QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
|
(Address of Principal Executive Offices) |
(Zip Code) |
Title of Each Class |
Trading Symbol |
Name of Each Exchange on which Registered |
||
Large accelerated filer |
☐ |
☑ |
|
Non-accelerated filer |
☐ |
Smaller reporting company |
|
Emerging growth company |
Class |
Number of Shares Outstanding |
Class A Common Stock, $0.0001 par value |
|
Class B Common Stock, $0.0001 par value |
PART I. |
4 |
||
Item 1. |
4 |
||
4 |
|||
5 |
|||
6 |
|||
8 |
|||
9 |
|||
Item 2. |
26 |
||
Item 3. |
41 |
||
Item 4. |
41 |
||
PART II. |
42 |
||
Item 1. |
42 |
||
Item 1A. |
42 |
||
Item 2. |
43 |
||
Item 6. |
43 |
||
44 |
|||
| Item 1. | Financial Statements |
September 30, 2020 |
December 31, 2019 |
|||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Restricted cash |
||||||||
Trading securities (note 11) |
||||||||
Accounts receivable, less allowance for doubtful accounts of $ |
||||||||
Other receivables |
||||||||
Inventories (note 4) |
||||||||
Prepaid expenses |
||||||||
Total current assets |
||||||||
Property, plant and equipment, net (note 5) |
||||||||
Land use right, net (note 2) |
||||||||
Operating lease right-of-use assets, net (note 8) |
||||||||
Intangible assets, net |
||||||||
Deferred tax assets (note 17) |
||||||||
Long-term investments (note 10) |
||||||||
Other long-term assets |
||||||||
Total assets |
||||||||
Liabilities, Redeemable Non-controlling Interests and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Short-term borrowings (note 6) |
||||||||
Accounts payable |
||||||||
Advances from customers |
||||||||
Income taxes payable |
||||||||
Other payables and accrued expenses (note 7) |
||||||||
Current portion of operating lease liability (note 8) |
||||||||
Deferred revenue |
||||||||
Total current liabilities |
||||||||
Long-term operating lease liability (note 8) |
||||||||
Other long-term liabilities (note 9) |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (note 18) |
||||||||
Redeemable non-controlling interests (note 15) |
||||||||
Stockholders’ equity: |
||||||||
Common stock – Class A, par value $ |
||||||||
Common stock–Class B, par value $ |
||||||||
Additional paid in capital |
||||||||
Accumulated surplus |
||||||||
Accumulated other comprehensive income (loss) |
( |
) |
||||||
Total ACM Research, Inc. stockholders’ equity |
||||||||
Non-controlling interests |
||||||||
Total stockholders’ equity |
||||||||
Total liabilities, redeemable non-controlling interests, and stockholders’ equity |
$ |
$ |
||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Revenue |
$ |
$ |
$ |
$ |
||||||||||||
Cost of revenue |
||||||||||||||||
Gross profit |
||||||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
||||||||||||||||
Research and development |
||||||||||||||||
General and administrative |
||||||||||||||||
Total operating expenses, net |
||||||||||||||||
Income from operations |
||||||||||||||||
Interest income |
||||||||||||||||
Interest expense |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||
Change in fair value of financial liability |
( |
) |
( |
) |
||||||||||||
Unrealized gain on trading securities |
||||||||||||||||
Other income (expense), net |
( |
) |
( |
) |
||||||||||||
Equity income (loss) in net income (loss) of affiliates |
( |
) |
||||||||||||||
Income before income taxes |
||||||||||||||||
Income tax benefit (expense) (note 17) |
( |
) |
( |
) |
||||||||||||
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 (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 (note 12) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||||||
Issuance of warrants (note 12) |
- |
- |
||||||||||||||||||||||||||||||||||
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 (Deficit) |
Accumulated Other Comprehensive Loss |
Total Stockholders’ Equity |
|||||||||||||||||||||||||
Balance at December 31, 2018 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||||||||||||||||
Net income attributable to ACM Research, Inc. |
- |
- |
||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
- |
- |
( |
) |
( |
) |
||||||||||||||||||||||||||
Exercise of stock options |
||||||||||||||||||||||||||||||||
Cancellation of stock options |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Stock-based compensation |
- |
- |
||||||||||||||||||||||||||||||
Issuance of Class A common stock in connection with public offering |
||||||||||||||||||||||||||||||||
Share repurchase |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock |
( |
) |
||||||||||||||||||||||||||||||
Balance at September 30, 2019 |
$ |
$ |
$ |
$ |
$ |
( |
) |
|||||||||||||||||||||||||
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 12) |
- |
- |
||||||||||||||||||||||||||||||||||
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 (Loss) |
Total Stockholders’ Equity |
|||||||||||||||||||||||||
Balance at June 30, 2019 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||||
Net income attributable to ACM Research, Inc. |
- |
- |
||||||||||||||||||||||||||||||
Foreign currency translation adjustment |
- |
- |
( |
) |
( |
) |
||||||||||||||||||||||||||
Exercise of stock options |
||||||||||||||||||||||||||||||||
Cancellation of stock options |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Stock-based compensation |
- |
- |
||||||||||||||||||||||||||||||
Issuance of Class A common stock in connection with public offering |
||||||||||||||||||||||||||||||||
Share repurchases |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||||
Conversion of Class B common stock to Class A common stock |
( |
) |
||||||||||||||||||||||||||||||
Balance at September 30, 2019 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
||||||||||||||||||||||||
Nine Months Ended September 30, |
||||||||
2020 |
2019 |
|||||||
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 flow used in operating activities |
( |
) |
( |
) |
||||
Cash flows from investing activities: |
||||||||
Purchase of property and equipment |
( |
) |
( |
) |
||||
Purchase of intangible assets |
( |
) |
( |
) |
||||
Purchase of land-use-right |
( |
) |
||||||
Purchase of trading securities |
( |
) |
||||||
Prepayment for property |
( |
) |
||||||
Investments in unconsolidated affiliates |
( |
) |
||||||
Net cash used in investing activities |
( |
) |
( |
) |
||||
Cash flows from financing activities: |
||||||||
Proceeds from short-term borrowings |
||||||||
Repayments of short-term borrowings |
( |
) |
( |
) |
||||
Repayments of notes payable |
( |
) |
||||||
Proceeds from stock option exercise to common stock |
||||||||
Proceeds from issuance of Class A common stock in connection with public offering, net of direct issuance expenses of $ |
||||||||
Payment for repurchase of Class A common stock |
( |
) |
||||||
Payment for cancellation of stock option |
( |
) |
||||||
Proceeds from issuance of common stock to redeemable Non-controlling interest |
||||||||
Net cash provided by financing activities |
||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
$ |
$ |
( |
) |
||||
Net increase (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 |
$ |
$ |
||||||
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 financing activities: |
||||||||
Warrant conversion to common stock |
$ |
$ |
||||||
Share cancellation, note 12 |
$ |
$ |
||||||
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, 2020 |
December 31, 2019 |
||||||
% |
% |
||||||||
% |
% |
||||||||
% |
% |
||||||||
% |
% |
||||||||
% |
% |
||||||||
% |
% |
||||||||
% |
% |
||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Numerator: |
||||||||||||||||
Net income |
$ |
$ |
$ |
$ |
||||||||||||
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 |
$ |
$ |
$ |
$ |
||||||||||||
September 30, 2020 |
December 31, 2019 |
|||||||
Accounts receivable |
$ |
$ |
||||||
Less: Allowance for doubtful accounts |
||||||||
Total |
$ |
$ |
||||||
September 30, 2020 |
December 31, 2019 |
|||||||
Raw materials |
$ |
$ |
||||||
Work in process |
||||||||
Finished goods |
||||||||
Total inventory |
$ |
$ |
||||||
September 30, 2020 |
December 31, 2019 |
|||||||
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, 2020 |
December 31, 2019 |
|||||||
Line of credit up to RMB |
$ |
$ |
||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to RMB |
||||||||
Line of credit up to KRW |
||||||||
Total |
$ |
$ |
||||||
September 30, 2020 |
December 31, 2019 |
|||||||
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, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Operating lease cost |
$ |
$ |
$ |
$ |
||||||||||||
Short-term lease cost |
||||||||||||||||
Lease cost |
$ |
$ |
$ |
$ |
||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||||||||||
Operating cash outflow from operating leases |
$ |
$ |
$ |
$ |
||||||||||||
December 31, |
||||
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
Total lease payments |
||||
Less: Interest |
( |
) |
||
Present value of lease liabilities |
$ |
|||
September 30, 2020 |
December 31, 2019 |
|||||||
Remaining lease term and discount rate: |
||||||||
Weighted average remaining lease term (years) |
||||||||
Weighted average discount rate |
% |
% |
||||||
September 30, 2020 |
December 31, 2019 |
|||||||
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, 2020 |
December 31, 2019 |
|||||||
Ninebell |
$ |
$ |
||||||
Shengyi |
||||||||
Hefei Shixi |
||||||||
Total |
$ |
$ |
||||||
September 30, 2020 |
December 31, 2019 |
|||||||
Trading securities listed in Shanghai Stock Exchange |
||||||||
Cost |
$ |
$ |
||||||
Market value |
$ |
$ |
||||||
Nine Months Ended September 30, |
|
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) |
Prepaid expenses |
September 30, 2020 |
December 31, 2019 |
||||||
Ninebell |
$ |
$ |
||||||
Accounts payable |
September 30, 2020 |
December 31, 2019 |
||||||
Ninebell |
$ |
$ |
||||||
Shengyi |
||||||||
Total |
$ |
$ |
||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
Purchase of materials |
2020 |
2019 |
2020 |
2019 |
||||||||||||
Ninebell |
$ |
$ |
$ |
$ |
||||||||||||
Shengyi |
||||||||||||||||
Total |
$ |
$ |
$ |
$ |
||||||||||||
Three Months Ended September 30 |
Nine Months Ended September 30 |
|||||||||||||||
Service fee charged by |
2020 |
2019 |
2020 |
2019 |
||||||||||||
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, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
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, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
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, 2019 |
$ |
$ |
|||||||||||
Granted |
|||||||||||||
Exercised |
( |
) |
|||||||||||
Expired |
|||||||||||||
Forfeited/cancelled |
( |
) |
|||||||||||
Outstanding at September 30, 2020 |
$ |
$ |
|||||||||||
Vested and exercisable at September 30, 2020 |
|||||||||||||
Number of Option Shares |
Weighted Average Grant Date Fair Value |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
||||||||||
Outstanding at December 31, 2019 |
$ |
$ |
|||||||||||
Granted |
|||||||||||||
Exercised |
( |
) |
|||||||||||
Expired |
|||||||||||||
Forfeited/cancelled |
( |
) |
|||||||||||
Outstanding at September 30, 2020 |
$ |
$ |
|||||||||||
Vested and exercisable at September 30, 2020 |
|||||||||||||
Nine Months Ended September 30, |
Year Ended December 31, |
|
2020 |
2019 |
|
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) |
Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant. |
(5) |
Nine Months Ended September 30, |
|
2020 |
|
Fair value of common share(1) |
$ |
Expected term in years(2) |
|
Volatility(3) |
|
Risk-free interest rate(4) |
|
Expected dividend(5) |
| (1) | Fair value of Class A common stock value was the closing market price of the Class A common stock on the grant date. |
| (2) | Expected term of share options is based on the average of the vesting period and the contractual term for each grant according to Staff Accounting Bulletin 110. |
| (3) | Volatility is calculated based on the historical volatility of the stock of companies comparable to ACM in the period equal to the expected term of each grant. |
| (4) | Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant. |
| (5) | Expected dividend is assumed to be |
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, 2019 |
$ |
$ |
||||||||||||||
Granted |
||||||||||||||||
Exercised |
||||||||||||||||
Expired |
||||||||||||||||
Forfeited/cancelled |
( |
) |
||||||||||||||
Outstanding at September 30, 2020 |
$ |
$ |
||||||||||||||
Vested and exercisable at September 30, 2020 |
||||||||||||||||
| • | repealed the 80% taxable income limitation for 2018, 2019 and 2020, and allows those years to be carried back up to five years; |
| • | allows corporations to claim 100% of AMT credits in 2019, and provides for an election to take the entire refundable credit amount in 2018; |
| • | raised the Section 163(j) ATI limit from 30% to 50% for businesses; and |
| • | made technical corrections to TCJA for Qualified Improvement Property (“QIP”) and designates QIP as 15-year property for depreciation purposes, which makes QIP a category eligible for 100% bonus depreciation |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(in thousands) |
(in thousands) |
|||||||||||||||
Total income tax benefit (expense) |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
| • | Space Alternated Phase Shift, or SAPS, technology for flat and patterned wafer surfaces (such as via or deep trench with stronger structure), which employs alternating phases of megasonic waves to deliver megasonic energy in a highly uniform manner on a microscopic level; |
| • | Timely Energized Bubble Oscillation, or TEBO, technology for patterned wafer surfaces at advanced process nodes, which provides effective, damage-free cleaning for 2D and 3D patterned wafers with fine feature sizes; |
| • | Tahoe technology for cost and environmental savings, which delivers high cleaning performance using significantly less sulfuric acid and hydrogen peroxide than is typically consumed by conventional high-temperature single-wafer cleaning tools; and |
| • | Electro-Chemical Plating, or ECP, technology for advanced metal plating, which includes Ultra ECP AP, or Advanced Packaging, technology for back-end assembly processes and Ultra ECP MAP, or Multi-Anode Partial Plating, technology for front-end wafer fabrication processes. |
| • | 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. |
| • | Our initial factory is located in the Pudong Region of Shanghai and has a total of 36,000 square feet of available floor space. |
| • | In September 2018 we announced the opening of a second factory, also in the Pudong region of Shanghai. This facility 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 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, front end process electroplating equipment, Stress Free Polish equipment and vertical furnace equipment; 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. Our corporate headquarters are located in Alameda County in the San Francisco Bay Area 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 73.8% of our revenue in 2019 and 87.6% of our revenue in 2018 are based in the PRC and Korea. One of those customers, Yangtze Memory Technologies Co., Ltd. — which accounted for 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 reflected as reductions of those expenses in the periods in which they are reported. Those reductions totaled $0.7 million and $2.9 million in the first nine months of 2020 and 2019 respectively. |
| • | Government grants used to acquire depreciable assets are transferred from long-term liabilities to property, plant and equipment when the assets are acquired, and the recorded amounts of the assets are credited to other income over the useful lives of the assets. These credits totaled $110,000 and $111,000 in the first nine months of 2020 and 2019, 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 tool to a customer on an approval basis, for which we may recognize revenue in the future if contractual conditions are met and customer acceptance 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” as our income 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. |
| • | 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, 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, |
||||||||
2020 |
2019 |
|||||||
(in thousands) |
||||||||
Adjusted EBITDA Data: |
||||||||
Net Income |
$ |
12,479 |
$ |
15,257 |
||||
Interest expense (income), net |
(223 |
) |
410 |
|||||
Income tax expense |
416 |
667 |
||||||
Depreciation and amortization |
774 |
586 |
||||||
Stock based compensation |
4,323 |
2,919 |
||||||
Change in fair value of financial liability |
11,964 |
- |
||||||
Unrealized gain on trading securities |
(8,970 |
) |
- |
|||||
Adjusted EBITDA |
$ |
20,763 |
$ |
19,839 |
||||
Nine Months Ended September 30, |
||||||||
2020 |
2019 |
|||||||
(in thousands) |
||||||||
Free Cash Flow Data: |
||||||||
Net cash used in operating activities |
$ |
(8,036 |
) |
$ |
(4,752 |
) |
||
Purchase property and equipment |
(3,583 |
) |
(832 |
) |
||||
Purchase of intangible assets |
(81 |
) |
(114 |
) |
||||
Purchase of land-use-right |
(9,331 |
) |
- |
|||||
Purchase of trading securities |
(14,680 |
) |
- |
|||||
Free cash flow |
$ |
(35,711 |
) |
$ |
(5,698 |
) |
||
` |
Nine Months Ended September 30, |
|||||||||||||||||||||||
2020 |
2019 |
|||||||||||||||||||||||
Actual (GAAP) |
SBC |
Adjusted (Non- GAAP) |
Actual (GAAP) |
SBC |
Adjusted (Non-GAAP) |
|||||||||||||||||||
(in thousands) |
||||||||||||||||||||||||
Revenue |
$ |
111,062 |
$ |
- |
$ |
111,062 |
$ |
82,916 |
$ |
- |
$ |
82,916 |
||||||||||||
Cost of revenue |
(61,137 |
) |
(132 |
) |
(61,005 |
) |
(44,705 |
) |
(213 |
) |
(44,492 |
) |
||||||||||||
Gross profit |
49,925 |
(132 |
) |
50,057 |
38,211 |
(213 |
) |
38,424 |
||||||||||||||||
Operating expenses: |
||||||||||||||||||||||||
Sales and marketing |
(11,524 |
) |
(495 |
) |
(11,029 |
) |
(8,679 |
) |
(252 |
) |
(8,427 |
) |
||||||||||||
Research and development |
(13,241 |
) |
(568 |
) |
(12,673 |
) |
(9,598 |
) |
(939 |
) |
(8,659 |
) |
||||||||||||
General and administrative |
(9,100 |
) |
(3,128 |
) |
(5,972 |
) |
(5,992 |
) |
(1,515 |
) |
(4,477 |
) |
||||||||||||
Income from operations |
16,060 |
(4,323 |
) |
20,383 |
13,942 |
(2,919 |
) |
16,861 |
||||||||||||||||
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Revenue |
100.0 |
% |
100.0 |
% |
100.0 |
% |
100.0 |
% |
||||||||
Cost of revenue |
57.3 |
51.4 |
55.0 |
53.9 |
||||||||||||
Gross margin |
42.7 |
48.6 |
45.0 |
46.1 |
||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing |
8.2 |
11.6 |
10.4 |
10.5 |
||||||||||||
Research and development |
9.1 |
10.4 |
11.9 |
11.6 |
||||||||||||
General and administrative |
9.6 |
5.5 |
8.2 |
7.2 |
||||||||||||
Total operating expenses, net |
26.9 |
27.6 |
30.5 |
29.3 |
||||||||||||
Income from operations |
15.8 |
21.0 |
14.5 |
16.8 |
||||||||||||
Interest income (expense), net |
(0.2 |
) |
(0.3 |
) |
0.2 |
(0.5 |
) |
|||||||||
Change in fair value of financial liability |
(13.7 |
) |
- |
(10.8 |
) |
- |
||||||||||
Unrealized gain on trading securities |
18.8 |
- |
8.1 |
- |
||||||||||||
Other income (expense), net |
(3.7 |
) |
5.5 |
(0.8 |
) |
2.6 |
||||||||||
Equity income (loss) in net income (loss) of affiliates |
0.4 |
(0.0 |
) |
0.5 |
0.3 |
|||||||||||
Income before income taxes |
17.4 |
26.2 |
11.6 |
19.2 |
||||||||||||
Income tax benefit (expense) |
3.7 |
1.0 |
(0.4 |
) |
(0.8 |
) |
||||||||||
Net income |
21.1 |
27.2 |
11.3 |
18.4 |
||||||||||||
Less: Net income attributable to non-controlling interests and redeemable non-controlling interests |
2.9 |
0.9 |
2.0 |
0.4 |
||||||||||||
Net income attributable to ACM Research, Inc. |
18.2 |
% |
26.3 |
% |
9.3 |
% |
18.0 |
% |
||||||||
Three Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
` |
(in thousands) |
|||||||||||
Revenue |
$ |
47,665 |
$ |
33,427 |
42.6 |
% |
||||||
Three Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Cost of revenue |
$ |
27,324 |
$ |
17,173 |
59.1 |
% |
||||||
Gross profit |
20,341 |
16,254 |
25.1 |
% |
||||||||
Gross margin |
42.67 |
% |
48.63 |
% |
-6.0 |
|||||||
Three Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Sales and marketing expense |
$ |
3,924 |
$ |
3,886 |
1.0 |
% |
||||||
Research and development expense |
4,343 |
3,492 |
24.4 |
% |
||||||||
General and administrative expense |
4,568 |
1,846 |
147.5 |
% |
||||||||
Total operating expenses |
$ |
12,835 |
$ |
9,224 |
39.1 |
% |
||||||
| • | 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 legal fees; |
| • | other corporate expenses; and |
| • | allocated overhead for rent and utilities. |
Three Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Interest Income |
$ |
179 |
$ |
95 |
88.4 |
% |
||||||
Interest Expense |
(272 |
) |
(205 |
) |
32.7 |
% |
||||||
Interest Income (expense), net |
$ |
(93 |
) |
$ |
(110 |
) |
-15.5 |
% |
||||
Other income (expense), net |
$ |
(1,759 |
) |
$ |
1,850 |
-195.1 |
% |
|||||
Three Months Ended September 30, |
||||||||
2020 |
2019 |
|||||||
(in thousands) |
||||||||
Total income tax benefit (expense) |
$ |
1,747 |
$ |
328 |
||||
| • | repealed the 80% taxable income limitation for 2018, 2019 and 2020, and allows those years to be carried back up to five years; |
| • | allows corporations to claim 100% of AMT credits in 2019, and provides for an election to take the entire refundable credit amount in 2018; |
| • | raised the Section 163(j) ATI limit from 30% to 50% for businesses; and |
| • | made technical corrections to TCJA for Qualified Improvement Property (“QIP”) and designates QIP as 15-year property for depreciation purposes, which makes QIP a category eligible for 100% bonus depreciation. |
Three Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Net income attributable to non-controlling interests |
$ |
1,393 |
$ |
307 |
353.7 |
% |
||||||
Nine Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Revenue |
$ |
111,062 |
$ |
82,916 |
33.9 |
% |
||||||
Nine Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Cost of revenue |
$ |
61,137 |
$ |
44,705 |
36.8 |
% |
||||||
Gross profit |
49,925 |
38,211 |
30.7 |
% |
||||||||
Gross margin |
44.95 |
% |
46.08 |
% |
-1.1 |
|||||||
Nine Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Sales and marketing expense |
$ |
11,524 |
$ |
8,679 |
32.8 |
% |
||||||
Research and development expense |
13,241 |
9,598 |
38.0 |
% |
||||||||
General and administrative expense |
9,100 |
5,992 |
51.9 |
% |
||||||||
Total operating expenses |
$ |
33,865 |
$ |
24,269 |
39.5 |
% |
||||||
| • | compensation of personnel associated with pre and aftersales 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 legal fees; |
| • | other corporate expenses; and |
| • | allocated overhead for rent and utilities. |
Nine Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Interest Income |
$ |
834 |
$ |
128 |
551.6 |
% |
||||||
Interest Expense |
(611 |
) |
(538 |
) |
13.6 |
% |
||||||
Interest Income (expense), net |
$ |
223 |
$ |
(410 |
) |
-154.4 |
% |
|||||
Other income (expense), net |
$ |
(933 |
) |
$ |
2,132 |
-143.8 |
% |
|||||
Nine Months Ended September 30, |
||||||||
2020 |
2019 |
|||||||
(in thousands) |
||||||||
Total income tax expense |
$ |
(416 |
) |
$ |
(667 |
) |
||
| • | repealed the 80% taxable income limitation for 2018, 2019 and 2020, and also allows those years to be carried back up to five years; |
| • | allows corporations to claim 100% of AMT credits in 2019, and also provides for an election to take the entire refundable credit amount in 2018; |
| • | raises Section 163(j) ATI limit from 30% to 50% for businesses; and |
| • | makes technical corrections to TCJA for Qualified Improvement Property (“QIP”), and designates QIP as 15-year property for depreciation purposes, which makes QIP a category eligible for 100% bonus depreciation. |
Nine Months Ended September 30, |
||||||||||||
2020 |
2019 |
% Change 2020 v 2019 |
||||||||||
(in thousands) |
||||||||||||
Net income attributable to non-controlling interests |
$ |
2,228 |
$ |
307 |
625.7 |
% |
||||||
Lender |
Agreement Date |
Maturity Date |
Annual Interest Rate |
Maximum Borrowing Amount(1) |
Amount Outstanding at September 30, 2020 |
|||||||||
(in thousands) |
||||||||||||||
Bank of China Pudong Branch |
June 2020 |
December 2020 |
4.35 |
% |
RMB30,000 |
RMB17,000 |
||||||||
$ |
4,404 |
$ |
2,496 |
|||||||||||
Bank of Shanghai Pudong Branch |
April 2020 |
May 2021 - June 2021 |
3.48%-4.68 |
% |
RMB70,000 |
RMB65,296 |
||||||||
$ |
10,276 |
$ |
9,585 |
|||||||||||
Bank of Communications |
April 2020 |
April 2021 - May 2021 |
3.65%-4.65 |
% |
RMB20,000 |
RMB20,000 |
||||||||
$ |
2,936 |
$ |
2,936 |
|||||||||||
China Everbright Bank |
April 2020 |
April 2021 - June 2021 |
2.7%-4.7 |
% |
RMB80,000 |
RMB58,749 |
||||||||
$ |
11,744 |
$ |
8,625 |
|||||||||||
China Merchants Bank |
August 2020 |
August 2021 |
3.85 |
% |
RMB80,000 |
RMB29,000 |
||||||||
$ |
11,744 |
$ |
4,257 |
|||||||||||
Industrial Bank of Korea |
July 2020 |
July 2021 |
3.99 |
% |
KRW500,000 |
KRW500,000 |
||||||||
$ |
428 |
$ |
428 |
|||||||||||
$ |
41,532 |
$ |
28,327 |
|||||||||||
| (1) | Converted from RMB to dollars as of September 30, 2020. All of the amounts owing under the line of credit with China Everbright Bank and Bank of China Pudong Branch 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 Dr. Wang and 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, CEO of ACM Research (Korea). |
September 30, 2020 |
||||
(in thousands) |
||||
Cash and cash equivalents |
$ |
92,203 |
||
Accounts receivable, less allowance for doubtful amounts |
59,796 |
|||
Inventory |
64,182 |
|||
Working capital |
$ |
216,181 |
||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risks |
| Item 4. | Controls and Procedures |
| Item 1. | Legal Proceedings |
| Item 1A. | Risk Factors |
| Item 6. | Exhibits |
Exhibit Number |
Description |
|
Warrant to Purchase Class A Common Stock issued to Shengxin (Shanghai) Management Consulting Limited Partnership dated July 29, 2020 |
||
Amendment No. 1 to Share Transfer and Note Cancellation Agreement dated July 29, 2020 between ACM Research, Inc. and Shengxin (Shanghai) Management Consulting Limited Partnership |
||
Adoption Agreement dated July 29, 2020 between ACM Research, Inc. and Shengxin (Shanghai) Management Consulting Limited Partnership (amending the Second Amended and Restated Registration Rights Agreement between ACM Research, Inc. and certain of its stockholders filed with the SEC on October 18, 2017 as Exhibit 10.09 to Amendment No. 1 to Registration Statement on Form S-1) |
||
10.03‡+ |
Facilities Agreement dated August 3, 2020 between China Merchants Bank Co., Ltd. Shanghai Branch and ACM Research (Shanghai), Inc. |
|
Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
||
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
||
101.INS |
XBRL Instance Document |
|
101.SCH |
XBRL Taxonomy Extension Schema Document |
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
|
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
|
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document |
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
ACM RESEARCH, INC. |
|||
Date: November 9, 2020 |
By: |
/s/ Mark McKechnie |
|
Mark McKechnie |
|||
Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) |
|||
|
Certificate No. A-20-01
|
Original Issue Date: July 29, 2020
|
| (i) |
this Warrant is, and any Warrant issued in substitution for or replacement of this Warrant will be upon issuance, duly authorized and validly issued;
|
| (ii) |
at all times during the Exercise Period, the Company will reserve and keep available out of its authorized but unissued Class A Shares or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of
this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant; and
|
| (iii) |
the Warrant Shares will be, upon issuance, and the Company will take all such actions as may be necessary or appropriate in order that the Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any
preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens and charges.
|
| (i) |
pay a dividend or make any other distribution upon any capital stock of the Company payable either in Class A Shares or in securities that are convertible into Class A Shares without payment of any consideration; or
|
| (ii) |
subdivide (by any stock split, recapitalization or otherwise) outstanding Class A Shares into a greater number of shares;
|
| (i) |
capital reorganization of the Company;
|
| (ii) |
reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares);
|
| (iii) |
consolidation or merger of the Company with or into another Person;
|
| (iv) |
sale of all or substantially all of the Company's assets to another Person; or
|
| (v) |
other similar transaction (other than any such transaction covered by Section 4(a)),
|
| (i) |
within ten Business Days following any adjustment of the Exercise Price, a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof;
and
|
| (ii) |
within ten Business Days following receipt by the Company of a written request by the Holder, a certificate of an executive officer certifying the Exercise Price then in effect and the number of Warrant Shares or the amount, if any, of other
shares of stock, securities or assets then issuable upon exercise of this Warrant.
|
|
If to the Company:
|
ACM Research, Inc.
42307 Osgood Road, Suite I
Fremont, CA 94539
E-mail: [***]
Attention: Chief Financial Officer
|
|
with a copy to:
|
K&L Gates LLP
One Lincoln Street
Boston, MA 02111
E-mail: [***]
Attention: Mark L. Johnson
|
|
If to the Holder:
|
Shengxin (Shanghai) Management Consulting Limited Partnership
Rm 210 32, 2nd fl. Building 1, 38 Debao Rd.,
Pilot Free Trade Zone,
Shanghai, China
|
| E-mail: |
| Attention: |
| (i) |
headings used in this Agreement are for convenience of reference only and shall not, for any purpose, be deemed a part of this Agreement;
|
| (ii) |
any references herein to a Section refer to a Section of this Agreement, unless specified otherwise;
|
| (iii) |
the words “include,” “includes” and “including” as used herein shall not be construed so as to exclude any other thing not referred to or described;
|
| (iv) |
the word “or” is not exclusive;
|
| (v) |
the definition given for any term in this Agreement shall apply equally to both the singular and plural forms of the term defined;
|
| (vi) |
whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms;
|
| (vii) |
unless the context otherwise requires, references herein to a statute means such statute as amended from time to time and includes any successor legislation thereto and any rules and regulations promulgated thereunder; and
|
| (viii) |
this Agreement shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
|
|
ACM RESEARCH, INC.
|
||
|
By:
|
/s/ Hui Wang
|
|
|
Name: Hui Wang
|
||
|
Title: CEO
|
||
|
By:
|
, General Partner
|
|
|
By: /s/ Steven Huang
|
| (a) |
headings used in this Amendment are for convenience of reference only and shall not, for any purpose, be deemed a part of this Amendment;
|
| (b) |
references to a Section or Subsection refer to a Section or Subsection of this Amendment, unless specified otherwise;
|
| (c) |
the words “include” and “including” shall not be construed so as to exclude any other thing not referred to or described;
|
| (d) |
the word “or” is not exclusive;
|
| (e) |
the definition given for any term shall apply equally to both the singular and plural forms of the term defined;
|
| (f) |
unless the context otherwise requires otherwise, references (i) to an agreement, instrument or other document (including this Amendment) mean such agreement, instrument or other document as amended, supplemented
and modified from time to time to the extent permitted by the provisions thereof and (ii) to a statute mean such statute as amended from time to time and include any successor legislation thereto and any rules and regulations promulgated
thereunder; and
|
| (g) |
this Amendment shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.
|
|
ACM Research, Inc.
|
||
|
By:
|
/s/ Hui Wang
|
|
|
Name: Hui Wang
|
||
|
Title: CEO
|
||
|
Address:
|
42307 Osgood Road, Suite I
|
|
|
Fremont, CA 94539
|
||
|
United States of America
|
|
Shengxin (Shanghai) Management
|
|
|
Consulting Limited Partnership
|
|
By:
|
/s/ Steven Huang
|
|
|
Name:
|
||
|
Title:
|
|
Address:
|
Rm. 210-32, 2nd Fl. Building 1
|
|
|
38 Debao Rd.
|
||
|
Pilot Free Trade Zone
|
||
|
Shanghai, China
|
| 1. |
Acknowledgement. Acquirer acknowledges that, as the result of its receipt on the date hereof of a Warrant to Purchase Class A Common Stock of the Company it has the right to acquire Registrable Securities,
consisting of 242,681 Class A Shares acquirable upon exercise of such Warrant, as a holder of securities of the Company in accordance with Section 12(b)(iii) of the Agreement, after which Acquirer shall be considered an “Incidental
Rights Holder” for all purposes of the Agreement.
|
| 2. |
Agreement. Acquirer adopts the Agreement with the same force and effect as if Acquirer were originally a party to the Agreement.
|
| 3. |
Conflicts. In the event that the terms of the Agreement conflict with any other agreement pursuant to which Acquirer is bound, Acquirer expressly acknowledges and agrees that the terms of the Agreement shall
govern.
|
| 4. |
Notice. Any notice required or permitted by the Agreement shall be given to Acquirer at the address or email address listed below Acquirer’s signature to this Adoption Agreement.
|
|
ACQUIRER:
|
ACCEPTED AND AGREED:
|
|
Shengxin (Shanghai) Management
|
ACM Research, Inc.
|
|
Consulting Limited Partnership
|
| By: |
|
, General Partner |
|
By: /s/ Steven Huang
|
By:
|
/s/ Hui Wang
|
|
|
Name: Hui Wang
|
|||
|
Title: CEO
|
|
Address:
|
Rm. 210 32, 2nd FL. Building 1, |
|
38 Debao Rd., Pilot Free Trade Zone
|
||
|
Shanghai, China
|
|
Email:
|
@acmrsch.com
|
| No.: 121XY2020018744 |
|
Date: November 9, 2020
|
/s/ David H. Wang
|
|
|
David H. Wang
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
Date: November 9, 2020
|
/s/ Mark McKechnie
|
|
|
Mark McKechnie
|
|
Chief Financial Officer, Executive Vice President and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
Date: November 9, 2020
|
/s/ David H. Wang
|
|
|
David H. Wang
|
|
|
Chief Executive Officer and President
|
|
|
(Principal Executive Officer)
|
|
Date: November 9, 2020
|
/s/ Mark McKechnie
|
|
|
Mark McKechnie
|
|
Chief Financial Officer, Executive Vice President and Treasurer
|
|
|
|
(Principal Financial Officer)
|
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| 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) | 50,000,000 | 50,000,000 |
| Common stock, shares issued (in shares) | 16,657,135 | 16,182,151 |
| Common stock, shares outstanding (in shares) | 16,657,135 | 16,182,151 |
| 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) | 2,409,738 | 2,409,738 |
| Common stock, shares issued (in shares) | 1,802,606 | 1,862,608 |
| Common stock, shares outstanding (in shares) | 1,802,606 | 1,862,608 |
Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) $ in Thousands |
9 Months Ended |
|---|---|
|
Sep. 30, 2019
USD ($)
| |
| Cash flows from financing activities: | |
| Direct issuance expenses | $ 2,287 |
DESCRIPTION OF BUSINESS |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 single-wafer wet cleaning equipment used to improve the manufacturing process and yield for advanced integrated chips. The Company markets and sells its single-wafer wet-cleaning equipment, under the brand name “Ultra C,” based on the Company’s proprietary Space Alternated Phase Shift (“SAPS”) and Timely Energized Bubble Oscillation (“TEBO”) 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 initially in 2005 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. 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 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 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 June 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 next 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 15).
In preparation for the STAR IPO, the Company 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 the Company’s consolidated financial statements.
The Company has direct or indirect interests in the following subsidiaries:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES |
NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The Company’s consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its subsidiaries, 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 and indirectly, controls more than one half 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 unaudited condensed consolidated financial statements herein should be read in conjunction with the historical consolidated financial statements of the Company for the year ended December 31, 2019 included in ACM’s Annual Report on Form 10-K for the year ended December 31, 2019.
The accompanying condensed consolidated balance sheet as of September 30, 2020, condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2020 and 2019, condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2020 and 2019, and condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. In the opinion of management, the 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, 2020 and the results of operations for the three and nine months ended September 30, 2020 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. The situation continues to develop, however, 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, 2020 the Company did not experience significant negative impact of COVID-19 on its operations, capital and financial resources, including overall liquidity position.
Use of Estimates
The preparation of condensed 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 revenue and expenses during the reported period in the condensed 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 stock-based compensation arrangements and valuation of financial 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 believes that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.
Basic and Diluted Net Income per Common Share
Basic and diluted net income per common share is 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, 2020 and 2019, 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 that could share in ACM’s earnings. ACM’s potential dilutive securities consist of warrants and stock options for the three and nine months ended September 30, 2020 and 2019.
Land use right, net
The land use right represents the cost to purchase a right to use state-owned land in the PRC with lease terms of 50 years expiring in 2070, for which an upfront lump-sum payment was made during the first nine months of 2020. The Company classifies the land use right as non-current assets on the condensed consolidated balance sheets.
The land use right is carried at cost less accumulated amortization and impairment losses, if any. Amortization is computed using the straight-line method over the term specified in the land use right certificate, which is 50 years.
Concentration of Credit Risk
The Company is potentially subject to concentrations of credit risks in its accounts receivable. For the nine months ended September 30, 2020 and 2019, the Company’s three largest customers accounted for 79.8% and 72.3%, respectively, of revenue. For the three months ended September 30, 2020 and 2019, the Company’s three largest customers accounted for 72.1% and 98.6%, respectively, of revenue. As of September 30, 2020 and December 31, 2019, the Company’s three largest customers accounted for 76.9% and 67.7%, 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 August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820), which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The modified standard eliminates the requirement to disclose changes in unrealized gains and losses included in earnings for recurring Level 3 fair value measurements and requires changes in unrealized gains and losses be included in other comprehensive income for recurring Level 3 fair value measurements of instruments. The standard also requires the disclosure of the range and weighted average used to develop significant unobservable inputs and how weighted average is calculate for recurring and nonrecurring Level 3 fair value measurements. The amendment is effective for fiscal years beginning after December 15, 2019 and interim periods within that fiscal year, with early adoption permitted. The adoption of ASU 2018-13 did not have a material impact on the Company’s 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 as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is a smaller reporting company, implementation is not needed until 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.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is evaluating the impact of the adoption of ASU 2019-12, but does not expect it to have a material impact on income taxes as reported in its consolidated financial statements.
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ACCOUNTS RECEIVABLE |
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| ACCOUNTS RECEIVABLE [Abstract] | |||||||||||||||||||||||||||||||||||||
| ACCOUNTS RECEIVABLE |
NOTE 3 – ACCOUNTS RECEIVABLE
At September 30, 2020 and December 31, 2019, 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, 2020 and December 31, 2019. At September 30, 2020 and December 31, 2019, accounts receivable of $0 and $1,433, respectively, were pledged as collateral for borrowings from financial institutions.
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INVENTORIES |
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| INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES |
NOTE 4 – INVENTORIES
At September 30, 2020 and December 31, 2019, inventory consisted of the following:
System shipments of first-tools to an existing or prospective customer, for which ownership does not transfer until customer acceptance, are classified as finished goods inventory and carried at cost until ownership is transferred.
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PROPERTY, PLANT AND EQUIPMENT, NET |
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| PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET |
NOTE 5 – PROPERTY, PLANT AND EQUIPMENT, NET
At September 30, 2020 and December 31, 2019, property, plant and equipment consisted of the following:
Depreciation expense was $195 and $176 for the three months ended September 30, 2020 and 2019, respectively, and $569 and $528 for the nine months ended September 30, 2020 and 2019, respectively.
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SHORT-TERM BORROWINGS |
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| SHORT-TERM BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHORT-TERM BORROWINGS |
NOTE 6 – SHORT-TERM BORROWINGS
At September 30, 2020 and December 31, 2019, short-term borrowings consisted of the following:
Interest expense related to short-term borrowings amounted to $272 and $205 for the three months ended September 30, 2020 and 2019, respectively, and $611 and $538 for the nine months ended September 30, 2020 and 2019, respectively.
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OTHER PAYABLE AND ACCRUED EXPENSES |
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| OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER PAYABLE AND ACCRUED EXPENSES |
NOTE 7 – OTHER PAYABLE AND ACCRUED EXPENSES
At September 30, 2020 and December 31, 2019, other payable and accrued expenses consisted of the following:
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LEASES |
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| LEASES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LEASES |
NOTE 8 – 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-month periods ended September 30, 2020 and 2019, respectively:
Maturities of lease liabilities for all operating leases were as follows as of September 30, 2020:
The weighted average remaining lease terms and discount rates for all operating leases were as follows as of September 30, 2020 and December 31, 2019:
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OTHER LONG-TERM LIABILITIES |
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| OTHER LONG-TERM LIABILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER LONG-TERM LIABILITIES |
NOTE 9 – OTHER LONG-TERM LIABILITIES
Other long-term liabilities represent subsidies that we have received from governmental authorities, including China’s Ministry of Science and Technology, the Shanghai Municipal Commission of Economy and Information, and the Shanghai Science and Technology Committee, for development and commercialization of certain technology but have not yet earned and recognized. As of September 30, 2020 and December 31, 2019, other long-term liabilities consisted of the following unearned government subsidies:
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LONG TERM INVESTMENTS |
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| LONG TERM INVESTMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| LONG TERM INVESTMENTS |
NOTE 10 – LONG TERM INVESTMENTS
In September 2017, ACM and Ninebell Co., Ltd. (“Ninebell”), a Korean company that is one of the Company’s principal materials suppliers, entered into an ordinary share purchase agreement, 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, 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 components 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) (“Hefei Shixi”), a Chinese limited partnership based in Hefei, China. Pursuant to such Partnership Agreement, on September 30, 2019, ACM Shanghai invested $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.
The components of long-term investments were as follows:
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TRADING SECURITIES |
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| TRADING SECURITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| TRADING SECURITIES |
NOTE 11 – 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.
ACM Shanghai’s investment is accounted for as trading securities, and is stated at market value which is classified as Level 2 of the hierarchy established under ASC No. 820 with valuations based on quoted prices for identical securities in active markets, less a discount applied to reflect the remaining lock-up period.
The components of trading securities were as follows:
Unrealized gain on trading securities amounted to $8,970 for the three and nine months ended September 30, 2020.
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FINANCIAL LIABILITY CARRIED AT FAIR VALUE |
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| FINANCIAL LIABILITY CARRIED AT FAIR VALUE [Abstract] | |||||||||||||||||||||||||
| FINANCIAL LIABILITY CARRIED AT FAIR VALUE |
NOTE 12 – 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 for 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 “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 Warrant. In March 2018 SMC exercised the Warrant in full, as a result of which (1) ACM issued 397,502 shares of Class A common stock to SMC, (2) SMC borrowed the funds to pay the 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 Warrant exercise price. Each of the SMC Note and the Intercompany Note bears interest at a rate of 3.01% per annum and matures on August 17, 2023. The SMC Note was secured by a pledge of the shares issued upon exercise of the Warrant.
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 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 are offsetting items in the Company’s consolidated balance sheet in accordance with Accounting Standards Codification 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 Warrant shares to ACM Research; and (iv) in exchange for such 242,681 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 Warrant shares. In a separate transaction in April 2020, ACM Shanghai repaid the remaining $1,820 of the SMC Investment in cash.
For the period beginning April 30, 2020 the SMC Consideration is accounted for as a financial liability, and the Company applies fair value option to measure the SMC Consideration in accordance with Accounting Standards Codification 825-15-4a. On April 30, 2020, the SMC Consideration was $9,715. The financial liability was remeasured to fair value as of the end of each of the reporting periods.
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 “SMC 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 SMC 2020 Warrant. The Company recognized a change in fair value of financial liability of $6,533 and $11,964 for the three and nine months ended September 30, 2020, respectively, which was charged to the consolidated statement of operations.
The SMC 2020 Warrant was initially measured at fair value at the issuance date and classified as equity permanently in accordance with Accounting Standards Codification 815. The fair value of the SMC 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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RELATED PARTY BALANCES AND TRANSACTIONS |
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| RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY BALANCES AND TRANSACTIONS |
NOTE 13 – RELATED PARTY BALANCES AND TRANSACTIONS
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COMMON STOCK |
9 Months Ended |
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Sep. 30, 2020 | |
| COMMON STOCK [Abstract] | |
| COMMON STOCK |
NOTE 14 – COMMON STOCK
ACM is 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. 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 nine months ended September 30, 2020 and 2019, ACM issued 592,946 and 193,642 shares of Class A common stock upon option exercises by employees and non-employees, respectively. 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 three months ended September 30, 2020 and 2019, ACM issued 407,043 and 89,015 shares, respectively, of Class A common stock upon option exercises by employees and non-employees.
During the nine months ended September 30, 2020, SMC transferred and cancelled its ownership of 242,681 shares of Class A common stock to ACM in exchange for the SMC 2020 Warrant (Note 12)
There were issued and outstanding 16,657,135 shares of Class A common stock and 1,802,606 shares of Class B common stock at September 30, 2020 and 16,182,151 shares of Class A common stock and 1,862,608 shares of Class B common stock at December 31, 2019.
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REDEEMABLE NON-CONTROLLING INTERESTS |
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| REDEEMABLE NON-CONTROLLING INTERESTS [Abstract] | ||||||||||||||||||||||||||
| REDEEMABLE NON-CONTROLLING INTERESTS |
NOTE 15 – REDEEMABLE NON-CONTROLLING INTERESTS
The components of the change in redeemable non-controlling interests for the nine months ended September 30, 2020 are presented in the following table:
Upon the submission of application documents by ACM Shanghai for the STAR Listing and the STAR IPO to the Shanghai Stock Exchange during the second quarter of 2020, the redemption feature of the private placement funding (Note 1) terminated and the aggregate proceeds of the funding therefore were reclassified from redeemable non-controlling interests to non-controlling interests. Further, upon the termination of such redemption feature, the Company released the aggregate proceeds of the private placement funding from reserved cash, which the Company previously had voluntarily imposed in light of a potential redemption.
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STOCK-BASED COMPENSATION |
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| STOCK-BASED COMPENSATION [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| STOCK-BASED COMPENSATION |
NOTE 16 – 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 currently 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 the 1998 Stock Option Plan and the 2016 Omnibus Incentive Plan and as standalone options. ACM granted stock options to employees under the 2016 Omnibus Incentive Plan during the nine months ended September 30, 2020. The vesting condition may consist of service period determined by the Board of Directors for s 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:
Employee Awards
The following table summarizes the Company’s employee share option activities during the nine months ended September 30, 2020:
As of September 30, 2020 and December 31, 2019, $9,697 and $4,712, 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 1.96 years and 1.47 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
Non-employee Awards
The following table summarizes ACM’s non-employee stock option activities during the nine months ended September 30, 2020:
As of September 30, 2020 and December 31, 2019, $235 and $406, 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 0.11 years and 0.23 years, respectively. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
The fair value of options granted to employee and non-employee with a service period based condition is estimated on the grant date using the Black-Scholes valuation model with the following assumptions.
The fair value of option granted to employee with market based condition is estimated on the grant date using the Monte Carlo simulation model with the following assumptions.
ACM Shanghai Option Grants
The following table summarizes the ACM Shanghai employee stock option activities during the nine months ended September 30, 2020:
During the three and nine months ended September 30, 2020, the Company recognized stock-based compensation expense of $84 and $250, respectively, related to stock option grants of ACM Shanghai. As of September 30, 2020, $911 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 2.75 years. Total recognized compensation cost may be adjusted for future changes in estimated forfeitures.
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INCOME TAXES |
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| INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES |
NOTE 17 – 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 15% 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 $1,747 and $328 during the three months ended September 30, 2020 and 2019, respectively, and $(416) and $(667) during the nine months ended September 30, 2020 and 2019, respectively.
As of September 30, 2020, the Company’s total unrecognized tax benefits were $155, which would not 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, 2020.
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, 2009 through December 31, 2019. 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 15% 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 value of client equity securities received for services and the treatment of stock-based compensation. The Company’s three PRC subsidiaries, ACM Shanghai, ACM Wuxi and ACM Shengwei, are liable for PRC corporate income taxes at the rates of 15%, 25% and 25%, 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.
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 2009 through 2019. 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. The U.S. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted on March 27, 2020. It contains several provisions that may have financial statement effects. Key aspects of the CARES Act include the following:
The CARES Act is not expected to have a material impact on income taxes in the Company’s consolidated financial statements.
Income tax expense was as follows:
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Sep. 30, 2020 | |
| COMMITMENTS AND CONTINGENCIES [Abstract] | |
| COMMITMENTS AND CONTINGENCIES |
NOTE 18 – COMMITMENTS AND CONTINGENCIES
The Company leases offices under non-cancelable operating lease agreements. See note 8 for future minimum lease payments under non-cancelable operating lease agreements with initial terms of one year or more.
As of September 30, 2020, the Company had $1,369 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 Lin-gang 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.
From time to time the Company is subject to legal proceedings, including claims in the ordinary course of business and claims with respect to patent infringements. As of September 30, 2020, the Company did not have any legal proceedings.
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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| SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation and Principles of Consolidation |
Basis of Presentation and Principles of Consolidation
The Company’s consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its subsidiaries, 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 and indirectly, controls more than one half 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 unaudited condensed consolidated financial statements herein should be read in conjunction with the historical consolidated financial statements of the Company for the year ended December 31, 2019 included in ACM’s Annual Report on Form 10-K for the year ended December 31, 2019.
The accompanying condensed consolidated balance sheet as of September 30, 2020, condensed consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2020 and 2019, condensed consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2020 and 2019, and condensed consolidated statements of cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. In the opinion of management, the 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, 2020 and the results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for any future period.
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| COVID-19 Assessment |
COVID-19 Assessment
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| Use of Estimates |
Use of Estimates
The preparation of condensed 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 revenue and expenses during the reported period in the condensed 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 stock-based compensation arrangements and valuation of financial 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 believes that the estimates, judgments and assumptions are reasonable, based on information available at the time they are made. Actual results could differ materially from those estimates.
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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 is 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, 2020 and 2019, 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 that could share in ACM’s earnings. ACM’s potential dilutive securities consist of warrants and stock options for the three and nine months ended September 30, 2020 and 2019.
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| Land Use Rights, Net |
Land use right, net
The land use right represents the cost to purchase a right to use state-owned land in the PRC with lease terms of 50 years expiring in 2070, for which an upfront lump-sum payment was made during the first nine months of 2020. The Company classifies the land use right as non-current assets on the condensed consolidated balance sheets.
The land use right is carried at cost less accumulated amortization and impairment losses, if any. Amortization is computed using the straight-line method over the term specified in the land use right certificate, which is 50 years.
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| Concentration of Credit Risk |
Concentration of Credit Risk
The Company is potentially subject to concentrations of credit risks in its accounts receivable. For the nine months ended September 30, 2020 and 2019, the Company’s three largest customers accounted for 79.8% and 72.3%, respectively, of revenue. For the three months ended September 30, 2020 and 2019, the Company’s three largest customers accounted for 72.1% and 98.6%, respectively, of revenue. As of September 30, 2020 and December 31, 2019, the Company’s three largest customers accounted for 76.9% and 67.7%, 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 August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2018-13, Fair Value Measurement (Topic 820), which eliminates, adds and modifies certain disclosure requirements for fair value measurements. The modified standard eliminates the requirement to disclose changes in unrealized gains and losses included in earnings for recurring Level 3 fair value measurements and requires changes in unrealized gains and losses be included in other comprehensive income for recurring Level 3 fair value measurements of instruments. The standard also requires the disclosure of the range and weighted average used to develop significant unobservable inputs and how weighted average is calculate for recurring and nonrecurring Level 3 fair value measurements. The amendment is effective for fiscal years beginning after December 15, 2019 and interim periods within that fiscal year, with early adoption permitted. The adoption of ASU 2018-13 did not have a material impact on the Company’s 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 as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is a smaller reporting company, implementation is not needed until 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.
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 will simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. For public business entities, the amendments in this ASU are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is evaluating the impact of the adoption of ASU 2019-12, but does not expect it to have a material impact on income taxes as reported in its consolidated financial statements.
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DESCRIPTION OF BUSINESS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic and Diluted Net Income per Common Share |
Basic and diluted net income per common share is calculated as follows:
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ACCOUNTS RECEIVABLE (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||
| ACCOUNTS RECEIVABLE [Abstract] | |||||||||||||||||||||||||||||||||||||
| Accounts Receivable |
At September 30, 2020 and December 31, 2019, accounts receivable consisted of the following:
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INVENTORIES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| INVENTORIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Inventory |
At September 30, 2020 and December 31, 2019, inventory consisted of the following:
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PROPERTY, PLANT AND EQUIPMENT, NET (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| PROPERTY, PLANT AND EQUIPMENT, NET [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property, Plant and Equipment |
At September 30, 2020 and December 31, 2019, property, plant and equipment consisted of the following:
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SHORT-TERM BORROWINGS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SHORT-TERM BORROWINGS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Borrowings |
At September 30, 2020 and December 31, 2019, short-term borrowings consisted of the following:
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OTHER PAYABLE AND ACCRUED EXPENSES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Payable and Accrued Expenses |
At September 30, 2020 and December 31, 2019, other payable and accrued expenses consisted of the following:
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LEASES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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-month periods ended September 30, 2020 and 2019, respectively:
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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, 2020:
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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, 2020 and December 31, 2019:
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OTHER LONG-TERM LIABILITIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OTHER LONG-TERM LIABILITIES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Long-Term Liabilities |
Other long-term liabilities represent subsidies that we have received from governmental authorities, including China’s Ministry of Science and Technology, the Shanghai Municipal Commission of Economy and Information, and the Shanghai Science and Technology Committee, for development and commercialization of certain technology but have not yet earned and recognized. As of September 30, 2020 and December 31, 2019, other long-term liabilities consisted of the following unearned government subsidies:
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LONG TERM INVESTMENTS (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| LONG TERM INVESTMENTS [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Components of Long-Term Investment |
The components of long-term investments were as follows:
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TRADING SECURITIES (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
| TRADING SECURITIES [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Components of Trading Securities |
The components of trading securities were as follows:
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FINANCIAL LIABILITY CARRIED AT FAIR VALUE (Tables) |
9 Months Ended | ||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||
| FINANCIAL LIABILITY CARRIED AT FAIR VALUE [Abstract] | |||||||||||||||||||||||||
| Assumptions Used to Determine Fair Value of Warrants |
The SMC 2020 Warrant was initially measured at fair value at the issuance date and classified as equity permanently in accordance with Accounting Standards Codification 815. The fair value of the SMC 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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RELATED PARTY BALANCES AND TRANSACTIONS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| RELATED PARTY BALANCES AND TRANSACTIONS [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Balances and Transactions |
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REDEEMABLE NON-CONTROLLING INTERESTS (Tables) |
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Sep. 30, 2020 | ||||||||||||||||||||||||||
| REDEEMABLE NON-CONTROLLING INTERESTS [Abstract] | ||||||||||||||||||||||||||
| Components of Change in Redeemable Non-controlling Interests |
The components of the change in 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, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 and non-employee with a service period based condition is estimated on the grant date using the Black-Scholes valuation model with the following assumptions.
The fair value of option granted to employee with market based condition is estimated on the grant date using the Monte Carlo simulation model with the following assumptions.
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| Employee Share Option [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, 2020:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Employee Share Option [Member] | ACM Shanghai [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, 2020:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Non-Employee Stock Option [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Share Option Activities |
The following table summarizes ACM’s non-employee stock option activities during the nine months ended September 30, 2020:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| INCOME TAXES [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Expense |
Income tax expense was as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
| Numerator [Abstract] | ||||
| Net income | $ 10,020 | $ 9,089 | $ 12,479 | $ 15,257 |
| Net income attributable to non-controlling interests and redeemable non-controlling interests | 1,393 | 307 | 2,228 | 307 |
| Net income attributable to ACM Research, Inc. | $ 8,627 | $ 8,782 | $ 10,251 | $ 14,950 |
| Weighted average shares outstanding, basic (in shares) | 18,201,943 | 16,999,746 | 18,124,665 | 16,381,944 |
| Effect of dilutive securities (in shares) | 3,353,353 | 2,354,468 | 3,132,996 | 2,317,066 |
| Weighted average shares outstanding, diluted (in shares) | 21,555,296 | 19,354,214 | 21,257,661 | 18,699,010 |
| Net income per common share: | ||||
| Basic (in dollars per share) | $ 0.47 | $ 0.52 | $ 0.57 | $ 0.91 |
| Diluted (in dollars per share) | $ 0.40 | $ 0.45 | $ 0.48 | $ 0.80 |
SIGNIFICANT ACCOUNTING POLICIES, Land Use Rights, Net (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2020 | |
| SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
| Right to use land lease term | 50 years |
SIGNIFICANT ACCOUNTING POLICIES, Concentration of Credit Risk (Details) - Customer |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
| Accounts Receivable [Member] | ||||
| Concentration of Credit Risk [Abstract] | ||||
| Number of major customers | 3 | 3 | 3 | 3 |
| Concentration of credit risk | 72.10% | 98.60% | 79.80% | 72.30% |
| Revenue Benchmark [Member] | ||||
| Concentration of Credit Risk [Abstract] | ||||
| Number of major customers | 3 | 3 | ||
| Concentration of credit risk | 76.90% | 67.70% | ||
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Accounts Receivable [Abstract] | ||
| Accounts receivable | $ 59,796 | $ 31,091 |
| Less: allowance for doubtful accounts | 0 | 0 |
| Total | 59,796 | 31,091 |
| Accounts receivable pledged as collateral for borrowings | $ 0 | $ 1,433 |
INVENTORIES (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| Inventory [Abstract] | ||
| Raw materials | $ 27,254 | $ 15,105 |
| Work in process | 13,882 | 10,407 |
| Finished goods | 23,046 | 19,284 |
| Total inventory | $ 64,182 | $ 44,796 |
PROPERTY, PLANT AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Property, Plant and Equipment [Abstract] | |||||
| Total cost | $ 6,667 | $ 6,667 | $ 6,095 | ||
| Less: Total accumulated depreciation | (3,751) | (3,751) | (3,077) | ||
| Construction in progress | 3,058 | 3,058 | 601 | ||
| Total property, plant and equipment, net | 5,974 | 5,974 | 3,619 | ||
| Depreciation expense | 195 | $ 176 | 569 | $ 528 | |
| Manufacturing Equipment [Member] | |||||
| Property, Plant and Equipment [Abstract] | |||||
| Total cost | 4,093 | 4,093 | 3,902 | ||
| Office Equipment [Member] | |||||
| Property, Plant and Equipment [Abstract] | |||||
| Total cost | 926 | 926 | 627 | ||
| Transportation Equipment [Member] | |||||
| Property, Plant and Equipment [Abstract] | |||||
| Total cost | 177 | 177 | 124 | ||
| Leasehold Improvement [Member] | |||||
| Property, Plant and Equipment [Abstract] | |||||
| Total cost | $ 1,471 | $ 1,471 | $ 1,442 | ||
OTHER PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
|---|---|---|
| OTHER PAYABLE AND ACCRUED EXPENSES [Abstract] | ||
| Accrued commissions | $ 7,785 | $ 4,082 |
| Accrued warranty | 3,449 | 2,811 |
| Accrued payroll | 2,960 | 2,092 |
| Accrued professional fees | 40 | 165 |
| Accrued machine testing fees | 1,481 | 1,456 |
| Others | 2,779 | 2,268 |
| Total | $ 18,494 | $ 12,874 |
LEASES (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Components of lease expense [Abstract] | |||||
| Operating lease cost | $ 384 | $ 363 | $ 1,139 | $ 1,064 | |
| Short-term lease cost | 73 | 92 | 170 | 117 | |
| Lease cost | 457 | 455 | 1,309 | 1,181 | |
| Cash paid for amounts included in the measurement of lease liabilities [Abstract] | |||||
| Operating cash outflow from operating leases | 457 | $ 455 | 1,309 | $ 1,181 | |
| Maturities of lease liabilities [Abstract] | |||||
| 2020 | 390 | 390 | |||
| 2021 | 1,592 | 1,592 | |||
| 2022 | 1,580 | 1,580 | |||
| 2023 | 912 | 912 | |||
| 2024 | 872 | 872 | |||
| 2025 | 22 | 22 | |||
| Total lease payments | 5,368 | 5,368 | |||
| Less: interest | (800) | (800) | |||
| Present value of lease liabilities | $ 4,568 | $ 4,568 | |||
| Weighted average remaining lease terms and discount rates [Abstract] | |||||
| Weighted average remaining lease term | 3 years 8 months 12 days | 3 years 8 months 12 days | 3 years 7 days | ||
| Weighted average discount rate | 5.29% | 5.29% | 5.43% | ||
TRADING SECURITIES (Details) $ in Thousands, ¥ in Millions |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Jun. 18, 2020
USD ($)
|
Jun. 18, 2020
CNY (¥)
|
Dec. 31, 2019
USD ($)
|
|
| Trading securities listed in Shanghai Stock Exchange [Abstract] | |||||
| Cost | $ 14,680 | $ 14,680 | $ 0 | ||
| Market value | 23,888 | 23,888 | $ 0 | ||
| Unrealized gain on trading securities | $ 8,970 | $ 8,970 | |||
| Qingdao LP [Member] | |||||
| Investments [Abstract] | |||||
| Total capital fund of limited partnership | $ 315,000 | ¥ 2,224 | |||
| Investment in partnership | $ 14,200 | ¥ 100 | |||
| 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, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Related Party Transaction [Abstract] | |||||
| Accounts payable | $ 3,806 | $ 3,806 | $ 1,215 | ||
| Purchase of materials | 4,628 | $ 2,852 | 10,665 | $ 7,848 | |
| Service fee charged by | 36 | 0 | 226 | 0 | |
| Ninebell Co., Ltd [Member] | |||||
| Related Party Transaction [Abstract] | |||||
| Prepaid expenses | 2,272 | 2,272 | 348 | ||
| Accounts payable | 3,197 | 3,197 | 727 | ||
| Purchase of materials | 4,029 | 2,591 | 9,552 | 7,395 | |
| Service fee charged by | 22 | 0 | 22 | 0 | |
| Shengyi Semiconductor Technology Co., Ltd [Member] | |||||
| Related Party Transaction [Abstract] | |||||
| Accounts payable | 609 | 609 | $ 488 | ||
| Purchase of materials | 599 | 261 | 1,113 | 453 | |
| Service fee charged by | $ 14 | $ 0 | $ 204 | $ 0 | |
COMMON STOCK (Details) |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
|---|---|---|---|---|---|---|---|
|
Apr. 30, 2020
shares
|
Aug. 31, 2019
shares
|
Sep. 30, 2020
Vote
$ / shares
shares
|
Sep. 30, 2019
shares
|
Sep. 30, 2020
Vote
$ / shares
shares
|
Sep. 30, 2019
shares
|
Dec. 31, 2019
$ / shares
shares
|
|
| Class of Stock [Abstract] | |||||||
| Number of shares cancelled (in shares) | 242,681 | 242,681 | |||||
| SMC [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Share cancellation (in shares) | 242,681 | 154,821 | |||||
| Common Class A [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 | 50,000,000 | ||||
| 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) | 16,657,135 | 16,657,135 | 16,182,151 | ||||
| Common stock, shares outstanding (in shares) | 16,657,135 | 16,657,135 | 16,182,151 | ||||
| Common Class A [Member] | SMC [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Share cancellation (in shares) | 242,681 | 242,681 | |||||
| Common Class A [Member] | Common Stock [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Exercise of common stock warrant issued (in shares) | 64,717 | ||||||
| Stock issued upon exercise of stock options (in shares) | 407,043 | 89,015 | 592,946 | 193,642 | |||
| Share cancellation (in shares) | 214,286 | 242,681 | 214,286 | ||||
| Common Class B [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Common stock, shares authorized (in shares) | 2,409,738 | 2,409,738 | 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) | 1,802,606 | 1,802,606 | 1,862,608 | ||||
| Common stock, shares outstanding (in shares) | 1,802,606 | 1,802,606 | 1,862,608 | ||||
| Common Class B [Member] | Common Stock [Member] | |||||||
| Class of Stock [Abstract] | |||||||
| Exercise of common stock warrant issued (in shares) | 0 | ||||||
| Stock issued upon exercise of stock options (in shares) | 0 | 0 | 0 | 0 | |||
| Share cancellation (in shares) | 0 | 0 | 0 | ||||
REDEEMABLE NON-CONTROLLING INTERESTS (Details) $ in Thousands |
9 Months Ended |
|---|---|
|
Sep. 30, 2020
USD ($)
| |
| 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, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | $ 2,779 | $ 1,557 | $ 4,323 | $ 2,919 |
| Employee Stock Purchase Plan [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 2,651 | 1,329 | 3,717 | 1,841 |
| Employee Stock Purchase Plan [Member] | ACM Shanghai [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 84 | 0 | 250 | 0 |
| Non-Employee Stock Purchase Plan [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 44 | 228 | 356 | 1,078 |
| Cost of Revenue [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 44 | 154 | 132 | 213 |
| Sales and Marketing Expense [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 237 | 172 | 495 | 252 |
| Research and Development Expense [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | 193 | 759 | 568 | 939 |
| General and Administrative Expense [Member] | ||||
| Stock-based Compensation Expense [Abstract] | ||||
| Stock-based compensation expense | $ 2,305 | $ 472 | $ 3,128 | $ 1,515 |
STOCK-BASED COMPENSATION, Share Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | 12 Months Ended | ||
|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
| Weighed Average Remaining Contractual Term [Abstract] | |||||
| Stock-based compensation expense | $ 2,779 | $ 1,557 | $ 4,323 | $ 2,919 | |
| Employee Share Option [Member] | |||||
| Number of Option Share [Roll Forward] | |||||
| Outstanding, beginning of period (in shares) | 2,994,063 | ||||
| Granted (in shares) | 778,399 | ||||
| Exercised (in shares) | (327,917) | ||||
| Expired (in shares) | 0 | ||||
| Forfeited/cancelled (in shares) | (40,515) | ||||
| Outstanding, end of period (in shares) | 3,404,030 | 3,404,030 | 2,994,063 | ||
| Vested and exercisable (in shares) | 2,061,793 | 2,061,793 | |||
| Weighted Average Grant Date Fair Value [Abstract] | |||||
| Outstanding at beginning of period (in dollars per share) | $ 2.59 | ||||
| Granted (in dollars per share) | 11.98 | ||||
| Exercised (in dollars per share) | 1.56 | ||||
| Expired (in dollars per share) | 0 | ||||
| Forfeited/cancelled (in dollars per share) | 4.94 | ||||
| Outstanding at end of period (in dollars per share) | $ 4.81 | 4.81 | $ 2.59 | ||
| Weighted Average Exercise Price [Abstract] | |||||
| Outstanding, beginning of period (in dollars per share) | 6.77 | ||||
| Granted (in dollars per share) | 28.70 | ||||
| Exercised (in dollars per share) | 4.33 | ||||
| Expired (in dollars per share) | 0 | ||||
| Forfeited/cancelled (in dollars per share) | 13.04 | ||||
| Outstanding, end of period (in dollars per share) | $ 11.95 | $ 11.95 | $ 6.77 | ||
| Weighed Average Remaining Contractual Term [Abstract] | |||||
| Outstanding weighed average remaining contractual term | 7 years 1 month 20 days | 7 years 18 days | |||
| Stock-based compensation expense | $ 2,651 | 1,329 | $ 3,717 | 1,841 | |
| Unrecognized employee stock-based compensation expense | $ 9,697 | $ 9,697 | $ 4,712 | ||
| Weighted-average period over which unrecognized compensation is expected to be recognized | 1 year 11 months 15 days | 1 year 5 months 19 days | |||
| Employee Share Option [Member] | ACM Shanghai [Member] | |||||
| Number of Option Share [Roll Forward] | |||||
| Outstanding, beginning of period (in shares) | 0 | ||||
| Granted (in shares) | 5,869,808 | ||||
| Exercised (in shares) | 0 | ||||
| Expired (in shares) | 0 | ||||
| Forfeited/cancelled (in shares) | (330,770) | ||||
| Outstanding, end of period (in shares) | 5,539,038 | 5,539,038 | 0 | ||
| Vested and exercisable (in shares) | 0 | 0 | |||
| Weighted Average Grant Date Fair Value [Abstract] | |||||
| Outstanding at beginning of period (in dollars per share) | $ 0 | ||||
| Granted (in dollars per share) | 0.22 | ||||
| Exercised (in dollars per share) | 0 | ||||
| Expired (in dollars per share) | 0 | ||||
| Forfeited/cancelled (in dollars per share) | 0.23 | ||||
| Outstanding at end of period (in dollars per share) | $ 0.22 | 0.22 | $ 0 | ||
| Weighted Average Exercise Price [Abstract] | |||||
| Outstanding, beginning of period (in dollars per share) | 0 | ||||
| Granted (in dollars per share) | 1.87 | ||||
| Exercised (in dollars per share) | 0 | ||||
| Expired (in dollars per share) | 0 | ||||
| Forfeited/cancelled (in dollars per share) | 1.87 | ||||
| Outstanding, end of period (in dollars per share) | $ 1.87 | $ 1.87 | $ 0 | ||
| Weighed Average Remaining Contractual Term [Abstract] | |||||
| Outstanding weighed average remaining contractual term | 3 years 9 months 3 days | 0 years | |||
| Stock-based compensation expense | $ 84 | 0 | $ 250 | 0 | |
| Non-Employee Stock Option [Member] | |||||
| Number of Option Share [Roll Forward] | |||||
| Outstanding, beginning of period (in shares) | 1,101,613 | ||||
| Granted (in shares) | 20,000 | ||||
| Exercised (in shares) | (265,029) | ||||
| Expired (in shares) | 0 | ||||
| Forfeited/cancelled (in shares) | (111) | ||||
| Outstanding, end of period (in shares) | 856,473 | 856,473 | 1,101,613 | ||
| Vested and exercisable (in shares) | 819,819 | 819,819 | |||
| Weighted Average Grant Date Fair Value [Abstract] | |||||
| Outstanding at beginning of period (in dollars per share) | $ 0.82 | ||||
| Granted (in dollars per share) | 10.29 | ||||
| Exercised (in dollars per share) | 0.91 | ||||
| Forfeited/cancelled (in dollars per share) | 0.30 | ||||
| Outstanding at end of period (in dollars per share) | $ 1.01 | 1.01 | $ 0.82 | ||
| Weighted Average Exercise Price [Abstract] | |||||
| Outstanding, beginning of period (in dollars per share) | 2.69 | ||||
| Granted (in dollars per share) | 25.60 | ||||
| Exercised (in dollars per share) | 3.34 | ||||
| Forfeited/cancelled (in dollars per share) | 0.75 | ||||
| Outstanding, end of period (in dollars per share) | $ 3.02 | $ 3.02 | $ 2.69 | ||
| Weighed Average Remaining Contractual Term [Abstract] | |||||
| Outstanding weighed average remaining contractual term | 5 years 1 month 9 days | 5 years 10 months 6 days | |||
| Stock-based compensation expense | $ 44 | $ 228 | $ 356 | $ 1,078 | |
| Unrecognized employee stock-based compensation expense | 235 | $ 235 | $ 406 | ||
| Weighted-average period over which unrecognized compensation is expected to be recognized | 1 month 9 days | 2 months 23 days | |||
| Non-Employee Stock Option [Member] | ACM Shanghai [Member] | |||||
| Weighed Average Remaining Contractual Term [Abstract] | |||||
| Unrecognized employee stock-based compensation expense | $ 911 | $ 911 | |||
| Weighted-average period over which unrecognized compensation is expected to be recognized | 2 years 9 months | ||||
STOCK-BASED COMPENSATION, Assumptions Used to Determine Fair Value of Share Options Granted (Details) - $ / shares |
9 Months Ended | 12 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|||||||||||
| Employee Share Option [Member] | Market Based [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Fair value of common share (in dollars per share) | [1] | $ 22.07 | ||||||||||
| Volatility | [2] | 45.10% | ||||||||||
| Risk-free interest rate | [3] | 2.68% | ||||||||||
| Expected dividend | [4] | 0.00% | ||||||||||
| Employee Share Option [Member] | Market Based [Member] | Minimum [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Expected term in years | [5] | 9 years 2 months 12 days | ||||||||||
| Employee Share Option [Member] | Market Based [Member] | Maximum [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Expected term in years | [5] | 9 years 9 months 18 days | ||||||||||
| Employee and Non-employee Stock Option [Member] | Service Period Based [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Expected term in years | [5] | 6 years 3 months | ||||||||||
| Expected dividend | [4] | 0.00% | 0.00% | |||||||||
| Employee and Non-employee Stock Option [Member] | Service Period Based [Member] | Minimum [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Fair value of common share (in dollars per share) | [1] | $ 22.07 | $ 13.64 | |||||||||
| Expected term in years | [5] | 5 years 6 months | ||||||||||
| Volatility | [2] | 42.17% | 39.91% | |||||||||
| Risk-free interest rate | [3] | 0.27% | 1.69% | |||||||||
| Employee and Non-employee Stock Option [Member] | Service Period Based [Member] | Maximum [Member] | ||||||||||||
| Fair Value of Options Granted [Abstract] | ||||||||||||
| Fair value of common share (in dollars per share) | [1] | $ 85.27 | $ 16.81 | |||||||||
| Expected term in years | [5] | 6 years 3 months | ||||||||||
| Volatility | [2] | 48.15% | 40.35% | |||||||||
| Risk-free interest rate | [3] | 0.82% | 2.46% | |||||||||
| ||||||||||||
INCOME TAXES (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
Subsidiary
|
Sep. 30, 2019
USD ($)
|
|
| Income Taxes [Abstract] | ||||
| Statutory U.S federal income tax rate | 21.00% | |||
| Total income tax benefit (expense) | $ 1,747 | $ 328 | $ (416) | $ (667) |
| Unrecognized tax benefits | 155 | 155 | ||
| Interest or penalties | 0 | |||
| Income Tax Expense [Abstract] | ||||
| Total income tax benefit (expense) | $ 1,747 | $ 328 | $ (416) | $ (667) |
| China [Member] | ||||
| Income Taxes [Abstract] | ||||
| Number of subsidiaries | Subsidiary | 3 | |||
| Effective period of preferential income tax rate | 3 years | |||
| China [Member] | ACM Research (Shanghai), Inc. [Member] | ||||
| Income Taxes [Abstract] | ||||
| Foreign corporate tax rate | 15.00% | |||
| China [Member] | ACM Research (Wuxi), Inc. [Member] | ||||
| Income Taxes [Abstract] | ||||
| Foreign corporate tax rate | 25.00% | |||
| China [Member] | Shengwei Research (Shanghai), Inc. [Member] | ||||
| Income Taxes [Abstract] | ||||
| Foreign corporate tax rate | 25.00% | |||
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands, ¥ in Millions |
9 Months Ended | |
|---|---|---|
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2020
CNY (¥)
|
|
| COMMITMENTS AND CONTINGENCIES [Abstract] | ||
| Open capital commitments | $ 1,369 | |
| Required liquidate damage value | $ 63,400 | ¥ 450.0 |
| Land use rights period | 6 years | 6 years |
| Annual total taxes | $ 22,000 | ¥ 157.6 |
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