| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
| Dec. 31, 2022 |
| SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
| Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company’s consolidated financial statements include the accounts of ACM and its subsidiaries, including ACM Shanghai and its subsidiaries, which include ACM Wuxi,
ACM Shengwei, ACM Beijing and CleanChip (the subsidiaries of which include ACM California and ACM Korea). ACM’s subsidiaries are those entities in which ACM, directly and indirectly, controls more than one half of the voting power. All significant
intercompany transactions and balances have been eliminated upon consolidation. |
| Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities at the balance sheet date and the reported revenues and expenses during the reported period in the consolidated financial statements and accompanying notes. The Company’s
significant accounting estimates and assumptions include, but are not limited to, those used for the valuation and recognition of fair value of trading securities, stock-based compensation arrangements, realization of deferred tax assets, assessment
for impairment of long-lived assets, allowance for doubtful accounts, inventory valuation for excess and obsolete inventories, lower of cost and market value or net realizable value of inventories, depreciable lives of property and equipment and
useful life of intangible assets. Management evaluates these estimates and assumptions on a regular basis. Actual results could differ from those estimates and assumptions. |
| Common Stock Split | Common Stock Split All prior period share and per share amounts, common stock, other capital, and retained earnings information presented in the accompanying financial statements and
these notes thereto has been retroactively adjusted to reflect the impact of the Stock Split. Proportional adjustments were also made to outstanding awards under the Company’s stock-based compensation plans. |
| Reclassification | Reclassifications Certain prior year amounts in the notes to the Consolidated Financial Statements have been reclassified to conform with the current year presentation. These
classifications within the statements had no impact on the Company’s results of operations. |
| Restrictions by the U.S. Department of Commerce on PRC-Based Semiconductor Producers | Restrictions by the U.S. Department of Commerce on PRC-Based Semiconductor Producers In early October 2022 the U.S. government enacted new rules aimed at restricting U.S. support for the PRC’s ability to manufacture advanced semiconductors. The rules
include new export license requirements for exports, re-exports or transfers to or within the PRC of additional types of semiconductor manufacturing items, items for use in manufacturing designated types of semiconductor manufacturing equipment in
the PRC, and semiconductor manufacturing equipment for use at certain IC manufacturing and development facilities in the PRC. In addition, the U.S. government imposed new restrictions by which U.S. persons anywhere in the world are effectively
barred from engaging in certain activities related to the development and production of certain semiconductors at PRC fabrication facilities meeting specified criteria, even if no items subject to the EAR are involved. ACM Shanghai has determined that several of its customers have PRC-based facilities that meet the restricted criteria, and has also determined that several of its
products may meet the parameters of export control classification numbers, or ECCNs, affected by the restrictions. Accordingly, depending on the details of the final implementation of these new restrictions and associates licensing policies, ACM
may not be able to import, or may face substantial restrictions in importing, parts from the United States to support tool shipments to such facilities, or to be embedded into tools defined by affected ECCNs. ACM and ACM Shanghai have
implemented modifications to their existing business policies and practices in response to the new restrictions, including by imposing limitations on the activities of their U.S. persons and their supply chains more broadly to comply with the new
regulations. ACM and ACM Shanghai believe that as a result of the new restrictions, several ACM Shanghai customers have significantly reduced production and related capital
spending at facilities meeting the restricted advanced node capabilities. In addition, ACM Shanghai has experienced challenges as the companies in its supply chain adapt their policies to the new regulations. These factors had an adverse impact
on ACM Shanghai’s shipments and sales in the three months ended December 31, 2022. ACM and ACM Shanghai anticipate these factors will continue to have an adverse impact on ACM Shanghai’s shipments and sales in future periods. |
| Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand and bank deposits that are unrestricted as to withdrawal and use, and highly liquid investments with an original
maturity date of three months or less at the date of purchase. At times, cash deposits may exceed government-insured limits. The following table presents cash and cash equivalents, according to jurisdiction as of December 31, 2022 and December 31, 2021:
December 31,
2022
2021
United States
$
25,011
$
34,852
Mainland China
129,695
469,494
China Hong Kong
89,187
52,527
South Korea
4,007
5,675
Singapore
51
-
Total
$
247,951
$
562,548 The amounts in mainland China do not include short-term and
long-term time deposits which totaled $172,448 and $0 at December 31, 2022 and 2021, respectively. Cash held in the U.S. exceeds the Federal Deposit Insurance
Corporation (“FDIC”) insurance limits and is subject to risk of loss. No losses have been experienced to date. Cash amounts held by ACM Shanghai at PRC banks in mainland China
are subject to a series of risk control regulatory standards from PRC bank regulatory authorities. ACM Shanghai is required to obtain approval from the State Administration of Foreign Exchange (“SAFE”) to transfer funds into or out of the PRC. SAFE
requires a valid agreement to approve the transfers, which are processed through a bank. Other than these PRC foreign exchange restrictions, ACM Shanghai is not subject to any PRC restrictions and limitations on its ability to transfer funds to ACM
Research or among our other subsidiaries. However, cash held by ACM Shanghai in mainland China does exceed applicable insurance limits and is subject to risk of loss, although no such losses have been experienced to date. ACM California periodically procures goods and services on behalf
of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM California in accordance with applicable transfer pricing arrangements. For the year ended December 31, 2022, cash payments from ACM
Shanghai to ACM California for the procurement of goods was $37.0 million and for services was $3.3 million. ACM California periodically borrows funds for working capital advances from its direct parent, CleanChip. ACM California repays or renews these intercompany loans
in accordance with their terms. For sales through CleanChip and ACM Research, a certain amount of
sales or advance payments from customer proceeds is repatriated back to ACM Shanghai, a subsidiary, in accordance with applicable transfer pricing arrangements in the ordinary course of business. ACM Research provides services to certain customers
located in the U.S., Europe and other regions outside of mainland China to support the evaluation of first tools and provide support for tools under warranty on behalf of ACM Shanghai. For these transactions, ACM Shanghai makes cash payments to ACM
Research, Inc. in accordance with applicable transfer pricing arrangements. Subsequent to June 30, 2020, with the exception of sales and
services-related transfer-pricing payments in the ordinary course of business, no cash transfers, dividends or other payments or distributions have been made between ACM Research and ACM Shanghai. The Company intends to retain any future earnings
to finance the operations and expenses of the business, and do not expect to distribute earnings or declare or pay any dividends in the foreseeable future. Amounts held in South Korea exceed the Korea Deposit Insurance
Corporation (“KDIC”) insurance limits and are subject to risk of loss. No losses have been experienced to date. There is no additional restriction for the transfer of cash from
bank accounts in the U.S., South Korea, and Hong Kong. For the years ended December 31, 2022 and 2021, with the exception
of sales and services-related transfer-pricing payments in the ordinary course of business, no transfers, dividends, or distributions have been made between ACM Research and its subsidiaries, including ACM Shanghai, or to holders of ACM Research
Class A common stock. |
| Time Deposits | Time Deposits Time deposits are deposited with banks in mainland China with fixed terms and interest rates which cannot be withdrawn before maturity. They are also subject to
the risk control regulatory standards described above upon maturity. Time deposits consisted of the following:
December 31,
2022
2021
Deposit in China Merchant Bank which matures on January 29, 2023 2.25
$
38,772
$
-
Deposit in China Everbright Bank which matures on January 29, 2023 2.25
14,360
-
Deposit in China Everbright Bank which matures on May 22, 2023 5.07
3,000
-
Deposit in China Industrial Bank which matures on January 30, 2023 2.15
14,360
-
Deposit in China Merchant Bank which matures on January 29, 2024 2.85
28,720
-
Deposit in Bank of Ningbo which matures on February 17, 2024 2.85
43,080
-
Deposit in Shanghai Pudong Development Bank which matures on October 20, 2025 3.10
7,180
-
Deposit in Shanghai Pudong Development Bank which matures on November 14, 2025 3.10
7,180
-
Deposit in Shanghai Pudong Development Bank which matures on December 8, 2025 3.10
4,308
-
Deposit in Shanghai Pudong Development Bank which matures on December 15, 2025 3.10
4,308
-
Deposit in Shanghai Pudong Development Bank which matures on December 30, 2025 3.10
7,180
-
$
172,448
$
- For the years ended December 31, 2022 and 2021, respectively,
interest income related to time deposits was $3,472 and $0, respectively. |
| Accounts Receivable | Accounts Receivable Accounts receivable are presented net of an allowance for doubtful accounts. The Company reviews its accounts receivable on a periodic basis and makes general and
specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, a customer’s historical
payment history and credit worthiness, current economic trends and reasonable and supportable forecasts. Accounts are written off after all collection efforts have been exhausted. At December 31, 2022, and 2021, the Company, based on a review of its
outstanding balances and its customers, determined the allowance for doubtful accounts was both $0. |
| Land Use Rights, Net | Land Use Right, Net The land use right represents the cost to purchase a right to use state-owned land in the PRC with lease terms of 50 years expiring in 2070, for which an upfront lump-sum payment was made during the year ended December 31, 2020. The Company classifies the land use right as non-current assets
on the consolidated balance sheets (note 7). The land use right is carried at cost less accumulated amortization and impairment losses, if any. Amortization is computed using the straight-line method over the term
specified in the land use right certificate, which is 50 years. |
| Inventory | Inventory Inventory consists of raw materials and related goods, work-in-progress, finished goods, and other consumable materials such as spare parts. Finished goods typically are
shipped from the Company’s warehouse within one month of completion. Inventory was recorded at the lower of cost or net realizable value at December 31, 2022 and 2021.
●
The cost of a general inventory item is determined using the weighted moving average method. Under the weighted moving average method, the Company calculates the new average price
of all items of a particular inventory stock each time one or more items of that stock are purchased. The then-current average price of the stock is used for purposes of determining cost of inventory or cost of revenue. The cost of an
inventory item purchased specifically for a customized product is determined using the specific identification method. Low-cost consumable materials and packaging materials are expensed as incurred.
●
Net realizable value is the estimated selling price, in the ordinary course of business, less estimated costs to complete or dispose. The Company assesses the recoverability of all inventories quarterly to determine if any adjustments are required. Potential excess or obsolete inventory is written off
based on management’s analysis of inventory levels and estimates of future 12-month demand and market conditions. |
| Property, Plant and Equipment, Net | Property, Plant and Equipment, Net Property, Plant and Equipment are recorded at cost less accumulated depreciation and any provision for impairment in value. Depreciation begins when the asset is placed
in service and is calculated by using the straight-line method over the estimated useful life of an asset (or, if shorter, over the lease term). Betterments or renewals are capitalized when incurred. Property, plant, and equipment is reviewed each
year to determine whether any events or circumstances indicate that the carrying amount of the assets may not be recoverable. There was no
impairment charge that was recognized for the years ended December 31, 2022 and 2021. Estimated useful lives of assets are as follows:
Buildings and Plants 30 years
Computer and office equipment
3 to 5 years
Furniture and fixtures
5 years
Leasehold improvements
shorter of lease term or estimated useful life
Electronic equipment 3 to 5 years
Manufacturing equipment for small to medium-sized equipment, 5 to 10 years; for large equipment,
Transportation equipment 4 to 5 years Expenditures for maintenance and
repairs that neither materially add to the value of the property nor appreciably prolong the life of the property are charged to expense as incurred. Upon retirement or sale of an asset, the cost of the asset and the related accumulated
depreciation are eliminated from the accounts and any resulting gain or loss is credited or charged to income. |
| Intangible Assets, Net | Intangible Assets, Net Intangible assets consist of capitalized software license and other related fees for items used for finance, manufacturing, and research and development purposes. Assets
are valued at cost at the time of acquisition and are amortized over their beneficial periods. If a contract specifies a license period, then the intangible asset is amortized over a term not exceeding the license period. For those intangible assets
with contracts that do not specify a license term or for which local law does not specify a license term, management estimates the amortization period based on the period over which the asset is expected to contribute directly or indirectly to the
cash flows in accordance with ASC 350, Intangibles—Goodwill and Other |
| Investments | Investments The Company uses the equity method of accounting for its investment in, and earning or loss of, companies that it does not control but over which it does exert
significant influence. The Company considers whether the fair value of its equity method investment has declined below its carrying value whenever adverse events or changes in circumstances indicate that the recorded value may not be recoverable. The
Company reviews its investments for other-than-temporary impairment whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. Investments identified as having an indication
of impairment are subject to further analysis to determine if the impairment is other-than-temporary and this analysis requires estimating the fair value of the investment. The determination of fair value of the investment involves considering
factors such as current economic and market conditions, the operating performance of the entities including current earnings trends and forecasted cash flows, and other company and industry specific information. If the Company considers any decline
to be other than temporary (based on various factors, including historical financial results and the overall health of the investee), then a write-down would be recorded to estimated fair value. See note 14 for discussion of equity method investment. The Company elects to measure its investments in other equity securities that the Company does not have control nor significant influence on the investee at cost minus
impairment, if any for those equity securities without a readily determinable fair value. All marketable securities are classified as trading securities and trading securities and are stated at fair market value, less a discount applied to reflect the
remaining lock-up period when the securities are subject to lock-up period. Fair market value is determined by the most recently traded price of the security at the balance sheet date. Net realized and unrealized gains and losses on trading
securities are included in the consolidated statements of operations. The cost of investments sold is based on the average cost method. Interest and dividend income earned are included in other income (expense), net. |
| Valuation of Long-Lived Assets | Valuation of Long-Lived Assets Long-lived assets are evaluated for impairment whenever events or changes in circumstance indicate that the carrying value of the assets may not be fully recoverable or
that the useful life of the assets is shorter than the Company had originally estimated. When these events or changes occur, the Company evaluates the impairment of the long-lived assets by comparing the carrying value of the assets to an estimate of
future undiscounted cash flows expected to be generated from the use of the assets and their eventual disposition. If the sum of the expected future undiscounted cash flows is less than the carrying value of the assets, the Company recognizes an
impairment loss based on the excess of the carrying value over the fair value. No impairment charge was recognized for either of the periods presented. |
| Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities
and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments
arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company uses
its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. It uses the implicit rate when readily determinable. The operating lease ROU asset also includes any lease
payments made and excludes lease incentives. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a
straight-line basis over the lease term. |
| Revenue Recognition | Revenue Recognition The Company derives revenue principally from the sale of semiconductor capital equipment. Revenue from contracts with customers is recognized using the following five
steps pursuant ASC Topic 606, Revenue from Contracts with Customers
1.
Identify the contract(s) with a customer;
2.
Identify the performance obligations in the contract;
3.
Determine the transaction price;
4.
Allocate the transaction price to the performance obligations in the contract; and
5.
Recognize revenue when (or as) the entity satisfies a performance obligation. A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct.
The transaction price is the amount of consideration a company expects to be entitled from a customer in exchange for providing the goods or services. The unit of account for revenue recognition is a performance obligation (a good or service). A contract may contain one or more performance obligations. Performance
obligations are accounted for separately if they are distinct. A good or service is distinct if the customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer, and the
good or service is distinct in the context of the contract. Otherwise, performance obligations are combined with other promised goods or services until the Company identifies a bundle of goods or services that is distinct. Promises in contracts which
do not result in the transfer of a good or service are not performance obligations, as well as those promises that are administrative in nature, or are immaterial in the context of the contract. The Company has addressed whether various goods and
services promised to the customer represent distinct performance obligations. The Company applied the guidance of ASC Topic 606 in order to verify which promises should be assessed for classification as distinct performance obligations. The Company’s
performance obligations in connection with a sale of equipment generally include production, delivery, installation, training and software updates. Given that the Company’s products are customized based on specifications of its customers, the Company determines that the promise to the customer is to provide a
customized product solution. The product and customization services are inputs into the combined item for which the customer has contracted and, as a result, the product and installation services are not separately identifiable and are combined
into a single performance obligation. Delivery of goods to a customer is not a separate performance obligation since control of the goods normally does not transfer to the customer before shipment. The Company’s warranties provide assurance that
its products will function as expected and in accordance with certain specifications. The Company’s warranties are intended to safeguard the customer against existing defects and do not provide any incremental service to the customer. They are not
separate performance obligations and accounted for under ASC 460, Guarantees The transaction price is allocated to all the separate performance obligations in an arrangement. It reflects the amount of consideration to which the Company expects to
be entitled in exchange for transferring goods or services, which may include an estimate of variable consideration to the extent that it is probable of not being subject to significant reversals in the future based on the Company’s experience with
similar arrangements. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes. This is done on a relative selling price basis using stand-alone selling prices (“SSP”). The SSP represents the price at which the
Company would sell that good or service on a stand-alone basis at the inception of the contract. Given the requirement for establishing SSP for all performance obligations, if the SSP is directly observable through standalone sales, then such sales
should be considered in the establishment of the SSP for the performance obligation. For some sale contracts, in addition to the sale of semiconductor capital equipment, the Company also provides certain spare parts to the customers. The Company
defers revenue associated with spare parts sold together with its tool products, including production, delivery, installation, training, and software updates which are accounted for as one performance obligation, based on stand-alone observable selling prices for which it receives payments in advance and recognizes the revenue upon the subsequent shipment
of the spare parts, which is expected within one year. The deferred revenue for spare parts was $4,174 and $3,180 at December 31, 2022 and 2021, respectively. Revenue is recognized when the Company satisfies each performance obligation by transferring control of the promised goods or services to the customer. Goods or services
can transfer at a point in time (upon the acceptance of the products or upon the arrival at the destination as stipulated in the shipment terms) in a sale arrangement. In general, the Company recognizes revenue when a tool has been demonstrated to
meet the customer’s predetermined specifications and is accepted by the customer. In the following circumstances, however, the Company recognizes revenue upon shipment or delivery, when legal title to the tool is passed to a customer as follows:
●
When the customer has previously accepted the same tool with the same specifications and the Company can objectively demonstrate that the tool meets all of the required acceptance
criteria;
●
When the sales contract or purchase order contains no acceptance agreement and the Company can objectively demonstrate that the tool meets all of the required acceptance criteria;
●
When the Company’s sales arrangements do not include a general right of return. The Company offers maintenance services, which consist principally of the installation and replacement of parts and small-scale modifications to the equipment. The
related revenue and costs of revenue are recognized when parts have been delivered and installed and the customers have obtained control of the parts. The Company incurs costs related to the acquisition of its contracts with customers in the form of sales commissions. Sales commissions are paid to third party
representatives and distributors. Contractual agreements with these parties outline commission structures and rates to be paid. Generally speaking, the contracts are all individual procurement decisions by the customers and are not for significant
periods of time, nor do they include renewal provisions. As such, all contracts have an economic life of significantly less than a year. Accordingly, the Company expenses sales commissions when incurred. These costs are recorded within sales and
marketing expenses. The Company, therefore, does not have contract assets. The Company does not incur any costs to fulfill the contracts with customers that are not already reported in compliance with another applicable standard (for example,
inventory or plant, property and equipment). The Company receives payments from customers prior to the transfer of control either upon contract sign-off and/or the delivery of evaluation tools, which are recorded
as advances from customers. |
| Cost of Revenue | Cost of Revenue Cost of revenue primarily consists of: direct materials, comprised principally of parts used in assembling equipment, together with crating and shipping costs; direct
labor, including salaries and other labor related expenses attributable to the Company’s manufacturing department; and allocated overhead cost, such as personnel cost, depreciation expense, and allocated administrative costs associated with supply
chain management and quality assurance activities, as well as shipping insurance premiums. |
| Research and Development Costs | Research and Development Costs Research and development costs relating to the development of new products and processes, including significant improvements and refinements to existing products or to
the process of supporting customer evaluations of tools, including the development of new tools for evaluation by customers during the product demonstration process, are expensed as incurred. |
| Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs, which relate to transportation of products to customer locations, are charged to selling and marketing expense. For the years ended December
31, 2022, 2021 and 2020, shipping and handling costs included in sales and marketing expenses were $1,507, $923, and $76, respectively. |
| Borrowing Costs | Borrowing Costs Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets that require a substantial period of time to be ready for their
intended use or sale are capitalized as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalized. All other borrowing costs
are recognized in interest expense in the consolidated statements of operations and comprehensive income in the period in which they are incurred. |
| Warranty | Warranty For each of its products, the Company generally provides a standard assurance type warranty ranging from 12 to 36 months and covering replacement of the product during the
warranty period. The Company accounts for the estimated warranty costs as sales and marketing expenses at the time revenue is recognized. Warranty obligations are affected by historical failure rates and associated replacement costs. Utilizing
historical warranty cost records, the Company calculates a rate of warranty expenses to revenue to determine the estimated warranty charge. The Company updates these estimated charges on a regular basis. Warranty obligations are included in other payables and accrued expenses in the consolidated balance sheets. The following table shows changes in the Company’s warranty obligations for the years ended December 31, 2022, 2021 and 2020,
respectively.
Year Ended December 31,
2022
2021
2020
Balance at beginning of period
$
6,631
$
3,975
$
2,811
Additions
5,379
5,026
3,101
Utilized
(3,230
)
(2,370
)
(1,937
)
Balance at end of period
$
8,780
$
6,631
$
3,975 |
| Government Subsidies | Government Subsidies ACM Shanghai has received seven special government
grants. The first grant, which was awarded in 2008, relates to the development and commercialization of 65nm to 45nm stress-free polishing technology. The second grant was awarded in 2009 to fund interest expense on short-term borrowings. The third
grant was made in 2014 and relates to the development of electro copper-plating technology. The fourth grant was made in June 2018 and relates to the development of polytetrafluoroethylene. The fifth grant was made in 2020 and relates to the
development of Tahoe single bench cleaning technologies. As of December 31, 2022, the fourth and fifth grants had been fully utilized. The sixth grant was made in 2020 and relates to the development of other cleaning technologies. The seventh grant
was made in 2021 and relates to the development of the R&D and production center in the Lin-gang Special Area of Shanghai. These governmental authorities provide significant funding, although ACM Shanghai and ACM Shengwei is also required to
invest certain amounts in the projects. The governmental grants contain certain operating conditions, and the Company is required to go through a government due diligence process once the project is complete.
The grants therefore are recorded as long-term liabilities upon receipt, although the Company is not required to return any funds it receives. Grant amounts are recognized in our statements of operations and comprehensive income as follows:
●
Government subsidies relating to current expenses are recorded as reductions of those expenses in the periods in which the current expenses are recorded. For the years ended December
31, 2022, 2021, and 2020, related government subsidies recognized as reductions of relevant expenses in the consolidated statements of operations and comprehensive income were $1,201, $11,260 and $2,658, respectively.
●
Government subsidies related to depreciable assets are credited to income over the useful lives of the related assets for which the grant was received. For the years ended December
31, 2022, 2021, and 2020, related government subsidies recognized as other income in the consolidated statements of operations and comprehensive income were $306, $200, and $149, respectively. Unearned government subsidies received are deferred and recorded as other long-term liabilities (note 13) in the balance sheet until the criteria for such recognition
are satisfied. |
| Stock-based Compensation | Stock-based Compensation ACM grants stock options to employees and non-employee consultants and directors and accounts for those stock-based awards in accordance with FASB ASC Topic 718, Compensation – Stock Compensation. Stock-based awards granted to employees and non-employee consultants and directors are measured at the fair value of the awards on the grant date and are recognized as
expenses either (a) immediately on grant, if no vesting conditions are required or (b) using the graded vesting method, net of estimated forfeitures, over the requisite service period. The fair value of stock options is determined using the
Black-Scholes valuation model when there is only service condition attached or the Monte Carlo valuation model when there is performance condition attached. Stock-based compensation expense, when recognized, is charged to the category of operating
expense corresponding to the service function of the employees and non-employee consultants and directors. |
| Income Taxes | Income Taxes The Company accounts for income taxes using the liability method whereby deferred tax asset and liability account balances are determined based on differences between
the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company provides a valuation allowance, if necessary, to
reduce deferred tax assets to their estimated realizable values. In evaluating the ability to recover its deferred income tax assets, the Company considers all available positive and negative evidence, including its operating results,
ongoing tax planning and forecasts of future taxable income on a jurisdiction-by-jurisdiction basis. In the event the Company determines that it would be able to realize its deferred income tax assets in the future in excess of their net recorded
amount, it would make an adjustment to the valuation allowance that would reduce the provision for income taxes. Conversely, in the event that all or part of the net deferred tax assets are determined not to be realizable in the future, an adjustment
to the valuation allowance would be charged to earnings in the period such determination is made. Tax benefits related to uncertain tax positions are recognized when it is more likely than not that a tax position will be sustained during an audit. Interest and
penalties related to unrecognized tax benefits are included within the provision for income tax. |
| Basic and Diluted Net Income per Common Share | Basic and Diluted Net Income per Common Share Basic and diluted net income per common share is calculated as follows:
Year Ended December 31,
2022
2021
2020
Numerator:
Net income
$
50,564
$
42,921
$
21,677
Less: Net income attributable to non-controlling interests
11,301
5,164
2,897
Net income available to common stockholders, basic $ 39,263 $ 37,757 $ 18,780
Less: Dilutive effect arising from stock-based awards by ACM Shanghai 584 108 -
Net income available to common stockholders, diluted
$
38,679
$
37,649
$
18,780
Weighted average shares outstanding, basic (1)
59,235,975
57,654,708
54,700,083
Effect of dilutive securities
6,105,796
7,702,008
8,850,324
Weighted average shares outstanding, diluted
65,341,771
65,356,716
63,550,407
Net income per common share:
Basic $
0.66 $
0.65 $
0.34
Diluted
$
0.59
$
0.58
$
0.30
(1)
Prior period results have been adjusted to reflect the three Basic and diluted net income per common share is presented using the two-class method, which allocates undistributed earnings to common stock and any participating
securities according to dividend rights and participation rights on a proportionate basis. Under the two-class method, basic net income per common share is computed by dividing the sum of distributed and undistributed earnings attributable to common
stockholders by the weighted average number of shares of common stock outstanding during the period. ACM did not have any participating securities outstanding during the three-year period ending December 31, 2022. ACM has been authorized to issue Class A and Class B common stock since redomesticating in Delaware in November 2016. The two classes of common stock are substantially
identical in all material respects, except for voting rights. Since ACM did not declare any dividends during the years ended December 31, 2022, 2021 and 2020, the net income per common share attributable to each class is the same under the
“two-class” method. As such, the two classes of common stock have been presented on a combined basis in the consolidated statements of operations and comprehensive income and in the above computation of net income per common share. Diluted net income per common share reflects the potential dilution from securities, including stock
options and issued warrants, that could share in ACM’s earnings. Certain potential dilutive securities were excluded from the net income per share calculation because the impact would be anti-dilutive. The number of potentially dilutive shares that
were not included in the calculation of diluted net income per share in the periods presented where their inclusion would be anti-dilutive were |
| Comprehensive Income Attributable to the Company | Comprehensive Income Attributable to the Company The Company applies FASB ASC Topic 220, Comprehensive Income |
| Statutory Surplus Reserve | Statutory surplus reserve The income of ACM’s PRC subsidiaries is distributable to their shareholders after transfers to reserves as required under relevant PRC laws and regulations and the
subsidiaries’ Articles of Association. As stipulated by the relevant laws and regulations in the PRC, the PRC subsidiaries are required to maintain reserves, including reserves for statutory surpluses and public welfare funds that are not
distributable to shareholders. A PRC subsidiary’s appropriations to the reserves are approved by its board of directors. At least 10% of annual statutory after-tax profits, as determined in accordance with PRC accounting standards and regulations, is
required to be allocated to the statutory surplus reserves. If the cumulative total of the statutory surplus reserves reaches 50% of a PRC subsidiary’s registered capital, any further appropriation is optional. Statutory surplus reserves may be used to offset accumulated losses or to increase the registered capital of a PRC subsidiary, subject to approval from the relevant PRC
authorities, and are not available for dividend distribution to the subsidiary’s shareholders. The PRC subsidiaries are prohibited from distributing dividends unless any losses from prior years have been offset. Except for offsetting prior years’
losses, however, statutory surplus reserves must be maintained at a minimum of 25% of share capital after such usage. ACM Shanghai estimated a statutory surplus reserve of $16,881 and $8,312 based on an accumulated profit as of December 31,
2022 and 2021, respectively, which is included in the statutory surplus reserve in the consolidated balance sheets. |
| Fair Value of Financial Instruments | Fair Value of Financial Instruments Under the FASB’s authoritative guidance on fair value measurements, fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. In determining the fair value, the Company uses various methods including market, income and cost approaches. Based on these approaches, the Company often utilizes certain
assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or
generally unobservable inputs. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. Based on observability of the inputs used in the valuation techniques, the Company is
required to provide the following information according to the fair value hierarchy. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value
are classified and disclosed in one of the following three categories: Level 1: Valuations for assets and liabilities traded in active exchange markets. Valuations are obtained from readily available pricing sources for
market transactions involving identical assets or liabilities. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing
services for identical or similar assets or liabilities. Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, including option pricing models, discounted cash
flow models and similar techniques, and not based on market exchange, dealer or broker traded transactions. Level 3 valuations incorporate certain unobservable assumptions and projections in determining the fair value assigned to such assets. All transfers between fair value hierarchy levels are recognized by the Company at the end of each reporting period. In certain cases, the inputs used to measure fair
value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement in its entirety, requires
judgment and considers factors specific to the investment. The inputs or methodology used for valuing financial instruments are not necessarily an indication of the risks associated with investment in those instruments. Fair Value Measured or Disclosed on a Recurring Basis Trading securities - The fair value of trading securities derives from the quoted prices for identical securities in active markets at the balance sheet date, less a discount applied to reflect the remaining lock-up period. The Company classifies the valuation
techniques that use these inputs as Level 1 and Level 2 fair value measurement as of December 31, 2022 and 2021, respectively. Financial liability – Other financial items for disclosure purpose —The fair value of other financial items of the Company, other than long-term borrowings for disclosure purposes, including cash and cash equivalents, accounts receivable, other receivables, short-term borrowings,
accounts payable, advances from customers, and other payables and accrued expenses, approximate their carrying value due to their short-term nature. The carrying value of the long-term borrowings which are subject to fixed interest rate
approximates its fair value as the market interest rate did not significantly change from the borrowing date to December 31, 2022.
Quoted Prices in Active Markets for Identical Liabilities (Level 1)
Significant Other Observable Inputs (Level 2)
Significant Unobservable Inputs (Level 3)
Total
As of December 31, 2022:
Assets
Cash equivalents $ 247,951 $ - $ - $ 247,951
Trading securities 20,209 - - 20,209
$ 268,160 $ - $ - $ 268,160
Liabilities:
Short-term borrowings $ - $ 56,004 $ - $ 58,326
Long-term borrowings - 21,009 - 18,687
$ - $ 77,013 $ - $ 77,013
As of December 31, 2021:
Assets
Cash equivalents $ 562,548 $ - $ - $ 562,548
Trading securities 29,498 - - 29,498
$ 592,046 $ - $ - $ 592,046
Liabilities:
Short-term borrowings $ -
$
9,591
$
-
$
9,591
Long-term borrowings - 25,367 -
25,367
$ - $ 34,958 $ - $ 34,958 |
| Operating and Financial Risks | Operating and Financial Risks Concentration of Credit Risk Financial instruments that potentially subject the Company to credit risk consist principally of cash and cash equivalents, time deposits, and accounts receivable. The
Company deposits and invests its cash with financial institutions that management believes are creditworthy. The Company is potentially subject to
concentrations of credit risks in its accounts receivable. For the years ended December 31, 2022 and December 31, 2021, three customers
accounted for 43.8% and two
customers accounted for 48.9% of revenue, respectively. As
of December 31, 2022 and December 31, 2021, two customers accounted for 42.6% and 53.8%, respectively, of the Company’s accounts
receivables. The Company believes that the receivable balances from these largest customers do not represent a significant credit risk based on past collection experience. Interest Rate Risk As of December 31, 2022 and 2021, the balance of the Company’s short term bank borrowings (note 9) were scheduled to mature at various dates within the following year
and thus exposed the Company to modest interest rate risk. As of December 31, 2022, the balance of the Company’s long-term borrowings (note 12) carry a fixed interest rate, and the Company may be exposed to the fair value interest rate risk. Liquidity Risk The Company’s working capital at December 31, 2022 and 2021 was sufficient to meet its then-current requirements. The Company may, however, require additional cash due
to changing business conditions or other future developments, including any investments or acquisitions the Company decides to pursue. In the long run, the Company intends to rely primarily on cash flows from operations and additional borrowings from
financial institutions in order to meet its cash needs. If those sources are insufficient to meet cash requirements, the Company may seek to issue additional debt or equity. Country Risk The Company has significant investments in the PRC. The operating results of the Company may be adversely affected by changes in the political and social conditions in
the PRC and by changes in PRC government policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. Foreign Currency Risk and Translation The Company’s consolidated financial statements are presented in U.S. dollars, which is the Company’s reporting currency, while the functional currency of ACM’s
subsidiaries is the Chinese Renminbi (“RMB”), and the Korean Won. Changes in the relative values of U.S. dollars and RMB affect the Company’s reported levels of revenues and profitability as the results of its operations are translated from RMB into
U.S. dollars for reporting purposes. Since the Company has not engaged in any hedging activities, it cannot predict the impact of future exchange rate fluctuations on the results of its operations, and it may experience economic losses as a result of
foreign currency exchange rate fluctuations. Transactions of ACM’s subsidiaries involving foreign currencies are recorded in functional currency according to the rate of exchange prevailing on the date when the
transaction occurs. The ending balances of the Company’s foreign currency accounts are converted into functional currency using the rate of exchange prevailing at the end of each reporting period. Net gains and losses resulting from foreign exchange
fluctuations as marked to market at year-end are included in the consolidated statements of operations and comprehensive income. Total foreign currency translation adjustment was ($59,102), $4,695, and $10,493 for the years ended December 31, 2022, 2021 and 2020, respectively. In accordance with FASB ASC Topic 830, Foreign Currency Matters Translations of amounts from RMB and Korean Won into U.S. dollars were made at the following exchange rates for the respective dates and periods:
At December 31,
2022
2021
2020
Consolidated balance sheets:
RMB to $1.00
6.9638
6.3757
6.5232
KRW to $1.00
1,262.63
1,145.48
1,088.14
Consolidated statements of operations and comprehensive income:
RMB to $1.00
6.7249
6.4515
6.8966
KRW to $1.00
1,288.66
1,190.48
1,179.25 |
| Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. ASU
2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The Company adopted ASU 2020-04 on January 1, 2021. The adoption of ASU 2020-04
did not have a material impact on the Company’s consolidated financial statements. Recent Accounting Pronouncements Not Yet Adopted Fair Value Measurement of Equity
Securities Subject to Contractual Sale Restrictions. In June 2022, the FASB issued an
accounting standard update which clarifies how the fair value of equity securities subject to contractual sale restrictions is determined (Topic 820). The amendment clarifies that a contractual sale restriction should not be considered in
measuring fair value. It also requires certain qualitative and quantitative disclosures related to equity securities subject to contractual sale restrictions. This authoritative guidance will be effective for the year beginning January 1, 2024
with early adoption permitted. The Company is currently evaluating the effect of this new guidance on its consolidated financial statements . In November 2019, the FASB issued ASU 2019-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates. In advance of the issuance of ASU 2019-10, the Company adopted
ASU 2017-12, Derivatives and Hedging (Topic 815) and ASU 2016-02, Leases (Topic 842) since January 1, 2019. ASU 2019-10 defers the effective date of ASU 2016-13 for public filers that are considered small reporting companies (“SRC”) as defined
by the SEC to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company was eligible to be an SRC based on its SRC determination as of November 15, 2019 (which is the issuance date of
ASU 2019-10) in accordance with SEC regulations, the Company will adopt amendments in ASU 2016-13 for the year beginning January 1, 2023. Adoption of the standard requires using a modified retrospective approach through a cumulative-effect
adjustment to retained earnings as of the effective date to align existing credit loss methodology with the new standard. The Company is evaluating the impact of this standard on its consolidated financial statements, including accounting
policies, processes and systems and expects the standard will not have a significant impact on its consolidated financial statements. |
