accounted for 65.6% and 79.8%,
respectively, of revenue. For the three months ended September 30, 2021 and 2020, the Company’s three largest customers accounted for
77.1% and 72.1%,
respectively, of revenue. As of September 30, 2021 and December 31, 2020, the Company’s three largest customers accounted for 73.8% and 75.8%, 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.
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Recent Accounting Pronouncements |
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions
to the general principles in Topic 740. It also improves
consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted ASU 2019-12 on January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s condensed consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on
Financial Reporting. ASU 2020-04 provide
optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The Company adopted ASU 2020-04 on January 1, 2021. The adoption of ASU 2020-04 did not have a material impact on the Company’s condensed consolidated financial statements.
Recent Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial
Instruments. ASU 2016-13 replaced the pre-existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader
range of reasonable and supportable information to inform credit loss estimates. ASU 2016-13 requires use of a forward-looking expected credit loss model for accounts receivables, loans and other financial instruments. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, with early adoption permitted.
In October 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815) and Leases (Topic 842), which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the U.S. Securities and Exchange
Commission (“SEC”) to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company was eligible to be an SRC based on its SRC determination as of November 15, 2019 (which is the issuance date of ASU 2019-10) in accordance with SEC regulations, the Company will adopt the standards for the year beginning January 1, 2023. Adoption of the standard requires using a modified
retrospective approach through a cumulative-effect adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company is evaluating the impact of this standard on its consolidated
financial statements, including accounting policies, processes and systems and expects the standard will have a minor impact on its consolidated financial statements.
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DESCRIPTION OF BUSINESS (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DESCRIPTION OF BUSINESS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Direct or Indirect Interests of Subsidiaries |
The Company has direct or indirect interests in the following subsidiaries:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and Diluted Net Income per Common Share |
Basic and diluted net income per common share are calculated as follows:
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REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE FROM CONTRACTS WITH CUSTOMERS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregated Revenue Information |
The Company assesses revenues based upon the nature or type of goods or services it provides and the geographic location of the related
businesses. The following tables present disaggregated revenue information:
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ACCOUNTS RECEIVABLE (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
ACCOUNTS RECEIVABLE [Abstract] | |||||||||||||||||||||||||||||||||||||
Accounts Receivable |
At September 30, 2021 and December 31, 2020 accounts
receivable consisted of the following:
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INVENTORIES (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Inventory |
At September 30, 2021 and December 31, 2020 inventory consisted of the following:
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment |
At September 30, 2021 and December 31, 2020, property, plant and equipment consisted of the following:
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LAND USE RIGHT, NET (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
LAND USE RIGHT, NET [Abstract] | |||||||||||||||||||||||||||||||||||||
Land Use Rights | A summary of land use right is as follows:
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Remaining Amortization of Land Use Right |
The remaining amortization of land use right for each of the five succeeding years is as follows:
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OTHER LONG-TERM ASSETS (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM ASSETS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-term Assets |
At September 30, 2021 and December 31, 2020, other long-term assets consisted of the following:
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SHORT-TERM BORROWINGS (Tables) |
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SHORT-TERM BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Borrowings |
At September 30, 2021 and December 31, 2020, short-term borrowings consisted of the following:
*1 Guaranteed by ACM’s
Chief Executive Officer
*2 Guaranteed by ACM’s
Chief Executive Officer and CleanChip
*3 Guaranteed by CleanChip
*4 Guaranteed by ACM Korea’s Chief Executive Officer
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OTHER PAYABLE AND ACCRUED EXPENSES (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Payable and Accrued Expenses |
At September 30, 2021 and December 31, 2020, other payable and accrued expenses consisted of the following:
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LEASES (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense |
The components of lease expense were as follows:
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Supplemental Cash Flow Information Related to Operating Leases |
Supplemental cash flow information related to operating leases was as follows for the three and nine months ended September 30, 2021 and 2020:
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Maturities of Lease Liabilities for Operating Leases |
Maturities of lease liabilities for all operating leases were as follows as of September 30, 2021:
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Weighted Average Remaining Lease Terms and Discount Rates for Operating Leases |
The weighted average remaining lease terms and discount rates
for all operating leases were as follows as of September 30, 2021 and December 31, 2020:
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LONG-TERM BORROWINGS (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM BORROWINGS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Borrowings |
At September 30, 2021 and December 31, 2020, long-term borrowings consisted of the following:
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Principal Payments for Outstanding Long-Term Loan |
Scheduled principal payments for the outstanding long-term
loan as of September 30, 2021 are as follows:
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OTHER LONG-TERM LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OTHER LONG-TERM LIABILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities |
Other long-term liabilities represent government subsidies
received from PRC governmental authorities for development and commercialization of certain technology but not yet recognized. As of September 30, 2021 and December 31, 2020, other long-term liabilities consisted of the following unearned government subsidies:
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LONG-TERM INVESTMENT (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||
LONG-TERM INVESTMENT [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Components of Long-Term Investment |
The Company treats the equity investment in the consolidated financial statements under the equity method. Under the equity method, the
investment is initially recorded at cost, adjusted for any excess of the Company’s share of the incorporated-date fair values of the investee’s identifiable net assets over the cost of the investment (if any). Thereafter, the investment is adjusted
for the post incorporation change in the Company’s share of the investee’s net assets and any impairment loss relating to the investment.
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FINANCIAL LIABILITY CARRIED AT FAIR VALUE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
FINANCIAL LIABILITY CARRIED AT FAIR VALUE [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Assumptions Used to Determine Fair Value of Warrants |
The 2020 Warrant was initially measured at fair value at the issuance date and classified as equity permanently in accordance with ASC 815.
The fair value of the 2020 Warrant amounted to $21,679, based on the grant date using the Black-Scholes valuation model with the following
assumptions:
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TRADING SECURITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||
TRADING SECURITIES [Abstract] | |||||||||||||||||||||||||||||||||||||
Components of Trading Securities |
The components of trading securities were as follows:
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RELATED PARTY BALANCES AND TRANSACTIONS (Tables) |
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Sep. 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Balances and Transactions |
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REDEEMABLE NON-CONTROLLING INTERESTS (Tables) |
9 Months Ended | |||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||
REDEEMABLE NON-CONTROLLING INTERESTS [Abstract] | ||||||||||||||||||||||||||
Components of Change in Redeemable Non-controlling Interests |
The components of the change in the redeemable non-controlling interests for the nine months ended September 30, 2020 are presented in the
following table:
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STOCK-BASED COMPENSATION (Tables) |
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Stock-based Compensation Expense |
The following table summarizes the components of stock-based compensation expense included in the consolidated statements of operations:
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Assumptions Used to Determine Fair Value of Share Options Granted |
The fair value of options granted to employee with a service
period based condition is estimated on the grant date using the Black-Scholes valuation.
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Employee Share Option [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share Option Activities |
The following table summarizes the ACM Shanghai employee stock option activities during the nine months ended September 30, 2021:
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Employee Share Option [Member] | ACM Shanghai [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share Option Activities |
The following table summarizes the Company’s employee share option activities during the nine months ended September 30, 2021:
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Non-Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Share Option Activities |
The following table summarizes the Company’s non-employee share option activities during the nine months ended September 30, 2021:
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INCOME TAXES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Benefit (Expense) |
Income tax benefit (expense) was as follows:
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, COVID-19 Assessment (Details) |
1 Months Ended |
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Feb. 29, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Number of days headquarters closed | 6 days |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Basic and Diluted Net Income per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
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Numerator [Abstract] | ||||
Net income | $ 11,150 | $ 10,020 | $ 24,306 | $ 12,479 |
Less: Net income attributable to non-controlling interests and redeemable non-controlling interests | 995 | 1,393 | 2,114 | 2,228 |
Net income available to common stockholders, basic and diluted | $ 10,155 | $ 8,627 | $ 22,192 | $ 10,251 |
Weighted average shares outstanding, basic (in shares) | 19,422,546 | 18,201,943 | 19,113,353 | 18,124,665 |
Effect of dilutive securities (in shares) | 2,619,970 | 3,353,353 | 2,616,987 | 3,132,996 |
Weighted average shares outstanding, diluted (in shares) | 22,042,516 | 21,555,296 | 21,730,340 | 21,257,661 |
Net income per common share [Abstract] | ||||
Basic (in dollars per share) | $ 0.52 | $ 0.47 | $ 1.16 | $ 0.57 |
Diluted (in dollars per share) | $ 0.46 | $ 0.40 | $ 1.02 | $ 0.48 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Concentration of Credit Risk (Details) - Customer Concentration Risk [Member] - Three Customers [Member] - Customer |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Revenue Benchmark [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Number of major customers | 3 | 3 | 3 | 3 | |
Concentration of credit risk | 77.10% | 72.10% | 65.60% | 79.80% | |
Accounts Receivable [Member] | |||||
Concentration of Credit Risk [Abstract] | |||||
Number of major customers | 3 | 3 | |||
Concentration of credit risk | 73.80% | 75.80% |
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts Receivable [Abstract] | ||
Accounts receivable | $ 84,787 | $ 56,441 |
Less: Allowance for doubtful accounts | 0 | 0 |
Total | $ 84,787 | $ 56,441 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventory [Abstract] | ||
Raw materials | $ 65,029 | $ 32,391 |
Work in process | 29,682 | 23,871 |
Finished goods | 81,898 | 32,377 |
Total inventory | 176,609 | 88,639 |
Inventory reserve | 1,112 | 1,140 |
First-Tools [Member] | ||
Inventory [Abstract] | ||
Finished goods | 81,898 | 32,275 |
Contractual Obligation [Member] | ||
Inventory [Abstract] | ||
Finished goods | $ 58,928 | $ 20,834 |
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Property, Plant and Equipment [Abstract] | |||||
Total cost | $ 11,780 | $ 11,780 | $ 9,627 | ||
Less: Total accumulated depreciation | (5,120) | (5,120) | (3,745) | ||
Construction in progress | 3,345 | 3,345 | 2,310 | ||
Total property, plant and equipment, net | 10,005 | 10,005 | 8,192 | ||
Depreciation expense | 501 | $ 195 | 1,407 | $ 569 | |
Manufacturing Equipment [Member] | |||||
Property, Plant and Equipment [Abstract] | |||||
Total cost | 6,992 | 6,992 | 5,966 | ||
Office Equipment [Member] | |||||
Property, Plant and Equipment [Abstract] | |||||
Total cost | 1,642 | 1,642 | 1,047 | ||
Transportation Equipment [Member] | |||||
Property, Plant and Equipment [Abstract] | |||||
Total cost | 214 | 214 | 216 | ||
Leasehold Improvement [Member] | |||||
Property, Plant and Equipment [Abstract] | |||||
Total cost | $ 2,932 | $ 2,932 | $ 2,398 |
LAND USE RIGHT, NET (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
Jul. 31, 2020
ft²
|
|
Land use Right [Abstract] | ||||
Land use right purchase amount | $ 9,801 | $ 9,801 | $ 9,744 | |
Less: Accumulated amortization | (245) | (245) | (98) | |
Land use right, net | 9,556 | 9,556 | 9,646 | |
Amortization | $ 49 | $ 147 | ||
Remaining Amortization of Land use Right [Abstract] | ||||
2021 | 49 | |||
2022 | 196 | |||
2023 | 196 | |||
2024 | 196 | |||
2025 | $ 196 | |||
Shangwei Research (Shanghai), Inc. [Member] | ||||
Land use Right [Abstract] | ||||
Right to use land lease term | 50 years | |||
Area for development and production center | ft² | 1,000,000 |
OTHER LONG-TERM ASSETS (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Long-term Assets [Abstract] | ||
Prepayment for property - Lingang | $ 40,433 | $ 39,450 |
Prepayment for property, plant and equipment and other non-current assets | 1,692 | 0 |
Prepayment for property - lease deposit | 422 | 0 |
Security deposit for land use right | 760 | 756 |
Others | 936 | 290 |
Total other long-term assets | 44,243 | $ 40,496 |
Capitalized interest charges related to property | $ 757 |
OTHER PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | ||
Accrued commissions | $ 10,527 | $ 7,127 |
Accrued warranty | 5,117 | 3,975 |
Accrued payroll | 3,492 | 3,068 |
Accrued professional fees | 40 | 384 |
Accrued machine testing fees | 1,825 | 1,595 |
Others | 4,949 | 2,656 |
Total | $ 25,950 | $ 18,805 |
LEASES (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Components of lease expense [Abstract] | |||||
Operating lease cost | $ 632 | $ 384 | $ 1,807 | $ 1,139 | |
Short-term lease cost | 105 | 73 | 258 | 170 | |
Lease cost | 737 | 457 | 2,065 | 1,309 | |
Cash paid for amounts included in the measurement of lease liabilities [Abstract] | |||||
Operating cash outflow from operating leases | 737 | $ 457 | 2,065 | $ 1,309 | |
Maturities of lease liabilities [Abstract] | |||||
2021 | 631 | 631 | |||
2022 | 2,292 | 2,292 | |||
2023 | 1,020 | 1,020 | |||
2024 | 914 | 914 | |||
2025 | 19 | 19 | |||
Total lease payments | 4,876 | 4,876 | |||
Less: Interest | (277) | (277) | |||
Present value of lease liabilities | $ 4,599 | $ 4,599 | |||
Weighted average remaining lease terms and discount rates [Abstract] | |||||
Weighted average remaining lease term | 1 year 6 months | 1 year 6 months | 2 years 1 month 9 days | ||
Weighted average discount rate | 4.58% | 4.58% | 5.14% |
LONG-TERM BORROWINGS (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
Intallment
|
Dec. 31, 2020
USD ($)
|
|
Long-Term Borrowings [Abstract] | |||
Long-term debt | $ 25,431 | $ 25,431 | |
Less: Current portion | (2,351) | (2,351) | $ (1,591) |
Long-term Borrowings | 23,080 | 23,080 | 17,979 |
Principal Payments of Long-Term Loan [Abstract] | |||
2021 | 484 | 484 | |
2022 | 2,370 | 2,370 | |
2023 | 2,450 | 2,450 | |
2024 | 7,313 | 7,313 | |
2025 and onwards | 12,814 | 12,814 | |
Long-term debt | 25,431 | 25,431 | |
Interest expense related to long-term borrowings incurred | 232 | 776 | |
Interest expense charged to long-term borrowings | 15 | 18 | |
Capitalized interest charged as other long-term assets | 217 | 758 | |
China Merchants Bank [Member] | |||
Long-Term Borrowings [Abstract] | |||
Long-term debt | 18,492 | $ 18,492 | 19,570 |
Number of installments for loan repayable | Intallment | 120 | ||
Last installment due date | Nov. 30, 2030 | ||
Annual interest rate | 4.65% | ||
Principal Payments of Long-Term Loan [Abstract] | |||
Long-term debt | 18,492 | $ 18,492 | 19,570 |
Bank of China [Member] | |||
Long-Term Borrowings [Abstract] | |||
Long-term debt | 6,939 | 6,939 | 0 |
Principal Payments of Long-Term Loan [Abstract] | |||
Long-term debt | $ 6,939 | $ 6,939 | $ 0 |
Bank of China [Member] | Loan 1 [Member] | |||
Long-Term Borrowings [Abstract] | |||
Number of installments for loan repayable | Intallment | 6 | ||
Last installment due date | Jun. 30, 2024 | ||
Annual interest rate | 2.60% | ||
Bank of China [Member] | Loan 2 [Member] | |||
Long-Term Borrowings [Abstract] | |||
Number of installments for loan repayable | Intallment | 6 | ||
Last installment due date | Sep. 30, 2024 | ||
Annual interest rate | 2.60% |
OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2021 |
Dec. 31, 2020 |
---|---|---|
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | $ 5,303 | $ 8,034 |
Subsidies to Stress Free Polishing Project, Commenced in 2008 and 2017 [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | 949 | 1,266 |
Subsidies to Electro Copper Plating Project, Commenced in 2014 [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | 901 | 2,156 |
Subsidies to Polytetrafluoroethylene, Commenced in 2018 [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | 0 | 130 |
Subsidies to Tahoe-Single Bench Clean, Commenced in 2020 [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | 185 | 1,544 |
Subsidies to Backside Clean-YMTC National Project, Commenced in 2020 [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | 2,779 | 2,591 |
Other [Member] | ||
Other Long-term Liabilities [Abstract] | ||
Other long-term liabilities | $ 489 | $ 347 |
LONG-TERM INVESTMENT (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Sep. 05, 2019
shares
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2019
CNY (¥)
|
Jun. 27, 2019
USD ($)
|
Sep. 11, 2017
USD ($)
$ / shares
shares
|
|
Classification of Investments [Abstract] | ||||||||||
Total | $ 7,408 | $ 7,408 | $ 6,340 | |||||||
Equity income in net income of affiliates | 421 | $ 182 | 1,036 | $ 539 | ||||||
Ninebell [Member] | ||||||||||
Investments [Abstract] | ||||||||||
Percentage of ordinary shares issued | 20.00% | |||||||||
Purchase price | $ 1,200 | |||||||||
Classification of Investments [Abstract] | ||||||||||
Total | 2,713 | 2,713 | 1,666 | |||||||
Ninebell [Member] | Class A Common Stock [Member] | ||||||||||
Investments [Abstract] | ||||||||||
Purchase price | $ 1,000 | |||||||||
Shares issued (in shares) | shares | 133,334 | |||||||||
Share price (in dollars per share) | $ / shares | $ 7.50 | |||||||||
Shengyi [Member] | ||||||||||
Investments [Abstract] | ||||||||||
Percentage of ordinary shares issued | 15.00% | |||||||||
Investment - equity method | $ 109 | |||||||||
Number of investors with agreements entered | shares | 6 | |||||||||
Classification of Investments [Abstract] | ||||||||||
Total | 186 | 186 | 134 | |||||||
Hefei Shixi [Member] | ||||||||||
Investments [Abstract] | ||||||||||
Investment in partnership | $ 4,200 | ¥ 30,000 | ||||||||
Ownership percentage in partnership | 10.00% | 10.00% | ||||||||
Classification of Investments [Abstract] | ||||||||||
Total | $ 4,509 | $ 4,509 | $ 4,540 |
FINANCIAL LIABILITY CARRIED AT FAIR VALUE (Details) $ / shares in Units, ¥ in Thousands, $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 09, 2021
USD ($)
shares
|
Jul. 29, 2020
USD ($)
$ / shares
shares
|
Apr. 30, 2020
USD ($)
Agreement
shares
|
Aug. 31, 2019
USD ($)
$ / shares
shares
|
Mar. 31, 2018
USD ($)
shares
|
Mar. 31, 2017
USD ($)
$ / shares
shares
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2016
CNY (¥)
|
|||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Change in fair value of financial liability | $ 0 | $ 6,533 | $ 0 | $ 11,964 | |||||||||||||||||||
Issuance of warrant for settlement of financial liability | $ 0 | $ 19,859 | |||||||||||||||||||||
2020 Warrants [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Financial liability carried at fair value | $ 21,679 | ||||||||||||||||||||||
Change in fair value of financial liability | $ 11,964 | ||||||||||||||||||||||
Fair value warrant amount | 21,679 | ||||||||||||||||||||||
Fair Value of Options Granted [Abstract] | |||||||||||||||||||||||
Fair value of common share (in dollars per share) | $ / shares | [1] | $ 89.28 | |||||||||||||||||||||
Expected term | [2] | 3 years 5 months 1 day | |||||||||||||||||||||
Volatility | [3] | 47.42% | |||||||||||||||||||||
Risk-free interest rate | [4] | 0.15% | |||||||||||||||||||||
Expected dividend | [5] | 0.00% | |||||||||||||||||||||
Common Class A [Member] | 2020 Warrants [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Shares issued (in shares) | shares | 242,681 | ||||||||||||||||||||||
Fair Value of Options Granted [Abstract] | |||||||||||||||||||||||
Fair value of common share (in dollars per share) | $ / shares | $ 7.50 | ||||||||||||||||||||||
ACM Shanghai [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Repayments of notes | $ 1,161 | ||||||||||||||||||||||
Number of agreement | Agreement | 2 | ||||||||||||||||||||||
ACM Shanghai [Member] | Senior Secured Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Receivables | $ 1,820 | ||||||||||||||||||||||
ACM Shanghai [Member] | Intercompany Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Promissory note principal amount | $ 2,981 | ||||||||||||||||||||||
Interest rate on promissory note | 3.01% | ||||||||||||||||||||||
Promissory note maturity date | Aug. 17, 2023 | ||||||||||||||||||||||
Fair value warrant amount | $ 1,820 | ||||||||||||||||||||||
SMC [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Payment for investment | $ 2,981 | ¥ 20,123,500 | |||||||||||||||||||||
Shares issued value | $ 1,820 | ||||||||||||||||||||||
Investment repayment period | 60 days | ||||||||||||||||||||||
Number of shares repurchased/surrender in exchange (in shares) | shares | 242,681 | 154,821 | |||||||||||||||||||||
Repayments of notes | $ 882 | ||||||||||||||||||||||
Investment due amount | $ 1,820 | ||||||||||||||||||||||
Consideration price in fair value | $ 9,715 | ||||||||||||||||||||||
Issuance of warrant for settlement of financial liability | $ 19,859 | ||||||||||||||||||||||
Fair Value of Options Granted [Abstract] | |||||||||||||||||||||||
Fair value of common share (in dollars per share) | $ / shares | $ 13.195 | ||||||||||||||||||||||
SMC [Member] | Senior Secured Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Promissory note principal amount | $ 2,981 | ||||||||||||||||||||||
Interest rate on promissory note | 3.01% | ||||||||||||||||||||||
Promissory note maturity date | Aug. 17, 2023 | ||||||||||||||||||||||
SMC [Member] | Common Class A [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Shares issued (in shares) | shares | 242,681 | 397,502 | |||||||||||||||||||||
Shares issued value | $ 2,981 | ||||||||||||||||||||||
Fair Value of Options Granted [Abstract] | |||||||||||||||||||||||
Fair value of common share (in dollars per share) | $ / shares | $ 13.195 | $ 7.50 | |||||||||||||||||||||
SMC [Member] | Common Class A [Member] | Senior Secured Promissory Note [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Exercise of common stock warrant issued (in shares) | shares | 397,502 | ||||||||||||||||||||||
SMC [Member] | ACM Shanghai [Member] | |||||||||||||||||||||||
Related Party Transaction [Abstract] | |||||||||||||||||||||||
Repayment of investment in cash | $ 1,820 | $ 1,161 | |||||||||||||||||||||
|
TRADING SECURITIES (Details) $ in Thousands, ¥ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Dec. 31, 2020
USD ($)
|
Jun. 18, 2020
CNY (¥)
|
Jun. 18, 2020
USD ($)
|
|
Trading securities listed in Shanghai Stock Exchange [Abstract] | |||||||
Cost | $ 15,108 | $ 15,108 | $ 15,020 | ||||
Market value | 30,219 | 30,219 | $ 28,239 | ||||
Unrealized gain (loss) on trading securities | $ (919) | $ 8,970 | $ 1,817 | $ 8,970 | |||
Qingdao LP [Member] | |||||||
Investments [Abstract] | |||||||
Total capital fund of limited partnership | ¥ 2,224 | $ 315,000 | |||||
Investment in partnership | ¥ 100 | $ 14,200 | |||||
Ownership percentage in partnership | 4.30% | 4.30% | |||||
SMIC [Member] | Minimum [Member] | |||||||
Investments [Abstract] | |||||||
Ownership percentage in partnership | 30.00% | 30.00% |
RELATED PARTY BALANCES AND TRANSACTIONS (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
Dec. 31, 2020 |
|
Related Party Transaction [Abstract] | |||||
Accounts payable | $ 8,260 | $ 8,260 | $ 4,093 | ||
Purchase of materials | 8,563 | $ 4,628 | 23,586 | $ 10,665 | |
Service fee charged by | 144 | 36 | 403 | 226 | |
Ninebell Co., Ltd [Member] | |||||
Related Party Transaction [Abstract] | |||||
Prepaid expenses | 2,192 | 2,192 | 1,607 | ||
Accounts payable | 6,340 | 6,340 | 2,898 | ||
Purchase of materials | 7,455 | 4,029 | 21,833 | 9,552 | |
Service fee charged by | 0 | 22 | 0 | 22 | |
Shengyi Semiconductor Technology Co., Ltd [Member] | |||||
Related Party Transaction [Abstract] | |||||
Accounts payable | 1,920 | 1,920 | $ 1,195 | ||
Purchase of materials | 1,108 | 599 | 1,753 | 1,113 | |
Service fee charged by | $ 144 | $ 14 | $ 403 | $ 204 |
COMMON STOCK (Details) |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2021
Vote
$ / shares
shares
|
Sep. 30, 2020
shares
|
Sep. 30, 2021
Vote
$ / shares
shares
|
Sep. 30, 2020
shares
|
Dec. 31, 2020
$ / shares
shares
|
|
Class of Stock [Abstract] | |||||
Number of shares cancelled (in shares) | 242,681 | ||||
Common Class A [Member] | |||||
Class of Stock [Abstract] | |||||
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 | 50,000,000 | ||
Additional shares reserved for issuance as dividends (in shares) | 60,000,000 | 60,000,000 | |||
Common stock, additional shares authorized (in shares) | 100,000,000 | 100,000,000 | |||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Number of votes for each share entitled | Vote | 1 | 1 | |||
Common stock, shares issued (in shares) | 17,798,740 | 17,798,740 | 16,896,693 | ||
Common stock, shares outstanding (in shares) | 17,798,740 | 17,798,740 | 16,896,693 | ||
Common Class B [Member] | |||||
Class of Stock [Abstract] | |||||
Common stock, shares authorized (in shares) | 5,307,816 | 5,307,816 | 2,409,738 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Number of votes for each share entitled | Vote | 20 | 20 | |||
Convertible shares in to Class A common stock (in shares) | 1 | ||||
Common stock, shares issued (in shares) | 1,707,605 | 1,707,605 | 1,802,606 | ||
Common stock, shares outstanding (in shares) | 1,707,605 | 1,707,605 | 1,802,606 | ||
Common Stock [Member] | Common Class A [Member] | |||||
Class of Stock [Abstract] | |||||
Stock issued upon exercise of stock options (in shares) | 130,331 | 407,043 | 564,365 | 592,946 | |
Conversion of class B common stock to Class A common stock (in shares) | 95,001 | 60,002 | |||
Exercise of common stock warrant issued (in shares) | 242,681 | 64,717 | |||
Number of shares repurchased/surrender in exchange (in shares) | 242,681 | ||||
Common Stock [Member] | Common Class B [Member] | |||||
Class of Stock [Abstract] | |||||
Stock issued upon exercise of stock options (in shares) | 0 | 0 | 0 | 0 | |
Conversion of class B common stock to Class A common stock (in shares) | (95,001) | (60,002) | |||
Exercise of common stock warrant issued (in shares) | 0 | 0 |
REDEEMABLE NON-CONTROLLING INTERESTS (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
REDEEMABLE NON-CONTROLLING INTERESTS [Abstract] | |
Redeemable non-controlling interest | $ 0 |
Change in Redeemable Non-controlling Interests [Abstract] | |
Balance | 60,162 |
Net income attributable to redeemable non-controlling interests | 643 |
Effect of foreign currency translation gain attributable to redeemable non-controlling interests | (847) |
Reclassification of redeemable non-controlling interest | (59,958) |
Balance | $ 0 |
STOCK-BASED COMPENSATION, Stock-based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021 |
Sep. 30, 2020 |
Sep. 30, 2021 |
Sep. 30, 2020 |
|
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | $ 1,278 | $ 2,779 | $ 3,823 | $ 4,323 |
Employee Stock Purchase Plan [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 1,179 | 2,651 | 3,481 | 3,717 |
Employee Stock Purchase Plan [Member] | ACM Shanghai [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 87 | 84 | 260 | 250 |
Non-Employee Stock Purchase Plan [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 12 | 44 | 82 | 356 |
Cost of Revenue [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 108 | 44 | 289 | 132 |
Sales and Marketing Expense [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 417 | 237 | 1,400 | 495 |
Research and Development Expense [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | 293 | 193 | 801 | 568 |
General and Administrative Expense [Member] | ||||
Stock-based Compensation Expense [Abstract] | ||||
Stock-based compensation expense | $ 460 | $ 2,305 | $ 1,333 | $ 3,128 |
STOCK-BASED COMPENSATION, Share Option Activities (Details) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2021
USD ($)
$ / shares
shares
|
Dec. 31, 2020
USD ($)
$ / shares
shares
|
|
Employee Share Option [Member] | ||
Number of Option Share [Roll Forward] | ||
Outstanding, beginning of period (in shares) | shares | 3,191,411 | |
Granted (in shares) | shares | 138,400 | |
Exercised (in shares) | shares | (443,683) | |
Forfeited/cancelled (in shares) | shares | (33,404) | |
Outstanding, end of period (in shares) | shares | 2,852,724 | 3,191,411 |
Vested and exercisable (in shares) | shares | 1,844,193 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 5.13 | |
Granted (in dollars per share) | 48.18 | |
Exercised (in dollars per share) | 2.39 | |
Forfeited/cancelled (in dollars per share) | 32.66 | |
Outstanding at end of period (in dollars per share) | 7.32 | $ 5.13 |
Weighted Average Exercise Price [Abstract] | ||
Outstanding, beginning of period (in dollars per share) | 12.73 | |
Granted (in dollars per share) | 106.15 | |
Exercised (in dollars per share) | 6.15 | |
Forfeited/cancelled (in dollars per share) | 73.94 | |
Outstanding, end of period (in dollars per share) | $ 17.57 | $ 12.73 |
Weighed Average Remaining Contractual Term [Abstract] | ||
Outstanding weighed average remaining contractual term | 6 years 9 months 10 days | 7 years 1 month 17 days |
Unrecognized employee stock-based compensation expense | $ | $ 10,677 | $ 8,733 |
Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 9 months 25 days | 1 year 10 months 20 days |
Employee Share Option [Member] | ACM Shanghai [Member] | ||
Number of Option Share [Roll Forward] | ||
Outstanding, beginning of period (in shares) | shares | 5,423,654 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | 0 | |
Expired (in shares) | shares | 0 | |
Forfeited/cancelled (in shares) | shares | (46,154) | |
Outstanding, end of period (in shares) | shares | 5,377,500 | 5,423,654 |
Vested and exercisable (in shares) | shares | 0 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 0.23 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Forfeited/cancelled (in dollars per share) | 0.24 | |
Outstanding at end of period (in dollars per share) | 0.24 | $ 0.23 |
Weighted Average Exercise Price [Abstract] | ||
Outstanding, beginning of period (in dollars per share) | 1.89 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Forfeited/cancelled (in dollars per share) | 2.01 | |
Outstanding, end of period (in dollars per share) | $ 2.01 | $ 1.89 |
Weighed Average Remaining Contractual Term [Abstract] | ||
Outstanding weighed average remaining contractual term | 2 years 9 months 3 days | 3 years 6 months |
Non-Employee Stock Option [Member] | ||
Number of Option Share [Roll Forward] | ||
Outstanding, beginning of period (in shares) | shares | 836,038 | |
Granted (in shares) | shares | 0 | |
Exercised (in shares) | shares | (120,682) | |
Expired (in shares) | shares | 0 | |
Forfeited/cancelled (in shares) | shares | (250) | |
Outstanding, end of period (in shares) | shares | 715,106 | 836,038 |
Vested and exercisable (in shares) | shares | 702,606 | |
Weighted Average Grant Date Fair Value [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 1.02 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 1.23 | |
Expired (in dollars per share) | 0 | |
Forfeited/cancelled (in dollars per share) | 0.30 | |
Outstanding at end of period (in dollars per share) | 0.99 | $ 1.02 |
Weighted Average Exercise Price [Abstract] | ||
Outstanding, beginning of period (in dollars per share) | 3.07 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 4.29 | |
Expired (in dollars per share) | 0 | |
Forfeited/cancelled (in dollars per share) | 0.75 | |
Outstanding, end of period (in dollars per share) | $ 2.86 | $ 3.07 |
Weighed Average Remaining Contractual Term [Abstract] | ||
Outstanding weighed average remaining contractual term | 4 years 1 month 24 days | 4 years 11 months 1 day |
Unrecognized employee stock-based compensation expense | $ | $ 113 | $ 195 |
Weighted-average period over which unrecognized compensation is expected to be recognized | 25 days | 1 month 2 days |
Non-Employee Stock Option [Member] | ACM Shanghai [Member] | ||
Weighed Average Remaining Contractual Term [Abstract] | ||
Unrecognized employee stock-based compensation expense | $ | $ 605 | $ 822 |
Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 9 months | 2 years 6 months |
STOCK-BASED COMPENSATION, Assumptions Used to Determine Fair Value of Share Options Granted (Details) - Employee Share Option [Member] - Service Period Based [Member] |
9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2021
$ / shares
| ||||||||||||
Fair Value of Options Granted [Abstract] | ||||||||||||
Expected dividend | 0.00% | [1] | ||||||||||
Minimum [Member] | ||||||||||||
Fair Value of Options Granted [Abstract] | ||||||||||||
Fair value of common share (in dollars per share) | $ 82.75 | [2] | ||||||||||
Expected term in years | 5 years 6 months | [3] | ||||||||||
Volatility | 48.53% | [4] | ||||||||||
Risk-free interest rate | 1.00% | [5] | ||||||||||
Maximum [Member] | ||||||||||||
Fair Value of Options Granted [Abstract] | ||||||||||||
Fair value of common share (in dollars per share) | $ 111.98 | [2] | ||||||||||
Expected term in years | 6 years 3 months | [3] | ||||||||||
Volatility | 49.47% | [4] | ||||||||||
Risk-free interest rate | 1.12% | [5] | ||||||||||
|
INCOME TAXES (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2021
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2021
USD ($)
Subsidiary
|
Sep. 30, 2020
USD ($)
|
|
Income Taxes [Abstract] | ||||
Statutory U.S federal income tax rate | 21.00% | |||
Unrecognized tax benefits | $ 570 | $ 570 | ||
Unrecognized tax benefits that would impact effective tax rate | 422 | 422 | ||
Interest or penalties | 0 | |||
Income Tax Benefit (Expense) [Abstract] | ||||
Total income tax benefit (expense) | $ 266 | $ 1,747 | $ 3,021 | $ (416) |
ACM Research (Shanghai), Inc. [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 15.00% | |||
PRC [Member] | ||||
Income Taxes [Abstract] | ||||
Number of subsidiaries | Subsidiary | 3 | |||
Foreign corporate tax rate | 25.00% | |||
Effective period of preferential income tax rate | 3 years | |||
PRC [Member] | Minimum [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 12.50% | |||
PRC [Member] | Maximum [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 25.00% | |||
PRC [Member] | ACM Research (Shanghai), Inc. [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 12.50% | |||
PRC [Member] | ACM Research (Wuxi), Inc. [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 25.00% | |||
PRC [Member] | Shengwei Research (Shanghai), Inc. [Member] | ||||
Income Taxes [Abstract] | ||||
Foreign corporate tax rate | 16.50% |
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands, ¥ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2021
USD ($)
LegalProceeding
|
Sep. 30, 2021
CNY (¥)
|
Dec. 21, 2020
ExecutiveOfficers
|
|
COMMITMENTS AND CONTINGENCIES [Abstract] | |||
Commitments | $ 2,663 | ||
Required liquidate damage value | $ 63,400 | ¥ 450.0 | |
Land use rights period | 6 years | 6 years | |
Annual total taxes | $ 22,000 | ¥ 157.6 | |
Investments | $ 10,977 | ||
Number of outstanding legal proceedings | LegalProceeding | 1 | ||
Number of executive officers against lawsuit filed | ExecutiveOfficers | 3 |
SUBSEQUENT EVENT (Details) - Nov. 04, 2021 - Subsequent Event [Member] - ACM Shanghai [Member] - IPO [Member] ¥ / shares in Units, $ in Thousands, ¥ in Millions |
CNY (¥)
¥ / shares
shares
|
USD ($)
shares
|
---|---|---|
Subsequent Event [Line Items] | ||
Offering of shares (in shares) | 43,355,753 | 43,355,753 |
Percentage amount of shares offered from shares outstanding | 10.00% | |
Common stock, shares outstanding (in shares) | 433,557,100 | |
Share price (in RMB per share) | ¥ / shares | ¥ 85.00 | |
Gross proceeds of stock issuance | ¥ 3,685 | $ 575,000 |
Percentage of shares owned by Company after stock issuance | 82.50% | 82.50% |
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