ACM Research, Inc.

(in thousands, except percents, share and per share data)

NOTE 1 –DESCRIPTION OF BUSINESS

ACM Research, Inc. (“ACM” or “ACM Research”) and its subsidiaries (collectively with ACM, the “Company”) develop, manufacture and sell capital equipment, or tools to the global semiconductor industry.

The Company has direct or indirect interests in the following subsidiaries:

(1) ACM Research (Lingang) Inc. is the English name referred to by its Chinese language name, Shengwei Research (Shanghai), Inc., or ACM Shengwei in prior filings. ACM Research (Lingang), Inc. and Shengwei Research (Shanghai), Inc. refer to the same entity.

NOTE 2 –SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company’s consolidated financial statements include the accounts of ACM (ACM Research) and its subsidiaries, including ACM Shanghai and its subsidiaries. ACM’s subsidiaries are those entities in which ACM, directly and indirectly, controls more than a majority of the voting power. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Certain reclassifications have been made to the amounts for prior years to conform to the current year’s presentation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. The Company’s significant accounting estimates and assumptions include, but are not limited to, those used for revenue recognition and deferred revenue, stock-based compensation arrangements, uncertain tax positions, warranty liabilities, allowance for credit losses and inventory provision.

Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates and assumptions.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and bank deposits that are unrestricted as to withdrawal and use, and highly liquid investments with an original maturity date of three months or less at the date of purchase. At times, cash deposits may exceed government-insured limits.

The following table presents cash and cash equivalents, according to jurisdiction as of December 31, 2025 and 2024:

Cash held in the U.S. exceeds the Federal Deposit Insurance Corporation (“FDIC”) insurance limits and is subject to risk of loss. No losses have been experienced to date.

Cash amounts at the banks in mainland China are subject to a series of risk control regulatory standards from mainland China bank regulatory authorities. ACM’s subsidiaries in mainland China are required to obtain approval from the State Administration of Foreign Exchange (“SAFE”) to transfer funds into or out of mainland China. SAFE requires a valid agreement to approve the transfers, which are processed through a bank. Other than these mainland China foreign exchange restrictions, ACM’s subsidiaries in mainland China are not subject to any mainland China restrictions and limitations on its ability to transfer funds to ACM Research or among our other subsidiaries. However, cash held by ACM’s subsidiaries in mainland China exceeds applicable insurance limits and is subject to risk of loss, although no such losses have been experienced to date.

ACM California periodically procures goods and services on behalf of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM California in accordance with applicable transfer pricing arrangements. For the years ended December 31, 2025, 2024 and 2023, cash payments from ACM Shanghai to ACM California for the procurement of goods and services were $13,683, $21,285, and $42,517, respectively. ACM California periodically borrows funds for working capital advances from its direct parent, CleanChip. ACM California repays or renews these intercompany loans in accordance with their terms.

For sales through CleanChip and ACM Research, a certain amount of sales or advance payments from customer proceeds is repatriated back to ACM Shanghai in accordance with applicable transfer pricing arrangements in the ordinary course of business. ACM Research provides support for tools under warranty to certain customers located in the U.S., Europe and other regions outside of mainland China on behalf of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM Research in accordance with applicable transfer pricing arrangements.

Cash held in Hong Kong exceeds the Hong Kong Deposit Insurance Corporation insurance limits, and the cash held in the United States exceeds the United States Deposit Insurance Corporation insurance limits and therefore, cash in these locations is subject to risk of loss. No losses have been experienced to date. There are no additional restrictions for the transfer of cash from bank accounts in the U.S., South Korea, Singapore and Hong Kong.

For the years ended December 31, 2025, 2024 and 2023, after deduction of withholding tax, ACM Shanghai paid $29,238, $28,480, and $19,200 in dividends to ACM Research, respectively.

For the years ended December 31, 2025, 2024 and 2023, with the exception of sales and services-related transfer-pricing payments in the ordinary course of business, and dividends paid by ACM Shanghai to the stockholders of ACM Shanghai (including ACM Research), no transfers, or distributions have been made between ACM Research and its subsidiaries, including ACM Shanghai, or to holders of ACM Research Class A common stock.

Time Deposits

Time deposits are denominated in Chinese Renminbi (“RMB”) and U.S. dollars and deposited with banks in mainland China with fixed terms and interest rates which cannot be withdrawn before maturity, and are presented as short-term deposits and long-term deposits in the consolidated financial statements based on their expected time of collection. They are also subject to the risk control regulatory standards described above upon maturity.

As of December 31, 2025 the Company had time deposits denominated in RMB of 341,463 and denominated in U.S. dollars of $25,128, respectively. As of December 31, 2024, the Company had time deposits denominated in RMB of 13,275 and denominated in U.S. Dollar of $17,277, respectively. Time deposits held as of December 31, 2025 had interest rates of 1.2% to 3.75% and mature between April and December 2026.

Restricted Cash

As of December 31, 2025 and 2024, all of the Company's restricted cash was held by financial institutions located in mainland China, Hong Kong and South Korea, and mainly represents cash secured to guarantee delivery of tools.

Accounts Receivable, Net

In determining the amount of the allowance for credit losses, the Company assesses collectability by reviewing accounts receivable on a collective basis where similar characteristics exist and on an individual basis when the Company identifies specific customers with known disputes or collectability issues. The Company considers historical collectability based on past due status, the age of the accounts receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers.

Inventories, Net

Inventories consist of raw materials (including consumable supplies such as spare parts), work-in-process and finished goods. Inventories are stated at the lower of cost or net realizable value (NRV). Cost is primarily determined by using the weighted average cost method for raw materials, which make up the majority of the cost of work-in-process and finished goods. At the end of each reporting period, the Company performs a recoverability assessment. Inventory write-downs are recorded in cost of goods sold for excess, slow-moving or obsolete inventories, as well as for any inventories where the estimated NRV is less than cost.

Property, Plant and Equipment, Net

Property, plant and equipment are recorded at cost less accumulated depreciation. Depreciation begins when the asset is placed in service and is calculated by using the straight-line method over the estimated useful life of an asset (or, if shorter, over the lease term). Betterments or renewals are capitalized when incurred.

Estimated useful lives of assets are as follows:

Expenditures for maintenance and repairs that neither materially add to the value of the property nor appreciably prolong the life of the property are charged to expense as incurred. Upon retirement or sale of an asset, the cost of the asset and the related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to income.

Impairment of Long-Lived Assets

Long-lived assets are evaluated for impairment whenever events or changes in circumstance indicate that the carrying value of the assets may not be fully recoverable or that the useful life of the assets is shorter than the Company had originally estimated. When these events or changes occur, the Company evaluates the impairment of the long-lived assets by comparing the carrying value of the assets to an estimate of future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an impairment loss based on the excess of the carrying value over the fair value.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. When readily determinable, the Company uses the implicit rate at lease commencement in determining the present value of lease payments. As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term. The Company has also elected the practical expedient for the short-term lease exemption for contracts with lease terms of 12 months or less.

Revenue Recognition

The Company derives revenue principally from the sale of semiconductor capital equipment, or tools. Revenue from contracts with customers is recognized using the following five steps pursuant ASC Topic 606, Revenue from Contracts with Customers:

1. Identify the contract(s) with a customer;

2. Identify the performance obligations in the contract;

3. Determine the transaction price;

4. Allocate the transaction price to the performance obligations in the contract; and

5. Recognize revenue when (or as) the entity satisfies a performance obligation.

Identify the contract(s) with a customer. The Company generally considers approved sales contracts, provided it has approval and commitment from the customer, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collection is probable. Collectability is assessed based on management’s assessment of the customer’s creditworthiness, historical payment experience, as well as other relevant factors.

Identify the performance obligations in the contract. Performance obligations are accounted for separately if they are distinct. A good or service is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and the good or service is distinct in the context of the contract. The Company’s performance obligations include sales of tools and spare parts. In addition, customer contracts can contain provisions for installation, training, and other items which have been deemed immaterial in the context of the contract.

Determine the transaction price. The transaction price for the Company’s contracts with customers generally does not include variable consideration.

Allocate the transaction price to the performance obligations in the contract. For contracts that contain multiple performance obligations, primarily those that include multiple tools, or spare parts sold together with tools, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. The Company recognizes contract liabilities associated with unsatisfied performance obligations, based on the stand-alone observable selling prices or using an expected cost-plus-margin approach when a stand-alone selling price is not directly observable, and recognizes revenue as the related performance obligations are satisfied.

Recognize revenue when, or as, a performance obligation is satisfied. The Company recognizes revenue from tools at a point in time, when the Company has satisfied its performance obligation. The Company’s sales arrangements do not include a general right of return. For shipments made to a customer that has not previously accepted a specific type of tool (“first tools”), revenues are recognized when the tools are accepted by the customer. For shipments made to a customer that have previously accepted a specific type of tool ("repeat shipment"), revenues are recognized upon shipment or delivery as the Company can objectively demonstrate that the tools meet all the required customer specifications. Revenue from spare parts are recognized when the customer has received the parts.

The Company’s warranties provide assurance that its products will function as expected and in accordance with certain specifications. The Company’s warranties are intended to safeguard the customer against existing defects and do not provide any incremental service to the customer. They are not separate performance obligations and are accounted for under FASB ASC Topic 460, Guarantees.

For sales of tools, payment terms and conditions vary by customer and are based on the billing schedule established in the Company’s contracts with customers, but the contract generally requires advanced payments for a portion of the transaction price prior to delivery and payment of the remaining transaction price after the tools are accepted by customers; therefore, the Company has determined that its contracts do not include a significant financing component. For sales of spare parts, the contract generally requires payment within 30 days after receipt. Contract liabilities include advances from customers and deferred revenue. Payments received from customers prior to the transfer of control of the tools are recorded as advances from customers. Payments received from customers related to the allocated transaction price for the unsatisfied performance obligations are recorded as deferred revenue.

Cost of Revenue

Cost of revenue primarily consists of direct materials, comprised principally of parts used in assembling equipment, direct labor, including salaries and other labor related expenses attributable to the Company’s manufacturing department; allocated overhead cost and inventory provision.

Research and Development Costs

Research and development costs relating to the development of new products and processes, significant improvements to existing products to achieve new features and the development of new tools for evaluation by customers during the product demonstration process, are expensed as incurred.

Warranty

The Company generally provides a standard assurance type warranty ranging from 12 to 36 months and covering replacement of its product during the warranty period. The Company accounts for the estimated warranty costs at the time revenue is recognized. Warranty obligations are estimated by historical failure rates and associated replacement costs. Warranty obligations are included in other payables and accrued expenses in the consolidated balance sheets. The following table shows changes in the Company’s warranty obligations for the years ended December 31, 2025, 2024 and 2023, respectively.

Employee Benefit Expenses

The Company has a defined contribution 401(k) plan for eligible employees in the U.S. Eligible employees have the option to participate in the plan beginning on their date of hire. Under the terms of the plan, employees may make voluntary contributions as a percentage of their compensation or a flat dollar amount.

All eligible employees of the Company’s mainland China subsidiaries are entitled to staff welfare benefits including medical care, welfare grants, unemployment insurance and pension benefits through a mainland China government-mandated multi-employer defined contribution plan. The Company’s mainland China subsidiaries are required to accrue for these benefits based on certain percentages of the qualified employees’ salaries, and are required to make contributions to the plans out of the amounts accrued. The Company has no further payment obligations once the contributions have been paid. Total contributions by the Company for such employee benefits were $20,496, $15,312, and $11,618 for the years ended December 31, 2025, 2024 and 2023, respectively.

Government Subsidies

ACM Shanghai has received several government grants. The government subsidies of operating nature with no further conditions to be met are recorded as income in the consolidated statements of comprehensive income when received. The government grants that contain certain operating conditions, and require a government due diligence process to confirm completion, are deferred and recorded as other long-term liabilities when received, and are recognized in the consolidated statements of comprehensive income as follows:

•Government subsidies relating to current expenses are recorded as reductions of those expenses in the periods in which the current expenses are recorded. For the years ended December 31, 2025, 2024 and 2023, related government subsidies recognized as reductions of relevant expenses in the consolidated statements of comprehensive income were $7,958, $462 and $1,740, respectively.

•Government subsidies related to depreciable assets are credited to income over the useful lives of the related assets for which the grant was received. As of December 31, 2025 and 2024, all of the Company’s other long-term liabilities represent unearned government subsidies.

•Government subsidies related to VAT reduction are credited to income in the period received. For the years ended December 31, 2025, 2024 and 2023, related government subsidies recognized as other income in the consolidated statements of comprehensive income were $1,388, $2,018, and $533, respectively.

Stock-based Compensation

ACM and ACM Shanghai grant stock options to employees and non-employee consultants and directors and account for those stock-based awards in accordance with FASB ASC Topic 718, Compensation – Stock Compensation.

Stock-based awards granted to employees and non-employee consultants and directors are measured at the fair value of the awards on the grant date. Forfeitures are estimated at the date of grant. The fair value of stock options is determined using the Black-Scholes valuation model when there are service and performance conditions attached or the Monte Carlo valuation model when there is a market condition attached. Stock-based compensation is charged to the category of operating expense corresponding to the service function of the employees and non-employee consultants and directors. For awards granted with no vesting condition, compensation expenses are recognized immediately on the grant date. The Company has elected to recognize share-based compensation on a straight-line basis for awards with graded vesting that vest based solely on a service condition. The Company uses the accelerated method for all awards granted based on service conditions and performance conditions, and only if performance conditions are considered probable to be satisfied.

Income Taxes

The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable values.

In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment to the valuation allowance would be charged to earnings in the period such determination is made.

Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and penalties related to unrecognized tax benefits are included within the provision for income tax.

Basic and Diluted Net Income per Share of Common Stock

Basic and diluted net income per share of common stock is calculated as follows:

Basic and diluted net income per share of common stock are presented in accordance with ASC topic 260, Earnings per Share (“ASC 260”) using thetwo-class method, which allocates undistributed earnings to common stock and any participating securities according to dividend rights and participation rights on a proportionate basis. Under thetwo-class method, basic net income per share of common stock is computed by dividing the sum of distributed and undistributed earnings attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period. ACM did not have any participating securities outstanding during the years ended December 31, 2025, 2024, and 2023.

ACM Research is authorized to issue Class A and Class B common stock. The two classes of common stock are substantially identical in all material respects, except for voting rights. The net income per share of common stock attributable to each class is the same under the “two-class” method. As such, thetwo classes of common stock have been presented on a combined basis in the consolidated statements of comprehensive income and in the above computation of net income per share of common stock.

Diluted net income per share of common stock reflects the potential dilution from securities, such as stock options that could share in ACM Research’s earnings. Certain potentially dilutive securities were excluded from the net income per share calculation because the impact would be anti-dilutive. The number of potentially dilutive shares that were not included in the calculation of diluted net income per share in the periods presented where their inclusion would be anti-dilutive were 658,796,1,511,335 and 3,651,337 for the years ended December 31, 2025, 2024 and 2023, respectively.

Comprehensive Income

The Company applies FASB ASC Topic 220, Comprehensive Income, which establishes standards for the reporting and display of comprehensive income, requiring its components to be reported in a financial statement with the same prominence as other financial statements. The Company’s comprehensive income includes net income, foreign currency translation adjustments, and unrealized gain on investments in available-for-sale debt securities and is presented in the consolidated statements of comprehensive income.

Restricted Net Assets

The Company’s ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant statutory laws and regulations of mainland China permit payments of dividends by the Company’s mainland China subsidiaries only out of its retained earnings, if any, as determined in accordance with accounting standards and regulations of mainland China. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the Company’s mainland China subsidiaries. The Company has not previously declared or paid any cash dividend or dividend in kind and has no plan to declare or pay any dividends in the near future.

Under laws and regulations of mainland China, there are restrictions on the Company’s mainland China subsidiaries with respect to transferring certain of their net assets to the Company either in the form of dividends, loans, or advances. Amounts of net assets restricted include paid-in capital, additional paid-in capital, and statutory surplus reserve of the Company’s mainland China subsidiaries totaling $1,675,187 as of December 31, 2025. Therefore, in accordance with Rules 504 and 4.08(e)(3) of Regulation S-X, the condensed parent company only financial statements as of December 31, 2025 and 2024, and for each of the three years ended December 31, 2025 are disclosed innote 20.

Furthermore, cash transfers from the Company’s mainland China subsidiaries to its subsidiaries outside of China are subject to mainland China government control of currency conversion. Shortages in the availability of foreign currency may restrict the ability of the mainland China subsidiaries to remit sufficient foreign currency to pay dividends or other payments to the Company, or otherwise satisfy their foreign currency denominated obligations.

Statutory Surplus Reserve

The income of ACM’s mainland China subsidiaries is distributable to their shareholders after transfers to reserves as required under relevant mainland China laws and regulations and the subsidiaries’ Articles of Association. As stipulated by the relevant laws and regulations in mainland China, mainland China subsidiaries are required to maintain reserves, including reserves for statutory surpluses and public welfare funds that are not distributable to shareholders. A mainland China subsidiary’s appropriations to the reserves are approved by its board of directors. At least 10% of annual statutory after-tax profits, as determined in accordance with mainland China accounting standards and regulations, is required to be allocated to the statutory surplus reserves. If the cumulative total of the statutory surplus reserves reaches 50% of a mainland China subsidiary’s registered capital, any further appropriation is optional.

Statutory surplus reserves may be used to offset accumulated losses or to increase the registered capital of a mainland China subsidiary, subject to approval from the relevant mainland China authorities, and are not available for dividend distribution to the subsidiary’s shareholders. The mainland China subsidiaries are prohibited from distributing dividends unless any losses from prior years have been offset. Except for offsetting prior years’ losses, however, statutory surplus reserves must be maintained at a minimum of 25% of share capital after such usage. ACM Shanghai estimated a statutory surplus reserve of $34,164 and $30,514 based on an accumulated profit as of December 31, 2025 and 2024, respectively, which is included in the statutory surplus reserve in the consolidated balance sheets.

Noncontrolling Interests

A noncontrolling interest is recognized to reflect the portion of subsidiaries’ equity which is not attributable, directly or indirectly, to ACM Research. Consolidated net income on the consolidated statements of comprehensive income includes the net income attributable to noncontrolling interests. The cumulative results of operations attributable to noncontrolling interests are recorded as “noncontrolling interests” in the Company’s consolidated balance sheets.

Financial Instruments

The Company periodically invests in equity and debt securities, and maintains an investment portfolio of various holdings, types, and maturities. For equity investments that do not have a readily determinable fair value, the Company classifies them as long-term investments, and records them using either: 1) the measurement alternative which measures the equity investments at cost minus impairment, if any, plus or minus changes resulting from qualifying observable price changes; or 2) the equity method whereby the Company recognizes its proportional share of the income or loss from the equity method investment. The equity method is utilized when the equity investments are common stock or in substance common stock, and the Company does not have the ability to control the investee but is deemed to have the ability to exercise significant influence over the investee’s operating or financial policies. For equity investments that have a readily determinable fair value, the Company classifies them as short-term investments, and records them at fair market value on a recurring basis based upon quoted market prices. Realized and unrealized gains and losses resulting from application of the measurement alternative, the impact of the application of the equity method to the Company’s equity investments, and recognition of changes in fair market value, as applicable, are recognized as Other (expense) income, net in theconsolidated statements of comprehensive income.

The Company recognizednil, nil, and $1,415 (upward adjustment) resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer for its long-term investments accounted for using measurement alternatives on the consolidated statements of comprehensive income for the years ended December 31, 2025, 2024, and 2023, respectively. The Company did not recognize any unrealized losses (downward adjustments) resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer for its long-term investments accounted for using measurement alternatives during the years ended December 31, 2025, 2024, and 2023, respectively.

The Company’s investments in debt securities have been classified and accounted for as available-for-sale. The Company classifies its debt securities as either short-term or long-term based on each instrument’s underlying contractual maturity date. Unrealized gains and losses on debt securities classified as available-for-sale are recognized in accumulated other comprehensive income in theconsolidated balance sheets.

Fair Value Measurement

The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact, and it considers assumptions that market participants would use when pricing the asset or liability.

A fair value hierarchy has been established that prioritizes the inputs to valuation techniques used to measure fair value. The level of an asset or liability in the hierarchy is based on the lowest level of input that is significant to the fair value measurement. Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

Level 1: Valuations based on quoted prices in active markets for identical assets or liabilities with sufficient volume and frequency of transactions.

Level 2: Valuations based on observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active for identical assets or liabilities, or model-derived valuations techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Valuations based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities and based on non-binding, broker-provided price quotes and may not have been corroborated by observable market data.

The Company’s financial instruments primarily include its cash, cash equivalents, restricted cash, short term and long term time deposits, short-term and long-term investments, other receivables, accounts receivable, accounts payable, and short-term and long-term borrowings. The estimated fair value of cash and cash equivalents, restricted cash, short-term time deposits, accounts receivable, other receivables, accounts payable, and short-term borrowings approximate their respective carrying value due to the short period of time to their maturities. The carrying amounts of long-term time deposits approximate their fair values as the related interest rates currently offered by financial institutions for similar debt instruments of comparable maturities.

All transfers between fair value hierarchy levels are recognized by the Company at the end of each reporting period. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value

measurement in its entirety, requires judgment and considers factors specific to the investment. The inputs or methodology

used for valuing financial instruments are not necessarily an indication of the risks associated with investment in those instruments.

Assets and liabilities measured at fair value on a recurring basis:

The Company did not have any assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2025 and 2024. Refer tonote 10 for fair value information related to the Company’s outstanding long-term borrowings as of December 31, 2025 and 2024.

Operating and Financial Risks

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, restricted cash, time deposits, and accounts receivable. The Company deposits and invests its cash with financial institutions that management believes are creditworthy.

The Company is potentially subject to concentrations of credit risks in its revenue and accounts receivable.

•Revenue concentration. During 2025, four customers accounted for approximately 17%,14%,12% and 10% of the Company's revenue, respectively, and in aggregate 52%. During 2024, four customers accounted for approximately 15%,14%,12%, and 12% of the Company's revenue, respectively, and in aggregate 52%. During 2023, three customers accounted for approximately 17%,15% and 13% of the Company's revenue, respectively, and in aggregate 46%.

•Accounts receivable concentration. As of December 31, 2025 and 2024, four customers accounted for 62% and four customers accounted for 57%, respectively, of the Company’s accounts receivables. The Company believes that the accounts receivable balances due from these customers do not represent a significant credit risk based on past collection experience.

Interest Rate Risk

As of December 31, 2025 and 2024, the balance of the Company’s short term bank borrowings (note 8) were scheduled to mature at various dates within the following year and thus exposed the Company to modest interest rate risk. The Company is exposed to interest rate risk related to its long-term borrowings (note 10), and as certain long-term borrowings carry a fixed interest rate, the Company may be exposed to the fair value interest rate risk.

Liquidity Risk

The Company’s working capital at December 31, 2025 and 2024 was sufficient to meet its then-current requirements. The Company may, however, require additional cash due to changing business conditions or other future developments, including any investments or acquisitions the Company decides to pursue. In the long run, the Company intends to rely primarily on cash flows from operations and additional borrowings from financial institutions in order to meet its cash needs. If those sources are insufficient to meet cash requirements, the Company may seek to issue additional debt or equity.

Country Risk

The Company has significant investments in mainland China. The operating results of the Company may be adversely affected either directly or indirectly by changes in the political and social conditions in mainland China, by changes in mainland China government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation, and export controls enacted by the U.S., Japan, and the Netherlands to restrict the sale of certain technology to mainland China, among other things.

Foreign Currency Risk and Translation

The Company’s consolidated financial statements are presented in U.S. dollars, which is the Company’s reporting currency, while the functional currency of ACM’s subsidiaries in mainland China and South Korea are the RMB, and the Korean Won, respectively. Changes in the relative values of the U.S. dollar, RMB,and Korean Won affect the Company’s reported levels of revenues and profitability as the results of its operations are translated from RMB and Korean Won into U.S. dollars for reporting purposes. Since the Company has not engaged in any hedging activities, it cannot predict the impact of future exchange rate fluctuations on the results of its operations, and it may experience economic losses as a result of foreign currency exchange rate fluctuations.

Transactions of ACM’s subsidiaries involving foreign currencies are recorded in functional currency according to the rate of exchange prevailing on the date when the transaction occurs. The ending balances of the Company’s foreign currency accounts are converted into functional currency using the rate of exchange prevailing at the end of each reporting period. Net gains and losses resulting from foreign exchange fluctuations as marked to market at year-end are included in the consolidated statements of comprehensive income.

In accordance with FASB ASC Topic 830, Foreign Currency Matters, the Company translates assets and liabilities into U.S. dollars from RMB or Korean Won using the rate of exchange prevailing at the applicable balance sheet date and the consolidated statements of comprehensive income and consolidated statements of cash flows are translated at an average rate during the reporting period. Adjustments resulting from the translation are recorded in stockholders’ equity as part of accumulated other comprehensive income.

Recently Adopted Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU No. 2023-09, Improvements to Income Tax Disclosures (Topic 740). The ASU requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The Company adopted ASU No. 2023-09 as of December 31, 2025 on a prospective basis. The adoption did not have a material impact on the Company’s financial position, results of operations and cash flows.

Recently issued accounting pronouncements not yet adopted

In December 2024, the FASB issued ASU 2024-03: Income Statement--Reporting Comprehensive Income--Expense Disaggregation Disclosures (Subtopic 220-40), which requires additional disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. In January 2025, the FASB issued ASU 2025-01, which clarifies the effective date of ASU 2024-03. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU should be applied prospectively with the option to apply the standard retrospectively. The Company is currently evaluating the provisions of this ASU.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides entities with a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses. ASU 2025-05 is effective for public companies for annual periods beginning after December 15, 2025. Early adoption is permitted. The Company is currently in the process of evaluating the disclosure impact.

In December 2025, the FASB issued ASU 2025-10– Government Grants which establishes guidance on the recognition, measurement, and presentation of government grants received by business entities. The new guidance leverages the principles in the accounting framework for government assistance in International Accounting Standard 20 "Accounting for Government Grants and Disclosure of Government Assistance". This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028 and interim reporting periods within those annual periods. This ASU may be applied prospectively or retrospectively to any or all periods presented in the Company’s consolidated financial statements. Early adoption of this ASU is permitted. The Company is currently evaluating the impact that the adoption of this ASU may have on its consolidated financial statements.

NOTE 3 –REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company assesses revenues based upon the nature or type of goods or services it provides and the geographic location of the customer facility. The following tables present disaggregated revenue information:

For the years ended December 31, 2025 and 2024, substantially all revenue was derived from customers in mainland China, and therefore, no geographical segment information is presented.

Contract liabilities balances were as follows as of:

During the year ended December 31, 2025, advances from customers decreased by $56,140 primarily due to more revenue recognized upon acceptance of first tools by customers than the payments made by customers for first tools.

Below are revenues recognized from amounts included in contract liabilities at the beginning of the year:

NOTE 4 –ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

NOTE 5 –INVENTORIES, NET

Inventories, net consisted of the following:

At December 31, 2025 and 2024, the value of finished goods comprised of first-tools located at customer sites for which customers are contractually obligated to take ownership upon acceptance, was $145,506 and $206,018, respectively.

The year over year net increase in raw materials was based on the Company's production plans and strategic purchases to mitigate supply chain risk and shipment.

During the years ended December 31, 2025, 2024, and 2023, the provisions for inventory recognized in cost of revenue were $15,485, $2,796, and $575, respectively.

NOTE 6 –PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment consisted of the following:

Depreciation expensewas $14,405,$6,573, and $6,912 for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, building and plants includes $35,539 for the Lingang housing property which is pledged as security for loans from the China Merchants Bank (note 10).

Construction in progress primarily reflects costs incurred for certain facilities located in ACM Shanghai's Lingang Development and Production Center.

NOTE 7 –OTHER LONG-TERM ASSETS

Other long-term assets consisted of the following:

NOTE 8 –SHORT-TERM BORROWINGS

Short-term borrowings as of December 31, 2025 and 2024 amounted to $74,041 and $32,814, respectively, which consisted of RMB denominated borrowings made by the Company’s subsidiaries from financial institutions in mainland China and were repayable within one year.

As of December 31, 2025 and 2024, the weighted average interest rates for the outstanding borrowings were 2.48% and 2.82%, respectively.

As of December 31, 2025, the Company was in compliance with the applicable covenants. The Company's short-term borrowings of $14,239 from Bank of China have certain covenants which require ACM Shanghai’s year-end outstanding interest-bearing debt not to exceed five times of its annual EBITDA, and to comply with other non-financial covenants; otherwise, Bank of China has the right to suspend the facility, or request ACM Shanghai to accelerate repayment or provide credit enhancement.

NOTE 9 –OTHER PAYABLES AND ACCRUED EXPENSES

At December 31, 2025 and 2024, other payables and accrued expenses consisted of the following:

NOTE 10 –LONG-TERM BORROWINGS

At December 31, 2025 and 2024, long-term borrowings consisted of the following:

China Merchants Bank

The loan from China Merchants Bank is for the purpose of purchasing property in Lingang, Shanghai. The loan is repayable in 120 installments with the last installment due in November 2030, with an annual interest rate of 2.95%. As of December 31, 2025, the loan is pledged by the property of ACM Lingang and guaranteed by ACM Shanghai.

Agricultural Bank of China

The loan from Agricultural Bank of China is for the purpose of purchasing housing property in Lingang, Shanghai. Principal repayments shall be made in 18 installments beginning November 2025, with final maturity in April 2034 with an annual interest rate of 2.43%-2.78%.

Bank of China

The first loan from Bank of China is for the purpose of funding ACM Shanghai's general corporate operations and working capital. The loan bears interest at an annual rate of 2.62% and is payable in 6 installments, with the last installment due in June 2027. The second loan from Bank of China is for the purpose of funding ACM Shanghai project expenditures. The loan bears interest at an annual rate of 2.52% and is payable in 6 installments, with the last installment due in August 2027. The third loan from Bank of China is for the purpose of funding ACM Shanghai's general corporate operations and working capital. The loan interest at an annual rate of 2.35% and is repayable in 6 installments, with the last installment due in June 2028.

Certain covenants for the banking facility require ACM Shanghai’s year-end outstanding interest-bearing debt not to exceed five times its annual EBITDA, and to comply with other non-financial covenants, or Bank of China has the right to suspend the facility, or request ACM Shanghai to accelerate repayment or provide credit enhancement. As of December 31, 2025, the Company was in compliance with the applicable covenants.

China CITIC Bank

The loan from China CITIC bank is for the purpose of general corporate operations. Principal repayments shall be made in 6 installments beginning January 2025, with final maturity in January 2028.The loan bears interest at an annual rate of 3.60%.

China Everbright Bank

The loans from China Everbright Bank are for the purpose of funding ACM Shanghai's general corporate operations and working capital. The first loan bears interest at annual rate of 2.15%, and is payable in 6 installments, with the last installment due in June 2027. The second loan bears interest at annual rate of 2.25%, and is payable in 3 installments, with the last installment due in March 2026. The third loan bears interest at annual rate of 2.5%, and is payable in 3 installments, with the last installment due in April 2026. The fourth loan bears interest at annual rate of 2.25% and is payable in 6 installments, with the last installment due in September 2027.

.

Industrial and Commercial Bank of China

In November 2024, ACM Shanghai entered into a long-term loan facility of $42,690 from Industrial and Commercial Bank of China for the purpose of funding its working capital and drew down the full amount. Principal repayment shall be made in 6 installments beginning May 2025, with final maturity in November 2027. The loan bears interest at an annual rate of 2.25%.

Additional Long-term Borrowings Disclosures

As of December 31, 2025 and 2024, the total carrying amount of long-term loans was $214,012 and $149,997, compared with an estimated fair value of $202,706 and $141,264, respectively. The fair value of the long-term loans is estimated by discounting cash flows using interest rates currently available for debts with similar terms and maturities (Level 2 fair value measurement). Refer to note 2 for an explanation of the fair value hierarchy structure.

Scheduled principal payments for the outstanding long-term loans, including the current portion, as of December 31, 2025 are as follows:

As of December 31, 2025, the aggregate amount of unused lines of credit for short-term and long-term loans was $85,777.

NOTE 11–LONG-TERM INVESTMENTS

The Company's long-term investments consist of the following:

Equity method investments

For the years ended December 31, 2025, 2024, and 2023, the Company received $2,100, $1,529, andnil dividends from equity investees, respectively.

The Company’s details for equity-method investees are as follows:

(1) Ninebell is a South Korea company that is one of the Company’s principal materials suppliers. On September 6, 2017, ACM and Ninebell entered into an ordinary share purchase agreement, effective as of September 11, 2017, pursuant to which Ninebell issued to ACM ordinary shares representing 20% of Ninebell’s post-closing equity for a purchase price of $1,200, and a common stock purchase agreement, effective as of September 11, 2017, pursuant to which ACM issued 400,002 shares of Class A common stock to Ninebell for a purchase price of $1,000 at $2.50 per share.

(2) On April 22, 2024, ACM Shanghai entered into an investment agreement with Ninebell to invest $16,737 which represented 20% of Ninebell’s total equity interest. As of December 31, 2024, ACM Shanghai pre-paid the consideration of $16,737 to Ninebell, which is recorded in other long-term assets (note 7) in the consolidated balance sheets. The share certification was issued in January 2025. After the share purchase transaction closed, the Company owned 36.2% equity interests of Ninebell. Subsequent to the Private Offering in September 2025, the Company's equity interests in Ninebell has decreased to 34.9%.

(3) In August 2022, ACM Singapore and Wooil entered into an agreement pursuant to which Wooil, in September 2022, issued to ACM Singapore shares representing 20% of Wooil’s post-closing equity for a purchase price of $1,000.

(4) Shengyi is based in Wuxi, China and is one of the Company’s component suppliers. In June 2019, ACM Shanghai and Shengyi entered into an agreement pursuant to which Shengyi issued to ACM Shanghai shares representing 14% of Shengyi’s post-closing equity for a purchase price of $109. The investment in Shengyi is accounted for under the equity method. In September 2023, the Company invested an additional RMB-6,100 ($900) to Shengyi. As the additional investment is not in substance common stock, the Company accounted for the additional investment in Shengyi using a measurement alternative.

(5) In September 2019, ACM Shanghai entered into a Partnership Agreement with six other investors, as limited partners, and Beijing Shixi Qingliu Investment Co., Ltd., as general partner and manager, with respect to the formation of Hefei Shixi Chanheng Integrated Circuit Industry Venture Capital Fund Partnership (LP), a Chinese limited partnership based in Hefei, China. The investment represents 10% of the partnership’s total subscribed capital.

(6) On January 19, 2024, ACM Shanghai entered into a limited partnership agreement with Company A for an ownership interest of 14.3%.

Available-for-sale debt investments

The available-for-sale debt investments are investments in preferred shares that are redeemable at the Company’s option with no contractual maturity date, which are measured at fair value.

The following table summarizes the amortized cost and estimated fair value of the Company’s available-for-sale debt investments as of December 31, 2025 and 2024.

NOTE 12 –SHORT-TERM INVESTMENTS

Pursuant to a Share Purchase Agreement dated August 2023, ACM Shanghai acquired shares of Zhongjuxin Limited Company (“Zhongjuxin”) in September 2023 with amount of $4,179. The shares held by ACM Shanghai are restricted for sale for a minimum period of twelve months. Zhongjuxin completed it STAR IPO in September 2023. The investments were partially-disposed by ACM Shanghai and net proceeds of RMB 38,464 ($5,267)were received during the year ended December 31, 2024. The investments were fully-disposed by ACM Shanghai and net proceeds of RMB 15,089 ($2,147) were received during the year ended December 31, 2025.

Pursuant to a Share Purchase Agreement dated January 2024, ACM Shanghai acquired shares of Shanghai Syncrystalline Silicon Materials Co., Ltd. (“Syncrystalline”) in February 2024 with amount of RMB 10 million ($1,423). The shares held by ACM Shanghai are restricted for sale for a minimum period of twelve months. Syncrystalline completed its STAR IPO in February 2024. As of December 31, 2025, the Company's total investment costs in Syncrystalline were RMB 20 million ($2,846), including RMB 10 million ($1,423) invested by ACM Shanghai in 2021 and RMB 10 million ($1,423) invested by ACM Shanghai in February 2024.

The components of short-term investments were as follows:

For the years ended December 31, 2025, 2024 and 2023, the net gains recognized on short-term investments were as follows:

For the years ended December 31, 2025, 2024 and 2023, the Company received proceeds of $2,147, $8,434 and $21,735 from the sale of short-term investments, respectively, including realized gains of $166, $1,788 and $9,047, respectively.

NOTE 13 –RELATED PARTY BALANCES AND TRANSACTIONS

Ninebell

Ninebell is an equity investee of ACM (note 11) and is the Company’s principal supplier of robotic delivery system subassemblies used in single-wafer cleaning equipment. The Company purchases equipment from Ninebell for production in the ordinary course of business. The Company pays for a portion of the equipment in advance and is obligated to pay the remaining amounts upon receipt of the product.

Shengyi

Shengyi is an equity investee of ACM Shanghai (note 11) and is one of the Company’s component suppliers in mainland China. The Company purchases components from Shengyi for production in the ordinary course of business. The Company incurs a service fee related to installation and hook-up fees which is recorded within cost of revenue on the Company’s consolidated statements of comprehensive income. The Company pays for a portion of the raw materials in advance and is obligated to pay the remaining amount upon receipt of the product.

All related party outstanding balances are short-term in nature and are expected to be settled in cash.

The following tables represent major related party balances and transactions as of December 31, 2025 and 2024:

NOTE 14 –COMMON STOCK

At December 31, 2025 and 2024, ACM was authorized to issue 150,000,000 shares of Class A common stock and 5,307,816 shares of Class B common stock, each with a par value of $0.0001. Each share of Class A common stock is entitled toone vote, and each share of Class B common stock is entitled totwenty votes and is convertible at any time intoone 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 years ended December 31, 2025, 2024 and 2023, ACM issued 2,651,132,1,902,713 and 1,380,886 shares of Class A common stock upon option exercises by employees and non-employees, respectively

At December 31, 2025 and 2024, the number of shares of Class A common stock issued and outstanding was 60,590,017 and 57,938,885, respectively. At December 31, 2025 and 2024, the number of shares of Class B common stock issued and outstanding was 5,021,811 and 5,021,811, respectively.

NOTE 15 –STOCK-BASED COMPENSATION

The Company’s stock-based compensation consists of employee and non-employee awards issued under its 2016 Omnibus Incentive Plan. The vesting condition may consist of service period conditions or certain performance conditions, as determined by the Board of Directors.

Employee Awards

The following table summarizes the ACM’s employee share option activities:

As of December 31, 2025, $15,178 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to stock-based awards for ACM was expected to be recognized over a weighted-average period of 2.4 years.

The weighted average grant date fair value of options granted during the years ended December 31, 2025, 2024 and 2023 were $18.35, $15.31, and $10.38, respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 was $52,606, $35,675, and $15,457, respectively.

The aggregate fair value of the share-based awards vested during the years ended December 31, 2025, 2024 and 2023 were $31,002, $26,137 and $18,378, respectively.

The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation model with the following assumptions:

(1)Fair value of Class A common stock value was the closing market price of the Class A common stock on the grant date.

(2)Expected term of share options is based on the average of the vesting period and the contractual term for each grant.

(3)Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant.

(4)Risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the share options in effect at the time of grant.

(5)Expected dividend is assumed to be 0% as ACM has no history or expectation of paying a dividend on its common stock.

Non-employee Award

The following table summarizes the Company's non-employee share option activities:

As of December 31, 2025, all of the non-employee share options were fully-vested. The aggregate intrinsic value of options exercised in the years ended December 31, 2025, 2024 and 2023 were $9,490, $7,901, and $3,796, respectively. The aggregate fair value of the share-based awards vested during the years ended December 31, 2025, 2024 and 2023 were $285, $408, and $479, respectively.

2019 Subsidiary Stock Option Plan

In January 2020, ACM Shanghai adopted a 2019 Stock Option Incentive Plan (the “2019 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain earning targets determined by the Board of Directors of ACM Shanghai.

There were no options outstanding under the 2019 Subsidiary Stock Option Plan as of December 31, 2024 and no activity thereafter.

The aggregate fair value of the share-based awards vested during the years ended December 31, 2025, 2024, and 2023 werenil, nil, and $99, respectively.

The aggregate intrinsic value of options exercised in the years ended December 31, 2025 and 2024 and 2023 wasnil, $25,946 and $31,144, respectively. There were nil options outstanding and exercisable as of December 31, 2025.

2023 Subsidiary Stock Option Plan

In June 2023, ACM Shanghai adopted a 2023 Stock Option Incentive Plan ( the "2023 Subsidiary Stock Option Plan”) that provides for, among other incentives, the granting to officers, directors, employees of options to purchase shares of ACM Shanghai’s common stock. The vesting conditions consist of service periods conditions and performance conditions related to certain sales and research and development progress targets determined by the Board of Directors of ACM Shanghai.

The following table summarizes the ACM Shanghai 2023 Subsidiary Stock Option Plan’s stock option activities:

No options were granted under ACM Shanghai 2023 Option Plan during the year ended December 31, 2025.

The weighted average grant date fair value of options granted during the years ended December 31, 2024 and 2023 were $6.04 and $9.49, respectively.

The aggregate intrinsic value of options exercised during the years ended December 31, 2025 was $23,638. No options were exercised under the 2023 Subsidiary Stock Option Plan during 2024 and 2023. The aggregate fair value of the share-based awards vested during theyears ended December 31, 2025, 2024 and 2023 were $43,475, $21,748, andnil, respectively.

The fair value of options granted to employees is estimated on the grant date using the Black-Scholes valuation with following assumptions:

(1) Equal to closing value on the grant date.

(2) Expected term of share options is based on the average of the vesting period and the contractual term for each grant.

(3) Volatility is calculated based on the historical volatility of ACM in the period equal to the expected term of each grant.

(4) Risk-free interest rate is based on the yields of RMB deposit in mainland China with maturities similar to the expected term of the share options in effect at the time of grant.

(5) Expected dividend is assumed to be 0% as the impact is adjusted on the value of share of common stock.

As of December 31, 2025, $25,583 of total unrecognized employee stock-based compensation expense, net of estimated forfeitures, related to ACM Shanghai stock-based awards were expected to be recognized over a weighted-average period of 0.98 years .

Total Stock-Based Compensation Expense

The following table summarizes the components of stock-based compensation expense included in the consolidated statements of comprehensive income:

NOTE 16 –INCOME TAXES

The following represent the U.S. and foreign components of income before income tax for the years ended December 31, 2025, 2024 and 2023:

The following represent components of the income tax benefit (expense) for the years ended December 31, 2025, 2024 and 2023:

The Company’s effective tax rate differs from statutory rates of 21% for U.S. federal income tax purposes and 25% for mainland China income tax purposes due to the effects of the valuation allowance and certain permanent differences as they pertain to book-tax differences in employee stock-based compensation and non-U.S. research and development expense. A new requirement to capitalize and amortize previously deductible research and experimental expenses resulting from a change in Section 174 made by the Tax Cuts and Jobs Act of 2017 (the “TCJA”) became effective on January 1, 2022. Under the TCJA, the Company is required to capitalize, and subsequently amortize R&D expenses over fifteen years for research activities conducted outside of the U.S. The capitalization of overseas R&D expenses resulted in a significant increase in the Company’s global intangible low-taxed income inclusion beginning in 2022. The enactment of the One, Big, Beautiful, Bill Act, signed into law in July 2025, repeals the mandatory capitalization requirement for domestic R&D expenses for tax years beginning after December 31, 2025. However, the capitalization requirement for research activities conducted outside of the U.S remains unchanged.

Pursuant to the Corporate Income Tax Law of mainland China, all of the Company’s mainland China subsidiaries are liable to mainland China Corporate Income Taxes at a rate of 25%, except for ACM Shanghai and ACM Lingang. According to Guoshuihan 2009 No. 203, an entity certified as an “advanced and new technology enterprise” is entitled to a preferential income tax rate of 15%. ACM Shanghai was certified as an “advanced and new technology enterprise” in 2012 and again in 2016, 2018, 2021 and 2024, effective until December 31, 2026. Certain entities which meet requirements according to the Policy of the Lingang New area in China (Shanghai) Pilot Free Trade Zone are entitled to a preferential income tax rate of 15%. ACM Lingang was certified for this in 2021, and this preferential income tax rate was valid from January 1, 2020 until December 31, 2024.ACM Lingang’s tax is expected to be exempt for first two profitable years after net operating loss utilization and half of the statutory tax rate for the next three years. The provision for mainland China corporate income tax for ACM Shanghai is calculated by applying the income tax rate of 15% for the years ended December 31, 2025, 2024 and 2023 .

Income tax expense for the years ended December 31, 2025, 2024 and 2023 differed from the amounts computed by applying the statutory U.S. federal income tax rate of 21% to pretax income as a result of the following:

A reconciliation of the federal statutory income tax rate to the effective income tax rate for the year ended December 31, 2025 is as follows:

*In 2025, state and local income taxes in California comprise the majority of the domestic and state and local income taxes, net of the federal income tax effect category.

Tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets at December 31, 2025 and 2024 are presented below:

The Company considers all available evidence to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become realizable. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carry-forward periods), and projected taxable income in assessing the realizability of deferred tax assets. In making such judgments, significant weight is given to evidence that can be objectively verified. Based on all available evidence, a partial valuation allowance has been established against some net deferred tax assets as of December 31, 2025 and 2024, based on estimates of recoverability. In order to fully realize the deferred tax assets, the Company must generate sufficient taxable income in future periods before the expiration of the deferred tax assets governed by the tax code.

As of December 31, 2025 and 2024, the Company had valuation allowances, respectively, of $5,789 and $5,467 for U.S. federal purposes, $593 and $295 for U.S. state purposes and $2,182 and $20,209 for mainland China income tax purposes, and $840 and $515 for Korea income tax purposes.

As of December 31, 2025, the Company had operating loss carryforward amounts, or NOLs, of $1,056 for U.S. federal income tax purposes and $7,364 for U.S. state income tax purposes. As of December 31, 2024, the Company had NOLs, of $2,030 for U.S. federal income tax purposes and $929 for U.S. state income tax purposes. As of December 31, 2023, the Company had NOLs of $3,121 for U.S. federal income tax purposes and $593 for U.S. state income tax purposes.

As of December 31, 2025 and 2024, the Company had NOLs, respectively, $17,863 and $30,481 for mainland China income tax purposes and $3,816 and $2,339 for South Korea income tax purposes. Such losses begin expiring in 2037, 2032, 2028 and 2037 for U.S. federal, U.S. state, mainland China, and South Korea income tax purposes, respectively.

Under provisions of the U.S. Internal Revenue Code (the “IRC”), a limitation applies to the use of the U.S. net operating loss and credit carry-forwards that would be applicable if ACM experiences an “ownership change,” as defined in IRC Section 382. ACM conducted an analysis of its stock ownership under IRC Section 382 and $2,030 of the net operating loss carryforwards are subject to annual limitation as a result of the ownership change in 2017. The net operating loss carryforwards are not expected to expire before utilization.

Tax positions are evaluated in a two-step process. The Company first determines whether it is more likely than not that a tax position will be sustained upon examination. If a tax position meets the more-likely-than-not recognition threshold it is then measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The aggregate changes in the balance of gross unrecognized tax benefits for the years ended December 31, 2025, 2024 and 2023 were as follows:

The Company is subject to taxation in the United States, state, and foreign jurisdictions. All tax returns will remain open for examination by the federal and state authorities for three and four years, respectively, from the date of utilization of any net operating loss or credits. Certain tax years are subject to foreign income tax examinations by tax authorities until the statute of limitations expire.

The Company had $20,905 and $16,774 of unrecognized tax benefits as of December 31, 2025 and 2024, respectively.

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025 and 2024, respectively, the Company had $7,094 and $2,973 of accrued penalties and interest related to uncertain tax positions, all of which was recognized in the Company’s consolidated statements of comprehensive income for the year then ended. The amount of the unrecognized tax benefit that, if recognized, would impact the effective tax rate was $20,770 as of December 31, 2025. There were no ongoing examinations by taxing authorities as of December 31, 2025 or 2024.

Prior to the TCJA, the Company asserted that all unremitted earnings of its foreign subsidiaries were considered indefinitely reinvested. As a result of the TCJA, the Company reported and paid U.S. tax on the majority of its previously unremitted foreign earnings, and repatriations of foreign earnings will generally be free of U.S. federal tax, but may incur other taxes such as withholding or state taxes. As of December 31, 2025, the Company has not made a provision for U.S. or additional foreign withholding taxes on approximately $343,266 of undistributed earnings of its foreign subsidiaries that is indefinitely reinvested. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances.

Cash income taxes paid by the Company were as follows:

NOTE 17 –SEGMENT INFORMATION

The Company identifies operating segments according to how the business activities are managed and evaluated. The Company’s chief operating decision maker (“CODM”) has been identified as ACM’s Chief Executive Officer. The

Company's operating segments include ACM Research and ACM Shanghai. As the Company is engaged in the development, manufacture and sale of capital equipment to global semiconductor manufacturers, and each of the operating segments share similar economic and other qualitative characteristics, the results of the Company’s operating segments are aggregated intoone reportable segment.

The CODM assesses financial performance for the Company and decides how to allocate resources based on consolidated revenue, gross margin and income from operations. The CODM considers forecasts and actual results on a regular basis when assessing the operating results and making resource decisions.

Significant expenses within income from operations, as well as within net income, include consolidated cost of revenue, sales and marketing, research and development, and general and administrative, and which are each separately presented in the Company’s consolidated statements of comprehensive income. Other segment items within net income include interest income, interest expense, income from equity method investments and other (expense) income, net, which are each separately presented on the Company’s consolidated statements of comprehensive income. The measure of segment assets is reported on the consolidated balance sheets as total assets.

Revenue by geographic location is determined by the location of customers’ facilities to which products were shipped. Long-lived assets consist primarily of property, plant and equipment, and right-of-use assets and are attributed to the geographic location in which the respective asset is located. Long-lived assets by geographic region as of the years ended were as follows:

NOTE 18 –COMMITMENTS AND CONTINGENCIES

The Company leases offices and manufacturing locations under non-cancelable operating lease agreements. As of December 31, 2025, the Company had $2,063 of open commitments to construction contracts.

Covenants in ACM Lingang’s Grant Contract for State-owned Construction Land Use Right in Shanghai City (Category of R&D Headquarters and Industrial Projects) with the China (Shanghai) Pilot Free Trade Zone Lingang Special Area Administration require, among other things, that ACM Lingang pay liquidated damages in the event that within 7 years after the land use right was obtained in July 2020, the Company does not (i) generate a minimum specified amount of annual sales of products manufactured on the granted land or (ii) pay to mainland China at least RMB 157.6 million ($22,000) in annual total taxes (including value-added taxes, corporate income tax, personal income taxes, urban maintenance and construction taxes, education surcharges, stamp taxes, and vehicle and shipping taxes) as a result ofoperations in connection with the granted land.

Legal Matters

In the normal course of business, the Company is subject to contingencies, including legal proceedings, investigations, and environmental claims arising out of the normal course of business that relate to a wide range of matters, including among others, contracts breach liability. The Company records accruals for such contingencies based upon the assessment of the probability of occurrence and, where determinable, an estimate of the liability. Management may consider many factors in making these assessments including past history, scientific evidence and the specifics of each matter. Some of these contingencies involve claims that are subject to substantial uncertainties and un-estimable damages.

In 2025, ACM's subsidiary, ACM Korea, received inquiries from the Seoul Customs Office ("SCO") regarding certain goods produced and shipped by ACM Korea to overseas markets. As of December 31, 2025, the SCO has completed its investigation and has issued a fine to ACM Korea, which ACM Korea paid and has formally appealed. The matter has been formally transferred to a regional prosecutor’s office in Korea, and is currently pending review and next steps, if any. The investigation is on-going and remains in its preliminary stages, and as such, this matter is subject to uncertainties and further developments as it proceeds. Although the Company cannot predict the outcome of this, or any other related governmental inquiries or proceedings that may occur, the Company does not believe at this time it will have a material effect on its consolidated financial condition or results of operations.

The Company’s management has evaluated all other proceedings and claims that existed as of December 31, 2025. In the opinion of management, except with respect to the ACM Korea customs matter described above, no provision for liability nor disclosure was required as of December 31, 2025 related to any claim against the Company because: (a) there is not a reasonable possibility that a loss exceeding amounts already recognized (if any) may be incurred with respect to such claim; (b) a reasonably possible loss or range of loss cannot be estimated; or (c) such estimate is immaterial.

As of December 31, 2025, the Company had no material outstanding legal proceedings.

NOTE 19 -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 includeone or more options to renew. The Company regularly evaluates the renewal options, and when they are reasonably certain of exercise, the Company includes the renewal period in its lease term.

The Company’s leases also include a right to use state-owned land in mainland China with lease terms of 50 years expiring in 2070, for which an upfront lump-sum payment was made during the year ended December 31, 2022.

The components of lease expense were as follows:

Supplemental cash flow information related to operating leases was as follows for the years ended December 31, 2025, 2024 and 2023:

Maturities of lease liabilities for all operating leases were as follows as of December 31, 2025:

The weighted average remaining lease terms and discount rates for all operating leases, excluding land-use right, were as follows as of December 31, 2025 and 2024:

NOTE 20 –PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

For the presentation of the parent company only condensed financial information, the Company records its investments in subsidiaries under the equity method of accounting as prescribed in ASC 323, Investments—Equity Method and Joint Ventures. Such investments are presented on the condensed balance sheets as “Investment in consolidated subsidiaries and equity method investees” and the subsidiaries’ losses and gains as “Equity in earnings of consolidated subsidiaries and equity method investees” on the condensed statements of comprehensive income. Certain information and footnote disclosures generally included in the financial statements prepared in accordance with GAAP have been condensed or omitted. The footnote disclosure contains supplemental information relating to the operations of ACM separately.

ACM Shanghai paid a dividend to ACM Research during the years ended December 31, 2025, 2024, and 2023 (note 2).

Except for long-term obligations, or guarantees, and a loan borrowed by ACM Inc. from China CITIC Bank (note 10), ACM does not have significant capital or other commitments, as of December 31, 2025 or 2024.

The following represents condensed unconsolidated financial information of ACM Research only as of December 31, 2025 and 2024, and for the years ended December 31, 2025, 2024 and 2023:

CONDENSED BALANCE SHEETS

CONDENSED STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF CASH FLOWS

NOTE 21: SUBSEQUENT EVENTS

On January 30, 2026, ACM Shanghai issued a notice to the Shanghai Stock Exchange that ACM Research intended to sell up to 4,801,648 shares of ACM Shanghai through an inquiry-based share transfer plan. On February 6, 2026, ACM Shanghai notified the Shanghai Stock Exchange that ACM Research sold 4,801,648 shares of ACM Shanghai at a price of RMB 160.00 (approximately $23.05) per share.