Blueprint
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):
June 12,
2019
ACM Research, Inc.
(Exact Name of Registrant as Specified in its Charter)
Delaware
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001-38273
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94-3290283
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(State or Other
Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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42307 Osgood Road, Suite I
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Fremont, California
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94539
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
(510)
445-3700
Not Applicable
(Former Name or Former Address, If Changed Since Last
Report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
□
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
□
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
□
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
□
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class
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Trading symbol
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Name of each exchange on which registered
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Class A Common Stock, par value $0.0001 per share
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ACMR
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Nasdaq Global Market
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Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 or
Rule 12b-2 of the Securities Exchange Act of
1934: Emerging
growth company ☑
If an emerging growth company, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange
Act. ☑
Unless the context otherwise requires,
references in this report to “we,” “our”
and similar terms refer to ACM Research, Inc. and its subsidiaries.
References to “ACM Research” refer to ACM Research,
Inc. and references to “ACM Shanghai” are to ACM
Research (Shanghai), Inc. For
purposes of this report, amounts in Renminbi, or RMB, have been
translated into U.S. dollars solely for the convenience of the
reader. The translations have been made at the conversion rate of
RMB 6.8937 to U.S. $1.00 effective as of June 12, 2019 (source:
State Administration of Foreign Exchange of the People’s
Republic of China).
Item 1.01
Entry into a Material
Definitive Agreement.
As
described below under “Item 8.01 Other Events,” on June
17, 2019 we announced our plans to complete:
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a listing of shares
of ACM Shanghai on the Shanghai Stock Exchange’s Sci-Tech
innovAtion boaRd, known as the STAR Market, which we refer to as
the Listing; and
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a concurrent
initial public offering of ACM Shanghai shares in the
People’s Republic of China, or the PRC, at a pre-offering
valuation of not less than RMB 5.15 billion ($747.1 million),
which we refer to as the IPO.
As an
initial step in qualifying for the Listing, on June 12, 2019 ACM
Shanghai entered into a Capital Increase Agreement and an
Agreement, which we refer to as a Supplemental Agreement, with
several investors, or the Investors, consisting of private equity
funds and other entities based in the PRC as well as two entities
owned by certain employees of ACM Shanghai.
Capital Increase Agreements
Under
its Capital Increase Agreement, each Investor has agreed to pay to
ACM Shanghai by July 5, 2019 a specified RMB amount that will be
applied, upon receipt of all required governmental approvals and
subject to the other terms of the Capital Increase Agreement, to
acquire shares of ACMR Shanghai, which we refer to as such
Investor’s Placement Shares.
●
The Investors,
other than the two employee entities, have agreed to pay a total of
RMB 161.8 million ($23.5 million) to purchase their Placement
Shares at a purchase price of RMB 13 for each RMB 1 of
ACM Shanghai registered capital. This purchase price is based
on a pre-investment enterprise valuation of ACM Shanghai of
RMB 4.65 billion ($674.5 million).
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The two employee
entities that are Investors have agreed to pay a total of
RMB 26.1 million ($3.8 million) to purchase their Placement
Shares at a purchase price of RMB 10.4 for each RMB 1 of
ACM Shanghai registered capital. This purchase price is based on a
pre-investment enterprise valuation of ACM Shanghai of
RMB 3.72 billion ($539.6 million), a discount of 20% from the
purchase price paid by the other Investors.
If all
of the Placement Shares are issued as contemplated by the several
Capital Increase Agreements, ACM Research would own 96.0% of the
outstanding ACM Shanghai shares, the Investors other than the two
employee entities would hold 3.3%, and the two employee entities
would hold 0.7%.
ACM
Shanghai is obligated under each Capital Increase Agreement to seek
to obtain all governmental approvals required for the Listing by no
later than July 31, 2019. Under each Investor’s Capital
Increase Agreement, if ACM Shanghai does not receive those
governmental approvals within three months after the Investor funds
the purchase of its Placement Share (other than for a reason not
attributable to ACM Shanghai), the Investor will have the right to
terminate its Capital Increase Agreement.
Supplemental Agreements
Under
each Supplemental Agreement, ACM Shanghai and the Investor party
thereto have agreed to use their respective best efforts to
facilitate the completion of the Listing and the IPO within three
years from the date on which the Placement Shares are issued. If,
by the end of such three-year period, the Listing and the IPO have
not been completed and the China Securities Regulatory Commission
has not otherwise approved the registration of ACM Shanghai’s
Listing application, the Investor and ACM Shanghai each will have
the right to require that ACM Shanghai repurchase the
Investor’s Placement Shares for a price equal to the initial
purchase price paid by the Investor, without interest.
We have
determined, voluntarily and not pursuant to any requirement of any
of the Capital Increase Agreements or Supplemental Agreements or
any other contractual or legal obligation, that ACM Shanghai will
deposit, and hold in reserve, all of the proceeds received from the
sale of Placement Shares in segregated cash and cash-equivalent
accounts pending either (a) completion of the Listing and the IPO
or (b) application to repurchase such Placement
Shares.
If the
Listing and the IPO are completed, each Investor, pursuant to the
terms of its Supplemental Agreement, will be prohibited from (a)
for a period of one year from the listing date, selling or
otherwise transferring its Placement Shares and (b) holding,
directly or indirectly, more than five percent of the total
registered capital of ACM Shanghai.
On June
17, 2019 we announced our intention to complete the Listing, under
which shares of ACM Shanghai would be listed on the STAR Market,
and the IPO, a public offering of ACM Shanghai shares in the PRC
that would be completed contemporaneously with the Listing. ACM
Shanghai currently is our primary operating subsidiary and a wholly
owned subsidiary of ACM Research.
Background of Proposed Listing and IPO
We will
seek to complete, within three years after the date on which the
Placement Shares are issued, the Listing on the STAR Market, a new
exchange organized by the Shanghai Stock Exchange in order to
support innovative companies in the PRC. We believe the Listing
will enable us to access a new source of growth capital in our
primary market, raise our profile with investors and potential
customers in the PRC, and help us achieve our goal of becoming a
global supplier to the semiconductor capital equipment
market.
To
qualify for the Listing, ACM Shanghai must have multiple
independent shareholders in the PRC. In order to satisfy this
requirement, ACM Shanghai entered into the Capital Increase
Agreements and Supplemental Agreements with the several Investors
on June 12, 2019, as described above under “Item 1.01 Entry
into a Material Definitive Agreement.” Upon, and subject to,
the Investors’ funding of the purchase prices for the
Placement Shares in accordance with the respective Capital Increase
Agreements, ACM Shanghai will receive aggregate proceeds of
RMB 187,924,000 ($27.3 million) and will have satisfied the
STAR Market requirement as to multiple independent PRC
shareholders.
We may
determine to enter into additional agreements in the quarter ending
September 30, 2019 pursuant to which certain existing ACM Research
stockholders could purchase shares of ACM Shanghai, which we refer
to as the Additional Shares, for an aggregate purchase price of up
to $40 million. The purchase price of the Additional Shares
would be RMB 13 per RMB 1 of registered capital, which is
the same price as is to be paid by Investors other than the two
employee entities. We expect that, if we were to enter any such
agreements for Additional Shares, the other terms of those
agreements would be substantially similar to those under the
Capital Increase Agreements and Supplemental Agreements entered
into with the Investors. As of the date of this report, we not
entered into any agreements or understandings with respect to the
issuance of Additional Shares. ACM Shanghai will not need to
complete any sale of Additional Shares in order to comply with the
Listing requirements, and we are not obligated–by the Listing
requirements, any contractual obligations or otherwise–to
enter into any agreements to sell Additional Shares.
As
described above under “Item 1.01 Entry into a Material
Definitive Agreement—Supplemental Agreements,” we have
voluntarily determined that ACM Shanghai will deposit, and hold in
reserve, the proceeds of the Placement Shares (and any Additional
Shares), in segregated cash and cash-equivalent accounts pending
either (a) completion of the Listing and the IPO or (b) application
to repurchase Placement Shares pursuant to the Supplemental
Agreements (or to repurchase Additional Shares pursuant to
equivalent agreements). Upon completion of the Listing and the IPO,
ACM Shanghai will have broad discretion in the use of the proceeds
of the sale of the Placement Shares (and any Additional Shares) and
of the IPO.
Our
global headquarters will continue to be located in Fremont,
California, and we are committed to maintaining the listing of ACM
Research Class A common stock on the Nasdaq Global Market. We
believe the listing of ACM Shanghai shares on the STAR Market will
help us scale our business in mainland PRC, as we continue to seek
to broaden our markets in Europe, Japan, Korea, Taiwan and the
United States.
Accounting Treatment
For
purposes of our consolidated financial statements prepared in
accordance with U.S. generally accepted accounting principles, we
expect that, pending completion of the Listing and the IPO or the
application of the proceeds of the Placement Shares (and any
Additional Shares) to repurchase such Placement Shares (or
Additional Shares):
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the proceeds of the
sales of Placement Shares (and any Additional Shares) will be
reflected in our consolidated balance sheets as investment deposits
(under non-current assets) and as a long-term liability;
and
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the Placement
Shares (and any Additional Shares) will not be reflected as
non-controlling or minority equity interests in ACM
Shanghai.
Risks and Uncertainties of Proposed Listing and IPO
Our
plans for the Listing and the IPO are subject to a number of risks
and uncertainties, and our actual results may vary significantly
from our expectations. The occurrence of any of the following risks
and uncertainties, or additional risks and uncertainties with
respect to the proposed Listing that are not presently known to us
or that we currently believe to be immaterial, could materially and
adversely affect our business, financial condition, results of
operations or cash flows. In any such case the trading price of our
Class A common stock could decline.
We may
not be able to complete the Listing and the IPO. One or more of the
Investors may not fund the purchase of their Placement Shares as
required by their Capital Increase Agreements. Even if the
Investors fund those purchases, ACM Shanghai must succeed in
obtaining PRC governmental approvals required to permit the Listing
and the IPO, and one or more of those approvals may be denied, or
significantly delayed, by the PRC regulators for numerous reasons,
many of which are outside of our control. Similarly, ACM
Shanghai’s Listing application may be denied or delayed by
the Shanghai Stock Exchange in its discretion.
If we
are unable to complete the Listing and the IPO, we may not
otherwise be able to realize the anticipated advantages in our PRC
operations. Because it may be more than three years before we know
whether the Listing and the IPO will be completed, we may, in the
interim, forego or postpone other alternative actions to strengthen
our market position and operations in the PRC. During that time,
the process underlying the Listing and the IPO could result in
significant diversion of management time as well as substantial
out-of-pocket costs.
We
cannot assure you that, even if the Listing and the IPO are
completed, we will realize any or all of our anticipated benefits
of the Listing and the IPO, including the strengthening of our
market position and operations in the PRC Market. If the listing is
completed, ACM Shanghai will have broad discretion in the use of
the proceeds from sales of Placement Shares and any Additional
Shares and from the IPO, and it may spend or invest those proceeds
in a way with which ACM Research stockholders
disagree.
In any
event, the proceeds from sales of Placement Shares and any
Additional Shares and from the IPO are not expected to be available
to expand our operations outside the PRC, and that global expansion
will be critical to our long-term business success. As a result, it
is likely that we will require additional capital in the future in
order to fund global operations and we cannot give any assurance
that such capital will be available at all in terms acceptable to
us. Under existing PRC laws and regulations, it may be difficult,
if not impossible, for ACM Research to be able to receive dividends
comprised of funds generated by ACM Shanghai and, even if such
dividends can be paid from the PRC to the United States, after the
completion of the Listing and the IPO, any such dividends can be
paid to ACM Research only if other holders of ACM Shanghai shares
receive their pro rata dividends.
In
order to help ensure that proceeds from the Placement Shares and
any Additional Shares can be repaid if necessary under the terms of
the applicable agreements, ACM Shanghai will reserve those proceeds
in segregated accounts and therefore those proceeds will not be
available to fund our operations in the PRC or elsewhere. In the
event, however, ACM Shanghai were to incur an unexpected
significant financial obligation, those proceeds may be subject to
claims of third parties, in which case we would need to find an
alternative source of funds to repurchase the Placement Shares and
any Additional Shares.
As of
the date of this report, no company with stock publicly traded in
the United States has effected a STAR Market listing of stock of a
PRC-based subsidiary. No assurance can be given regarding the
effect of the Listing and the IPO on the market price of ACM
Research Class A common stock. The market price of Class A common
stock may be volatile or may decline, for reasons other than the
risk and uncertainties described above, as the result of investor
negativity or uncertainty with respect to the impact of the
proposed Listing and IPO.
ACM Research stockholders are not entitled to purchase ACM Shanghai
shares in the pre-Listing placement, and they may have limited
opportunities to purchase ACM Shanghai shares even if the Listing
and the IPO are completed. Investors may elect to invest in our
business and operations by purchasing ACM Shanghai shares in the
IPO or on the STAR Market rather than purchasing ACM Research Class
A common stock, and that reduction in demand could lead to a
decrease in the market price for the Class A common
stock.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly
authorized.
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ACM RESEARCH,
INC.
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Date:
June 18, 2019
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By:
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/s/ David H.
Wang
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David
H. Wang |
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Chief Executive
Officer and President
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