SEC Filing | ACM Research, Inc.

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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): May 26, 2020

ACM Research, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-38273	94-3290283
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

42307 Osgood Road, Suite I
Fremont, California	94539
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 445-3700

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		Trading symbol		Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share		ACMR		Nasdaq Global Market

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. ☒

NOTE:

ACM Research, Inc., or ACM Research, conducts its business operations principally through its subsidiary ACM Research (Shanghai), Inc., or ACM Shanghai. Unless the context requires otherwise, references in this report to “our,” “us,” “we” and similar terms refer to ACM Research and its subsidiaries, including ACM Shanghai, collectively.

Item 1.01.

Entry into a Material Definitive Agreement.

The information set forth under the heading “STAR Listing and STAR IPO—ACM Research Undertaking Agreements” in Item 8.01 of this report is incorporated by reference into this Item 1.01.

Item 7.01.

Regulation FD Disclosure.

A copy of the preliminary information document, or PID, filed by ACM Shanghai on May 26, 2020 in connection with the STAR Listing and the STAR IPO, each as defined under “STAR Listing and STAR IPO—Background” in Item 8.01 of this report, is furnished as Exhibit 99.01 to this report.

There have not been any decisions made regarding the timing or terms of the STAR Listing and the STAR IPO or whether the proposed actions will ultimately be approved by the Shanghai Stock Exchange. Accordingly, there is no assurance that the proposed STAR Listing and STAR IPO will be completed.

The ACM Shanghai shares referred to in the PID and this Item 7.01 have not been and will not be registered under the Securities Act of 1933, or the Securities Act, or any state securities laws and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This report is neither an offer to sell nor a solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of these shares in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Item 8.01.

Other Information.

STAR Listing and STAR IPO

Background

In June 2019, we announced our intention to complete:

•	a listing, which we refer to as the STAR Listing, of shares of ACM Shanghai on the Shanghai Stock Exchange’s Sci-Tech Innovation Board, known as the STAR Market; and

•	a concurrent initial public offering, which we refer to as the STAR IPO, of ACM Shanghai shares in the People’s Republic of China, or the PRC, at a pre-offering valuation of not less than RMB 5.15 billion ($747.1 million).

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. Our global headquarters will continue to be located in Fremont, California, and we are committed to maintaining the listing of Class A common stock of ACM Research on the Nasdaq Global Market, or Nasdaq.

Certain STAR Listing Requirements

To meet a STAR Listing requirement that it have multiple independent stockholders in the PRC, ACM Shanghai completed private placements of its shares in June and November 2019, following which, as of May 31, 2020, the private placement investors held a total of 8.3% of the outstanding shares of ACM Shanghai and ACM Research held the remaining 91.7%.

The board of directors of ACM Shanghai consists of nine members, seven of whom are nominated by ACM Research and two of whom are nominated by two of the private placement investors. The directors nominated by ACM Research include two individuals who also are members of the board of directors of ACM Research: Haiping Dun and David H. Wang, who also is the Chief Executive Officer and President of ACM Research.

Consistent with STAR Listing requirements and applicable law, ACM Shanghai has adopted a dividend distribution policy, which generally contemplates that it will pay dividends, typically annually, based on its then-existing situation by fully considering and accepting the opinions of shareholders (especially small and medium shareholders), independent directors and supervisors through a variety of channels. In the absence of a “major” project, if ACM Shanghai is profitable and has met statutory reserve, surplus reserve and similar legal requirements with respect to a year, the annual cash dividend amount will be at least ten percent of any profits for that year, but any profit distribution established by the ACM Shanghai board will be subject to shareholder approval. We expect ACM Shanghai will not pay dividends under this policy for the foreseeable future, because the execution of its business strategy and growth plans each year will involve a “major” project, which generally is defined to be a project for which ACM Shanghai’s cumulative expenditures for proposed capital investments, asset acquisitions, research and development, and other items during that year will exceed five percent of its net assets.

Certain Proposed STAR IPO Terms

ACM Shanghai currently proposes to offer up to ten percent of its shares in the STAR IPO. The net proceeds of the STAR IPO would be used to fund:

•	the land lease and building construction for our proposed development and production center in the Lingang region of Shanghai, as described in the Current Report on Form 8-K we filed with the Securities and Exchange Commission, or SEC, on May 13, 2020;

•

product development to upgrade and expand our process equipment targeted at more advanced process nodes, including technical improvement and development of TEBO megasonic cleaning equipment, Tahoe single wafer wet bench combined cleaning equipment, front-end brush scrubbing equipment, front end process electroplating equipment, Stress Free Polish equipment and vertical furnace equipment; and

•	working capital.

ACM Research Undertaking Agreements

In connection with ACM Shanghai’s submission of the PID on May 26, 2020 with respect to the STAR IPO, ACM Research, as the controlling shareholder of ACM Shanghai, was required to enter into a series of agreements with the STAR Market, which became effective upon submission and are described below:

•

Commitment Letter Regarding the Lock-up of Shares, pursuant to which ACM Research has agreed to a three-year lockup of its shares in ACM Shanghai, including a prohibition against directing ACM Shanghai to repurchase any of its shares following the closing of the STAR IPO. The lockup period will be extended for six additional months if the daily closing price of ACM Shanghai shares for twenty consecutive trading days during the first six months following the STAR IPO is lower than the issue price of shares in the STAR IPO.

•

Commitment Letter Regarding Shareholding Intent and Intent to Reduce Shareholdings, pursuant to which ACM Research and David H. Wang, Chief Executive Officer, President and Chair of the Board, have agreed that sale of ACM Shanghai shares during the two-year period following the termination of its lockup period (as described above) will be made (a) in a manner consistent with the regulations of the China Securities Regulatory Commission, or CSRC, and the Shanghai Stock Exchange, (b) at a price no lower than the issue price of shares the STAR IPO and (c) following a pre‑announcement of its intention to make such sale. Assuming the lockup period is not extended as described in the preceding paragraph, this agreement will terminate five years following the closing of the STAR IPO.

•

Commitment Letter Regarding the Plan and Binding Measures for Stabilizing the Stock Price of ACM Shanghai Within Three Years After Listing, pursuant to which ACM Research and certain of its officers and directors, including Dr. Wang, have severally agreed that if, during the three‑year period following the STAR IPO, the daily closing price of the shares of ACM Shanghai for twenty consecutive trading days is lower than the audited net assets value per share (as defined) for the fiscal year prior to the STAR IPO, the parties agree that they will take measures to stabilize the ACM Shanghai share price by either (a) ACM Shanghai repurchasing shares purchased by minority shareholders or (b) ACM Research, Dr. Wang or other executive officers and directors purchasing additional ACM Shanghai shares.

•

Commitment Letter Regarding Fraudulent Issuance of Listed Shares, pursuant to which ACM Research, ACM Shanghai and Dr. Wang have represented that there has been no fraud in the STAR IPO and undertake to purchase any shares of ACM Shanghai issued pursuant to the STAR IPO if it is determined by the CSRC and other relevant authorities that fraud was so committed or that ACM Shanghai was ineligible for the STAR IPO.

•

Commitment Letter Regarding the Lack of False Records, Misleading Statements or Major Omissions, pursuant to which ACM Research has covenanted not to make any misrepresentations, misleading statements or major omissions in its disclosure documents relating to the STAR IPO and has agreed to compensate investors in ACM Shanghai for losses according to law in the event of a breach.

•

Commitment Letter Regarding Making Up for Diluted Immediate Returns, pursuant to which ACM Research has undertaken to prevent the risk of dilution to ACM Shanghai shareholders and to assert influence of ACM Shanghai’s operations only to the extent of ACM Research’s authority as a majority shareholder.

•

Commitment Letter Regarding Unfulfilled Commitment on Binding Measures, pursuant to which ACM Research and Dr. Wang have committed to fulfill the obligations of ACM Research set forth in the PID and have agreed to take certain corrective actions for failure to do so, including publicly explaining reasons for such failure, compensate investors in ACM Shanghai for losses according to law, foregoing dividends from ACM Shanghai, and returning any gains that resulted from such failure.

•

Letter of Commitment on the Avoidance of Competition in the Same Industry, pursuant to which ACM Research has agreed that it will not, without the prior consent of ACM Shanghai, compete with the principal business of ACM Shanghai, including supporting any companies that may compete with ACM Shanghai. If ACM Research engages in any competitive activity, it has agreed to terminate or otherwise transfer such activity and, in the case of transfer, grants to ACM Shanghai a right of first refusal to acquire such transferred activity. The commitment under this agreement will remain in effect so long as ACM Research remains the controlling shareholder of ACM Shanghai.

•	Commitment Letter Regarding the Standardization and Reduction of Related Transactions, pursuant to which ACM Research has agreed that any transactions between ACM Research and ACM Shanghai will be standardized, to the extent possible, at arm’s-length and fair to ACM Shanghai.

•

Commitment Letter Regarding the Avoidance of Funds Occupation and Illegal Guarantee, pursuant to which ACM Research has agreed that the funds of ACM Shanghai and its controlled companies have not, and will not, be used for non-operating purposes, including that ACM Shanghai will not provide any guarantees in violation of applicable regulations.

•	Statement and Commitment Letter, pursuant to which ACM Research has covenanted as to its ownership of shares of ACM Shanghai and related matters.

•

Commitment Letter Regarding Property Lease Matters, pursuant to which ACM Research has guaranteed in full the payment of all costs of any relocation of ACM Shanghai resulting from ACM Shanghai being unable to continue to lease and use, due to certain property mortgage matters, either of the two properties it currently leases in Shanghai for ACM Shanghai’s headquarters and manufacturing space.

•	Commitment Letter Regarding Social Insurance and Housing Provident Fund Matters, pursuant to which ACM Research has guaranteed in full the payment of ACM Shanghai’s obligations to make certain social insurance and housing fund contributions.

•	Commitment Letter Regarding Foreign Exchange Matters pursuant to which ACM Research has agreed to be responsible for any obligations imposed by the foreign exchange management department relating to the STAR IPO or for any foreign exchange matters existing before the STAR IPO.

•	Confirmation and Commitment Letter Regarding the Historical Evolution Related Matters Regarding ACM Shanghai, pursuant to which ACM Research has covenanted as to historical developments regarding ACM Shanghai, including with respect to certain intellectual property of ACM Shanghai.

•

Confirmation Letter, pursuant to which ACM Research has confirmed it did not use any intellectual property licensed under its Technology License Agreement dated January 31, 2007 with ACM Shanghai (under which ACM Research granted ACM Shanghai a worldwide exclusive license to the intellectual property owned or controlled by ACM Shanghai) in a manner inconsistent with such agreement, that it has not otherwise transferred or authorized anyone else to use the licensed intellectual property, and that no dispute exists with respect to the intellectual property of ACM Shanghai.

The foregoing summaries of the agreements of ACM Research with the STAR Market are qualified in their entirety by reference to the text of the agreements, which are being filed as Exhibits 10.01 through 10.16 to this report and which are incorporated in this report by reference.

David H. Wang Undertaking Agreements

In connection with ACM Shanghai’s submission with respect to the STAR IPO, David H. Wang, as our Chief Executive Officer, President and Chair of the Board and a significant stockholder of ACM Research, was required to enter into a series of agreements with the STAR Market in his individual capacity. As of the date of the submission, Dr. Wang beneficially owned approximately 15% of the outstanding shares of ACM Research Class A common stock (including shares issuable upon conversion of Class B common stock) and approximately 55% of the total voting power of ACM Research common stock. He did not beneficially own any ACM Shanghai shares as of that date.

In addition to his commitments made under four of the agreements described above, Dr. Wang agreed that:

•	he will not voluntarily convert any Class B common stock held by him into Class A common stock for a three-year period after the completion of the STAR IPO;

•

he will lockup, and not sell, any shares of ACM Shanghai directly or indirectly owned by him for a three-year period after the completion of the STAR IPO, subject to a six-month extension if the daily closing price of ACM Shanghai shares for twenty consecutive trading days during the first six months following the STAR IPO is lower than the issue price of shares in the STAR IPO;

•	following the expiration of his lockup obligations, his sales of ACM Shanghai shares will be subject to volume limitations for a period of four years and as long as he continues to serve on the board of directors of ACM Shanghai;

•	he will cause ACM Shanghai to fulfill its obligations set forth in the PID and to take certain actions if it fails to do so, including compensating investors for losses and publicly explaining the reason for any failure;

•	he will refrain from competing, or causing any entities controlled by him to compete, with the primary business of ACM Shanghai;

•	he will, to the extent possible, cause related party transactions with ACM Shanghai to be standardized and ensure that such transactions are fair to ACM Shanghai; and

•	he will not use the funds of ACM Shanghai for personal gain or any other unlawful purpose.

Risk Factors

If the STAR Listing and the STAR IPO are completed, ACM Research and ACM Shanghai both will be public reporting companies but each will be subject to separate, and potentially inconsistent, accounting and disclosure requirements, which may lead to investor confusion or uncertainty that could cause decreased demand for, or fluctuations in the price of, one or both of the companies’ publicly traded shares.

If ACM Shanghai completes the STAR Listing and the STAR IPO, it will be subject to accounting, disclosure and other regulatory requirements of the STAR Market. At the same time, ACM Research will remain subject to accounting, disclosure and other regulatory requirements of the SEC and Nasdaq. As a result, ACM Research and ACM Shanghai periodically will disclose information simultaneously pursuant to differing laws and regulations. Even though substantially all of the operations of ACM Research are currently conducted through ACM Shanghai, the information disclosed by the two companies will differ, and may differ materially from time to time, due to the distinct, and potentially inconsistent, accounting standards applicable to the two companies and disclosure requirements imposed by securities regulatory authorities, as well as differences in language, culture and expression habit, in composition of investors in the United States and PRC, and in the capital markets of the United States and the PRC.

Differing disclosures could lead to confusion or uncertainty among investors in the publicly traded shares of one or both companies. Differences between the price of ACM Shanghai shares on the STAR Market and the price of ACM Research Class A common stock on Nasdaq could lead to increased volatility, as some investors seek to arbitrage price differences. Moreover, such volatility could be exacerbated by the fact that ACM Shanghai shares currently represent substantially all of the assets of ACM Research.

We could be adversely affected if proposed legislation is adopted regarding improved access to audit and other information and audit inspections of accounting firms, including registered public accounting firms operating in the PRC such as our auditor.

BDO China Shu Lun Pan Certified Public Accountants LLP, our independent registered public accounting firm, is not inspected by the Public Company Accounting Oversight Board, or PCAOB. See “Item 1A. Risk Factors—Risks Related to Our Business and Our Industry—Our auditor, as a registered public accounting firm operating in the PRC, is not permitted to be inspected by the Public Company Accounting Oversight Board, and consequently investors may be deprived of the benefits of such inspections” in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 that we filed with the SEC on March 24, 2020.

On April 21, 2020, the SEC and the PCAOB issued a joint statement highlighting the significant disclosure, financial reporting and other risks associated with emerging market investments, including the PCAOB’s continued inability to inspect audit work papers of auditors in the PRC. This statement is the latest in a series of recent proposed actions:

•	In December 2018 the SEC and the PCAOB issued a joint statement highlighting continued challenges faced by U.S. regulators in their oversight of financial statement audits of U.S.-listed reporting companies with significant operations in the PRC.

•

In June 2019 a bipartisan group of lawmakers introduced bills in both houses of the U.S. Congress that, if passed, would have required the SEC to maintain a list of reporting companies for which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm. The proposed Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges Act, or EQUITABLE Act, would have prescribed increased disclosure requirements for these reporting companies and, beginning in 2025, provided for the delisting from U.S. stock exchanges of reporting companies included on the SEC’s list for three consecutive years.

It remains unclear what further actions the SEC and the PCAOB will take to address these issues and what impact those actions will have on companies who have significant operations in the PRC and who have securities listed on a U.S. stock exchange.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit		Description
10.01*		Commitment Letter Regarding the Lock-up of Shares, effective as of May 26, 2020, of ACM Research, Inc.
10.02*		Commitment Letter Regarding Shareholding Intent and Intent to Reduce Shareholding, effective as of May 26, 2020, of ACM Research, Inc. and David H. Wang
10.03*		Commitment Letter Regarding the Plan and Binding Measures for Stabilizing the Stock Price of ACM Research (Shanghai), Inc. Within Three Years After Listing, effective as of May 26, 2020, of ACM Research, Inc., ACM Research (Shanghai), Inc., and certain individuals named therein
10.04*		Commitment Letter Regarding Fraudulent Issuance of Listed Shares, effective as of May 26, 2020, of ACM Research, Inc., ACM Research (Shanghai), Inc. and David H. Wang
10.05*†		Commitment Letter Regarding the Lack of False Records, Misleading Statements or Major Omissions in the Preliminary Information Document, effective as of May 26, 2020, of ACM Research, Inc.
10.06*		Commitment Letter Regarding Making Up for Diluted Immediate Returns, effective as of May 26, 2020, of ACM Research, Inc.
10.07*†		Commitment Letter Regarding Unfulfilled Commitment on Binding Measures, effective as of May 26, 2020, of ACM Research, Inc. and David H. Wang
10.08*		Commitment Letter Regarding the Avoidance of Competition in the Same Industry, effective as of May 26, 2020, of ACM Research, Inc.
10.09*		Commitment Letter Regarding the Standardization and Reduction of Related Transactions, effective as of May 26, 2020, of ACM Research, Inc.
10.10*		Commitment Letter Regarding the Avoidance of Funds Occupation and Illegal Guarantee, effective as of May 26, 2020, of ACM Research, Inc.
10.11*†		Statement and Commitment Letter, effective as of May 26, 2020, of ACM Research, Inc.
10.12*		Commitment Letter Regarding Property Lease Matters, effective as of May 26, 2020, of ACM Research, Inc.
10.13*		Commitment Letter Regarding Social Insurance and Housing Provident Fund Matters, effective as of May 26, 2020, of ACM Research, Inc.
10.14*		Commitment Letter Regarding Foreign Exchange Matters, effective as of May 26, 2020, of ACM Research, Inc.
10.15*		Confirmation and Commitment Letter Regarding the Historical Evolution Related Matters Regarding ACM Research (Shanghai), Inc., effective as of May 26, 2020, of ACM Research, Inc.
10.16*		Confirmation Letter, effective as of May 26, 2020, of ACM Research, Inc.
99.01*†		Preliminary Information Document of ACM Research (Shanghai), Inc.

* Unofficial English translation of original document prepared in Mandarin Chinese.

† Certain information redacted and replaced with “[***]”.

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.

	ACM RESEARCH, INC.
	By:	/s/ Mark McKechnie
		Mark McKechnie
		Chief Financial Officer and Treasurer

Dated: June 1, 2020

Exhibit 10.01

Commitment Letter Regarding the Lock-up of Shares

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to issue an initial public offering and be listed on the Science and Technology Board (hereinafter referred to as “this issuance and listing”), the company, as the controlling shareholder of the issuer, makes the following commitment with respect to the lock-up and reduction of the issuer’s shares:

1. Within 36 months from the date of the issuer’s stock listing, the company will not transfer or entrust others to manage the issuer’s direct and indirect holdings of the issuer’s shares issued before the listing (hereinafter referred to as the “pre-issuance shares “), nor will it propose that the issuer repurchase that part of the shares. The above mentioned commitment does not affect the normal trading of the company’s stocks on the US stock exchange, and the company’s financing, mergers and acquisitions in accordance with the provisions of the US securities laws.

2. Within 6 months after the issuer’s listing, if the issuer’s stock’s closing price for 20 consecutive trading days is lower than the issuer’s stock issue price at the time of listing (hereinafter referred to as the “issuer’s stock issue price”), or the closing price at the end of the 6-month period after listing is lower than the issuer’s stock issue price, then the lock-up period of the issuer’s shares held by the company is automatically extended by 6 months. If the issuer has incurred ex-rights and ex-dividends such as dividend payouts, bonus shares, capital reserve conversion to increase in share capital, and additional new shares, the above issue price refers to the adjusted price of the issuer’s shares.

3. If the issuer has a major violation of the law as specified in Article 12, Section 2 of the Shanghai Stock Exchange Science and Technology Board Listing Rules, and it involves the delisting standard, the company will not reduce the issuer’s shares from the date of the relevant administrative penalty decision or judicial decision until the issuer’s shares are terminated from listing.

4. If the company reduces its pre-issuance shares after the lock-up period expires, it will strictly abide by laws, administrative regulations, departmental rules, regulatory documents and relevant regulations of the Shanghai Stock Exchange, and perform the corresponding information disclosure obligations.

5. The company will promptly report to the issuer on the issuer’s shares held by the company and their changes.

6. If the company violates the above commitments and reduces the issuer’s shares, the actual gains (if any) obtained from the sale of the issuer’s shares shall belong to the issuer.

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	ACM RESEARCH, INC.



	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: May 21, 2020

Exhibit 10.02

Commitment Letter Regarding Shareholding Intent and Intent to Reduce Shareholding

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “company”) intends to apply for an initial public offering of shares and be listed on the Science and Technology Board (hereinafter referred to as “this issuance and listing”), the enterprise / I as the controlling shareholder / actual controller of the company, make the following commitment regarding the company’s shareholding intent and intent to reduce shareholding:

1. After the lock-up period for holding the company’s shares has expired, the enterprise / I will decide whether to reduce the shareholding and the number of shares to be reduced according to the actual needs and secondary market conditions.

2. If the enterprise / I intend to reduce the company’s shares issued prior to the listing (hereinafter referred to as “pre-issuance shares”), the enterprise / I will strictly abide by the relevant regulations of the China Securities Regulatory Commission and the Shanghai Stock Exchange regarding shareholders’ holding reduction, carefully formulate shareholding reduction plans, and clarify and disclose the company’s control arrangements in advance to ensure the company’s continued stable operation; if the enterprise / I intend to reduce the company’s shares within two years after the expiration of the lock-up period, the price will not be lower than the issue price of the company’s initial public offering of stocks (if the company has incurred ex-rights and ex-dividends such as dividend payouts, bonus shares, capital reserve conversion to increase in share capital, and additional new shares after the company’s initial public offering, the price of reduction of shares shall be adjusted accordingly in accordance with the regulations), and the company will make announcements within the three trading days before the reduction or the time period stipulated by relevant laws and regulations, and disclose in the relevant information disclosure documents with respect to the reasons for the reduction of shares, the number of shares to be reduced, the intention to hold shares in the future, and the impact of the reduction of shareholding on the company’s governance structure, shareholding structure, and continuous operation.

3. If the enterprise / I reduce(s) the company’s pre-issuance shares after the expiration of the lock-up period, the methods and procedures for reducing the shareholding will strictly comply with the Company Law of the People’s Republic of China, Securities Law of the People’s Republic of China and other applicable laws and administrative regulations, departmental regulations, regulatory documents and relevant regulatory rules on share reduction and information disclosure.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

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	/s/ Hui Wang

	HUI WANG

Exhibit 10.03

Commitment Letter

Regarding the Plan and Binding Measures for Stabilizing the Stock Price of the Company Within Three Years After Listing

In order to maintain the stability of the share price of ACM Research (Shanghai), Inc. (hereinafter referred to as the “company”) after listing, and fully protect the rights of the company’s shareholders, particularly small and medium shareholders, the company has specially formulated the Plan for Stabilizing the Stock Price of the Company Within Three Years After Listing of ACM Research (Shanghai), Inc. (hereinafter referred to as the “plan for stabilizing stock price”). According to the requirements of the Opinions on Further Promoting the Reform of the New Share Issuance System of the China Securities Regulatory Commission (hereinafter referred to as the “China Securities Regulatory Commission”), the company and its controlling shareholders, actual controllers, and directors receiving remuneration and/or allowances from the company (except for independent directors, the same below) and senior management personnel promise to strictly abide by the following plan to stabilize the stock price of the company:

1. Conditions for starting and stopping stock price stabilization measures

(1) Starting conditions: If the company has made an initial public offering of shares and the closing price of the stock price within three years after the listing on the Science and Technology Board is lower than the company’s audited net assets per share (net assets per share = total equity of common shareholders attributable to the parent company in the consolidated financial statements / total number of company shares at the end of the year. If the company’s net assets or total shares have changed due to the occurrence of ex-rights and ex-dividends such as dividend payouts, bonus shares, capital reserve conversion to increase in share capital, and additional new shares, or due to other reasons, then the relevant calculation and comparison methods shall be adjusted in accordance with the relevant regulations of the stock exchange or other applicable regulations, the same below) in the previous fiscal year for 20 consecutive trading days, the company will take one or more of the following measures in order to stabilize the stock price of the company: (1) The company buys back stocks; (2) The controlling shareholder increases the shareholding; (3) The directors and senior management personnel increase the shareholding.

(2) Stopping conditions: During the implementation period of the following specific stock price stabilization measures, if the company’s stock closing prices for 20 consecutive trading days are higher than the company’s audited net assets per share in the previous fiscal year, or the continuation to buy back and/or increase the company’s shares will result in the company’s equity distribution not meeting the listing conditions, the implementation of stock price stabilization measures shall stop.

2. Measures to stabilize the stock price

1. Measures by the company to stabilize the stock price

When triggering the starting conditions for the above stock price stabilization measures, on the premise of ensuring that the company’s equity distribution meets the listing conditions and does not affect the company’s normal production and operation, the company shall comply with the Company Law of the People’s Republic of China, Administrative Measures for the Repurchase of Public Shares by Listed Companies (Trial), Supplementary Provisions on the Repurchase of Shares by Listed Companies by Centralized Auction, and other laws, administrative regulations, departmental regulations, regulatory documents, relevant provisions of the stock exchange, the company’s articles of association and the requirements of the company’s internal governance system, after timely implementation of the relevant statutory procedures, buy back shares from the public shareholders.

The company shall convene a board meeting within 10 trading days from the date of triggering the stock price stabilization measures to review the company’s share repurchase proposal, which must be passed by more than half of all directors of the company’s Board of Directors, and within 2 trading days after the Board of Directors makes a resolution, a public announcement of the Board of Directors resolutions, relevant proposals and notice of convening a general meeting of shareholders shall be made. The proposal to repurchase shares shall include the price or price range of the shares to be repurchased, the number of shares, the period of repurchase, as well as the laws, administrative regulations, departmental regulations, regulatory documents and other information that shall be included in the relevant regulations of the stock exchange. The resolution of the company’s general meeting of shareholders on the repurchase of shares must be passed by more than two-thirds of the voting rights held by the shareholders present at the general meeting of shareholders. The controlling shareholders of the company undertakes to vote in favor of such repurchase matters at the general meeting of shareholders. The company shall initiate the implementation of the specific plan for stabilizing the stock price within 5 trading days after the plan is reviewed and approved at the general meeting of shareholders. The repurchased shares will be cancelled according to law and the company’s capital reduction procedures will be processed in a timely manner.

If the company passes the share repurchase proposal for the purpose of stabilizing the stock price, the number and number of shares repurchased by the company shall meet the following conditions:

1. The amount of funds used for a single share repurchase is not less than 10% of the net profit attributable to shareholders of the company audited in the previous fiscal year, but not higher than 20% of the net profit attributable to shareholders of the company audited in the previous fiscal year;

2. The total amount of repurchase funds used to stabilize stock prices in the same fiscal year shall not exceed 50% of the net profit attributable to shareholders of the company audited in the previous fiscal year.

If the above standards are exceeded, the relevant stock price stabilization measures will not continue to be implemented in the current year. However, when the situation that needs to initiate stock price stabilization measures continues to occur in the following year, the company will continue to implement the stock price stabilization plan in accordance with the above principles.

2. Measures by the controlling shareholder to stabilize the stock price

When the closing price of the company’s stock repurchase plan is lower than the company’s audited net assets per share in the previous fiscal year for 20 consecutive trading days after the expiration of the implementation period of the company’s share repurchase plan, or when the company’s share repurchase measures cannot be implemented, the controlling shareholder of the company shall initiate a plan to increase the company’s shares through auctions in the secondary market:

1. Under the premise of compliance with the conditions and requirements of laws, administrative regulations, departmental rules, regulatory documents, and relevant provisions of the stock exchange, such as the Administrative Measures for the Acquisition of Listed Companies and the Shanghai Stock exchange Science and Technology Board Listing Rules, the controlling shareholder of the company shall increase the shareholding in the company’s stock, and promise to vote in favor of the company’s share price stabilization plan with all the votes it has at the general meeting of shareholders.

2. The controlling shareholder shall, within 10 trading days from the date of triggering the stock price stabilization measure, notify the company in writing of its specific plan to increase its shareholding in the company and the company will make an announcement. The controlling shareholder shall initiate the implementation of the specific stock price stabilization plan within 5 trading days after the announcement of the stock price stabilization plan.

3. If the controlling shareholder of the company increases the company’s shares for the purpose of stabilizing the stock price, the number and amount of the company’s shares increased shall meet the following conditions:

(1) The accumulative amount of capital held by the controlling shareholder to increase the company’s shares within 12 consecutive months shall not be less than 30% of the after-tax cash dividend amount of the company obtained in the previous year, and shall not exceed the total after-tax cash dividend amount of the company obtained by the controlling shareholder in the previous year;

(2) The cumulative increase in the number of shares held within 12 consecutive months does not exceed 2% of the company’s total shares. If this requirement conflicts with item (1), this item shall prevail.

If the above standards are exceeded, the relevant stock price stabilization measures will not continue to be implemented in the current year. However, when the situation that needs to initiate stock price stabilization measures continues to occur in the following year, the stock price stabilization plan will continue to be implemented in accordance with the above principles.

3. Measures by the directors and senior management personnel to stabilize the stock price

When the company initiates stock price stabilization measures and the closing share price of the company’s stocks is lower than the company’s audited net assets per share in the previous fiscal year for 20 consecutive trading days after the expiration of the implementation period of the shareholding increase plan of the controlling shareholder, or if the share price stabilization measures for controlling shareholders to increase their shares cannot be implemented, the directors and senior management personnel shall initiate a plan to increase the company’s shares through auction transactions through the secondary market:

1. Under the premise of compliance with the conditions and requirements of laws, administrative regulations, departmental regulations, regulatory documents, and relevant regulations of the Stock exchange, such as the Administrative Measures for the Acquisition of Listed Companies and Management Rules for Shares of the Company Held by Directors, Supervisors and Senior Management Personnel of Listed Companies, the directors and senior management personnel shall increase their shareholding in the company’s stock, and promise to vote in favor of the company’s share price stabilization plan as its director (if any) on the Board of Directors.

2. The above mentioned directors and senior management personnel with the obligation to increase shareholding shall notify the company in writing of the specific plan to increase the company’s shares within 10 trading days from the date of triggering the share price stabilization measure and the company shall make an announcement. These directors and senior management personnel shall initiate the implementation of the specific stock price stabilization plan within 5 trading days after the announcement of the stock price stabilization plan.

3. Except for force majeure, if the above mentioned directors and senior management personnel who have the obligation to increase their shareholdings increase their shareholdings for the purpose of stabilizing the stock price, the number and number of shares held by the company shall meet the following conditions:

Within one fiscal year from the date on which the conditions for starting the above stock price stabilization measures have been achieved, the amount of funds for directors and senior management to increase their holdings of the company’s shares shall be not less than 10% but not more than 30% of the total amount of after-tax cash dividends (if any), salaries and allowances received from the company in the previous year.

If the above standards are exceeded, the relevant stock price stabilization measures will not continue to be implemented in the current year. However, when the situation that needs to initiate stock price stabilization measures continues to occur in the following year, the stock price stabilization plan will continue to be implemented in accordance with the above principles.

4. During the period of validity of the plan for stabilizing stock price, newly appointed directors and senior management personnel who meet the above conditions shall abide by the provisions on the obligations and responsibilities of the company’s directors and senior management in the plan for stabilizing stock price. The company and its controlling shareholder, existing directors, and senior management personnel shall urge the newly appointed directors and senior management personnel to abide by the plan for stabilizing stock price and sign relevant commitments before they receive written nominations.

4. Other measures to stabilize the stock price

1. On the premise of complying with the laws, administrative regulations, departmental regulations, regulatory documents, and relevant provisions of the stock exchange and ensuring the company’s operating capital requirements, the company may, through the review and approval of the meeting of the Board of Directors and general meeting of shareholders, stabilize the company’s share price by implementing profit distribution or capital accumulation fund to increase share capital;

2. On the premise of complying with the laws, administrative regulations, departmental regulations, regulatory documents, and relevant provisions of the stock exchange, the company may improve the company’s performance and stabilize the company’s stock price by reducing expenditures, limiting senior management’s remuneration, and suspending the equity incentive plan;

3. Other measures to stabilize stock prices as prescribed by laws, administrative regulations, departmental rules, and regulatory documents, and approved by the China Securities Regulatory Commission and the stock exchange.

3. Binding measures

1. The company has not fulfilled the binding measures to stabilize the stock price commitment

If the company fails to perform or fails to fulfill its commitment to stabilizing the stock price according to the schedule, it is necessary to publicly explain the specific reasons on the disclosure media designated by the general meeting of shareholders and the China Securities Regulatory Commission. If it is not caused by force majeure and causes losses to the investor, the company will bear the liability for compensation to the investor according to law and bear the corresponding responsibility according to the requirements of laws, administrative regulations and relevant regulatory agencies; if it is caused by force majeure, the company shall research the treatment plan as soon as possible to reduce the loss of investor’s interests to the minimum, and submit it to the general meeting of shareholders for consideration, in order to protect the interests of the company’s investors as much as possible.

2. Binding measures for controlling shareholder’s failure to fulfill commitment to stabilize the stock price

If the controlling shareholder fails to perform or fails to fulfill its commitment to stabilize the stock price according to the schedule, the specific reason shall be publicly disclosed on the disclosure media designated by the general meeting of shareholders and the China Securities Regulatory Commission. If it is not caused by force majeure, the controlling shareholder shall agree not to receive the part of the company’s distributed profits that belongs to the controlling shareholder until the completion of the relevant commitments. If it causes losses to the investor, compensation shall be made for the investor’s losses according to law; if it is caused by force majeure, the controlling shareholder shall research the treatment plan as soon as possible to reduce the loss of investor’s interests to the minimum, in order to protect the interests of the investors as much as possible.

3. Binding measures for directors and senior management personnel’s failure to fulfill commitment to stabilize the stock price

If the above mentioned directors and senior management personnel who have an obligation to increase shareholdings fail to perform or fail to fulfill their commitment to stabilize the stock price according to the schedule, the specific reason shall be publicly disclosed on the disclosure media designated by the general meeting of shareholders and the China Securities Regulatory Commission. If it is not caused by force majeure, the salary and/or allowance of directors and senior management personnel should be reduced or stopped. If it causes losses to the investor, compensation shall be made for the investor’s losses according to law; if it is caused by force majeure, the directors and senior management personnel shall research the treatment plan as soon as possible to reduce the loss of investor’s interests to the minimum, in order to protect the interests of the investors as much as possible.

This letter of commitment will take effect from the date of the company’s initial public offering and listing on the Science and Technology Board.

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/s/ ACM Research (Shanghai), Inc.

ACM Research (Shanghai), Inc.

(seal)

Date: Year Month Day

	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

	/s/ Hui Wang
	HUI WANG

Date: Year Month Day

/s/ Luo Qianli	/s/ Haiping Dun	/s/ Stephen Sun-Hai Chiao

Luo Qianli	HAIPING DUN	STEPHEN SUN-HAI CHIAO

/s/ Wang Jian	/s/ Lisa Yi Lu Feng	/s/ Sotheara Cheav

Wang Jian	LISA YI LU FENG	SOTHEARA CHEAV


/s/ Chen Fuping	/s/ Luo Mingzhu

Chen Fuping	Luo Mingzhu

Date: Year Month Day

Exhibit 10.04

Commitment Letter Regarding Fraudulent Issuance of Listed Shares

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “company”) intends to apply for an initial public offering of shares and be listed on the Science and Technology Board (hereinafter referred to as “this issuance and listing”), the company as well as the controlling shareholder and actual controller of the company make the following commitment:

1. Ensure that the company does not have any fraudulent issuance in this issuance and listing.

2. If the company does not meet the conditions for issuance and listing, deceives the issuance registration through fraudulent means and the issuance and listing have already taken place, the company as well as the controlling shareholder and actual controller of the company will initiate the share repurchase process within 5 working days after the China Securities Regulatory Commission and other competent authorities have confirmed and which has become effective (if a lawsuit is involved, the final judgment of the judicial authority shall prevail), and repurchase all new shares of the company’s public offering this time. The specific responsibility for repurchase shall be subject to the final determination by the competent authority such as the China Securities Regulatory Commission.

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/s/ ACM Research (Shanghai), Inc.

Regarding ACM Research (Shanghai), Inc.

(seal)

Date: Year Month Day

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

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	/s/ Hui Wang

	HUI WANG

	Date: Year Month Day

Attachment: Legal requirements

1. Article 93 of the Guidelines for Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No. 41 - Prospectus of Science and Technology Board Companies: The issuer shall fully disclose the important commitments made by the issuer, shareholders, actual controllers, directors, supervisors, senior management personnel, core technical personnel of the issuer, and the sponsors and securities service institutions of this issuance, constraining measures for the failure to fulfill the commitments, as well as the performance of commitments that have triggered the fulfillment of conditions. Commitments mainly include:

(1) Restrictions on the sale of shares held by shareholders before the issuance, voluntary lock-up of shares, extension of lock-up period, and shareholders’ intent to hold and reduce holdings;

(2) Measures and commitments to stabilize stock prices;

(3) Measures and commitments for share repurchase and share buyback;

(4) Commitment to buy back shares with respect to fraudulent issuance and listing;

(5) Measures and commitments to make up for the diluted immediate returns;

(6) Commitment of profit distribution policy;

(7) Commitment to bear compensation or liability for compensation according to law;

(8) Other commitments.

2. “Notice on Matters Concerning Effectively Improving the Quality of Prospectus (Application Draft) and the Quality of Inquiry Responses” 6 of the Shanghai Stock Exchange Science and Technology Board Listing Review Center regarding investor protection (commitment to fraudulent issue of share buybacks): 20. Sponsoring organizations are asked to urge issuers and their controlling shareholders and actual controllers, in accordance with Article 68 of the Administrative Measures on the Initial Public Offering of Stocks of Science and Technology Board (Trial)”, to clarify the initiation of the share repurchase procedures within 5 working days after the company, its controlling shareholder and actual controller are confirmed by the competent authority such as the China Securities Regulatory Commission when the company is found to have made fraudulent issuance, and to make a commitment to buy back all the new shares of the company’s public offering; if there is a placement of old shares, the shareholders implementing the placement shall also commit to repurchase the original restricted shares that have been transferred.

Exhibit 10.05

Commitment Letter

Regarding the Lack of False Records, Misleading Statements or Major Omissions in the [***]

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to issue an initial public offering and be listed on the Science and Technology Board (hereinafter referred to as “this issuance and listing”), the enterprise, as the controlling shareholder of the issuer, makes the following commitment:

1. There are no false records, misleading statements or major omissions in the issuer’s [***] and other information disclosure materials for this issuance and listing, and the enterprise assumes individual and joint legal responsibility for its authenticity, accuracy, and completeness.

2. If the China Securities Regulatory Commission (hereinafter referred to as the “China Securities Regulatory Commission”), the Shanghai Stock Exchange or other competent authorities determine that the contents of the [***] contain false records, misleading statements or major omissions, and such circumstances have a significant and substantial impact on whether the issuer meets the issuance conditions prescribed by law, then the enterprise promises to repurchase the original restricted shares (if any) that the enterprise has transferred in accordance with the provisions of the Company Law of the People’s Republic of China and the Securities Law of the People’s Republic of China.

3. If the issuer’s [***] and other information disclosure materials contain false records, misleading statements or major omissions, causing investors to suffer losses in securities issuance and trading, the enterprise will compensate the investors for the losses according to law.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Attachment: Legal requirements

1. Article 142 of the Company Law of the People’s Republic of China: The company shall not purchase shares of the company. However, except for one of the following situations:

(1) To reduce the registered capital of the company;

(2) To merge with other companies holding shares of the company;

(3) To use the shares for employee stock ownership plans or equity incentives;

(4) The shareholders make a resolution of disagreement at the shareholders’ general meeting regarding the company merger and division and requests the company to purchase its shares;

(5) To use the shares on converting corporate bonds issued by the listed company that can be converted into stocks;

(6) The listed company is necessary to maintain company value and shareholders’ rights and interests.

2. Article 24 of the Securities Law of the People’s Republic of China: If the issuer of the stock conceals important facts or fabricates major false content in the prospectus and other securities issuance documents, and the issuance and listing have already occurred, the securities regulatory authority under the State Council may order the issuer to repurchase securities, or order the responsible controlling shareholder and actual controller to buy back the securities.

3. Opinions of the China Securities Regulatory Commission on Further Promoting the Reform of the New Share Issuance System, Article 2, Item (1), point 3: The issuer and its controlling shareholder shall make a public commitment in the public offering and listing documents that if the issuer’s prospectus contains false records, misleading statements or major omissions, which have a significant and substantial impact on determining whether the issuer meets the issuance conditions prescribed by law, all new shares in the initial public offering will be repurchased according to law, and the controlling shareholder of the issuer will repurchase the original restricted shares that have been transferred. The issuer and its controlling shareholders, actual controllers, directors, supervisors, senior management personnel and other relevant responsible entities shall make public commitments in public offerings and listing documents: If the issuer’s prospectus and other information disclosure materials contain false records, misleading statements or major omissions, causing investors to suffer losses in the issuance and trading of securities, the losses of the investors will be compensated according to law.

4. Article 20 of the Guidelines for Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No. 41 - Prospectus of Science and Technology Board Companies: The issuer shall make the following statement on the title page of the prospectus: “The issuer and all directors, supervisors and senior management personnel promise that there will be no false records, misleading statements or major omissions in the prospectus and other information disclosure materials, and shall bear individual and joint legal liabilities for their authenticity, accuracy and completeness”; the controlling shareholder and actual controller of the issuer promise that there will be no false records, misleading statements or major omissions in this prospectus, and bear individual and joint legal responsibility for its authenticity, accuracy and completeness”; “The issuer and all directors, supervisors, senior executives, the controlling shareholder and actual controller of the issuer, sponsors, and underwriting securities companies promise that if the issuer’s prospectus and other information disclosure materials contain false records, misleading statements or major omissions, causing investors to suffer losses in the issuance and trading of securities, the losses of the investors will be compensated according to law.”

5. Article 3 of Questions and Answers on Issuance Supervision and Administration - Implementation of Initial Commitments and Regulations on Transfer of Old Shares: What are the specific requirements for share repurchase commitments? Answer: The prospectus and relevant reporting documents shall make it clear that if the prospectus contains false records, misleading statements or major omissions that constitute a significant and substantial impact on the judgment of the issuer’s compliance with the issuance conditions prescribed by law, how the issuers and controlling shareholders will initiate share repurchase measures and at what price, etc.; commitments made by the company and its controlling shareholders, actual controllers, directors, supervisors, senior management personnel and relevant intermediaries regarding compensation for investor losses should be specific and clear to ensure that the legitimate rights and interests of investors are effectively protected.

6. Article 5 of the Memorandum No. 7 of Listed Companies on Daily Information Disclosure Work - Standard Requirements for Information Disclosure of Commitment to Fulfillment by Related Parties After the Issuance of New Shares: (1) The listed company and its controlling shareholder publicly promise that if the issuer’s prospectus contains false records, misleading statements or major omissions, which will have a significant and substantial impact on whether the issuer meets the issuance conditions prescribed by law, all new shares in the initial public offering will be repurchased according to law, and the controlling shareholder of the issuer will repurchase the original restricted shares that have been transferred.

Exhibit 10.06

Commitment Letter Regarding Making Up for the Diluted Immediate Returns

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to apply for an initial public offering and be listed on the Science and Technology Board, the enterprise, as the controlling shareholder of the issuer, now in accordance with the relevant laws, administrative regulations and relevant regulations of the China Securities Regulatory Commission, makes the following commitment with respect to the matters on making up for the diluted immediate returns:

The enterprise will urge the issuer to effectively implement the measures to make up for the diluted immediate returns, and promise that the directors of the company or nominated by the company will participate in the issuer's operation and management activities within the scope of its authority, and do its utmost to protect the legitimate interests of the issuer and its shareholders.

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	ACM RESEARCH, INC.



	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: May 21, 2020

Exhibit 10.07

Commitment Letter Regarding Unfulfilled Commitment on Binding Measures

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to issue an initial public offering and be listed on the Science and Technology Board (hereinafter referred to as “this issuance and listing”), the enterprise / I, as the controlling shareholder / actual controller of the issuer, make(s) the following commitment:

I. The enterprise / I guarantee(s) to strictly fulfill all obligations and responsibilities in all public commitments disclosed in the issuer’s listing [***].

II. If the enterprise / I fail(s) to fully or effectively fulfill the public commitments for reasons other than force majeure, then the enterprise / I will promise to take the following measures according to the specific circumstances:

1. The enterprise / I will publicly explain the specific reasons for the failure to fulfill the commitments in the disclosure media designated by the general meeting of the shareholders and the China Securities Regulatory Commission (hereinafter referred to as the “China Securities Regulatory Commission”);

2. If the enterprise / I fail(s) to perform the public commitments causing the investor to suffer losses in the securities transaction, the enterprise / I will compensate the investor for the losses according to law ;

3. Until the enterprise / I completely eliminate(s) all adverse effects caused by the failure of the enterprise / myself to fulfill the relevant commitments, the enterprise / I will not temporarily receive dividends distributed or dividend shares distributed by the issuer;

4. If the enterprise / I obtain(s) economic benefits due to failure to perform the public commitments, the income belongs to the issuer, and the enterprise / I shall pay it within five working days from the date of obtaining such income to an account designated by the issuer.

III. If the enterprise / I fail(s) to fulfill the public commitments due to force majeure, the enterprise / I need(s) to make a new commitment (for the relevant commitments, relevant approval procedures need to be performed in accordance with laws and regulations and the issuer’s articles of association) and accept the following binding measures until the new commitment is fulfilled or the corresponding remediation measures are implemented:

1. Publicly explain the specific reasons for non-performance at the general meeting of the shareholders and the disclosure media designated by the China Securities Regulatory Commission;

2. Research the treatment plan as soon as possible to reduce the loss of investor’s interests to the minimum, in order to protect the investor’s interests as much as possible.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

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	/s/ Hui Wang

	HUI WANG


	Date: Year Month Day

Exhibit 10.08

Commitment Letter Regarding the Avoidance of Competition in the Same Industry

1. The enterprise (including other enterprises controlled by the enterprise except the issuer and its holding enterprise, the same below) is currently not engaged in any form of business or activity that constitutes a competitive relationship with the issuer’s (including enterprises directly or indirectly controlled by the issuer, the same below) main business; the issuer’s assets are complete, and its assets, businesses, personnel, finances, and institutions are independent of the enterprise.

2. From the date of issuance of this letter, the enterprise will not engage in any form of business or activity that the issuer believes it constitutes a competitive relationship with the issuer’s main business, or support other enterprises except for the issuer in any form to engage in business or activities that the issuer believes it forms a competitive relationship with the issuer’s main business, but except relevant business or activities exempted from the performance of the aforementioned commitments as followed by review process of the issuer’s meeting..

3. From the date of issuance of this letter, if the enterprise will inevitably engage in business or activities that form a competitive relationship with the issuer in the future, the enterprise will transfer or terminate the above mentioned business or activities in a timely manner on its own initiative or after the issuer raises an objection to these business or activities the enterprise performed; and in the case where the enterprise transfers the aforementioned business or activities, the issuer shall enjoy the priority transfer right with respect to these business or activities.

4. The above mentioned commitments will continue to be effective during the period when the enterprise is the controlling shareholder of the issuer.

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	ACM RESEARCH, INC.



	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: May 21, 2020

Exhibit 10.09

Commitment Letter Regarding the Standardization and Reduction of Related Transactions

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to apply for an initial public offering of shares and be listed on the Science and Technology Board, the company, as the issuer’s controlling shareholder, makes the following commitment in order to ensure the sustainable development of the issuer’s business and standardize related transactions:

1. On the premise of not affecting the interests of the issuer and other shareholders, the company will take measures to standardize and reduce related transactions with the issuer.

2. For related transactions within the normal business scope or other reasonable causes that need to occur or cannot be avoided, the company and other companies controlled by the company will sign a transaction agreement with the issuer according to law, and in accordance with the relevant laws, administrative regulations, departmental regulations, regulatory documents and the then valid “ACM Research (Shanghai), Inc. Articles of Association”, perform the approval process, and ensure that these related transactions will be implemented based on the principle of fair pricing.

3. The company will strictly perform related obligations such as avoiding voting by related parties in strict accordance with relevant regulations, and fulfill the statutory approval procedures and information disclosure obligations to approve related transactions.

4. Ensure that the related transactions are not used to illegally transfer the issuer’s funds, profits or engage in other acts that damage the interests of the issuer and other shareholders and creditors .

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 10.10

Commitment Letter Regarding the Avoidance of Funds Occupation and Illegal Guarantee

Given that ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to apply for an initial public offering and be listed on the Science and Technology Board, the company, as the issuer’s controlling shareholder, now in accordance with the relevant laws, administrative regulations and relevant regulations of the China Securities Regulatory Commission, in order to protect the legitimate rights and interests of the issuer and other shareholders, the company confirms and makes the following commitment:

1. As of the date of this letter, there is no non-operating occupation of the issuer or its holding company’s funds by the company and other companies controlled by the company, and there is no situation in which the issuer or its holding company provides guarantees for the company and other companies controlled by the company in violation of the regulations.

2. The company promises to exercise the rights of shareholders in accordance with the law, and to not abuse the rights of shareholders to damage the legitimate interests of the issuer or other shareholders of the issuer. The company and other companies controlled by the company will not illegally occupy the funds of the issuer or its holding company by borrowing, paying debts, making advances or otherwise, and will not require the issuer or its holding company to provide guarantees in violation of the regulations.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 10.11

Statement and Commitment Letter

As the controlling shareholder of ACM Research (Shanghai), Inc. (hereinafter referred to as the “company” or “ACM Shanghai”), the enterprise makes the following statements and commitments:

1. The investment funds corresponding to the registered capital of the company subscribed to or subject to transfer by the enterprise are all owned or raised by the enterprise, and the source is legal and compliant.

2. The company’s equity held by the enterprise is the true holding of the enterprise, the ownership is clear, and there is no entrusted shareholding, trust shareholding or other special arrangements.

3. As of the date of issuance of this letter, there is no special arrangement between the enterprise and other shareholders of the company for unanimous action relationship, voting entrustment / agency, etc.

4. As of the date of issuance of this letter, the company’s shares held by the enterprise have not been pledged, frozen, sealed up or set up with other third party rights, nor have they been involved in any disputes or potential disputes.

5. As of the date of issuance of this letter, except for the Commitment Letter issued by the enterprise on June 12, 2019 to Xinwei (Shanghai) Management Consulting Partnership (limited partnership), Jiaxing Haitong Xuchu Equity Investment Fund Partnership (limited partnership), Shanghai Jinpu Lingang Smart Technology Equity Investment Fund Partnership (limited partnership), Wuxi Taihu Guolian Emerging Growth Industry Investment Enterprise (limited partnership), Xinshi (Shanghai) Management Consulting Partnership (limited partnership), Hai Feng Investment Holding Limited, Xingang (Shanghai) Management Consulting Partnership (limited partnership), as well as the contents stipulated in the Commitment Letter issued by the company on November 29, 2019 to Shanghai Yongkong Business Information Consulting Partnership (Limited Partnership), Shanghai Shanyi Enterprise Management Center (Limited Partnership), Shangrong Innovation (Ningbo) Equity Investment Center (Limited Partnership), Shanghai Shangrong Juyuan Equity Investment Center (Limited Partnership), Hefei Runguang Equity Investment Partnership (Limited Partnership), Shanghai Integrated Circuit Industry Investment Fund Co., Ltd., Shanghai Pudong Emerging Industries Investment Co., Ltd., and Shanghai Zhangjiang Technology Venture Capital (hereinafter collectively referred to as the “special agreement”), the enterprise and/or the company and other shareholders of the company do not have any written or oral agreement that involves and/or may involve investor investment return commitments, company performance commitments, related commitments related to the company’s listing, compensation clause, share buyback, agreement or commitment on valuation adjustment and other matters; from the date when the company submits its initial public offering of shares to the Shanghai Stock Exchange and the application documents for listing on the Science and Technology Board, the above mentioned special agreement automatically terminates, and there is no valid, written or oral agreement between the enterprise and/or the company and other shareholders of the company that involves and/or may involve investor investment return commitments, company performance commitments, related commitments related to the company’s listing, compensation clause, share buyback, agreement or commitment on valuation adjustment and other matters;

6. From January 1, 2017 to the date of issuance of this letter, the enterprise has no criminal offences of corruption, bribery, property embezzlement, misappropriation of property, or disruption of the socialist market economic order, there are no major violations involving national security, public safety, ecological security, production safety, public health and safety, etc., and there is no case of being investigated or subject to investigation by a judicial organ and the case has not been closed; there are no major litigation, arbitration or administrative punishment cases that have not been settled or can be reasonably foreseen by the enterprise.

7. The enterprise does not belong to a contract private equity fund, asset management plan (including fund subsidiary asset management plan, securities company asset management plan, etc., the same below) or a trust plan, nor is there a case of equity held by holding company for contract-type private equity funds, asset management plans or trust plans.

8. As of the date of issuance of this letter, except for the circumstances listed in Appendix 1, the enterprise has not directly or indirectly held any rights or interests in the company’s main customers or suppliers; there is no connected relationships between the enterprise and intermediaries related to ACM Shanghai’s application for initial public offering and listing on the Science and Technology Board (referring to [***], [***], Beijing Jindu Law Firm, Lixin Accounting Firm) (special general partnership), the same below) as well as the actual controllers, shareholders / partners, directors, supervisors, senior managers and managers of these units.

9. All original written materials, duplicate materials, photocopy materials, verbal information or testimonies provided by the enterprise to the company and its intermediaries in connection with the company’s application for initial public offering and listing on the Science and Technology Board are true, complete and accurate, without any falsehood, concealment, omission or misleading; the copies provided by the enterprise or photocopies are consistent with the official copy or original content, and the seals and signatures on all documents are true. If the above mentioned commitment is violated, the enterprise will compensate the company and its intermediary institutions for all losses it has suffered in accordance with the law; if there are inconsistencies between the materials and information provided by the enterprise in the future, the enterprise will immediately notify the company and its intermediary institutions.

The commitment is hereby stated.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Appendix 1 The enterprise’s shareholding in the major customers or suppliers of ACM Shanghai

Company name	Shareholding ratio (%)
NINEBELL CO., LTD	20

Exhibit 10.12

Commitment Letter Regarding Property Lease Matters

As the controlling shareholder of ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”), the enterprise now makes the following commitment with respect to the matters related to the issuer's lease of property:

1. With respect to the issuer’s lease of the property located at Floors 1-5, Building 4, No. 1690 Cailun Road, Zhangjiang Hi-Tech Park, Shanghai, with a total area of 5,900.28 square meters from Shanghai Zhangjiang (Group) Co., Ltd. (hereinafter referred to as “Zhangjiang Group”) where the property rights certificate has not been obtained and the issuer is unable to handle the leasing record registration for the leasing of such property, the enterprise promises that: during the validity period of the lease contract, if the issuer cannot continue to lease and use the above mentioned property due to the failure to obtain the property rights certificate and/or the failure to file the record, the enterprise is willing to unconditionally bear the costs and expenses (deducting the actual amount of insurance company claims) .

2. Regarding the situation where the entire property located at Building 2, No. 365 Chuanhong Road, Shanghai (a total area of 9,858.57 square meters) leased by the issuer from Shanghai Shengyu Cultural Development Co., Ltd. has been mortgaged and registered for mortgage, the enterprise promises that: Within the validity of the lease contract, if the issuer cannot continue to lease and use the above mentioned property due to such property mortgage matters, the enterprise is willing to unconditionally bear the costs and expenses incurred by the issuer due to the relocation (deducting the actual amount of insurance company claims); if the issuer is involved in litigation, arbitration and other disputes with the lessor and/or third party due to such mortgages, the enterprise is willing to unconditionally bear all costs and expenses such as the attorney's fees, litigation fees, and case acceptance fees paid by the issuer due to such disputes.

The commitment is hereby made.

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	ACM RESEARCH, INC.



	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: May 21, 2020

Exhibit 10.13

Commitment Letter Regarding Social Insurance and Housing Provident Fund Matters

The company, as the controlling shareholder of ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”), with respect to the relevant matters on the issuer’s failure to pay social insurance and housing provident fund for employees in accordance with regulations before the initial public offering of shares and listing on the Science and Technology Board, now makes the following commitment:

1. If the issuer’s employees pursue social insurance or housing provident fund and causes litigation or arbitration as a result, or are subject to administrative punishment by the relevant competent authorities, the enterprise will compensate the issuer in full and bear the responsibility for these matters. All expenses incurred that should be paid by the issuer.

2. If the competent department of labor, social security and housing provident fund require the issuer to make up payment for the employee’s social insurance and housing provident fund in the previous year, the enterprise will make up for the issuer on the amount approved by the competent authority.

3. If the issuer fails to pay social insurance and housing provident funds in accordance with the regulations and incurred any other expenses and economic losses, the enterprise will bear all the expenses on behalf of the issuer.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 10.14

Commitment Letter Regarding Foreign Exchange Matters

If the issuer or its holding company is subject to punishment by the foreign exchange management department for the company’s initial public offering of stock and related foreign exchange matters before the listing on the Science and Technology Board, the enterprise will unconditionally compensate the issuer and its holding company in full and bear all the expenses arising from these issues that should be paid by the issuer and its holding company.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 10.15

Confirmation and Commitment Letter Regarding the Historical Evolution Related Matters

Regarding ACM Research (Shanghai), Inc.

1. In December 2006, the registered capital of the issuer’s predecessor, ACM Research (Shanghai), Inc. (hereinafter referred to as “ACMSH”) increased from USD $1.2 million to RMB 174 million, of which the enterprise has performed valuation on the 45 patents for copper plating equipment and stress-free polishing equipment in the semiconductor copper process that it had obtained and the 62 patents being applied for at the time of valuation, as well as the exclusive license to use the patent technology and proprietary technology that will be applied for in the future development process, and an estimated price of RMB 84 million shall be provided as capital contribution to ACMSH. On January 31, 2007, the enterprise and ACMSH signed the Technology Licensing Agreement, but ACMSH failed to comply with the Technology Import and Export Management Regulations of the People’s Republic of China, Technology Import and Export Contract Registration Management Measure” and other relevant provision in the registration of technology import contracts for the Technology License Agreement. In this regard, the enterprise confirms and promises: The above mentioned capital contribution is true and effective. The enterprise has fulfilled its capital contribution obligations in full and on time. If the issuer is fined by the relevant government department for failing to register the technology import contract in the above mentioned Technology License Agreement, the enterprise will compensate the issuer for the fines in full in accordance with law.

2. In accordance with the Joint Venture Contract signed by the enterprise and Shanghai Venture Capital Co., Ltd. on March 19, 2007, the enterprise shall pay 2.5 million yuan in cash capital contribution and 37.5 million yuan in fixed assets capital contribution within 60 days (that is, June 24, 2007) after the new Business License for Corporate Legal Entity (April 25, 2007) is issued by ACMSH, however, the actual capital contribution time of the enterprise does not comply with the above mentioned provisions of the Joint Venture Contract. In this regard, the enterprise confirms and promises: As of the date of issuance of this letter, the other shareholders and creditors of the issuer and its predecessor ACMSH have not raised any objections or claims for breach of contract for the enterprise’s failure to pay its registered capital on time. The above mentioned failure of the enterprise to pay its capital contribution on time has not damaged the legitimate rights and interests of the issuer and its predecessor, ACMSH, creditors, and other shareholders, and there are no disputes or potential disputes.

Confirmation and commitment are hereby made.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 10.16

Confirmation Letter

ACM Research (Shanghai), Inc. (hereinafter referred to as the “issuer”) intends to apply for an initial public offering of shares and be listed on the Science and Technology Board. As the controlling shareholder of the issuer, the enterprise signed the Technology License Agreement (hereinafter referred to as the “agreement”) with the predecessor of the issuer, ACM Research (Shanghai), Inc. (hereinafter referred to as “ACMSH”) on January 31, 2007”), and the relevant matters related to the agreement are now confirmed as follows::

1. From the effective date of the agreement to the date of issuance of this letter, the enterprise has not used the licensed intellectual property in the agreement in any form, nor has the agreement been assigned or transferred to any third party, nor has the enterprise transfer the licensed intellectual property to any third party in any form, permit any third party to use, or set any burden of rights on the licensed intellectual property rights.

2. The agreement represents the true meaning of the enterprise and ACMSH, that the content is legal and valid, and the enterprise does not have any controversies or disputes regarding the signing, content and performance of the agreement.

3. From the effective date of the agreement to the date of issuance of this letter, the enterprise does not have any controversies or disputes over intellectual property rights such as patents, patent application rights, trademarks, and proprietary technologies owned by the issuer (including its predecessor ACMSH) and its subsidiaries.

The commitment is hereby made.

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	ACM RESEARCH, INC.


	Signature: /s/ Hui Wang

	Name: HUI WANG

	Title: Authorized representative


	Date: Year Month Day

Exhibit 99.01

The shares in the Offering intends to be listed on the STAR Market, which has high investment risks. The listed companies on the STAR Market have the characteristics of large investment in research and development, high risk of operation, unstable performance and high risk of delisting, where Investors are facing high market risks. Investors should fully understand the investment risks of the STAR Market and the risk factors disclosed by the Company, and make investment decisions prudently.

ACM Research (Shanghai), Inc.

(Building 4, No.1690 Cailun Road, China (Shanghai) Pilot Free Trade Zone)

An Initial Public Offering and Listing of

Shares on the STAR Market

[***]

(Declaration Version)

The application for the offering of the Company has yet not been approved by Shanghai Stock Exchange and the CSRC. This [***] does not have the legal force for stock issue, which is used only for advance disclosure purpose. Investors shall make investment decisions based on the officially announced [***].

Sponsor (Lead Underwriter)

[***]

([***])

Co-lead Underwriter

[***]

ACM Research (Shanghai), Inc.

[***]

Issuer Statement

No decision or opinion issued by the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) or the Shanghai Stock Exchange represents any guarantee for authenticity, accuracy and completeness of the registration documents and the information disclosed, or any substantial judgment or guarantee on the profitability, the investment value of the Issuer or any returns to investors. Any statement to the contrary is false and untrue.

According to the provisions of the Securities Law, after the Offering of shares in accordance with the law, the Issuer shall be solely responsible for the changes in its operation and earnings; investors shall independently judge the investment value of the Issuer, make investment decisions independently, and bear the investment risks caused by changes in the Issuer’s operation and earnings or share price changes after the Offering of shares in accordance with the law.

The Issuer and all of its directors, supervisors and senior managers shall undertake that there are no false records, misleading statements or major omissions in the [***] and other information disclosure documents, and bear several and joint legal liabilities for their authenticity, accuracy and completeness.

The controlling shareholder and the de facto controller of the Issuer undertake that there are no false records, misleading statements or major omissions in the [***], and bear several and joint legal liabilities for its authenticity, accuracy and completeness.

The person in charge of the Company, the person in charge of the accounting work and the person in charge of the accounting institution shall ensure that the financial and accounting information in the [***] is true and complete.

The Issuer and all of its directors, supervisors and senior managers, its controlling shareholder, its actual controller, the Sponsor and the underwriting securities companies promise to compensate investors for their losses in the Offering and the transactions caused by any false records, misleading statements or major omissions in the [***] and other disclosure documents of the Issuer in accordance with the law.

The Sponsor and the securities service institutions promise to compensate investors for losses caused by any false records, misleading statements or major omissions in the documents prepared and issued by them for the Public Offering of the Issuer.

ACM Research (Shanghai), Inc.

[***]

Overview of the Offering

Class of Shares	RMB Common Shares (Class A Shares)
Number of Shares in the Offering	The number of shares offered in the Public Offering shall not exceed 43,355,800, accounting for at least 10.00% of the total share capital of the Company after the Offering. The Offering does not involve any public offering of shares by shareholders.
Par Value per Share	1.00 Yuan
Offering Price per Share	[ ] Yuan
Estimated Offering Date	[MM][DD][YY]
The Stock Exchange and Board for Listing	the STAR Market of the Shanghai Stock Exchange
Total Share Capital after the Offering	Not more than 433,557,100 shares
Participation of the Sponsor’s Relevant Subsidiaries in Strategic Placement	The Sponsor will arrange relevant subsidiaries to participate in the strategic placement in the Offering, which will be carried out in accordance with relevant regulations of the exchange. The Sponsor and its relevant subsidiaries will further clarify the specific plan of participating in the strategic placement in the Offering and submit relevant documents to the exchange as required.
Sponsor (Lead Underwriter)	[***]
Co-lead Underwriter	[***]
Signing Date	[MM][DD], 2020

ACM Research (Shanghai), Inc.

[***]

Important Notice

The Company particularly prompts investors to read this [***] in full and pay special attention to the following major issues before they make investment decisions

I. The Company particularly prompts investors to pay attention to the following risk factors

(I) Risks of Technical Innovation

The Company operates in the semiconductor special equipment industry, which involves many academic fields including microelectronics, electricity, mechanics, chemical engineering, fluid dynamics, automation, image recognition, communications, software system, among others, resulting in a high threshold in technical research and development. The vigorous development of the global semiconductor industry is accompanied by the constant technical innovations in the semiconductor industry and varying customer demands. The Company has been adhering to the development strategy of differentiated competition and innovation for long. If the Company cannot continuously ensure sufficient research and development investment, or process nodes for chips are further reduced, or a new chip manufacturing technology comes out, the core technologies of the Company, including SAPS, TEBO, and Tahoe, and relevant products may become less advanced, which may cause adverse effects on the operating performance of the Company.

(II) Risks of Losing Key Technical Talents

Technical talents are a key factor of competitiveness in the semiconductor special equipment industry, which is a technology-intensive industry. After the development for over ten years, the Company has built up a technical research and development team with rich experience headed by Dr. Hui Want. The Company has provided competitive remunerations, share incentives, and option incentives to the technical research and development team in the hope of improving the loyalty and stability of the technical team. However, the continuous development of the semiconductor special equipment industry in Chinese mainland will lead to more intensive competition for technical talents. If the Company loses substantial key technical personnel due to remuneration or other reasons, or the Company could not motivate existing technical talents or could not attract outstanding technical talents, the Company may be short-handed in the technical team, hence could not continue the research, development, and sales of new products, or provide quality services to customers; moreover, the Company may have higher recruitment and training costs, which may cause adverse effects on the technical research and development capability and operating performance of the Company.

(III) Risks of Market Competition

The global market of the semiconductor special equipment industry is intensively competitive; since the market is dominated by international giants, the Company’s products have to directly compete on the market with such international giants. Compared with semiconductor special equipment manufacturers in Chinese mainland, such international giants are stronger in funds, technical accumulation, sales team, manufacturing capability, sales channels, and market awareness, have relations with more customers and partners, and have longer operating histories, more abundant product portfolios, and wider geographical coverage, hence can identify and respond to changes in the market and customer demands in a better manner. Some international giants are capable of offering bundle discounts for customers purchasing multiple products at the same time.

With the constant growth of the semiconductor terminal application market in China, sub-industries, including semiconductor manufacturing, packaging, testing, material, and equipment, in China have been developing rapidly. During the third transition of the global semiconductor industry, it is estimated that the Chinese mainland market will become the main competition field for global semiconductor equipment manufacturers, hence the Company has to compete with both international giants and newcomers in China in the future. If the Company cannot effectively handle the competition with such competitors, the business incomes, results of operation, and

ACM Research (Shanghai), Inc.

[***]

financial conditions of the Company may be affected adversely.

(IV) Risks of De Facto Controller Losing Control

ACMR, the controlling shareholder of the Company, has special voting rights. Specially, ACMR’s shares are divided into shares of Class A common stock and shares of Class B common stock. The Class B common stock shares have 20 votes per share versus Class A common stock shares. As of the signing date of this [***], HUI WANG holds 168,006 shares of Class A common stock and 1,146,934 shares of Class B common stock, representing not less than 35% of total voting rights in ACMR.

ACMR was listed on NASDAQ in November 2017, and make the disclosure as follows in its U.S. prospectus:

“Each outstanding share of Class B common stock is convertible into one share of Class A common stock (a) at any time, at the option of the holder, or (b) upon any transfer of such share of Class B common stock, whether or not for value, except for certain transfers described in our restated charter, including transfers to family members, trusts solely for the benefit of the stockholder or their family members, and partnerships, corporations, and other entities exclusively owned by the stockholder or their family members.

In addition, on or after the date of this prospectus, all outstanding shares of Class B common stock will convert automatically into shares of Class A common stock, on a one for one basis, upon (a) the election of the holders of a majority of the then outstanding shares of Class B common stock or (b) on the first December 31 that occurs more than five years after the date of this prospectus if the October Market Cap with respect to the month of October immediately preceding such December 31 exceeds $1.0 billion, provided that the conversion provided by this clause (b) shall not apply and no automatic conversion of Class B common stock into Class A common stock will ever occur pursuant to this clause (b) if the October Market Cap for the month of October immediately preceding a December 31 exceeds $1.0 billion prior to the fifth anniversary of the date of this prospectus.”

If all outstanding shares of Class B common stock of ACMR will be converted into shares of Class A common stock, on a one for one basis, according to the above provisions on conversion, then Hui WANG will hold less than 10% of voting rights in ACMR, and may lose the largest voting right status such that ACMR will be changed to a company without controlling shareholder and de facto controller, indirectly resulting in the ACMSH having no de facto controller.

HUI WANG, the de facto controller of the Company, holds more than 50% of the total shares of Class B common stock in ACMR, and HUI WANG has issued the letter of commitment with respect thereto which reads: “to ensure the stability of the de facto controller of the Issuer, I irrevocably make commitment that I will not voluntarily or actively convert shares of Class B common stock held by me in ACMR into shares of Class A common stock within 36 months from the date of this letter until the date of the IPO and listing of issuer’s stocks on the STAR Market.”

However, according to the aforesaid provisions on conversion, if the October Market Caps of October 2020, October 2021 and October 2022 will not exceed $1.0 billion, and the October Market Cap of October 2023 will exceeds $1.0 billion, then the shares of Class B of ACMR will be automatically converted into shares of Class A common stock, on a one for one basis, according to the aforesaid provisions on conversion, and accordingly ACMSH will face the risks on changes in de facto controller as early as December 31, 2023.

(V) Risk of Intellectual Property Disputes

The industry of special semiconductor equipment in which the Company is located is a typical technology-intensive industry, a leading enterprise with technical advantage in the industry needs to protect its own core technologies through applying for patents. The business results obtained by the Company, to some degree, rely on its own system of intellectual properties and the ability of the Company to maintain such intellectual properties and preserve confidential information, as well as the ability of the Company to engage in its business without infringing on any patent of others. As of December

ACM Research (Shanghai), Inc.

[***]

31, 2019, the Company and its subsidiaries in which it owns controlling equity interest own 232 major patents which have been granted with patent rights, among which, 108 patents are domestic patents, 124 patents are foreign patents, and 227 patents are invention patents.

The Company will continue to apply for more patents according to actual needs of production and operation in the future, but cannot ensure that patent applications submitted by the Company will be actually granted with patents, the intellectual property regulatory and administrative authorities of each country will require the Company to observe numerous provisions and pay corresponding fees, a failure to observe such provisions or pay fees may result in the waiver or termination of patents or patent applications; the Company cannot ensure that granted patents are able to provide sufficient protection against a competitor which owns similar technologies, and a granted patent may be questioned, declared to be void, modified, cancelled, avoided or unable to be implemented, or cannot provide any competitive advantage due to other reasons.

The Company cannot protect its own intellectual properties globally as well, the Company chooses to apply for patents in the places where main production and operation, major and potential clients and major suppliers are located. If a competitor exists any infringement over intellectual properties of the Company within a region where patents of the Company cannot provide protection, then it may adversely affect businesses of the Company. In addition, the Company also takes measures to protect commercial secrets and non-patented technologies of the Company, including entering into confidentiality agreements with key employees, clients, suppliers and important third parties, but others may acquire knowledge of such commercial secrets and non-patented technologies, and then the operation of the Company may be adversely affected.

The Company may be involved in litigations for the purpose of protecting or enforcing its own patents, but such litigations may cost a great deal of money and take a long time, and the Company may be unable to win such litigations. Any potential intellectual property claims, or litigation raised by others against the Company may need a time-consuming and costly defense, regardless of whether a favorable result is obtained or not. This may result in that the Company will face the following results: the Company may be forced to cease the sale or use of parts or technologies which are accused of infringing on intellectual properties; the shipment of goods may be delayed; the Company may be required to compensate for damages or pay settlement fees to parties alleging to be infringed; the Company may need to obtain the license of relevant intellectual properties, but such license may be unable to be obtained at a reasonable price or cannot be obtained absolutely; the Company may be forced to redesign products containing technologies alleged to be infringing, but such redesign may be unrealizable or too costly; the Company may need to make compensation to clients, suppliers or other third parties for any loss arising from their use of technologies of the Company which are alleged to infringe on intellectual properties of third parties, which may have materially adverse effect on the financial status and business results of the Company.

As the period of patent application is relatively long, there may be applications under review but the Company does not have knowledge of such applications, these applications may ultimately be granted with patents, meanwhile, there may be granted patents which are relevant with products of the Company but the Company does not have knowledge of them, which will result in products or technologies of the Company being in infringing status.

The Company attaches great importance to protecting intellectual properties, assisting technology research and development personnel in generating patentable technology results, and improving the awareness of non-infringing intellectual properties of others. If an intellectual property dispute is brought by the Company against a competitor, or any intellectual property of the Company is infringed by a competitor, the production and operation of the Company will be adversely affected.

ACM Research (Shanghai), Inc.

[***]

(VI) Risks of Reliance on Suppliers of Some Key Parts

At present, the Company relies on existing suppliers for some key parts used in the Company’s equipment. For example, Product Systems, Inc. is the only supplier of megasonic wave generators, a key part for our wafer cleaning equipment; NINEBELL is the main supplier of robot arms used in the transport system of our wafer cleaning equipment; Advanced Electric Co., Inc. is the key supplier of valves in our wafer cleaning equipment. In the event of adverse changes in the cooperation between the Company and such suppliers, or such suppliers suffer difficulties in their operations, the production plans of the Company may be adversely affected; if the Company replaces the source of such key parts, the supply may be interrupted during the transition period, which may lead to delayed delivery of the Company’s products and causing high expenses, hence causing adverse effects on the operating performance of the Company.

(VII) Risks of Adverse Effect on the Semiconductor Industry Caused by the Global COVID-19 Epidemic

Since early 2020, the COVID-19 epidemic breaks out globally. To handle such major epidemic, various provinces and cities in China launched the first-level reaction of serious and unexpected public health incident and take various measures, such as sealing off cities, quarantine and postponing start dates after Spring Festival. At present, China and other Asian countries have contained the COVID-19 epidemic to a great extent, but there remains risk of second outbreak of the epidemic due to persons entering China. The Company has strictly implemented notices and requirements on epidemic control and prevention issued by governmental authorities of each level in China, and all employees of factories in Mainland China have returned and such factories have started to produce at present, the effect of the epidemic on the Company is limited at present.

If a manager or employee of the Company is absent from work due to his/her infection of epidemic, or cannot carry out on-site works because of quarantine, or cannot visit clients to provide services for them due to quarantine or other restrictions imposed by governmental authorities, or journeys to or from Mainland China, the United States and other countries are limited for a long time, it may result in adverse situations, such as extending period of research and development or manufacturing.

Considering that the Company almost does not engage in the business of parts processing, main raw materials and parts are obtained through external purchase or external coordination, and suppliers of the Company are located in Mainland China, the United States, South Korea, Japan, China Taiwan and other countries and regions. If the epidemic lasts for a long term or continues to exacerbate, the supply capacity of major suppliers of the Company may be affected in the future, the Company may need to look for replacing suppliers, which may result in the increase in costs, or the Company may be unable to find replacing sources. It may also affect logistics transportation of raw materials and parts and result in the delay of shipment by suppliers to the Company, which may lead to the delay of shipment by the Company to clients. all of the above may affect business results of the Company.

Most of major clients of the Company are located in Mainland China and neighboring countries and regions. Among which, Yangtze Memory is located in Wuhan, although there is no change in purchase orders of Yangtze Memory for products of the Company, the period of product acceptance may be extended to some degree. If the epidemic lasts for a long term or continues to exacerbate, it may have adverse effect on the production and operation of major clients of the Company and result in the decrease in needs of special semiconductor equipment, which may lead to cancellation, decrease or postponement of orders for products of the Company by such major clients, all of the above may adversely affect businesses of the Company.

ACM Research (Shanghai), Inc.

[***]

major countries in the world, resulting in the recession of global economy and changes in economic policies of various countries, which may lead to continuous depression of the semiconductor industry from the origin and have materially adverse effect on businesses, operating results and financial situations of the Company.

(VIII)Relevant Risks of the Company and ACMR, the Controlling Shareholder, being Listed on the STAR Market and the NASDAQ Stock Market Respectively

After A-share stocks in this Offering are listed, the Company and ACMR, the controlling shareholder of the Company, will be listed on the STAR Market of Shanghai Stock Exchange and the NASDAQ Stock Market in the U.S. respectively. The Company and ACMR need to comply with laws and regulations and regulatory requirements on listing issued by regulatory authorities in both places at the same time, and shall simultaneously disclose information in both places which are required to be publicly disclosed according to laws.

Due to discrepancies in terms of laws and regulations and regulatory policies in China and the United States, there are some discrepancies in terms of specific accounting treatment and financial information disclosure between the Company and ACMR as they are governed by different accounting standards. Meanwhile, the price of stocks of the Company listed on the STAR Market and the price of stocks of ACMR listed in NASDAQ stock market may be different due to differences in requirements of disclosing information on listed companies imposed by securities regulatory authorities, in language, culture and expression habit, in composition of investors in China and the United States and their investment ideas, and in specific situations of capital markets.

II. The Company particularly prompts investors to pay attention to the important commitments made by the relevant entities with respect to the Offering

The Company prompts investors to carefully read the important commitments made by the Company, its shareholders, directors, supervisors, officers, key technical personnel, and the sponsors and securities service providers of the Offering, the restraint measures for non-fulfillment, and the fulfillment of commitments triggering the fulfillment conditions. Please refer to “V. Important Commitments Made by Relevant Parties to the Offering and Their Fulfillment” in the “Section X Investor Protection” of this [***] for details.

III. State of Operation from Financial Report Audit Deadline to the Signing Date of this [***]

The Company’s financial report audit deadline is December 31, 2019. From the financial report audit deadline to the signing date of this [***], the Company’s operating conditions are good, and there have not been major changes in its business model, in the purchase scale and price of its main raw materials, revenue and sales price, in its customers and suppliers or in the overall operating environment.

ACM Research (Shanghai), Inc.

[***]

Table of Contents

SECTION I INTERPRETATIONS	11
SECTION II OVERVIEW	16
I. Overview of the Issuer and the Intermediaries	16
II. Overview of the Offering	17
III. Major Financial Data and Indicators for the Issuer’s Reporting Period	18
IV. Main Business and Operation of the Issuer	18
V. Technology Advancement, R&D Technology Industrialization and Future Development Strategies of the Issuer	20
VI．Listing Criteria Chosen by the Issuer	21
VII. Special Arrangements on the Issuer’s Corporate Governance	21
VIII．Use of the Fund Raised by the Issuer	21
SECTION III - OVERVIEW OF THE OFFERING	22
I. Basic Information of the Offering	22
II. Relevant Parties in the Offering	22
III. Relationship between the Issuer and Other Related Parties in the Offering	23
IV. Important Dates for the Offering	24
SECTION IV RISK FACTORS	24
I. Technical Risks	24
II. Operating Risks	25
III. Risks of Management and Internal Control	30
IV. Financial Risks	31

V. Legal Risks	33
VI. Risks of Offering Failure	34
VII. Risks of Investment Projects of Raised Funds	34
VIII. Risks of Adverse Effect on the Semiconductor Industry Caused by the Global COVID-19 Epidemic	35
IX. Relevant Risks of the Company and ACMR, the Controlling Shareholder, being Listed on the STAR Market and the NASDAQ Stock Market Respectively	36
X. Other Risks	36
SECTION V - OVERVIEW OF THE ISSUER	37
I. Overview of the Issuer	37
II. Establishment and Reorganization of the Issuer	37
III．Equity Structure of the Issuer	44
IV. Majority Owned Subsidiaries and Equity Participation Companies of the Issuer	44
V. Basic Information of Major Shareholders Holding More than 5% of the Shares and the Actual Controller	49
VI. Share Capital of the Issuer	53
VII. Brief Information of Directors, Supervisors, Senior Managers and Core Technicians	73
VIII. Agreements between the Company and any of Directors, Supervisors, Senior Managers and Key technicians and their Performance	79
IX. Changes in Directors, Supervisors, Senior Managers and Key technicians of the Company within the Last Two Years	79
X. External Investments Made by Directors, Supervisors, Senior Managers and Key Technicians of the Company	80

ACM Research (Shanghai), Inc.

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XI. Shares Held by Directors, Supervisors, Senior Managers and Key technicians of the Company and their Immediate Relatives	81
XII. Information on Remuneration of Directors, Supervisors, Senior Managers and Key Technicians of the Company	83
XIII. Equity Incentives and Relevant Arrangements of the Issuer prior to this Offering	84
XIV. Employees of the Issuer and their Social Securities	88
SECTION VI BUSINESS AND TECHNOLOGY	90
Ⅰ. Main Business and Main Products of the Issuer	90
Ⅱ. The basic situation and competition condition of the issuer’s industry	100
III. Issuer’s Sales and Main Customers	134
IV. Issuer’s Procurement and Main Suppliers	137
V. Situation of Key Resource Elements, Such as Fixed Assets, Intangible Assets, ETC. That Have a Major Impact on Main Business	142
VI. Core Technologies of the Issuer	149
VII. Overseas Operation of the Issuer	169
SECTION VII CORPORATE GOVERNANCE AND INDEPENDENCE	169
I. Establishment, Perfection and Operation of Systems of General Meeting of Shareholders, Board of Directors, Supervisory Board, Independent Directors, Secretary of Board of Directors, Special Committees of Board of Directors	169
II. Shares with Special Voting Rights of the Issuer	173
III. Structure of Contractual Control of the Issuer	173
IV. Self-appraisal of the Management and Certification Opinions of Certified Public Account on Internal Control	173

V. Funds Occupancy and External Securities of the Issuer	173
VI. Violations of Laws or Regulations by the Issuer	174
VII. Independent and Continuous Operation of the Issuer Directed to the Market	175
VIII. Horizontal Competition	177
IX. Related Party and Related Relationship	178
X. Related Transactions	185
XI. Decision-making Procedures and Opinions of Independent Directors of Related Transactions during the Reporting Period	194
XII. Changes in Related Parties	195
SECTION VIII FINANCIAL ACCOUNTING INFORMATION AND MANAGEMENT ANALYSIS	196
I. Audited Financial Statements	196
II. Preparation Basis of Financial Statements and Scope of Consolidated Statements	204
III. Audit Opinion of Certified Public Accountant	205
IV. Key Audit Matters and Judgment Criteria for Materiality Related to Financial Accounting Information	205
V. Potential Specific Impacts on or Risks to Issuer’s Future Profitability (Operation) or financial position	206
VI. Significant Accounting Policies and Accounting Estimates Adopted in the Reporting Period	208
VII. Applicable Tax Rate and Main Fiscal and Tax Preferential Policies	226
VIII. Segment Information	228
IX. Non-recurring Profits or Losses	228
X. Main Financial Indicators	229

ACM Research (Shanghai), Inc.

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XI. Operating Results Analysis	231
XII. Asset Quality and Solvency Analysis	252
XIII. Dividend Distribution Policy	275
XIV. Cash Flow Analysis	275
XV. Capital Expenditure Analysis	278
XVI. Analysis of Going Concern Capability	278
XVII. Major Equity Acquisition and Merger	278
XVIII. Subsequent Matters, Contingencies, Other Important Matters, Major Guarantees and Litigation Matters	279
XIX. Profit Forecast	279
SECTION IX UTILIZATION OF RAISED FUNDS AND FUTURE DEVELOPMENT PLAN	280
I. Overview of Investment Projects with Raised Funds	280
II. Utilization of Raised Funds	285
III. Explanation on the Newly Acquired Land or Real Estate Involved in the Use of Raised Funds	293
IV. Strategic Planning of the Company	293
SECTION X INVESTOR PROTECTION	296
I. Main Arrangements by the Issuer on Investor Relations	296
II. Dividend Distribution Policy of the Issuer	297
III. Distribution Policy of Accumulated Profits before the Offering	300
IV. Voting Mechanism for Shareholders of the Issuer	300

V. Important Commitments Made by Relevant Parties to the Offering and Their Fulfillment	301
SECTION XI OTHER IMPORTANT MATTERS	319
I. Material Contracts	319
II. External Guarantee	323
III. Litigation and Arbitration	323
SECTION XII STATEMENTS	324
I. Statement by All Directors, Supervisors and Senior Executives of the Issuer	324
II. Statement by the Issuer’s Controlling Shareholder	325
III. Statement by the Issuer’s De Facto Controller	325
IV. Statement (I) by the Sponsor (Lead Underwriter)	326
IV. Statement (II) by the Sponsor (Lead Underwriter)	326
V. Statement by the Co-lead Underwriter	327
VI. Statement by the Issuer’s Lawyer	327
VII. Statement by the Audit Institution	328
VIII. Statement by the Asset Appraisal Agency	328
IX. Statement by the Capital Verification Institution	329
SECTION XIII ATTACHMENTS	329
I. Documents for Future Reference	329
II. Access to Documents for Future Reference	329
SCHEDULE I: IMPORTANT PATENTS	330
SCHEDULE II: IMPORTANT TRADEMARKS	341

ACM Research (Shanghai), Inc.

[***]

Section I Interpretations

In the [***], unless the context otherwise requires, the following terms have the following meanings:

I. Basic Terms
Issuer, Company, the Company	means	ACM Research (Shanghai), Inc. and its predecessor ACM Research (Shanghai), Inc.(before restructuring)
Corporation, ACMSH	means	ACM Research (Shanghai), Inc.
ACMSH (before restructuring)	means	ACM Research (Shanghai), Inc., the predecessor of the Issuer
ACM Wuxi	means	ACM Research (Wuxi), Inc., a wholly-owned subsidiary of the Issuer
Shengwei Shanghai	means	Shengwei Semiconductor Equipment (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Issuer
CleanChip HK	means	CleanChip Technologies Limited, a wholly-owned subsidiary of the Issuer
ACMKR	means	ACM Research Korea Co., Ltd., a wholly-owned subsidiary of CleanChip HK
ACM CA	means	ACM Research (CA), Inc., a wholly-owned subsidiary of CleanChip HK
Shengyi Technology	means	Shengyi Semiconductor Technology (Wuxi) Co., Ltd., an equity participation enterprise of the Issuer
Shixi Chanheng	means	Hefei Shixi Chanheng Integrated Circuit Venture Capital Fund (L.P.), an equity participation enterprise of the Issuer
ACMR	means	ACM Research, Inc., a Nasdaq stock market listed company and the controlling shareholder of the Issuer
Xinwei Consulting	means	Xinwei (Shanghai) Management Consulting Partnership (L.P.), a shareholder of the Issuer
SICIF	means	Shanghai Integrated Circuit Industry Fund Co., Ltd., a shareholder of the Issuer
PDHTI	means	Shanghai Pudong High-tech Investment Co., Ltd., a shareholder of the Issuer
HTXC	means	Jiaxing Haitong Xuchu Private Equity Fund (L.P.), a shareholder of the Issuer
Shangrong Innovation	means	Shangrong Innovation (Ningbo) Equity Investment Center (L.P.), a shareholder of the Issuer

Jinpu Investment	means	Shanghai Jinpu Lingang Intelligent Technology Private Equity Investment Fund (L.P.), a shareholder of the Issuer
Taihu Guolian	means	Wuxi Taihu Guolian Emerging Industry Investment Enterprise (L.P.), a shareholder of the Issuer
Xinshi Consulting	means	Xinshi (Shanghai) Management Consulting Partnership (L.P.), a shareholder of the Issuer
Yongkong Consulting	means	Shanghai Yongkong Business Information Consulting Partnership (L.P.), a shareholder of the Issuer
Hai Feng Investment	means	Hai Feng Investment Holding Limited, a shareholder of the Issuer
Runguang Investment	means	Hefei Runguang Equity Investment Partnership (L.P.), a shareholder of the Issuer
ZJTVC	means	Shanghai Zhangjiang Science and Technology Venture Capital Co., Ltd., a shareholder of the Issuer
SYEM	means	Shanghai Shanyi Enterprise Management Center (L.P.), a shareholder of the Issuer
Xingang Consulting	means	Xingang (Shanghai) Management Consulting Partnership (L.P.), a shareholder of the Issuer
SRJY	means	Shanghai Shangrong Juyuan Equity Investment Center (L.P.), a shareholder of the Issuer
Shengxin Shanghai	means	Shengxin (Shanghai) Enterprise Management Consulting Partnership (L.P.)
Zhangjiang Group	means	Shanghai Zhangjiang (Group) Co., Ltd.
Yangtze Memory	means	Yangtze Memory Technologies Co., Ltd., a customer of the Issuer
SMIC	means	Semiconductor Manufacturing International Corporation, a customer of the Issuer
Hynix	means	SK Hynix Inc., a customer of the Issuer
Hefei Changxin	means	Hefei Changxin Integrated Circuit Manufacture Co., Ltd., a customer of the Issuer
Huahong Group	means	Shanghai Huahong (Group) Co., Ltd., a customer of the Issuer
JCET	means	Jiangsu Changjiang Electronics Technology Co., Ltd., a customer of the Issuer
TFME	means	Tongfu Microelectronics Co., Ltd., a customer of the Issuer
SJsemi	means	SJ Semiconductor (Jiangyin) Limited, a customer of the Issuer

ACM Research (Shanghai), Inc.

[***]

Nepes	means	Nepes corporation, a customer of the Issuer
Wafer Works	means	Wafer Works Corporation, a customer of the Issuer
JRH	means	Zhejiang QL Electronics Co., Ltd., a customer of the Issuer
ZING SEMI	means	Zing Semiconductor Corporation, a customer of the Issuer
PSI	means	Phoenix Silicon International Corporation, a customer of the Issuer
NCAP	means	National Center for Advanced Packaging Co., Ltd., a customer of the Issuer
ICRD	means	Shanghai IC R&D Center Co., Ltd., a customer of the Issuer
NINEBELL	means	NINEBELL Co., Ltd., a supplier of the Issuer
NOMURA	means	NOMURA MICRO SCIENCE CO., LTD., a supplier of the Issuer
Charter Base International	means	Charter Base International Logistics (Shanghai) Co., Ltd.
DNS	means	SCREEN Holdings Co., Ltd.
TEL	means	Tokyo Electron Ltd.
LAM	means	LAM Research Corporation
SEMES	means	SEMES Co. Ltd.
NAURA	means	NAURA Technology Group Co., Ltd.
KINGSEMI	means	KINGSEMI Co., Ltd.
PNC System	means	PNC Process System Co., Ltd.
AMEC	means	Advanced Micro-Fabrication Equipment Inc.
HZCCTECH	means	Hangzhou Changchuan Technology Co., Ltd.
ASML	means	ASML Holding N.V.
KLA	means	KLA Corporation
Applied Materials	means	Applied Materials, Inc.
MOST	means	Ministry of Science and Technology of the People’s Republic of China
MIIT	means	Ministry of Industry and Information Technology of the People’s Republic of China
NDRC	means	National Development and Reform Commission of the People’s Republic of China
MOF	means	Ministry of Finance of the People’s Republic of China
CSRC	means	China Securities Regulatory Commission

SASAC	means	State-owned Assets Supervision and Administration Commission of the State Council
The Company Law	means	The Company Law of the People’s Republic of China
The Securities Law	means	The Securities Law of the People’s Republic of China
The Articles of Association	means	The Articles of Association of ACM Research (Shanghai), Inc.
The Articles of Association (Draft)	means	The Articles of Association of ACM Research (Shanghai), Inc. (Draft) applicable to the Issuer after the Offering
NASDAQ	means	National Association of Securities Dealers Automated Quotations, the NASDAQ stock market
Sponsor, Lead Underwriter, [***]	means	[***]
Co-lead Underwriter	means	[***]
Issuer’s Lawyer; King & Wood	means	King & Wood Mallesons
Reporting Accountant, Lixin	means	BDO CHINA SHU LUN PAN Certified Public Accountants LLP
Appraisal Agency, China United Appraisal	means	China United Assets Appraisal Group Co., Ltd.
Offering	means	the public offering of 43,355,800 shares
Reporting Period	means	the three years of 2017, 2018 and 2019
Yuan, RMB 10,000 Yuan	means	RMB Yuan and RMB RMB 10,000 Yuan
II. Technical Terms
Semiconductors	mean	materials which have an intermediate conductivity between that of conductors and insulators at room temperature, which can be divided into integrated circuits (IC), discrete devices, optoelectronics and sensors in accordance with manufacturing technology. Semiconductors can be widely used in downstream communications, computers, consumer electronics, network technology, automobile, aerospace and other industries.
Silicon Slice	means	Silicon Wafer, a silicon slice of semiconductor used for the fabrication of semiconductor devices such as integrated circuits, discrete devices and sensors.

ACM Research (Shanghai), Inc.

[***]

IC	means	Integrated Circuit, a circuit or system that uses a series of specific processing techniques to interconnect active components such as transistors and diodoes and passive originals such resistors and capacitors, integrate them on a semiconductor wafer according to a certain circuit, and package them in a shell to achieve specific functions.
Wafer	means	the Silicon Slice during the specific processing such as oxidation/diffusion, photolithography, etching, ion implantation, film growth, cleaning and polishing, metallization, etc.
Fab	means	a manufacturer that produces semiconductor devices on silicon wafers through a series of specific processing techniques.
Chip	means	an IC carrier, and also the result of design, manufacturing, packaging, and testing of IC.
Graphic Wafer	means	a wafer with a patterned structure on its surface.
Wafer Fabrication, Chip Fabrication	means	the process of manufacturing semiconductor silicon wafers into chips through a series of specific processing technology, which are divided into front wafer manufacturing and back packaging testing.
IDM	means	Integrated Device Manufacture, i.e., an Integrated Device Manufacturer completes the entire industrial chain from integrated circuit design, wafer manufacturing to test and packaging.
Storage Device	means	a memory device in an electronic system for holding programs and data.
Sensor	means	a detection device, which can feel the information measured and convert it to an electrical signal or information output in any other required form according to a certain law, thus to meet the information transmission, processing, storage, display, record and control requirements.
Power Device	means	a large-power electronic device for power conversion and control circuits in power equipment.
Discrete Device	means	a semiconductor device having a fixed single characteristic and function.

NAND Flash Memory	means	flash memory/data storage type flash memory.
5G	means	5th-Generation, i.e., the Fifth Generation of Mobile Phone Mobile Communications Standards.
Photoetching	means	a process in which the circuit graphics are transferred to the surface of a single crystal or dielectric layer to form effective graphics windows or functional graphics by using the optical-chemical reaction principle and chemical and physical etching methods.
Etching	means	the process of selectively removing unwanted material from a silicon surface by chemical or physical means, which is one of the main processes for photolithographic processing and a key step in semiconductor manufacturing.
Gluing	means	the process of applying photoresist evenly to the surface of a wafer.
Developing	means	the process of imaging the exposed wafer, by which the graphics imaged on the optical resistance are displayed.
CVD	means	Chemical Vapor Deposition
PVD	means	Physical Vapor Deposition
LPCVD	means	Low Pressure Chemical Vapor Deposition
ALD	means	Atomic Layer Deposition, a method that can plate the substance layer by layer in the form of monatomic film.
DRAM	means	Dynamic Random-Access Memory
RAM	means	Random Access Memory, a semiconductor memory.
LCD	means	Liquid Crystal Display
MEMS	means	Mechanical System
MOCVD	means	Metal-organic Chemical Vapor Deposition.
CMP	means	Chemical Mechanical Polishing, to make the surface of a wafer completely flat or flattened.

ACM Research (Shanghai), Inc.

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SFP	means	Stress Free Polish, a technology that uses the principle of electrochemical reaction to abandon the mechanical pressure of the polishing process during the process of discarding the metal film on the surface of the wafer to eliminate the damage of the mechanical pressure on the metal wiring.
VOC	means	Volatile Organic Compounds.
Pa	means	The unit of pressure pascal, referred to as Pa.
Dielectric Substance	means	all materials that can be polarized under the action of an external electric field, which usually present their electrical properties in the form of induction rather than conduction in the electric field.
Precursor Chemicals	means	a chemical that can be mutated into another chemical or used to make another chemical.
Yield	means	the percentage of the number of circuits whose test results are good accounting for the total number of circuits under test after the circuits under test have gone through all test procedures.
Front-End, Back-End	means	the front-end process and the back-end process in the manufacture of the semiconductor devices, with the front-end process mainly including Photoetching, Etching, cleaning, ion implantation, chemical machinery flat etc. and the back-end process mainly including routing, Bonder, FCB, BGA reballing, inspection, testing etc.
Packaging	means	the process of wrapping a small piece of material (such as a Chip) in a support housing during the final phase of Semiconductor development to prevent physical damage and corrosion and to allow the Chip to be connected to a circuit board.
Advanced Packaging	means	cutting-edge Packaging forms and technologies. At present, Packaging with Flip Chip (FC) structure, Wafer Level Packaging (WLP), System in a Package (SIP), 2.5D Packaging and 3D Packaging etc. are considered to belong to the category of Advanced Packaging

FC	means	Flip Chip, a DFN structure generally containing circuit units, which is designed to be electrically and mechanically connected to a circuit by an appropriate number of solder balls on its surface (covered by a conductive adhesive).
WLP	means	Wafer Level Packaging, reducing the size of the Packaging to the size of an integrated circuit Chip and the fact that it can be made in batches as a wafer reduces the cost of the Packaging.
SIP	means	System in a Package, which integrates a variety of functional Chips, including processors, memory and other functional Chips in a package, so as to achieve a basic complete function.
3D Packaging	means	the Packaging technology in which more than two Chips are stacked vertically in the same packaging body without changing the size of the package body, with the main characteristics of multi-function, high efficiency, large capacity, high density, diploid increase of the functions and applications in unit volume and low cost.
Fan-out	means	a wafer reconstruction technology, by which the Chip is re-embedded on the wafer, and then the Packaging is carried out according to the steps similar to the standard WLP process. The actual package area is larger than the chip area, and other active devices and passive components can be added to form SIP when the area is expanded.
Under Bump Metal, UBM	means	the metal transition layer between the solder pad and the solder ball, which is located on top of the wafer passivation layer. There are very good adhesion characteristics between UBM and the metallized layer on the wafer and UBM also has good wetting characteristics with the solder ball, which acts as the diffusion layer of solder between the welding ball and IC metal welding pad. As an oxidation barrier layer, UBM also plays a role in protecting the Chip.
UBM/RDL Technology	means	the Under-Bump Metal/redistribution layer technology, by which the undercut can be minimized while removing the barrier layer and seed layer, and the time to complete the etching step can be controlled and accurately monitored thus to reduce the undercut and ensure the critical feature (line or bump) size.
Pillar Bump	means	pillar bumps.

ACM Research (Shanghai), Inc.

[***]

FinFET	means	Fin Field-Effect Transistor, a new complementary metal-oxide semiconductor transistor, which can improve circuit control, reduce leakage current and shorten the gate length of the transistor.
SC-1 Solution	means	Standard Clean 1, a solution prepared by mixing a certain proportion of ammonia water, hydrogen peroxide and water and used for cleaning semiconductor silicon wafers.
ppm	means	Parts per million, a concentration expressed in parts per million of the mass of the solute in the total solution mass, also known as parts per million concentration.
IPA Drying	means	the process of using low surface tension and volatile characteristics of isopropyl alcohol (IPA) to replace the water with high surface tension on the surface of silicon wafers and then blowing dry with nitrogen to completely dry the silicon water film.
PTFE	means	Poly Tetra FluoroEthylene, with the characteristics of anti-acid, anti-alkali, anti-various organic solvents, high temperature resistance and very low friction coefficient.
TSV	means	Through Silicon Vias, a three-dimensional (3D) vertical integration with through silicon vias (TSV) copper interconnect, which is currently considered to be one of the most advanced technologies in the Semiconductor industry.
Bernoulli Chuck	means	a device that uses the Bernoulli aerodynamic suspension principle to suck the wafer on the chuck during wafer cleaning.
Robot Arm	means	an automatic operation device that can imitate some action functions of human hand and arm to grab and carry objects or to operate tools according to fixed procedures. The feature is that it can complete various expected tasks through programming. The structure and performance of the device have the advantages of both human and manipulator machines.

SAPS Cleaning Technology	means	Space Alternative Phase Shift technology, which utilizes megasonic alternating phases to provide megasonic energy to the flat and patterned wafer surfaces in a highly uniform manner at the microscopic level, effectively removing random defects throughout the wafer and reducing the use of chemicals.
TEBO Cleaning Technology	means	Timely Energized Bubble Oscillation technology, which enables damage-free cleaning of patterned Chips through the use of a series of rapid pressure changes forcing the bubbles to oscillate in the specific size and shape, precise and multiparameter control of cavitation of bubbles in the mega-frequency ultrasonic cleaning process, and avoidance of any damage to the patterns caused by transient cavitation in traditional supersonic cleaning.
Tahoe Technology	means	the cleaning technology independently developed by the Issuer, which integrates the tank module and the single-chip module in a single wet cleaning equipment and has the advantages of both; the cleaning effect and process applicability of the Tahoe cleaner can be compared with that of single-chip cleaner, can also greatly reduce the use of sulfuric acid, help customers reduce production costs and better comply with energy conservation and environmental protection policies.
Damascus Process	means	a technique derived from the ancient Damascus craftsman, in which the dielectric layer is first etched with a film of a metal conductor and then filled with metal, with the feature that the metal layer does not need to be etched.
Process, Node and Manufacturing Procedure	means	the size of the transistor gate width, used to measure the level of semiconductor chip manufacturing.
Moore’s Law	means	the Moore’s Law put forward by Gordon Moore, i.e., the number of transistors on an integrated circuit doubles every 18 months, the corresponding performance doubles, and the cost drops by half.
ECP	means	Electro Chemical Plating, the process of coating the surface of a wafer with a thin layer of other metals or alloys by using the electrolysis principle.

Mm	means	Millimeter, 10^-3meter, a unit used to describe the diameter of a Semiconductor Wafer.
μm	means	Micrometer, 10^-6meter
nm	means	Nanometer, 10^-9meter
Gartner	means	a leading research and consulting company in the field of IT. Its research scope covers the entire IT industry from the upstream hardware design and manufacture and to the downstream terminal applications.
WSTS	means	World Semiconductor Trade Statistics, a data statistics company in the semiconductor industry whose members include the world’s leading semiconductor manufacturers.
SEMI	means	Semiconductor Equipment and Materials International
VLSI Research	means	a leading research consultancy in the field of integrated circuits and pan-semiconductors, providing market research and economic analysis on technology, business and economics for the semiconductor industry chain. It rates and ranks the world’s IC and pan-semiconductor manufacturing and equipment companies annually.
Yole	means	Yole Dévelopment, which provides market research, technology analysis, strategy consulting, targeted media and financial advisory services.

As a result of rounding, there may be some differences in mantissas between the sum of some sums and the sum of the addends in the [***].

ACM Research (Shanghai), Inc.

[***]

Section II Overview

This overview provides only a summary of the full [***]. Investors should read the full [***] carefully before making an investment decision.

I. Overview of the Issuer and the Intermediaries

(I) Overview of the Issuer
Issuer’s Name	ACM Research (Shanghai), Inc.	Date of Establishment	May 17, 2005
Registered Capital	390,201,300 Yuan	Legal Representative	HUI WANG
Registered Address	Building 4, No.1690 Cailun Road, China (Shanghai) Pilot Free Trade Zone	Main Production and Operation Premises	Building 4, No.1690 Cailun Road, China (Shanghai) Pilot Free Trade Zone
Controlling Shareholder	ACM Research, Inc.	Actual Controller	HUI WANG
Classification of Industry	Manufacture of Computers, Communication and Other Electronic Equipment (Classification Code: C39)	Status of Listing (Applying to List) on Another Exchange	None
(II) The Intermediaries for the Offering
Sponsor	[***]	Lead Underwriter	[***]
Issuer’s Lawyer	King & Wood Mallesons	Co-lead Underwriter	[***]
Audit Institution	BDO CHINA SHU LUN PAN Certified Public Accountants LLP	Appraisal Agency	China United Assets Appraisal Group Co., Ltd.

ACM Research (Shanghai), Inc.

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II. Overview of the Offering

(I) Basic Information of the Offering
Class of Shares	RMB Common Shares (A Shares)
Par Value per Share	RMB 1.00 Yuan
Number of Shares in the Offering	No more than 43,355,800 shares	Proportion in the Total Share Capital after the Offering	No less than 10.00%
Thereinto: Number of New Shares	No more than 43,355,800 shares	Proportion in the Total Share Capital after the Offering	No less than 10.00%
Number of Shares Offered by Shareholders	-	Proportion in the Total Share Capital after the Offering	-
Total Share Capital after the Offering	No more than 433,557,100 shares
Offering Price per Share	RMB [ ] Yuan
Offering P/E	[ ] Times
Net Asset Value per Share Prior to the Offering	RMB [ ] Yuan/Share	Earnings per Share Prior to the Offering	-
Net Asset Value per Share after the Offering	[ ]	Earnings per Share after the Offering	[ ]
Offering P/B	[ ] Times
Pricing Mode	The Issuer and the Lead Underwriter make inquiries to professional institutional investors registered with the Securities Association of China such as securities companies, fund management companies, trust companies, finance companies, insurance companies, qualified foreign institutional investors and private equity fund managers to determine the offering price of the shares.
Offering Mode	The combination mode of offline inquiry placing to inquiry objects and online fund subscription for offering, or any other offering mode approved by the securities regulatory authorities will be adopted.
Offering Targets	Qualified inquiry objects and natural persons, legal persons and other investors opening accounts on the STAR Market of the Shanghai Stock Exchange (other than purchasers prohibited by national laws and regulations)

Underwriting Mode	Stand-by Underwriting
Name of Shareholders Proposing to Offer Shares to the Public	N/A
Principle of Offering Expenses Sharing	-
Total Fund Raised	RMB[ ] Yuan
Net Fund Raised	RMB[ ] Yuan
Projects to be Invested by the Fund Raised	[ ]
	[ ]
Estimated Offering Expenses	Sponsor and underwriting fee amounting to RMB [ ] Yuan; Audit and capital verification fee amounting to RMB [ ] Yuan; Lawyer’s fee amounting to RMB[ ] Yuan; Appraisal fee amounting to RMB [ ] Yuan; Offering fees in total amounting to RMB[ ] Yuan
(II) Important Dates for the Offering
Date for Publication of the Offering	[ ]
Date to Start Inquiry Recommendation	[ ]
Date for Publication of Pricing Notice	[ ]
Subscription Date and Payment Date	[ ]
Listing Date	[ ]

ACM Research (Shanghai), Inc.

[***]

III. Major Financial Data and Indicators for the Issuer’s Reporting Period

Item	December 31, 2019	December 31, 2018	December 31, 2017
Total Assets (RMB 10,000 Yuan)	130,800.15	63,602.25	32,091.98
Owner’s Equity Attributable to Parent Company (RMB 10,000 Yuan)	82,992.90	14,504.75	4,835.86
Debt Asset Ratio (Parent Company)	32.56%	76.34%	84.86%
Item	2019	2018	2017
Operating Income (RMB 10,000 Yuan)	75,673.30	55,026.91	25,358.73
Net Profit (RMB 10,000 Yuan)	13,488.73	9,253.04	1,086.06
Net Profit Attributable to the Shareholders of the Issuer (RMB 10,000 Yuan)	13,488.73	9,253.04	1,086.06
Net Profit Attributable to the Parent Company after Deduction of Non-recurring Profit and Loss (RMB 10,000 Yuan)	13,047.50	7,140.06	-229.84
Basic Earnings per Share (RMB 1 Yuan)	0.36	N/A	N/A
Diluted Earnings per Share (RMB 1 Yuan)	0.36	N/A	N/A
Weighted Average Return on Equity (%)	34.22	137.72	26.36
Net Cash Flow from the Operating Activities (RMB 10,000 Yuan)	7,270.65	3,881.03	-899.23

Cash Dividends (RMB 10,000 Yuan)	-	-	-
R & D Expenditure as a Percentage of Operating Income (%)	13.12	14.43	20.57

IV. Main Business and Operation of the Issuer

(I) Main Business

The Company is mainly engaged in the research and development, production and sales of semiconductor equipment, with the main products including semiconductor cleaning equipment, semiconductor electroplating equipment and advanced packaging wet processing equipment. The Company insists on the development strategy of differentiation competition and innovation. Through independent research and development of single-wafer megasonic cleaning technology, single wafer wet bench combined cleaning technology, electro-plating technology, and stress-free polishing technology etc., it provides customers in the semiconductor industry with customized wet processing solutions such as semiconductor cleaning, semiconductor polishing and advanced packaging etc., effectively improving the production efficiency and yield of the customers and reducing their costs of production.

Based on independent innovation and research and development as well as many years of professional technique and technology accumulation, the Company has successfully developed the world’s first SAPS/TEBO megasonic cleaning technology and single wafer wet bench combined cleaning technology applied to the wafer cleaning area with technology nodes 45 nm and below, which can effectively solve the cleaning problem of organic contamination and particles after etching and greatly reduce the usage of the chemical reagents such as sulfuric acid, helping customers reduce production costs while meeting the requirements of China’s energy conservation and emissions reduction at the same time.

ACM Research (Shanghai), Inc.

[***]

With its advanced technology and abundant product lines, the Company has developed into one of the few semiconductor equipment suppliers with certain international competitiveness in China, whose products have been recognized by many domestic and foreign mainstream semiconductor manufacturers and have gained a good reputation in the market. The Company’s major customers are as follows:

No.	Field of the Customer	Names of Customers
1	Wafer Fabrication	Hynix, Huahong Group, Yangtze Memory, SMIC, Hefei Changxin
2	Advanced Packaging	JCET, TFME, SJsemi, Nepes
3	Semiconductor Wafer Manufacturing and Recycling	ZING SEMI, JRH, Wafer Works, PSI
4	Scientific Research Institutions	Institute of Microelectronics of the Chinese Academy of Sciences, Shanghai IC R&D Center Co., Ltd., NCAP

During the reporting period, the composition of the Company’s main business income by product category is as follows:

Unit: RMB 10,000 Yuan

Item	2019		2018		2017
Item	Amount	Ratio	Amount	Ratio	Amount	Ratio
Semiconductor Cleaning Equipment	62,522.30	84.10%	50,135.96	92.91%	21,492.48	86.27%
Thereinto: Single-wafer Cleaning Equipment	55,099.52	74.12%	50,135.96	92.91%	21,492.48	86.27%
Wet Bench Cleaning Equipment	4,801.36	6.46%	-	-	-	-
Single Wafer Wet Bench	2,621.43	3.53%	-	-	-	-

Combined Cleaning Equipment
Semiconductor Electro-plating Equipment	7,857.39	10.57%	1,191.13	2.21%	-	-
Advanced Packaging Wet Processing Equipment	3,961.12	5.33%	2,634.07	4.88%	3,421.33	13.73%
Total	74,340.81	100.00%	53,961.17	100.00%	24,913.81	100.00%

During the reporting period, the Company’s single-chip cleaning equipment accounted for a relatively high proportion and grew rapidly, and was the Company’s main source of income. In addition, the Company has developed the first front-end brushing equipment, stress-free polishing equipment and vertical furnace tube equipment and such equipment has successfully entered the client verification; during the reporting period, no sales revenue has been achieved.

(II) Competitive Status

The global market of semiconductor cleaning equipment is highly concentrated, especially in the field of single-wafer cleaning equipment. DNS, TEL, LAM and SEMES have a combined market share of over 90%, among which DNS has the highest market share, i.e., over 40%.

At present, there are only a few companies in mainland China that can provide semiconductor cleaning equipment, mainly including ACMSH, NAURA, KINGSEMI and PNC System. Among them, ACMSH is a leading enterprise in the semiconductor cleaning equipment industry in China, with relatively rich product lines, mainly including single-wafer SAPS megasonic cleaning equipment, single-wafer TEBO magasonic cleaning equipment, single-wafer cleaning equipment, single-wafer backside cleaning equipment, single-wafer scrubbing equipment, Wet Bench Cleaning equipment, and single wafer wet bench combined cleaning equipment; the main

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cleaning equipment products of NAURA are single-wafer and Wet Bench Cleaning equipment, which are suitable for chip manufacturing with 65nm and 28nm technology nodes; PNC System has the relevant technology to produce 8-12 inch high-level single wafer wet cleaning equipment and Wet Bench cleaning equipment, which can cover the market needs of many downstream industries including wafer manufacturing, advanced packaging, and solar; and KINGSEMI’s current products are used in the field of integrated circuit manufacturing for single-wafer physical scrubbing.

Among the top 5 semiconductor equipment manufacturers in Mainland, China in 2018, ACMSH ranked the fourth. The details are as follows:

Ranking	Name of Enterprise
1	AMEC
2	NAURA
3	CETC Electronics Equipment Group Co., Ltd.
4	ACMSH
5	KINGSEMI

Source: Shanghai IC Industry Development Report 2019, Shanghai Municipal Commission of Economy and Informatization, Shanghai Integrated Circuit Industry Association.

In addition, according to the bidding result of Huahong Group’s Wuxi Project, ACMSH won the bidding for 5 sets of cleaning equipment, accounting for 27% of the share and ranking No.1 in the cleaning equipment field when international competitors are included.¹

According to the bidding result of Yangtze Memory’s 3D NAND 20,000 Pieces/Month Production Line, ACMSH won the bidding for 15 sets of cleaning equipment (all of which are single-wafer cleaning equipment), ranking No.2 only after 18 sets of DNS (including 12 sets of single-wafer cleaning equipment and 6 sets of Wet Bench Cleaning equipment). With respect to the single-wafer cleaning equipment, the number of orders won by ACMSH ranked No.1, accounting for 32.61%.²

According to the biding results of the equipment from Yangtze Memory and Huahong Group (Wuxi Project and Huali Phase II Project), among the more than 200 cleaning equipment purchased in total, the suppliers are ranked in order of the number of bids winning: DNS, ACMSH, LAM, TEL, NAURA, KINGSEMI, etc., the proportions are 48%, 20.5%, 20%, 6%, 1%, 0.5% in order, ACMSH ranks second in market share, slightly higher than LAM.³

V. Technology Advancement, R&D Technology Industrialization and Future Development Strategies of the Issuer

Further, focusing on independent innovation, research and development, it has successfully developed SAPS/TEBO megasonic cleaning technology and Tahoe single wafer wet bench combined cleaning equipment to be applied in the wafer cleaning field of 45 nm or below technology nodes by virtue of its professional technology and process accumulation over the past years. The above technology and equipment effectively solve the problem of organic contamination and particle cleaning after etching and greatly reduce the use of concentrated sulfuric acid and other chemical reagents. What’s more, its technology and equipment meet the energy-saving and emission-reduction requirements of the State while helping customers reduce production costs.

The Company has reached the international leading or international advanced level in the field of single-wafer megasonic cleaning equipment, single wafer wet bench combined cleaning equipment and copper interconnect and electroplate processing equipment. As of December 31, 2019, the Company and its majority-owned subsidiaries had 232 main patents granted, including 108 patents authorized in China

¹ Source: Semiconductor Equipment Localization - Processing Equipment Led by NAURA, AMEC and ACMSH: See from the Bid-winning Data of Huahong (Wuxi) Project, BOCI Securities, May, 2019

² Source: 3D NAND Industry Pattern & Elastic Measurement of Domestic Equipment in Yangtze Memory, the Industrial Securities, November 2019

³ Source: Topic 9 of Semiconductor Equipment Localization: Cleaning Equipment, BOCI Securities, May 2020.

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and 124 patents authorized abroad, including 227 invention patents, and won the title of “Shanghai Key Laboratory of Advanced Wet Process Equipment for Integrated Circuits”. The Company has been the main responsible unit for the Chinese “02 Special” major scientific research projects, such as “R & D and application for 20-14nm copper plating equipment of copper interconnection” and “R & D for 65-45nm stress-free polishing equipment of copper interconnection”.

Since its establishment, the Company has always focused on the field of semiconductor equipment, aiming to attract high-end professionals with continuous R&D team building and to improve the ability of scientific and technological innovation through independent research and development; to improve the market share through the powerful market development; to enhance its core competitiveness, to expand its revenue and profit scale, to create value for shareholders, and to continuously increase its market share by continuously introducing new products and technologies with differentiation.

The Company will strive to seize the opportunity for the rapid development of China’s semiconductor industry, give full play to its current market position, technological advantages, process accumulation and industry experience, pay close attention to the cutting-edge technologies of the global semiconductor equipment industry, ensure the industry leading position of its product quality and core technologies, and strive to catch up with and surpass the global advanced level. The Company will implement product performance and technology upgrading on the basis of existing products, and continuously track the changes in emerging end markets, thus to ensure the effective integration of the Company’s products with market demand.

VI．Listing Criteria Chosen by the Issuer

The listing criteria chosen by the Issuer are “the market value and financial indicators” stipulated in the Rules Governing the Listing of Stocks on the STAR Market of Shanghai Stock Exchange: (IV) the expected market value shall not be less than 3 billion Yuan, and the operating income in the latest year shall not be less than 300 million Yuan.

VII. Special Arrangements on the Issuer’s Corporate Governance

As of the date of signing the [***], there are no special arrangements on the corporate governance structure of the Issuer.

VIII．Use of the Fund Raised by the Issuer

According to the second extraordinary general meeting of shareholders of the Company in 2020 held on May 15, 2020, the fund raised from the Offering will be invested in the following projects after deducting the Offering fees:

Unit: RMB 10,000 Yuan

No.	Investment Orientation of the Raised Fund	Total Investment	Amount of the Raised Fund to be Used
1	ACMSH Equipment R&D and Manufacturing Center	[***]	[***]
2	ACMSH High-end Semiconductor Equipment R&D Project	[***]	[***]
3	To Supplement Liquidity	[***]	[***]
Total		[***]	[***]

If the actual amount of fund raised in the Offering (after deducting the Offering fees) is lower than the fund demand of the proposed investment projects, the Company will arrange the fund raised according to the investment proportion of the projects, with the gap filled with self-raised funds. If the actual amount of fund raised in the Offering (after deducting the Offering fees) exceeds the above fund needs, the remaining part will be used for the development of the Company’s main business according to its actual operation needs and the relevant regulations of the CSRC and the Shanghai Stock Exchange. The fund raised in the Offering will be invested according to the priorities of the projects. Before the fund raised is in place, the Company may use the self-raised funds to invest in the proposed investment projects, and then replace such self-raised funds with the raised funds after the fund raised is in place.

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Section III - Overview of the Offering

I. Basic Information of the Offering

(I) Class of Shares:	RMB Common Shares (A Shares)
(II) Par Value per Share:	RMB 1.00 Yuan
(III) Number of Shares in the Offering:	The number of shares in the Public Offering shall not exceed 43.3558 million, accounting for at least 10.00% of the Company’s total share capital after the Offering, and the Offering does not involve the public sale of shares by the shareholders of the Company.
(IV) Offering Price per Share:	RMB [ ] Yuan/Share, to be determined through making inquiries to the inquiry objects
(V) Participation of the Issuer’s Senior Managers and Employees in Strategic Placement:	[ ]. After the CSRC completes the registration procedures for the Offering, the Issuer will convene a board meeting to review relevant matters.
(VI) Participation of the Sponsor’s Subsidiaries in Strategic Placement:	The Sponsor will arrange relevant subsidiaries to participate in the strategic placement in the Offering, which will be carried out in accordance with relevant regulations of the Shanghai Stock Exchange. The Sponsor and its relevant subsidiaries will further clarify the specific plan for participating in the strategic placement in the Offering as required and submit relevant documents to the Shanghai Stock Exchange in accordance with relevant provisions.
(VII) Offering P/E:	[ ] Times (calculated by the offering price dividing by the earnings per share; the earnings per share is calculated by dividing the lower of the audited net profits attributable to the parent company before and after deducting non-recurring profit and loss in the year [ ] by the total share capital after the Offering)
(VIII) Net Asset Value per Share Prior to the Offering:	RMB [ ] Yuan/Share (calculated by dividing the audited shareholder’s equity attributable to the parent company on the date of [MM][DD][YY] by the total share capital prior to the Offering)
(IX) Net Asset Value per Share after the Offering:	RMB [ ] Yuan/Share (calculated by dividing the sum of the audited shareholder’s equity attributable to the parent company on the date of [MM][DD][YY] plus the net proceeds of the Offering by the total share capital after the Offering)

(X) Offering P/B:	[ ] Times (calculated by dividing the offering price per share by the net assets per share after the Offering)
(XI) Offering Mode:	The combination mode of offline inquiry placing to inquiry objects and online fund subscription for offering, or any other offering mode approved by the securities regulatory authorities will be adopted.
(XII) Offering Targets:	Qualified inquiry objects and natural persons, legal persons and other investors opening accounts on the STAR Market of the Shanghai Stock Exchange (other than purchasers prohibited by national laws and regulations)
(XIII) Underwriting Mode:	Stand-by Underwriting
(XIV) Estimated Offering Fees:	Sponsor and underwriting fee	RMB [ ] ×10,000 Yuan
	Audit and capital verification fee	RMB [ ] ×10,000 Yuan
	Lawyer’s fee	RMB [ ] ×10,000 Yuan
	Appraisal fee	RMB [ ] ×10,000 Yuan
	Offering fees in total	RMB [ ] ×10,000 Yuan

II. Relevant Parties in the Offering

(I) Issuer
Name	ACM Research (Shanghai), Inc.
Legal Representative	HUI WANG
Domicile	Building 4, No.1690 Cailun Road, China (Shanghai) Pilot Free Trade Zone
Telephone	021-50808868
Fax	021-50808860
Contact Person	MINGZHU LUO
(II) Sponsor (Lead Underwriter)
Name	[***]
Legal Representative	[***]

ACM Research (Shanghai), Inc.

[***]

Domicile	[***]
Telephone	[***]
Fax	[***]
Sponsor Representatives	[***]
Project Co-organizer	[***]
Project Managers	[***]
(III) Co-lead Underwriter
Name	[***]
Legal Representative	[***]
Domicile	[***]
Telephone	[***]
Fax	[***]
Project Managers	[***]
(IV) Law Firm
Name	King & Wood Mallesons
Person in Charge	LING WANG
Domicile	17th & 18th Floors, East Tower, World Financial Center 1, No.1 Dongsanhuan Zhonglu, Chaoyang District, Beijing
Telephone	010-58785588
Fax	010-58785599
Responsible Lawyers	HUI XU, FUAN CHEN, ANRONG WANG
(V) Accounting Firm
Name	BDO CHINA SHU LUN PAN Certified Public Accountants LLP
Managing Partner	ZHIGUO YANG
Domicile	4 F, No.61 East Nanjing Road, Huangpu District, Shanghai
Telephone	0755-82584611

Fax	0755-82584611
Responsible Certified Public Accountants	YI TANG, JING Zhao
(VI) Asset Appraisal Agency
Name	China United Assets Appraisal Group Co., Ltd.
Legal Representative	ZHI HU
Domicile	F4, East Block, Kaichen World Trade Center, 28 Fuxingmennei Street, Xicheng District, Beijing
Telephone	010-88000066
Fax	010-88000066
Responsible Certified Appraisers	WEI LIU and QIQUAN GE
(VII) Stock Registrar
Name	China Securities Depository and Clearing Corporation Limited Shanghai Branch
Domicile	3/F, China Insurance Building, 166 Lujiazui East Road, Pudong New District, Shanghai,
Telephone	021-68870587
(VIII) Recipient Bank
Account Name
Account Number
(IX) Stock Exchange Applied for Listing
Name	Shanghai Stock Exchange
Domicile	Shanghai Stock Exchange Building, 528 Pudong South Road, Shanghai
Telephone	021-68808888

III. Relationship between the Issuer and Other Related Parties in the Offering

As of the signing date of the [***], [***], a wholly-

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owned subsidiary of the Sponsor, holds 19.39% of the partnership shares of HTXC and serves as HTXC’s [***]. HTXC holds 0.59% of the Company’s shares, so the Sponsor indirectly holds 0.59% of the Company’s shares.

As of May 19, 2020, [***], a Hong Kong subsidiary of the co-lead underwriter [***], holds 600 shares of Class A common stock in ACMR.

Other than the above situations, the Issuer does not have any direct or indirect equity relationship or other rights and interests relationship with the intermediaries related to the Offering. The person in charge, senior managers and responsible personnel of each intermediary do not directly or indirectly hold the shares of the Issuer, nor do they have any other right and interests relationship.

IV. Important Dates for the Offering

Date for Publication of the Offering	[MM][DD][YY]
Date to Start Inquiry Recommendation	[MM][DD][YY] - [MM][DD][YY]
Date for Publication of Pricing Notice	[MM][DD][YY]
Subscription Date and Payment Date	[MM][DD][YY] - [MM][DD][YY]
Listing Date	[MM][DD][YY]

Section IV Risk Factors

When assessing the shares issued by the Company in this Offering, investors should especially and carefully consider the following risk factors besides other information provided in the [***]. The risk factors below are sorted in the order of materiality and degree of possible impacts on decision-making by investors, but it does not necessarily mean that the risk factors will occur in such an order.

I. Technical Risks

(I) Risks of Technical Innovation

(II) Risks of Technical Research and Development

To maintain its technical advancement, the Company needs to continuously develop new products and improve existing products in the future. It took 8 years for the Company to develop the TEBO technology, and it may take similar or even more time to develop any new technology in the future; meanwhile, the research and

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development of new products require a large amount of fund investment. If the direction of the Company’s technical research and development cannot adapt to market demands, technical changes, and constantly developing standards, or the research and development team of the Company cannot make breakthrough in key technical problems in an economic and efficient manner, or new products developed by the Company cannot meet customer requirements on costs, dimensions, acceptance standards, specifications, performance, and delivery period, or no supplier is available to promptly supply key parts for new products developed by the Company, or customer acceptance of the Company’s new products is less than expected, or the service lives of the Company’s new products cannot meet the expectations, the Company may face risks of failing to achieve expected effects with the investment in technical research and development.

In addition, certain improvement made by the Company on equipment products may reduce the customer demands on existing equipment products. When releasing new products, if the Company cannot properly handle the transition from existing products, customers may suspend purchasing, or existing products on stock may fail to be sold out. Moreover, customers may delay in making purchase in the hope of new products, resulting in less current orders for the Company, hence affecting the operating performance of the Company.

(III) Risks of Divulging Core Technologies

The Company has built up a series of technologies and process experiences in semiconductor cleaning equipment, semiconductor electroplating equipment, and advanced packaging wet equipment via continuous research and development investment over years. Meanwhile, the Company per se does not operate part manufacturing, but organizes part procurement and outsourcing according to product designs. Despite its constant attention on the protection of core technologies, if the network security system of the Company or suppliers cannot prevent unauthorized access and complicated network attacks, or the employees and suppliers of the Company handle sensitive data improperly, which divulges the intellectual properties and core technologies of the Company, the Company may suffer major liability claims from customers. This may cause serious damages to the reputation and competitive position of the Company, hence causing adverse effects on the business development and results of operation of the Company.

(IV) Risks of Losing Key Technical Talents

Technical talents are a key factor of competitiveness in the semiconductor special equipment industry, which is a technology-intensive industry. After the development for over ten years, the Company has built up a technical research and development team with rich experience headed by Dr. Hui Wang. The Company has provided competitive remunerations, share incentives, and option incentives to the technical research and development team in the hope of improving the loyalty and stability of the technical team. However, the continuous development of the semiconductor special equipment industry in Chinese mainland will lead to more intensive competition for technical talents. If the Company loses substantial key technical personnel due to remuneration or other reasons, or the Company could not motivate existing technical talents or could not attract outstanding technical talents, the Company may be short-handed in the technical team, hence could not continue the research, development, and sales of new products, or provide quality services to customers; moreover, the Company may have higher recruitment and training costs, which may cause adverse effects on the technical research and development capability and operating performance of the Company.

II. Operating Risks

(I) Risks of Fluctuation in the Macro Economy and Industry

The Company operates in the semiconductor special equipment industry, a key supporting industry for the semiconductor industry chain, and the demands are directly subject to the impact of the chip manufacturing and packaging industry and the terminal application market.

In the event of violent fluctuation in the macro economy in the future, reducing

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the demands on terminal markets of 5G communication, computers, consumer electronics, network communications, automobile electronics, and Internet of Things, and causing surplus of capacity of wafer manufacturing and packaging enterprises, the sales volume and prices of chip products may decrease, hence reducing the operating incomes and profitability. Wafer manufacturing and packaging enterprises normally reduce their capital expenditures greatly during the recession of the industry, and the decrease of capital expenditures normally exceeds the decrease of their operating incomes; therefore, they may reduce the amounts of purchasing semiconductor special equipment. This will cause adverse effects on the business development and operating performance of the Company.

In the booming cycle of the semiconductor industry, the Company has to increase its production volume to meet customer demands, which requires the Company and suppliers to expand stock and improve their production capabilities. If the Company is unable to respond to a rapid increase in customer demands on a timely basis, or if the Company misjudges the timing, duration or magnitude of such an increase in demand, the Company may lose existing customers or incur increased costs disproportionate to any gains in revenue, which could have a material adverse effect on the business, results of operation, financial conditions, or cash flows of the Company.

(II) Risks of Escalated International Trade Dispute

The trade dispute between the US and China has escalated since 2018. The US government imposed additional custom duties on specific imported products originated from China in July, August, and September 2018, June and September 2019, and February 2020. For each round of changes in the custom duties imposed by the US, the Chinese government responded by imposing additional custom duties on specific products imported from the US. In the future, it is likely that the US and Chinese governments will continue to impose additional custom duties or set other trade barriers on specific products originated from each other.

The additional custom duties imposed by the US and Chinese governments, and the uncertainty in surrounding economies, could adversely affect the semiconductor industry, including the demands on semiconductor special equipment from wafer manufacturing, packaging, and testing enterprises. Further deterioration of trade policies, custom duties, additional taxes, export restrictions, or other trade barriers in the country of operation may adversely affect the production or sales capabilities of the Company’s customers and harm the operating conditions of the Company’s customers, leading to reduced demands of such customers for equipment products of the Company. In addition, if the Chinese government imposes additional custom duties on raw materials or parts purchased by the Company from the US, the operating costs of the Company may increase, leading to material adverse effects on the operating incomes, results of operation, or financial conditions of the Company.

(III) Risks of Market Competition

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equipment manufacturers, hence the Company has to compete with both international giants and newcomers in China in the future. If the Company cannot effectively handle the competition with such competitors, the business incomes, results of operation, and financial conditions of the Company may be affected adversely.

(IV) Risks of Market Reputation

The Company operates in the industry of semiconductor special equipment, which is characterized by high industry concentration and intense competition. The Company has built up and maintained a favorable market reputation by adhering to the development strategy of differentiated competition and innovation and providing high-quality and highly reliable products. The Company has to compete with a few of international giants of semiconductor special equipment having longer operating histories, more comprehensive product portfolios, and higher market awareness; under such a competition pattern, the value of conventional marketing is limited, while the market reputation is crucial. If the market reputation of the Company is affected due to product quality accidents, delay in delivery, lag in technology, and delayed services, etc., the results of operation and financial conditions of the Company may be adversely affected.

(V) Risks of Product Quality

The Company operates in the semiconductor special equipment industry, a key supporting industry for the semiconductor industry chain, for which the quality, technical indicators, and operation stability of semiconductor special equipment is crucial for the quality of chip products. The semiconductor special equipment products of the Company are complicated, may have defects in designing and manufacturing, and may fail to meet specific specification requirements of customers; the test procedures of the Company may be insufficient to detect quality problems in the products. This may result in delayed acceptance of rejection of the Company’s equipment products by customers, or even result inn returns. The Company may have negative comments from customers, negative news reports, and reputation damages, which may reduce orders from existing customers and affect the development of new customers by the Company. The Company may have additional warranty or service obligations due to product quality problems, leading to additional costs. Moreover, quality defects in the Company’s products may cause losses to customers, causing liability claims or litigations from customers with respect to the Company’s products, hence the Company may have to pay high litigation costs or be liable for making high compensation for damages. The occurrence of quality problems above in the Company’s products may adversely affect the operating performance and market reputation of the Company.

(VI) Risks of High Concentration of Customers

The industry of semiconductor wafer manufacturing, packaging, and testing is a highly concentrated industry. During the reporting periods, the total sales to top 5 customers of the Company amount for 94.99%, 92.49%, and 87.33%, respectively, in the total sales of the corresponding periods; moreover, the Company also has a highly concentrated customer base. Although the customers and products of the Company are becoming more diversified, incomes from a few major customers will still account for a high proportion in the Company’s operating incomes in the future. The Company’s incomes from existing major customers may not increase or continue, and the Company’s results of operation may fluctuate in response to the purchase acts of major customers. In addition, the incomes of the Company may reduce if the Company loses any major customer, or the relation with any major customer changes. Moreover, our customers do not enter into long-term purchase commitments, and they may decrease, cancel or delay their purchase plans at any time.

In line with the industry practice, the sales of the Company are based on purchase orders from customers. The Company will not get binding purchase commitments before receiving formal purchase orders. Major customers of the Company may provide the Company with non-binding purchase predictions, but such predictions may be changed at any time without notifying the Company. However, due to the long delivery

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period up to 6 months for the Company’s products, the Company may have to arrange the procurement and outsourcing of raw materials and parts based on non-binding purchase predictions, despite that there is no assurance that the customers may place orders at the time expected by the Company. Meanwhile, the customers of the Company may place orders exceeding the predicted quantities, resulting in loss of sales opportunities because the Company may not deliver the ordered products on time. Due to the high concentration of the Company’s customers, if there is a major deviation in the Company’s prediction of sales to major customers, or major customers have serious problems in their production and operation, or have their financial conditions deteriorated, the sales of our products and the prompt collection of accounts receivable may be adversely affected.

(VII) Risks of Long Acceptance Period for the Company’s Products

The equipment of the Company, being highly customized, has to be installed and commissioned on site at the customer’s premise. The inspection and acceptance period of the equipment depends on a variety of factors including the maturity of the equipment and process, on-site preparation of customers, adjustment in customers’ process requirements, customers’ acceptance procedures, emergencies on site, and other accidental factors, hence may fluctuate to a large extent. In addition, the new products of the Company, including the stress-free polishing equipment and vertical furnace tube equipment may have a long period for inspection and acceptance. A long period of inspection and acceptance of the Company’s products will lead to postponed recognition of revenues of the Company; meanwhile, the Company has risks of failing to pass equipment inspection and acceptance, delayed collection of payments, and increased stock of products, which may cause material adverse effects on the business operation, results of operation, and financial conditions of the Company.

(VIII) Risks of Reliance on Third-party Suppliers for Parts

The semiconductor special equipment products of the Company are highly complicated, requesting highly reliable and stable and high-precision parts. However, the Company per se almost does not have part manufacturing, hence relies on suppliers for purchasing or outsourcing parts required for our products; the Company has no direct control over the delivery time and quality of suppliers. If the Customer’s suppliers delay in making delivery, or key parts of the Company have quality problems, the delivery of the Company’s products may be delayed, or a defect may be caused in the Company’s products; as a result, the Company may be in a disadvantage condition of cancelled orders, delayed inspection and acceptance by customers, or additional costs, hence adversely affecting the financial performance and results of operation of the Company.

(IX) Risks of Reliance on Suppliers of Some Key Parts

(X) Risks of Failure in Market Development

The Company has a market development strategy of attracting global leading semiconductor manufacturers first to have the Company’s technologies and products accepted by such manufacturers on the basis of long-term research, development, and technical accumulation, so as to build up the Company’s reputation on the market. Then, on the basis of the performance and reputation acquired in the international industry, continuously expand to emerging semiconductor markets including Chinese mainland.

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The Company presents the differentiated and innovative features of the SAPS, TEBO, Tahoe technologies, electroplating equipment, and stress-free polishing equipment, and the performance and reliability of vertical furnace tube serial products to customers, allowing global leading chip manufacturers to assess and verify the technologies and products of the Company. During the Company’s efforts of market development, if such leading chip manufacturers do not accept and verify the equipment products of the Company, or do not recognize the high values in the Company’s technologies, or despite the acceptance of the Company’s technologies and equipment by such leading chip manufacturers, other chip manufacturers may not accept the Company’s technologies and equipment, the market development for the Company’s products may fail, which may cause material adverse effects on the business operation, results of operation, and financial conditions of the Company.

The sales cycle of the Company’s products may be very long and uncertain. The sales procedure of the Company includes presentation of the Company’s equipment to customers, assessment of customer demands, configuration of the Company’s equipment based on specific customer demands, and verification of equipment by customers. The typical sales cycle of the Company is 6 to 24 months or even longer from the initial contact with customers to the execution of purchase orders. The lasting period or final success of the Company’s sales cycle depend on the following factors: efforts of the Company’s agencies and sales staff; compatibility of the manufacturing technologies of customers with the equipment and technologies of the Company; internal technical capability and maturity of the Company’s customers; and the capital expenditure plan and procedures of the Company’s customers, including budget limits, internal approvals, negotiation efficiencies, etc. Therefore, the Company could hardly predict when or even whether a potential customer will purchase from the Company, and could hardly make accurate prediction on whether the Company will have additional sales to existing customers. During the sales cycle, the Company will devote a large amount of time and funds to marketing activities, which may cause certain adverse effects on the results of operation and financial conditions of the Company.

In addition, due to the small scale of business at the beginning stage of the Company, it is hard to cover all potential customers, hence the Company mainly relies on agencies for market development. The Company has started to expand its own sales team on the basis of the constant expansion in the Company’s business scale. If the agencies and the Company’s own sales team could not continuously develop new customers, or the agencies opt not to cooperate with the Company any longer, the business operation and results of operation of the Company may be adversely affected.

(XI) Risks of Fluctuation in Quarterly Operating Performance

The Company’s revenues and operating performance vary from quarter to quarter in each of the reporting periods. The main reasons are as follows: the semiconductor industry is a cyclical industry, and chip manufacturers normally make equipment purchase plans in advance on their judgment of the industry cycles, resulting in uncertain purchase orders for equipment from customers; moreover, due to the high concentration of customers, the cancellation of orders from any major customer, or accelerated or postponed product inspection and acceptance by major customer may affect the current operating incomes of the Company; in addition, the plans of the Company or competitors for product upgrade may also result in changes in the time for customers to place orders; due to the small number of customers and relative high average prices of individual equipment products, the order for individual equipment may substantially affect the incomes of the Company. In addition, it takes certain time for the Company’s suppliers to supply parts and for the Company to implement production and manufacturing, and a certain period is also required for the transportation, inspection, and acceptance of the Company’s equipment products.

The factors above are beyond control of the Company, and may cause fluctuation in quarterly operating performance of the Company during the reporting periods. Therefore, the Company could hardly predict its quarterly incomes accurately, and our results of operations for any quarter may not be indicative of results for future quarters. The Company has risks of quarterly fluctuation in its operating performance.

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III. Risks of Management and Internal Control

（I）Risks of De Facto Controller Losing Control

ACMR was listed on NASDAQ in November 2017, and make the disclosure as follows in its U.S. prospectus: “Each outstanding share of Class B common stock is convertible into one share of Class A common stock (a) at any time, at the option of the holder, or (b) upon any transfer of such share of Class B common stock, whether or not for value, except for certain transfers described in our restated charter, including transfers to family members, trusts solely for the benefit of the stockholder o their family members, and partnerships, corporations, and other entities exclusively owned by the stockholder or their family members.

(II) Risks of Improper Intervention By De Facto Controller

Before the Offering, the Company’s de facto controller HUI WANG controlled 91.67% of the Issuer’s equity interests through ACMR; if 43,355,800 shares will be publicly offered in the Offering, the de facto controller HUI WANG will still control 82.50% of the Issuer’s equity interests after the Offering. The de facto controller HUI WANG may use its controlling position in the Company to exert a decisive influence on major issues such as personnel, financial and operating decisions of the Company through the exercise of voting rights at the shareholders’ general meeting. If the

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Company’s governance structure is not sound enough, its operation is not standardized, and the Company fails to disclose information in a timely and comprehensive manner, the interests of small and medium shareholders would be damaged.

(III) Risks of Integration and Management of Subsidiaries

At the end of 2019, the Company merged CleanChip HK and its subsidiaries under the same control. CleanChip HK and its subsidiaries are mainly engaged in the development and sales of semiconductor special equipment. After the Company merged CleanChip HK, it has further conducted the integration in terms of operation management, R&D activities, etc. However, due to the short time for their inclusion in the Company’s consolidated statements, if the Company’s integration and management of its controlled subsidiaries cannot be effectively implemented, the Company’s future business activities may be affected to a certain degree.

(IV) Risks of Management and Internal Control Caused by Expansion of the Company

During the reporting period, the Company’s total assets were RMB320,919,800, RMB636,022,500 and 1,308,001,500.00, operating incomes were RMB253,587,300, RMB550,269,100 respectively. Both the asset and revenue scales achieved rapid growth. During the development process, the Company has established a business model that conforms to the Company’s own business characteristics, set up a relatively complete corporate governance structure, cultivated a management team with advanced concepts, broadened horizons, and rich management experience, and established a relatively sound management system.

However, with the further expansion of the Company’s assets, business, institutions and personnel, there is a continuous increase in the complexity of resource allocation and internal control management of the Company in terms of R&D, procurement, production, sales and other links, which requires the Company to improve its organizational structure and operational management capabilities. However, the Company’s internal control system and management level would not be adapted to the rapid expansion of the Company’s size, which may lead to a decline in the Company’s operating efficiency, result in the Company’s cost and expense growth rate exceeding the revenue growth rate and thereby damage the Company’s competitiveness. Therefore, the Company will face the management and internal control risks caused by its scale expansion.

IV. Financial Risks

(I) Risks of Tax Preference

During the reporting period, the Company was entitled to high-tech corporate income tax preference and extra tax deductions for research and development costs. If there are major adjustments to China’s laws, regulations and policies on tax incentives, or the Company cannot continue to obtain the qualification of a Chinese high-tech enterprise in the future or meet the conditions for extra tax deductions for research and development costs, the Company’s operating performance will be affected to a certain degree.

(II) Risks of Government Subsidy Policy

During the reporting period, the amount of government subsidies included in other incomes of the Company was RMB15,909,700, RMB20,823,400 and RMB26,666,900 respectively. If the support for the Company’s industry is weakened in the future according to the government authorities’ policies, or other subsidy policies are adversely changed, the amount of government subsidies obtained by the Company will be reduced, which will have a certain adverse effect on the Company’s operating performance.

(III) Risks of Fluctuation in Gross Profit Margin

The Company provides semiconductor special equipment for the semiconductor companies including wafer manufacturing, advanced packaging, and semiconductor wafer manufacturing companies. The Company’s products have significant customized

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characteristics. The different customers may have different product configuration, performance requirements and bargaining capabilities. The price of the first order and the repeat order for the same customer may also be different, resulting in a certain difference in the Company’s product gross profit margin. During the reporting period, the Company’s main business gross profit margins were 44.46%, 43.80% and 44.67% respectively, which was relatively stable. If there will be signification changes in the Company’s operating scale, product structure, customer resources, cost control, technological innovation advantages and other aspects, or the industry competition will intensify, resulting in a decline in the Company’s product sales price, an increase in costs, or greater changes in customer demand. Therefore, the Company will face the risks on fluctuations in the main business gross profit margin.

(IV) Risks of Exchange Rate Fluctuation

During the reporting period, most of the Company’s product sales were denominated in U.S. dollars, some raw materials and parts were purchased in U.S. dollars and KRW, while other raw materials, parts, employee compensation, and other costs were denominated in RMB. The exchange rate of RMB against U.S. dollars and KRW will affect the Company’s operating performance. During the reporting period, the exchange losses of the Company’s financial expenses were RMB266,000, RMB-7,169,500 and RMB9,246,500 (negative sign represents income). The RMB exchange rate fluctuates with changes in the international political and economic environment, and has certain uncertainties. As the Company’s business scale continues to expand, if the exchange rate of RMB against the US dollar and KWR fluctuates sharply in the future, which will bring certain uncertainty to the Company’s performance, lead to the exchange loss and adversely affect the operating performance and financial conditions.

(V) Risks of Net Assets Income Rate Falling

At the end of each reporting period, the Company’s net asset balances were RMB48,358,600, RMB145,047,500 and RMB829,929,000 respectively. Since the Company and its subsidiaries leased office buildings and factories from others to operate, and there were unrecovered losses and small balance of net assets during the reporting period. In 2019, the Company raised two rounds and the scale of net assets has expanded, and the Company’s weighted average return on net assets after being deducted non-recurring gains and losses was 30.67%. After the closing of the Offering, the Company’s net assets will increase significantly in a short period of time, and the fund-raising investment project will take some time from construction to production. In the short term, the Company’s net profit may be difficult to keep pace with net assets, so the Company has the risk of falling returns on net assets.

(VI) Risks of Decline in Value of Inventories

The Company’s semiconductor special equipment needs to go through a long verification process to enter the market. The products need to be prepared in advance according to the order in the production stage, and the customers will complete the acceptance upon installation and commissioning after delivery. Therefore, the Company’s raw materials and shipped commodities increase as the rapid expansion of the business, the rise in product types and the augmentation of orders in hand. At the end of each reporting period, the Company’s inventory book value was RMB 135,531,900 Yuan, RMB264,159,900 Yuanand RMB307,274,100 Yuan, accounting for 46.79%, 46.52% and 25.42% of current assets respectively. The shipped products are the most important component of the Company’s inventory. At the end of each reporting period, the Company’s book value of shipped goods was high, i.e. RMB 77,077,100 Yuan, RMB 124,748,200 Yuan and RMB 137,624,600 Yuan, accounting for 56.87%, 47.22%, and 44.79% of the inventory book value. With the Company’s business development, the book value has increased year by year.

The Company needs to effectively manage the inventory of raw materials and parts to meet changing customer demand. However, it is difficult for the Company to accurately predict customer demand. The Company’s equipment demand forecast is based on multiple assumptions, including non-binding forecasts obtained from customers, but each assumption may make the Company’s forecast incorrect, resulting

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in the inventory of raw materials and parts exceeding the customers’ needs, or the change in the list of parts or raw materials due to the change in product design scheme or the reduction of customer orders may cause some of the Company’s parts and raw materials to become outdated or surplus during the inventory period, which may lead to decline in value of inventoriess.

If there is a significant adverse change in the future sales price of the products or the shipped products are rejected due to failure to pass the check of customers, the net realizable value of the inventory may be lower than the net book value, and the inventory depreciation reserve needs to be accrued, thereby affecting the Company’s profitability.

(VII) Risks of Receivables Recovery

At the end of each reporting period, the Company’s book value of accounts receivable was RMB 97,704,900 Yuan, RMB 173,605,500 Yuan and RMB 209,896,400 Yuan, accounting for 30.45%, 27.30% and 16.05% of total assets respectively. During the reporting period, the Company’s large amount of accounts receivable caused a certain working capital pressure on the Company. However, the Company’s main customers are domestic and foreign mainstream semiconductor companies, and the overall credit status is good. The Company has made provision for bad debts based on the principle of prudence. If the Company’s accounts receivable is improperly managed in the future or the client has major operational difficulties, it may result in the Company’s accounts receivable not being recovered in time, which will adversely affect the Company’s operating performance.

V. Legal Risks

(I) Risk of Intellectual Property Disputes

The business results obtained by the Company, to some degree, rely on its own system of intellectual properties and the ability of the Company to maintain such intellectual properties and preserve confidential information, as well as the ability of the Company to engage in its business without infringing on any patent of others. As of December 31, 2019, the Company and its subsidiaries in which it owns controlling equity interest own 232 major patents which have been granted with patent rights, among which, 108 patents are domestic patents, 124 patents are foreign patents, and 227 patents are invention patents.

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affected.

(II) Risk of Defects in Title of Certain Leased Premises

Main plant and land used by the Company for production and operation at present are acquired by the means of lease. Among which, the premise located at Building 4, No. 1690 Cailun Road, Zhangjiang Hi-tech Park, Shanghai leased by the Company from Zhangjiang Group, the total area of which is 5,900.28 m², has not obtained the certificate of property title, the area of such premise accounts for approximately 35% of main property area used for production and operation of the Company, such premise are mainly used for office, research and development and storage. The project of ACMSH high-end semiconductor equipment research and development, a project which will be invested by using funds raised in this Offering, will also be implemented on such premise. Zhangjiang Group, the lessor, has confirmed to the Company that it has the right to rent out such premise, the Issuer’s lease and use of such premise will not be affected by the ownership of such premise.

In addition, the premise located at Building 2, No.365 Chuanhong Road, Shanghai leased by the Company from Shanghai Shengyu Culture Development Co., Ltd., the total area of which is 9,858.57 m², has been mortgaged and gone through the mortgage registration. Shanghai Shengyu Culture Development Co., Ltd., the lessor, has issued the Commitment Letter to warrant that the right of using plant by the Issuer will not be interrupted or suspended due to the mortgage of the above premise; in the case of such circumstances, the lessor will bear corresponding defaulting liabilities or is liable to make compensation for damages.

However, if any adjustment in local regional overall planning of Shanghai or other reason results in the demolition of the above premises, such premises cannot continue to be leased to the Company, or the realization of mortgage of such premises during the term of lease results in the Company’s inability to continue to lease and use such premises, the day-to-day production and operation of the Company and the implementation of the project which will be invested by using funds raised in this Offering will be adversely affected.

VI. Risks of Offering Failure

According to requirements of relevant regulations, if the number of investors providing valid offers or investors making off-line subscriptions is less than the number as required by laws, or the total market value at the time of the Offering fails to reach the expected market value, this Offering shall be suspended. If the listing approval process of the Company exceeds the time limit as provided for by the exchange, or the offering registration process is suspended for more than 3 months and fails to be resumed, or there is any other adverse circumstance affecting the Offering, then the Company will exist risk of offering failure.

VII. Risks of Investment Projects of Raised Funds

(I) Risk of Failure of Investment Projects of Raised Funds to Realize Expected Economic Effect

The projects to be invested by using funds raised in this Offering are ACMSH equipment research and manufacturing center, ACMSH high-end semiconductor equipment research and development project and supplementary working capital project. Although investment projects of raised funds in this Offering have gone through feasibility study and market research, but such study and research are made on the basis of current market environment, technical capacity, development tendency and other factors. In the course of actually implementing projects, it will be confronted with uncertainties, such as in overall economic situation, industrial market environment and technical innovation, and failure to realize breakthrough of key technologies in the course of research and development or failure of performance of researched and developed products to reach the anticipated effect, which will have adverse effect on the implementation of projects to be invested by funds raised by the Company.

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(II) Risk of Newly Increased Depreciation and Amortization of Fixed Assets Affecting Profitability

After investment projects of raised funds in this Offering are built up, the total amount of newly increased depreciation and amortization of fixed assets if RMB 33.3574 million per year after they reach design capacity, which will result in a dramatic increase in fixed production costs and expenses of the Company. After investment projects of raised funds are completed, if such projects cannot bring benefits or actual benefits of them are lower than expected, then the newly increased depreciation and amortization of fixed assets will exacerbate operating risks of the Company, which will have adverse effect on profitability of the Company.

VIII. Risks of Adverse Effect on the Semiconductor Industry Caused by the Global COVID-19 Epidemic

Since early 2020, the COVID-19 epidemic breaks out globally. To handle such major epidemic, various provinces and cities in China launched the first-level reaction of serious and unexpected public health incident and take various measures, such as sealing off cities, quarantine and postponing start dates after Spring Festival. At present, China and other Asian countries have contained the COVID-19 epidemic to a great extent, but there remains risk of second outbreak of the epidemic due to persons entering China. The Company has strictly implemented notices and requirements on epidemic control and prevention issued by governmental authorities of each level in China, and all employees of ACMSH factories in Mainland China have returned and such factories have started to produce at present, the effect of the epidemic on the Company is limited at present.

If the COVID-19 epidemic affects for a long term or exacerbates, or cannot be effectively controlled in Europe, North America, Japan, South Korea and other countries and regions for a long term, it may adversely affect the R&D and production of the Company, the supply of raw materials and parts of the Company, the sales of the Company to clients and other aspects, as well as economical and financial markets of major countries in the world, resulting in the recession of global economy and changes in economic policies of various countries, which may lead to continuous depression of the semiconductor industry from the origin and have materially adverse effect on

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businesses, operating results and financial situations of the Company.

IX. Relevant Risks of the Company and ACMR, the Controlling Shareholder, being Listed on the STAR Market and the NASDAQ Stock Market Respectively

Due to discrepancies in terms of laws and regulations and regulatory ideas in China and the United States, there are some discrepancies in terms of specific accounting treatment and financial information disclosure between the Company and ACMR as they are governed by different accounting standards. Meanwhile, the price of stocks of the Company listed on the STAR Market and the price of stocks of ACMR listed in NASDAQ stock market may be different due to differences in requirements of disclosing information on listed companies imposed by securities regulatory authorities, in language, culture and expression habit, in composition of investors in China and the United States and their investment ideas, and in specific situations of capital markets. Such differences and fluctuation in stocks of ACMR may affect the price of stocks listed on the STAR Market.

X. Other Risks

(I) Risk of Force Majeure

In the day-to-day operation of the Company, damages caused to assets, personnel and suppliers or clients of the Company arising from force majeure events (including political factors, natural disasters, wars) cannot be excluded, which may have adverse effect on the production and operation of the Company.

(II) Risk of Fluctuation in Stock Price

The fluctuation in market price of stocks is not only dependent on business results and development prospect of the Company, but affected by macroeconomic cycle, interest rate, capital supply and demand and other factors, and at the same time, such market price will fluctuate because of changes in international and domestic political and economic circumstances and psychological factors of investors. The fluctuation in price of stocks is a normal phenomenon. For this purpose, the Company specially reminds investors that they must have consciousness of risk in order to make correct investment decisions. At the same time, the Company will, on the one hand, make maximization of shareholders’ interests as the ultimate goal, strengthen internal management, endeavor to reduce costs, actively develop market and improve profitability; on the other hand, the Company will normatively operate in strict compliance with requirements of the Company Law, the Securities Law, the Rules on the Listing of Stocks on the STAR Market of Shanghai Stock Exchange and other laws and regulations, and timely, fully and accurately disclose information in order to facilitate investors to make correct investment decisions.

The market price of stocks of the Company may dramatically fluctuate due to various factors, many of which are beyond the control of the Company, mainly including: fluctuation in macroeconomy, fluctuation in business performance and its expectation of listed companies in the industry in which the Company is located and relevant industries and price of stocks in the secondary market; changes in financial forecast of the Company’s businesses and suggestion on holding stocks made by securities analysts, or the failure of the Company to realize estimates of the above financial forecast; changes in forecast on chip manufacturing industry or special semiconductor equipment industry made by third-party research institutions; sales of stocks of the Company by shareholders of the Company in the secondary market; fluctuation in indexes and trading amount in the stock market of China, as a whole, and the STAR Market; litigations brought by clients, suppliers, competitors and employees against the Company; litigations, disputes or controversies on patents involving the Company; disposals or investigations made by China Securities Regulatory Commission, Shanghai Stock Exchange and other regulatory authorities; geopolitical events, such as wars or terrorism acts, etc.

In conclusion, investment return coexists with investment risks in the stock market, investors shall make adequate preparations for this.

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Section V - Overview of the Issuer

I.	Overview of the Issuer

Name:	盛美半导体设备（上海）股份有限公司
English Name:	ACM Research (Shanghai), Inc
Legal Representative：	HUI WANG
Share Capital:	RMB 390,201,347 Yuan
Date of Establishment:	May 17, 2005
Date of Overall Change:	November 21, 2019
Domicile:	Building 4, No.1690 Cailun Road, China (Shanghai) Pilot Free Trade Zone
Post Code:	201203
Telephone:	021-50808868
Fax:	021-50808860
Internet Address:	www.acmrcsh.com.cn
Email Address:	ir@acmrcsh.com
Information Disclosure Department:	Board Office
Person in Charge of Information Disclosure:	MINGZHU LUO
Telephone of the Information Disclosure Department:	021-50276506

II. Establishment and Reorganization of the Issuer

(I)	Establishment of ACM Research (Shanghai), Inc.

On April 25, 2005, Shanghai Songjiang Export Processing Zone Management Committee issued the Approval for the Feasibility Study Report and the Articles of Association of the Wholly Foreign-Owned Enterprise ACM Research (Shanghai), Inc. (Song Chu Pi Zi (2005) No.024), agreeing ACMR to establish ACM Research (Shanghai), Inc., with the registered capital of USD 1.2 million dollars, the business scope of the design, production, processing of electronic special equipment and parts, sales of self-produced products, and provision of after-sales technical services and consulting services (for the above items subject to the administrative permits, relevant permits shall be obtained for operation).

On April 29, 2005, Shanghai Municipal People’s Government approved and issued the Certificate of Approval for Establishment of Enterprises with Foreign Investment (Shang Wai Zi Hu Song Chu Du Zi Zi [2005] No.1229).

On May 17, 2005, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Shanghai Administration for Industry and Commerce.

On August 15, 2005, Shanghai Shangzi Accounting Firm Co., Ltd. verified the paid-up status of the registered capital of ACMSH and issued the Capital Verification Report (Shang Zi Kuai Yan (2005) No. 101), verifying that up to August 9, 2005, ACMSH, had received the registered capital of USD 180,088 dollars from the investors.

The equity structure of ACMSH upon establishment was as follows as of August 2005:

No.

Name of

Shareholder

Subscribed Capital

Contribution (Ten

Thousand US Dollars)

Paid-up Capital

Contribution (Ten

Thousand US Dollars)

Proportion of

Shareholding

(%)

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1	ACMR	120	18.0088	100
Total		120	18.0088	100

(II)	Establishment of ACMSH

ACMSH is a joint stock limited company established by the overall change of ACMSH (before restructuring).On October 30, 2019, the board of directors of ACMSH passed a resolution that the Company’s name should be changed to “盛美半导体设备（上海）股份有限公司(ACM Research (Shanghai), Inc.)” and the Company should be changed into a joint stock limited company as a whole by taking August 31, 2019 as the base date for restructuring. On October 30, 2019, all shareholders of ACMSH, as the promoters, signed the Promoters’ Agreement, agreeing that on the basis of the net assets as of August 31, 2019 audited by BDO China RMB 552,890,000 Yuan, it shall be converted to 372,649,808 shares at the rate of 1: 0.6740, with the remaining RMB 180,240,200 Yuan included in the capital reserves and the registered capital of ACMSH RMB 372,649,800 Yuan.

On November 15, 2019, the Company handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

On November 21, 2019, the Company obtained the business license issued by Shanghai Municipal Administration for Market Supervision (Uniform Social Credit Code: 91310000774331663A).

BDO China verified the paid-up registered capital after the overall change and issued the Capital Verification Report (Xin Kuai Shi Bao Zi [2020] No. ZI10024)", confirming that the promoters' capital contributions had been paid in full and on time as of November 14, 2019.

The equity structure of ACMR upon establishment was as follows:

No.	Name of Shareholders	Shares Held (Ten Thousand Shares)	Proportion of Shareholding (%)
1	ACMR	35,769.2308	95.99
2	Xinwei Consulting	475.6154	1.28
3	HTXC	230.7692	0.62
4	Jinpu Investment	192.3077	0.52
5	Taihu Guolian	192.3077	0.52
6	Xinshi Consulting	178.1923	0.48
7	Hai Feng Investment	153.8462	0.41
8	Xingang Consulting	72.7115	0.20
Total		37,264.9808	100.00

1. The reason why the accumulative undistributed loss has been formed upon the establishment of the Company by the overall change

When ACMSH (before restructuring) was changed to ACMSH as a whole, the undistributed profit shown on the financial statements as of the base date for restructuring August 31, 2019 was RMB -14,168,800 Yuan. Such cumulative loss was mainly due to the facts that the Company had made large amount of investments in product technology research and development at the beginning of the business development and meanwhile the product development cycle was long while the Company obtained low sales income in the early market cultivation.

2. As of December 31, 2019, the Company's accumulative undistributed losses had been eliminated.

During the Reporting Period, with the continuous improvement of the Company's technical level, product maturity and market recognition of the Company's products, the Company's business was expanded rapidly, sales incomes continued to grow, and

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continuous profits were maintained during the Reporting Period. As of December 31, 2019, the Company's accumulative undistributed losses had been eliminated, and the Company's undistributed profits had amounted to RMB 65,594,700 Yuan.

During the Reporting Period, the Company's earnings were as follows:

Unit: RMB 10,000 Yuan

Item	2019/ December 31, 2019	2018/ December 31, 2018	2017/ December 31, 2017
Consolidated Financial Statements
Operating Income	75,673.30	55,026.91	25,358.73
Net Profit	13,488.73	9,253.04	1,086.06
Undistributed Profit	6,559.47	-7,598.98	-16,852.02
Financial Statements of the Parent Company
Operating Income	72,799.03	53,826.81	25,358.73
Net Profit	14,076.03	8,785.44	1,091.39
Undistributed Profit	6,724.45	-8,021.29	-16,806.73

3. Specific Plan of the Overall Change and the Corresponding Accounting Treatments

As of August 31, 2019, as audited by BDO CHINA SHU LUN PAN Certified Public Accountants LLP (“BDO China”), the paid-up capital of ACMSH was RMB 372,649,800 Yuan, the undistributed profit was RMB -14,168,800 Yuan, and the net asset was RMB 552,890,000 Yuan.

On the basis of the net assets of ACMSH RMB 552,890,000 Yuan as of August 31, 2019, it was converted to 372,649,808 shares at the rate of 1:0.6740, with the remaining RMB 180,240,200 Yuan included in the capital reserves and the registered capital of ACMR RMB 372,649,800 Yuan, which was established by overall change from ACMSH.

The Company adopted the following accounting treatments upon the overall change:

Unit: RMB 10,000 Yuan

Debit/Credit	Accounting Name	Amount
Debit	Paid-up Capital	37,264.98
Debit	Undistributed Profit	-1,416.88
Debit	Capital Reserves	19,440.89
Credit	Share Capital	37,264.98
Credit	Capital Reserves - Share Premium	18,024.01

4. The Procedures Performed for the Overall Change, Legal Compliance and Legal Rights and Interests of Creditors in the Process of Restructuring

On October 30, 2019, the board of directors of ACMSH passed a resolution on its overall change to a joint stock limited company. BDO China audited the financial statements of ACMSH as of August 31, 2019 and issued the Audit Report (Xin Kuai Shi Bao Zi [2019] No. ZI10682). China United Assets Appraisal Group Co., Ltd. issued the Asset Appraisal Report (Zhong Lian Ping Bao [2019] No. 1812) taking August 31, 2018 as the base date of the asset appraisal. On October 30, 2019, all shareholders of ACMSH signed the Promoters’ Agreement. On November 14, 2019, with the approval

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of the founding meeting of the Issuer and the first shareholders’ meeting, the Company as a whole was changed into a joint stock limited company with the audited net assets as of August 31, 2019.

After the overall change and establishment of the joint stock limited company, the Company inherited all the assets and liabilities of ACMSH (before restructuring), and there was no circumstance that infringed the legitimate rights and interests of its creditors; as of the date of signing of the [***], the Issuer has not had any dispute with its creditors over the overall change.

As of the date of signing the [***], the Company has completed the procedures related to the industrial and commercial registration and tax registration of the overall change in accordance with the Company Law and other laws and regulations.

(III)

Changes in the Shareholders of the Issuer

During the Reporting Period, changes in the Issuer's share capital and shareholders were as follows:

Equity Structure of the Issuer at the Beginning of the Reporting Period

On January 1, 2017, the equity structure of the predecessor of the Company -ACMSH (before restructuring) was as follows:

No.	Name of Shareholder	Subscribed Capital Contribution (RMB 10,000 Yuan)	Paid-up Capital Contribution (RMB 10,000 Yuan)	Proportion of Shareholding (%)
1	ACMR	13,400.0000	13,400.0000	62.87
2	Shanghai Venture Capital Co., Ltd.	4,000.0000	4,000.0000	18.77
3	ZJTVC	1,615.1250	1,615.1250	7.58
4	PDHTI	2,297.3700	2,297.3700	10.78

Total

21,312.4950

100.00

In August, 2017, the Second Equity Transfer of ACMSH

On January 4, 2017, the Office of Leading Group of Invigorating the City with Science and Education in Shanghai issued the Reply to the Exit Plan of the Special Fund for Invigorating the City with Science and Education from ACM Research (Shanghai) Co., Ltd. (Hu Tui Ban [2017] No.1), agreeing that Shanghai Venture Capital Co., Ltd. withdraws RMB 40 million Yuan Special Fund for Invigorating the City with Science and Education from ACMSH at its original value.

On March 23, 2017 and July 27, 2017, ACMR signed a Share Subscription Agreement and Supplementary Agreement respectively with Shanghai Science and Technology Venture Capital Co., Ltd., agreeing on matters including the subscription of ACMR by Shanghai Science and Technology Venture Capital Co., Ltd. Both Shanghai Science and Technology Venture Capital Co., Ltd. and Shanghai Venture Capital Co., Ltd. are wholly-owned subsidiaries of Shanghai Science and Technology Venture Capital (Group) Co., Ltd.

On May 2, 2017, Shanghai Venture Capital Co., Ltd. and ACMR signed a Shanghai Assets and Equity Exchange Contract, stipulating that Shanghai Venture Capital Co., Ltd. would transfer its 18.77% equity of ACMSH to ACMR for RMB 40 million Yuan.

On June 12, 2017, Shanghai United Assets and Equity Exchange issued the Transaction Certificate (Type A2 - Unlisted), setting forth that with the approval of the Office of Leading Group of Invigorating the City with Science and Education in Shanghai, Shanghai Venture Capital Co., Ltd., as the transferor, transferred 18.77% equity of ACMSH held by it to the transferee ACMR, at the transfer price of RMB 40 million Yuan, which complied with the procedural provisions for the transaction.

On August 10, 2017, the board of directors of ACMSH passed the resolution on the above equity transfer. On the same day, ACMR, ZJTVC and PDHTI signed a new

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Joint Venture Contract.

On August 15, 2017, ACMSH handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

On September 28, 2017, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Market Supervision Administration of China (Shanghai) Pilot Free Trade Zone. Upon completion of the change, the equity structure of ACMSH was as follows:

No.	Name of Shareholder	Subscribed Capital Contribution (RMB 10,000 Yuan)	Paid-up Capital Contribution (RMB 10,000 Yuan)	Proportion of Shareholding (%)
1	ACMR	17,400.0000	17,400.0000	81.64
2	ZJTVC	1,615.1250	1,615.1250	7.58
3	PDHTI	2,297.3700	2,297.3700	10.78
Total		21,312.4950	21,312.4950	100.00

In November, 2017, the Third Equity Transfer of ACMSH

On August 31, 2017, ACMR, ZJTVC and Zhangjiang AJ Company Limited, a wholly-owned subsidiary of ZJTVC signed a Shares Subscription Agreement, agreeing on matters including the transfer of whole shares of ACMSH held by ZJTVC to ACMR, and the issuance of Class A Common Shares to Zhangjiang AJ Company Limited by ACMR.

On the same day, ACMR, PDHTI and Pudong Science and Technology (Cayman) Co., Ltd., a wholly-owned subsidiary of PDHTI signed a Shares Subscription Agreement, agreeing on the transfer of whole shares of ACMSH held by PDHTI to ACMR, and the issuance of Class A Common Shares to Pudong Science and Technology (Cayman) Co., Ltd. by ACMR.

On November 2, 2017, ZJTVC and PDHTI signed a Shanghai Assets and Equity Exchange Contract with ACMR, which agreed that ZJTVC would transfer its 7.58% equity in ACMSH, and PDHTI would transfer its 10.78% equity in ACMSH, totaling 18.36% equity, to ACMR, for RMB 95,655,600 Yuan. The transfer price in this transaction was RMB 2.44 Yuan/unit registered capital, which had been determined according to the Asset Appraisal Report issued by Shanghai Orient Appraisal Co., Ltd. (Dong Zhou Ping Bao Zi (2017) No.0594). The appraisal value of ACMSH was RMB 521 million Yuan as of December 31, 2016.

On November 7, 2017, Shanghai United Assets and Equity Exchange issued the Transaction Certificate of Shanghai United Assets and Equity Exchange (Type A1 - Listed), setting forth that ZJTVC and PDHTI, as the transferors, transferred 18.36% equity of ACMSH held by them to the transferee ACMR, at the transfer price of RMB 95,655,600 Yuan, which complied with the procedural provisions for the transaction.

On November 8, 2017, the board of directors of ACMSH passed the resolution on the above equity transfer.

On December 5, 2017, ACMSH handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

On May 3, 2018, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Market Supervision Administration of China (Shanghai) Pilot Free Trade Zone. Upon completion of the change, the equity structure of ACMSH was as follows:

No.

Name of

Subscribed Capital

Paid-up Capital

Proportion of

ACM Research (Shanghai), Inc.

[***]

	Shareholder	Contribution (RMB 10,000 Yuan)	Contribution (RMB 10,000 Yuan)	Shareholding (%)
1	ACMR	21,312.4950	21,312.4950	100.00
Total		21,312.4950	21,312.4950	100.00

In May, 2019, the Fourth Capital Increase of ACMSH

On May 6, 2019, ACMR, the shareholder of ACMSH, made a shareholder's decision that the Company would increase the registered capital by RMB 144,567,357.69 Yuan, all of which would be subscribed by ACMR. The capital increase price would be RMB 1 Yuan/unit registered capital, which would increase the registered capital to RMB 357,692,307.69 Yuan.

On May 29, 2019, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Market Supervision Administration of China (Shanghai) Pilot Free Trade Zone.

On June 14, 2019, ACMSH handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

On July 4, 2019, BDO China verified the paid-up status of the registered capital of ACMSH, and issued the Capital Verification Report (Xin Kuai Shi Bao Zi [2019] No. ZI10586). As of June 26, 2019, ACMSH had received the newly increased capital of RMB 144,567,357 Yuan paid by ACMR.

Upon completion of the change, the equity structure of ACMSH was as follows:

No.

Name of

Shareholder

Subscribed Capital

Contribution (RMB

10,000 Yuan)

Paid-up Capital

Contribution

(RMB 10,000

Yuan)

Proportion of

Shareholding

(%)

1	ACMR	35,769.2308	35,769.2308	100.00
Total		35,769.2308	35,769.2308	100.00

In June, 2019, the Fifth Capital Increase of ACMSH

On June 26, 2019, the board of directors of ACMSH passed the resolution that the registered capital of the Company increased from RMB 357,692,307.69 Yuan to RMB 372,649,807.69 Yuan.The newly increased registered capital would be subscribed in cash by seven new shareholders including Xinwei Consulting, HTXC, Taihu Guolian, Jinpu Investment, Xinshi Consulting, Hai Feng Investment and Xingang Consulting. In June 2019, the above shareholders signed the Capital Increase Agreement with ACMSH: Xinshi Consulting and Xingang Consulting were the employee stock ownership platforms, the capital increase price of which was RMB 10.40 Yuan/unit registered capital, while the other five new shareholders' capital increase price was RMB 13 Yuan/unit registered capital. On the same day, ACMR signed a new Joint Venture Contract with the above new shareholders, agreeing on the aforesaid capital contribution matters.

On July 22, 2019, ACMSH handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

On August 20, 2019, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Market Supervision Administration of China (Shanghai) Pilot Free Trade Zone.

On August 29, 2019, BDO China verified the paid-up status of the registered capital of ACMSH, and issued the Capital Verification Report (Xin Kuai Shi Bao Zi [2019] No. ZI10620). As of August 22, 2019, ACMSH had received the newly increased capital of RMB 187,924,000 Yuan paid by the above shareholders, with RMB 14,957,500 Yuan included in the registered capital and RMB 172,966,500 Yuan included in the capital reserves.

ACM Research (Shanghai), Inc.

[***]

Upon completion of the increase, the equity structure of ACMSH was as follows:

No.	Name of Shareholder	Subscribed Capital Contribution (RMB 10,000 Yuan)	Paid-up Capital Contribution (RMB 10,000 Yuan)	Proportion of Shareholding (%)
1	ACMR	35,769.2308	35,769.2308	95.99
2	Xinwei Consulting	475.6154	475.6154	1.28
3	HTXC	230.7692	230.7692	0.62
4	Jinpu Investment	192.3077	192.3077	0.52
5	Taihu Guolian	192.3077	192.3077	0.52
6	Xinshi Consulting	178.1923	178.1923	0.48
7	Hai Feng Investment	153.8462	153.8462	0.41
8	Xingang Consulting	72.7115	72.7115	0.20
Total		37,264.9808	37,264.9808	100.00

6. In November 2019, the Overall Change of ACMSH to Establish a Joint Stock Company Limited

With respect to the overall change of ACMSH to establish a joint stock company limited, please refer to "II (II) Establishment of A Joint Stock Company Limited" in Section V "General Information of the Issuer" of the [***].

In November, 2019, the First Capital Increase of ACMSH

On November 29, 2019, the first extraordinary general meeting of ACMSH passed the resolution that the registered capital of the Company increased from RMB 372,649,808 Yuan to RMB 390,201,347 Yuan. The newly increased registered capital would be subscribed in cash by eight new shareholders including Yongkong Consulting, SYEM, Shangrong Innovation, SRJY, Runguang Investment, SICIF, PDHTI and ZJTVC. In November 2019, the above shareholders signed the Capital Increase Agreement with ACMSH, with the capital increase price of RMB 13.00 Yuan/Share.

On December 13, 2019, ACMSH completed the industrial and commercial registration and obtained the business license issued by the Market Supervision Administration of China (Shanghai) Pilot Free Trade Zone.

On December 18, 2019, ACMSH handled the registration of change of foreign-invested enterprises at the Management Committee of China (Shanghai) Pilot Free Trade Zone and obtained the Receipt of Registration of Change of Foreign-invested Enterprises.

BDO China verified the paid-up status of the registered capital of ACMSH and issued the Capital Verification Report (Xin Kuai Shi Bao Zi [2020] No. ZI10025). As of December 10, 2019, ACMSH had received the newly increased capital of RMB 228,170,000 Yuan paid by the above shareholders, with RMB 17,551,500 Yuan included in the registered capital and RMB 210,618,500 Yuan included in the capital reserves

Upon completion of the capital increase, the equity structure of ACMSH was as follows:

No.	Name of Shareholder	Quantity of Shares Held (Ten Thousand Shares)	Proportion of Shareholding (%)
1	ACMR	35,769.23	91.67
2	Xinwei Consulting	475.62	1.22
3	SICIF	461.54	1.18
4	PDHTI	461.54	1.18
5	HTXC	230.77	0.59

ACM Research (Shanghai), Inc.

[***]

6	Shangrong Innovation	207.69	0.53
7	Jinpu Investment	192.31	0.49
8	Taihu Guolian	192.31	0.49
9	Xinshi Consulting	178.19	0.46
10	Yongkong Consulting	176.92	0.45
11	Hai Feng Investment	153.85	0.39
12	Runguang Investment	153.85	0.39
13	ZJTVC	153.85	0.39
14	SYEM	116.69	0.30
15	Xingang Consulting	72.71	0.19
16	SRJY	23.08	0.06
Total		39,020.13	100.00

(IV)

Material Assets Reorganization during the Issuer's Reporting Period

During the Reporting Period, no material assets reorganization of the Company has occurred.

In November 2019, the Company acquired the 100% equity of CleanChip HK held by the controlling shareholder ACMR by way of equity transfer. For details, please refer to "IV (I) Majority Owned Subsidiaries" in this Section.

(V)	Listing of the Issuer in Other Securities Markets

Since its establishment, the Company has not been listed in other securities markets. The controlling shareholder of the Issuer, ACMR, was listed on NASDAQ stock market in 2017 under the stock code ACMR. The details of ACMR are set forth in "V (I) Controlling Shareholders and Actual Controller" in this Section.

III．Equity Structure of the Issuer

As of the signing date of the [***], the equity structure of the Company is as follows:

IV. Majority Owned Subsidiaries and Equity Participation Companies of the Issuer

(I)	Majority Owned Subsidiaries

As of the signing date of the [***], the Company has 5 majority owned subsidiaries, the details of which are as follows:

ACM Research (Shanghai), Inc.

[***]

1. CleanChip HK

(1) Basic Information

Name	清芯科技有限公司
English Name	CleanChip Technologies Limited
Address	FLAT/RM K 15/F, MG TOWER, 133 HOI BUN ROAD, KWUN TONG KL, HONGKONG
Legal Representative	HUI WANG
Registered Capital	10 Hong Kong Dollars
Date of Establishment	June 9, 2017
Main Business and Its Relationship with Main Business of the Issuer	Sales of Special Equipment for Semiconductors; Sales Platform of the Issuer’s Export Business
Shareholders	The Company holds its 100% equity interests.

CleanChip HK was established in June 2017 and it is mainly engaged in the sales of special semiconductor equipment. CleanChip HK was 100% owned by ACMR when it was established, and its equity structure had remained unchanged until the acquisition of CleanChip HK by ACMSH.

(2) Acquisition of CleanChip HK

On November 29, 2019, the Company's first extraordinary general meeting of shareholders in 2019 passed the resolution that ACMSH would acquire the 100% equity of CleanChip HK from ACMR in the form of cash. On the same day, ACMSH signed a Share Transfer Agreement with ACMR, under which ACMSH purchased all equities of CleanChip HK from ACMR for USD 3.5 million dollars. The price of this transaction was determined by the Company based on the Assets Appraisal Report for the Project that ACM Research (Shanghai), Inc. Intends to Acquire All Shareholders' Equities of CleanChip Technologies Limited (Zhong Lian Ping Bao Zi [2019] No.1879) issued by China United Assets Appraisal Group Co., Ltd. The appraised net asset value of CleanChip HK was RMB 24.875 million Yuan as of June 30, 2019.

In December, 2019, the Company received the Notice of Recordation of an Overseas Investment Project (Hu Zi Mao Guan Kuo Jing Wai Bei [2019] No.276) and the Enterprise Overseas Investment Certificate (Jing Wai Tou Zi Zheng No. N3100201901015) issued by the Management Committee of China (Shanghai) Pilot Free Trade Zone.

On February 24, 2020, the Company completed the foreign exchange registration procedures related to the payment of the purchase price in the acquisition, and paid the equity transfer fund of USD 3.5 million dollars to ACMR on the next day.

(3) Financial Data

The main financial data of CleanChip HK in the latest year audited by BDO China are as follows:

Unit: RMB 10,000 Yuan

Item	December 31, 2019/2019
Total Assets	35,226.43
Net Assets	-639.20
Net Profit	-1,053.14

Note: The above financial data comes from the separate financial statement of CleanChip HK.

2. ACM Wuxi

Name	ACM Research (Wuxi), Inc.
Uniform Social Credit Code	91320214579450405R

ACM Research (Shanghai), Inc.

[***]

Domicile	J1-6, Export Processing Zone, Wuxi New District
Legal Representative	HUI WANG
Registered Capital	RMB 5 million Yuan
Paid-in Capital	RMB 5 million Yuan
Date of Establishment	July 14, 2011
Type of Company	Limited Liability Company (Sole Proprietorship by Legal Person)
Business Scope	The design, production, processing of electronic special equipment and parts, sales of self-produced products, and provision of after-sales technical services and consulting services (for the above items subject to the administrative permits, relevant permits shall be obtained for operation)
Main Business and Its Relationship with Main Business of the Issuer	After-sales services for semiconductor equipment; providing after-sales services for some clients of the issuer
Shareholder	The Company holds its 100% equity interests.

ACM Wuxi is 100% owned by ACMSH and its equity structure has remained unchanged since its establishment. The main financial data of ACM Wuxi in the latest year audited by BDO China are as follows:

Unit: RMB 10,000 Yuan

Item	December 31, 2019/2019
Total Assets	510.56
Net Assets	441.72
Net Profit	-7.66

3. Shengwei Shanghai

Name	Shengwei Semiconductor Equipment (Shanghai) Co., Ltd.
Uniform Social Credit Code	91310115MA1HAJFA8M
Domicile	Building C, No.888 Huanhu West II Road, Nanhui New Town, Lingang New Area, China (Shanghai) Pilot Free Trade Zone
Legal Representative	HUI WANG
Registered Capital	RMB 5 million Yuan
Paid-in Capital	RMB 1 million Yuan
Date of Establishment	March 25, 2019
Type of Company	Limited Liability Company (Sole Proprietorship by WFOE Legal Person)
Business Scope	The technology development, technical services, technical consulting and technology transfer in the field of semiconductor equipment technology, the design and sales of electronic equipment and its parts, the import and export of goods and technology. (for the above items subject to the administrative permits, relevant permits shall be obtained for operation)
Main Business and Its Relationship with Main Business of the Issuer	Intending to be engaged in research and development, production and sales of semiconductor special equipment; under construction, not yet carrying out any business.
Shareholder	The Company holds its 100% equity interests.

Shengwei Shanghai is 100% owned by ACMSH and its equity structure has remained unchanged since its establishment. The main financial data of Shengwei Shanghai in the latest year audited by BDO China are as follows:

ACM Research (Shanghai), Inc.

[***]

Unit: RMB 10,000 Yuan

Item	December 31, 2019/2019
Total Assets	106.41
Net Assets	99.99
Net Profit	-0.01

4. ACMKR

Name	ACM Research Korea Co., LTD.
Registration No.	134411-0078948
Registered Address	No.402, 2106 Gyeongchung-daero, Bubal-eup, Icheon-si, Gyeonggi-do (Modern City Plaza)
CEO	YOUNG YOUL KIM
Registered Capital	KRW 100 Million
Number of Issued Shares	20,000 shares
Date of Establishment	December 5, 2017
Main Business and Its Relationship with Main Business of the Issuer	Research and development, production and sales of semiconductor special equipment; conducting research and development of semiconductor special equipment and the spare parts for the Issuer, and at the same time, purchasing the spare parts of semiconductor special equipment for the Issuer
Shareholders	CleanChip HK holds its 100% equity interests.

ACMKR is 100% owned by CleanChip HK and its equity structure has remained unchanged since its establishment. The main financial data of ACMKR in the latest year audited by BDO China are as follows:

Unit: RMB 10,000 Yuan

Item	December 31, 2019/2019
Total Assets	1,914.77
Net Assets	226.87
Net Profit	21.23

5. ACM CA

Name	ACM Research (CA), Inc.
Address	42307 Osgood Road, Suite #I, ROOM B,Fremont, CA 94539
Director	JIAN WANG
Number of Shares Outstanding	10,000 shares
Main Business and Its Relationship with Main Business of the Issuer	Purchase and sales of the spare parts of semiconductor special equipment; purchasing the spare parts of semiconductor special equipment for the Issuer
Date of Establishment	April 5, 2019
Shareholder	CleanChip HK holds its 100% equity interests.

ACM CA is 100% owned by CleanChip HK and its equity structure has remained unchanged since its establishment. The main financial data of ACM CA in the latest year audited by BDO China are as follows:

Unit: RMB 10,000 Yuan

Item	December 31, 2019/2019
Total Assets	882.06
Net Assets	-17.70

ACM Research (Shanghai), Inc.

[***]

Net Profit

-17.64

(II)	Equity Participation Companies

As of the signing date of the [***], the Company has 2 equity participation companies, the details of which are as follows:

Shengyi Technology

Name	Shengyi Semiconductor Technology (Wuxi) Co., Ltd.
Uniform Social Credit Code	91320214MA1XD32R1A
Domicile	E2-111, China Sensor Network International Innovation Park, Xinwu District, Wuxi
Legal Representative	BEIYI WANG
Registered Capital	RMB 5 million Yuan
Type of Company	Limited Liability Company
Business Scope	Semiconductor technology development, technical services, technical consultation and technology transfer; Semiconductor equipment production, sales, installation, maintenance, testing; Sales of electronic products, electrical and mechanical equipment, mechanical equipment and accessories, instrumentation, chemical raw materials and products (with the hazardous chemicals business permit), metal materials, environmental protection equipment, metal products, rubber and plastic products, electrical and mechanical equipment, hardware and electrical equipment, building materials, chemical raw materials (except dangerous goods), fire-fighting equipment, packaging materials, furniture supplies, office supplies, articles of daily use, cleaning supplies; Import and export of all kinds of commodities and technologies on its own behalf or on behalf of others (except for commodities and technologies whose import and export are restricted or prohibited by the state). (For the above items subject to the administrative permits, relevant permits shall be obtained for operation)

Main Business	Production and sales of components and parts of semiconductor special equipment
Date of Establishment	October 29, 2018

As of the signing date of the [***], the equity structure of Shengyi Technology is as follows:

No.	Name of Shareholder	Subscribed Capital Contribution (RMB 10,000 Yuan)	Proportion of Contributions (%)
1	BEIYI WANG	425	85
2	ACMSH	75	15
Total		500	100

The main financial data of Shengyi Technology in the latest year are as follows:

Unit: RMB 10,000 Yuan

Item