|
Delaware
|
|
94-3290283
|
(State
or Other Jurisdiction of Incorporation or
Organization)
|
|
(I.R.S.
Employer Identification No.)
|
42307
Osgood Road, Suite I, Fremont, California
|
|
94539
|
(Address
of Principal Executive Offices)
|
|
(Zip
Code)
|
Large accelerated
filer
|
☐
|
Accelerated
filer
|
☐
|
Non-accelerated
file
|
☐
|
Smaller reporting
company
|
☑
|
(Do not check if a smaller reporting
company)
|
Emerging growth
company
|
☑
|
Class
|
|
Number of Shares Outstanding
|
Class A
Common Stock, $0.0001 par value
|
|
13,626,637
shares outstanding as of May 9, 2018
|
|
|
|
Class B
Common Stock, $0.0001 par value
|
|
2,213,510 shares
outstanding as of May 9, 2018
|
|
PART I.
FINANCIAL
INFORMATION
|
4
|
|
|
|
|
Item
1.
Financial
Statements (unaudited)
|
4
|
|
|
|
|
Condensed
Consolidated Balance Sheets as of March 31, 2018 and December 31,
2017
|
4
|
|
|
|
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss
for
the Three Months Ended March 31, 2018 and 2017
|
5
|
|
|
|
|
Condensed
Consolidated Statements of Cash Flows for the Three Months
Ended
March 31, 2018
and 2017
|
6
|
|
|
|
|
Notes
to Condensed Consolidated Financial Statements
|
7
|
|
|
|
|
Item
2.
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
|
23
|
|
|
|
|
Item
3.
Quantitative and
Qualitative Disclosures about Market Risks
|
35
|
|
|
|
|
Item
4.
Controls and
Procedures
|
35
|
|
|
|
|
PART II.
OTHER
INFORMATION
|
37
|
|
|
|
|
Item
1A.
Risk
Factors
|
37
|
|
|
|
|
Item
2.
Unregistered
Sales of Equity Securities and Use of Proceeds
|
37
|
|
|
|
|
Item
6.
Exhibits
|
38
|
|
|
|
|
SIGNATURE
|
39
|
|
Three Months Ended March 31,
|
|
|
2018
|
2017
|
|
(unaudited)
|
|
|
(in thousands)
|
|
Cash flows from operating activities:
|
|
|
Net
loss
|
$
(2,780
)
|
$
(2,474
)
|
Adjustments
to reconcile net loss from operations to net cash provided by
operating activities:
|
|
|
Depreciation
and amortization
|
80
|
57
|
Undistributed
earnings from investments in equity method affiliates
|
(1
)
|
─
|
Deferred
income taxes
|
─
|
781
|
Stock-based
compensation
|
2,175
|
835
|
Net
changes in operating assets and liabilities:
|
|
|
Accounts
receivable
|
14
|
3,068
|
Other
receivables
|
1,331
|
275
|
Inventory
|
(3,896
)
|
(1,784
)
|
Prepaid
expenses
|
(1,791
)
|
(299
)
|
Other current assets
|
3
|
(100
)
|
Accounts
payable
|
(2,364
)
|
533
|
Advances
from customers
|
87
|
458
|
Other
payables and accrued expenses
|
27
|
(9
)
|
Other
long-term liabilities
|
(278
)
|
(989
)
|
Net cash (used in) provided by operating
activities
|
(7,393
)
|
352
|
|
|
|
Cash flows from investing activities:
|
|
|
Purchase
of property and equipment
|
(395
)
|
(12
)
|
Purchase
of intangible assets
|
─
|
(24
)
|
Net cash used in investing activities
|
(395
)
|
(36
)
|
|
|
|
Cash flows from financing activities:
|
|
|
Proceeds
from short-term borrowings
|
7,387
|
3,824
|
Repayments
of short-term borrowings
|
(2,306
)
|
(2,541
)
|
Proceeds from stock option exercise to common
stock
|
62
|
378
|
Net cash provided in financing activities
|
$
5,143
|
$
1,661
|
|
|
|
Effect of exchange rate changes on cash and cash
equivalents
|
$
150
|
$
(13
)
|
|
|
|
Net
(decrease) increase in cash and cash equivalents
|
$
(2,495
)
|
$
1,964
|
Cash
and cash equivalents at beginning of period
|
17,681
|
10,119
|
Cash and cash equivalents at end of period
|
$
15,186
|
$
12,083
|
|
|
|
Supplemental disclosure of cash flow information:
|
|
|
Interest
paid
|
$
103
|
$
78
|
|
Three Months Ended March 31,
|
|
|
2018
|
2017
|
Numerator:
|
|
|
Net
loss
|
$
(2,780
)
|
$
(2,474
)
|
Net
loss attributable to non-controlling interest
|
─
|
(385
)
|
Net
loss available to common stockholders, basic and
diluted
|
$
(2,780
)
|
$
(2,089
)
|
Denominator:
|
|
|
Weighted
average shares outstanding, basic
|
15,383,086
|
4,817,745
|
Effect
of dilutive securities
|
─
|
─
|
Weighted
average shares outstanding, diluted
|
15,383,086
|
4,817,745
|
Net
loss per common share:
|
|
|
Basic
|
$
(0.18
)
|
$
(0.43
)
|
Diluted
|
$
(0.18
)
|
$
(0.43
)
|
|
March 31,
2018
|
December 31,
2017
|
Accounts
receivable
|
$
27,793
|
$
26,762
|
Less:
Allowance for doubtful accounts
|
─
|
─
|
Total
|
$
27,793
|
$
26,762
|
|
March 31,
2018
|
December 31,
2017
|
Raw
materials
|
$
8,937
|
$
6,181
|
Work
in process
|
5,496
|
4,328
|
Finished
goods
|
5,432
|
4,879
|
Total
inventory, gross
|
19,865
|
15,388
|
Inventory
reserve
|
-
|
-
|
Total
inventory, net
|
$
19,865
|
$
15,388
|
|
March 31,
2018
|
December 31,
2017
|
Manufacturing
equipment
|
$
10,038
|
$
9,660
|
Office
equipment
|
493
|
463
|
Transportation
equipment
|
211
|
203
|
Leasehold
improvement
|
289
|
277
|
Total
cost
|
11,031
|
10,603
|
Less:
Total accumulated depreciation
|
(8,673
)
|
(8,263
)
|
Construction
in progress
|
373
|
─
|
Total
property, plant and equipment, net
|
$
2,731
|
$
2,340
|
|
March 31, 2018
|
December 31, 2017
|
Line
of credit up to RMB30 million from Bank of China Pudong Branch, due
on March 5, 2018 with annual interest rate of 5.69%, secured by
certain of the Company’s intellectual property and fully
repaid on March 5, 2018
|
$
─
|
$
2,219
|
Line
of credit up to
RMB
30 million from Bank of China Pudong Branch, due on
September 11, 2018 with annual interest rate of 5.69%, secured by
certain of the Company’s intellectual property and the
Company’s CEO
|
1,590
|
─
|
Line
of credit up to
RMB
30 million from Bank of China Pudong Branch, due on
September 24, 2018 with annual interest rate of 5.69%, secured by
certain of the Company’s intellectual property and the
Company’s CEO
|
1,590
|
─
|
Line
of credit up to
RMB
25 million from Bank of Shanghai Pudong Branch, due on
various dates in October 2018 with an annual interest rate of
5.66%, guaranteed by the Company’s CEO
|
2,194
|
2,111
|
Line
of credit up to
RMB
25 million from Bank of Shanghai Pudong Branch, due on
November 20, 2018 with an annual interest rate of 5.66%, guaranteed
by the Company’s CEO
|
1,027
|
─
|
Line
of credit up to
RMB
5 million from Shanghai Rural Commercial Bank, due on
November 21, 2018 with an annual interest rate of 5.44%, guaranteed
by the Company’s CEO
|
795
|
765
|
Line
of credit up to
RMB
10 million from Shanghai Rural Commercial Bank, due on
January 23, 2019 with an annual interest rate of 5.44%, guaranteed
by the Company’s CEO and secured by a pledge on accounts
receivable (note 3)
|
1,590
|
─
|
Line
of credit up to
RMB
10 million from Bank of Communications, due on December
28, 2018 with an annual interest rate of 5.66%
|
1,590
|
─
|
Total
|
$
10,376
|
$
5,095
|
|
March 31,
2018
|
December 31,
2017
|
Lease
expenses and payable for leasehold improvement due to a related
party (note 11)
|
$
2,248
|
$
2,024
|
Commissions
|
928
|
836
|
Accrued
warranty
|
979
|
839
|
Accrued
payroll
|
745
|
|
Accrued
professional fees
|
196
|
60
|
Accrued
machine testing fees
|
1,038
|
684
|
Others
|
926
|
849
|
Total
|
$
6,542
|
$
6,037
|
|
March 31,
2018
|
December 31,
2017
|
Subsidies
to Stress Free Polishing project, commenced in 2008 and
2017
|
$
1,977
|
$
1,952
|
Subsidies
to Electro Copper Plating project, commenced in 2014
|
4,204
|
4,265
|
Total
|
$
6,181
|
$
6,217
|
|
March 31,
2018
|
December 31,
2017
|
2018
|
$
766
|
$
315
|
2019
|
739
|
22
|
2020
|
716
|
─
|
2021
|
716
|
─
|
2022
|
716
|
─
|
Total
|
$
3,654
|
$
72
|
|
Number of
Option Shares
|
Weighted
Average Grant
Date Fair Value
|
Weighted
Average Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Outstanding
at December 31, 2017
|
2,045,616
|
$
0.66
|
$
2.46
|
7.57
years
|
Granted
|
500,000
|
2.26
|
5.31
|
|
Exercised
|
(57,222
)
|
0.47
|
1.09
|
|
Expired
|
(2,575
)
|
0.55
|
3.00
|
|
Forfeited
|
(72,192
)
|
0.54
|
3.00
|
|
Outstanding
at March 31, 2018
|
2,413,627
|
1.00
|
3.06
|
7.86
years
|
Vested
and exercisable at March 31, 2018
|
1,120,598
|
|
|
|
|
March 31,
2018
|
Fair
value of common share(1)
|
$
5.31
|
Expected
term in years(2)
|
6.25
|
Volatility(3)
|
39.14
%
|
Risk-free
interest rate(4)
|
2.55
%
|
Expected
dividend(5)
|
0.00
%
|
|
Number of
Option Shares
|
Weighted
Average Grant
Date Fair Value
|
Weighted
Average Exercise
Price
|
Weighted Average
Remaining
Contractual Term
|
Outstanding
at December 31, 2017
|
1,326,676
|
$
0.78
|
$
2.52
|
7.54
years
|
Granted
|
─
|
─
|
─
|
─
|
Exercised
|
─
|
─
|
─
|
─
|
Expired
|
─
|
─
|
─
|
─
|
Forfeited
|
─
|
─
|
─
|
─
|
Outstanding
at March 31, 2018
|
1,326,676
|
$
0.75
|
2.52
|
7.29
years
|
Vested
and exercisable at March 31, 2018
|
841,329
|
|
|
|
|
March
31,
2018
|
Fair value of common share(1)
|
$12.30
|
Expected term in years(2)
|
3.33-5.36
|
Volatility(3)
|
45.48%
|
Risk-free interest rate(4)
|
2.39%-2.56%
|
Expected dividend(5)
|
0.00%
|
|
Three Months Ended March 31,
|
|
|
2018
|
2017
|
|
(in thousands)
|
|
Stock-Based Compensation Expense:
|
|
|
Cost
of revenue
|
$
8
|
$
5
|
Sales
and marketing expense
|
34
|
6
|
Research
and development expense
|
27
|
13
|
General
and administrative expense
|
2,106
|
811
|
|
$
2,175
|
$
835
|
|
2018
|
2017
|
Revenue
|
100.0
%
|
100.0
%
|
Cost
of revenue
|
47.4
|
57.6
|
Gross
margin
|
52.6
|
42.4
|
Operating
expenses:
|
|
|
Sales
and marketing
|
19.0
|
20.5
|
Research
and development
|
15.8
|
16.4
|
General
and administrative
|
37.3
|
32.9
|
Total
operating expenses, net
|
72.1
|
69.8
|
Income
(loss) from operations
|
(19.5
)
|
(27.4
)
|
Interest
expense, net
|
(1.0
)
|
(1.4
)
|
Other
income (expense), net
|
(7.8
)
|
(1.1
)
|
Income
(loss) before income taxes
|
(28.3
)
|
(29.9
)
|
Income
tax (expense) benefit
|
(0.2
)
|
(13.8
)
|
Net
loss
|
(28.5
)
|
(43.7
)
|
Less:
Net income (loss) attributable to non-controlling
interests
|
─
|
6.8
|
Net
loss attributable to ACM Research, Inc.
|
(28.5
)%
|
(36.9
)%
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
2017
|
% Change
2017 v 2018
|
|
(in thousands)
|
|
|
Revenue
|
$
9,743
|
$
5,660
|
72.1
%
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
2017
|
% Change
2017 v 2018
|
|
(in thousands)
|
|
|
Cost
of revenue
|
$
4,621
|
$
3,258
|
41.8
%
|
Gross
profit
|
$
5,122
|
$
2,402
|
113.2
|
Gross
margin
|
52.6
%
|
42.4
%
|
10.2
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
2017
|
% Change
2017 v 2018
|
|
(in thousands)
|
|
|
Sales
and marketing expense
|
$
1,855
|
$
1,163
|
59.5
%
|
Research
and development expense
|
1,541
|
928
|
66.1
|
General
and administrative expense
|
3,630
|
1,864
|
94.7
|
Total
operating expenses
|
$
7,026
|
3,955
|
77.6
%
|
|
Three Months Ended March 31,
|
|
|
|
2018
|
2017
|
% Change
2017 v 2018
|
|
(in thousands)
|
|
|
Interest
expense, net
|
$
(100
)
|
$
(76
)
|
31.6
%
|
Other
income (expense), net
|
(755
)
|
$
(64
)
|
1,079.7
|
|
Three Months Ended March 31,
|
|
|
2018
|
2017
|
|
(in thousands)
|
|
Current:
|
|
|
U.S.
federal
|
$
─
|
$
─
|
U.S.
state
|
─
|
─
|
Foreign
|
(22
)
|
─
|
Total current
income tax expense
|
(22
)
|
─
|
Deferred:
|
|
|
U.S.
federal
|
─
|
─
|
U.S.
state
|
─
|
─
|
Foreign
|
─
|
(781
)
|
Total deferred
income tax expense
|
─
|
(781
)
|
Total current
income tax expense
|
$
(22
)
|
$
(781
)
|
Lender
|
|
Agreement Date
|
|
Maturity Date
|
|
Annual Interest Rate
|
|
Maximum Borrowing Amount(1)
|
|
Amount Outstanding at March 31, 2018(1)
|
|
|
|
|
|
|
|
|
(in thousands)
|
||
Bank of China Pudong Branch
|
|
August 2017
|
|
September 2018
|
|
5.69%
|
|
RMB30,000
|
|
RMB20,000
|
$4,770
|
|
$3,180
|
||||||||
Bank
of Shanghai Pudong Branch
|
|
August 2017
|
|
September 2018
|
|
5.66
|
|
RMB25,000
|
|
RM20,260
|
$3,975
|
|
$3,221
|
||||||||
Shanghai
Rural Commercial Bank
|
|
November 2017
|
|
November 2018 ─January 2019
|
|
5.44
|
|
RMB15,000
|
|
RM15,000
|
$4,770
|
|
$2,385
|
||||||||
Bank of Communications
|
|
November 2017
|
|
December 2018
|
|
5.66
|
|
RMB10,000
|
|
RMB10,000
|
|
$1,590
|
|
$1,590
|
|||||||
|
RMB70,000
|
|
RMB65,260
|
|||||||
|
$12,720
|
|
$10,376
|
|
March 31,
2018
|
|
(in thousands)
|
Cash
and cash equivalents
|
$
15,186
|
Accounts
receivable, less allowance for doubtful amounts
|
27,793
|
Inventory
|
19,865
|
Working
capital
|
$
62,844
|
|
|
|
Exhibit
Number
|
|
Description
|
|
Advisory Board Agreement dated May 1, 2016 by and between ACM
Research, Inc. and Chenming Hu
|
|
|
Warrant Exercise Agreement dated March 30, 2018 by and among ACM
Research, Inc., ACM Research (Shanghai), Inc., and Shengxin
(Shanghai) Management Consulting Limited Partnership
|
|
|
Senior Secured Promissory Note dated March 30, 2018 issued by
Shengxin (Shanghai) Management Consulting Limited Partnership to
ACM Research (Shanghai), Inc.
|
|
|
Intercompany Promissory Note dated March 30, 2018 issued by ACM
Research (Shanghai), Inc. to ACM Research, 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: May 11,
2018
|
By:
|
/s/ Lisa
Feng
|
|
|
|
Lisa Feng |
|
|
|
Interim
Chief Financial Officer, Chief Accounting Officer and
Treasurer
|
|
Dated:
May 11, 2018
|
By:
|
/s/ David H.
Wang
|
|
|
David
H. Wang
Chief
Executive Officer and President
(Principal
Executive Officer)
|
Dated:
May 11, 2018
|
By:
|
/s/ Lisa
Feng
|
|
|
Lisa
Feng
Interim
Chief Financial Officer, Chief Accounting Officer and
Treasurer(Principal Financial Officer)
|
Dated:
May 11, 2018
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By:
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/s/ David H.
Wang
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David
H. Wang
Chief
Executive Officer and President
(Principal
Executive Officer)
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Dated:
May 11, 2018
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By:
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/s/ Lisa
Feng
|
|
|
Lisa
Feng
Interim
Chief Financial Officer, Chief Accounting Officer and
Treasurer(Principal Financial Officer)
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COMPANY
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|
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ADVISORY
BOARD MEMBER
|
|
|
|
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Signature:
/s/ David H.
Wang
|
|
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Signature:
/s/ Chenming
Hu
|
|
Name:
David H. Wang
|
|
|
N
ame:
Chenming
Hu
|
|
Co. Title:
CEO
|
|
|
|
|
|
ACM Research, Inc.
By:
/s/ David H. Wang
Name: David H.
Wang
Title: Chief
Executive Officer and President
Address:
42307
Osgood Road, Suite I
Fremont, CA
94539
ACM Research (Shanghai), Inc.
By:
/s/ David H. Wang
Name: David H.
Wang
Title: Chief
Executive Officer and President
Address:
Building 4,
No.1690
Cai Lun
Road
Zhangjiang High
Tech Park
Shanghai, P.R.
China 201203
Shengxin (Shanghai) Management Consulting Limited
Partnership
By:
/s/ Jian Wang
Name: Jian
Wang
Title: General
Partner
Address:
Rm.
210-32, 2
nd
Fl. Building
1
38
Debao Rd.
Pilot
Free Trade Zone
Shanghai,
China
|
$2,981,259.26
|
Issue Date:
March 30, 2018
|
$2,981,259.26
|
Issue Date:
March 30, 2018
|