Amtech Systems, Inc. Annual Report 2022

FY2022 Annual Report · Amtech Systems, Inc.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: September 30, 2022
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission file number: 0-11412

AMTECH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)

Arizona
(State or other jurisdiction of
incorporation or organization)

131 South Clark Drive, Tempe, Arizona
(Address of principal executive offices)

86-0411215
(I.R.S. Employer
Identification No.)

85288
(Zip Code)

Securities registered pursuant to Section 12(b) of the Act:

Registrant’s telephone number, including area code: 480-967-5146

Title of each class
Common Stock, par value $0.01 per share

Trading Symbol(s)
ASYS

Name of each exchange on which registered
NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.01 Par Value

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of
“large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer
Non-accelerated filer

☐
☒

Accelerated filer
Smaller reporting company
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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the
Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of March 31, 2022, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the voting and non-voting stock held by non-affiliates of the
registrant was approximately $113,239,072, based upon the closing sales price reported by the NASDAQ Global Market on that date.

As of November 23, 2022, the registrant had outstanding 14,000,154 shares of Common Stock, $0.01 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Definitive Proxy Statement related to the registrant’s 2023 Annual Meeting of Shareholders, which Proxy Statement will be filed under the Securities Exchange Act of 1934, as amended,
within 120 days of the end of the registrant’s fiscal year ended September 30, 2022, are incorporated by reference into Items 10-14 of Part III of this Form 10-K.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Table of Contents

Definitions
Cautionary Note Regarding Forward-Looking Statements

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

Part I

Part II

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Reserved

Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance

Part III

Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Exhibit and Financial Statement Schedules
Form 10-K Summary

Part IV

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Item 5.
Item 6.
Item 7.

Item 7A.
Item 8.

Item 9.
Item 9A.
Item 9B.
Item 9C.

Item 10.
Item 11.

Item 12.
Item 13.
Item 14.

Item 15.
Item 16.
Signatures

3
5

6
18
31
31
32
32

33
34

35
46
46

78
78
78
78

79
79
79
79

80
80
83

Acronyms and defined terms used in the text include the following:

DEFINITIONS

Term
2007 Plan

2022 Plan

401(k) Plan

Amtech

Board

Bruce Technologies

BTU

CARES Act

CEO

CFO

CMP

Common Stock

Company

COSO

COVID-19

DBC

EBIT
EBITDA

EPS

ERISA

Exchange Act

FDIC

GAAP

Intersurface Dynamics

ISO 9001:2015

IoT

LED

MEMS

NIGPP

Note __

O-S-D

our

PCAOB

Meaning
The 2007 Employee Stock Incentive Plan

Amtech Systems, Inc. 2022 Equity Incentive Plan

Three dimensional

The Amtech Systems, Inc. 401(k) Plan

Fifth generation of mobile communications

Amtech Systems, Inc. and Subsidiaries

The Board of Directors of Amtech Systems, Inc.

Bruce Technologies, Inc.

BTU International, Inc.

Coronavirus Aid, Relief, and Economic Security Act

Chief Executive Officer

Chief Financial Officer

Chemical Mechanical Polishing

Our common stock, par value $0.01 per share

Amtech Systems, Inc. and Subsidiaries

Committee of Sponsoring Organizations of the Treadway Commission

A novel coronavirus strain commonly referred to as “coronavirus”

Direct Bond Copper

Earnings Before Interest and Taxes

Earnings Before Interest, Taxes, Depreciation, and Amortization

Earnings (loss) per share

Employee Retirement Income Security Act of 1974

Electric vehicle

Securities Exchange Act of 1934, as amended

Federal Deposit Insurance Corporation

Generally Accepted Accounting Principles in the United States

Intersurface Dynamics, Inc.

International standard that specifies requirements for a quality management system

Internet of things

Light-emitting diode

Microelectromechanical systems

Millimeter

National Integrated Group Pension Plan and Trust Fund

Note __ to the consolidated financial statements

Optoelectronic Sensors & Discrete

Amtech Systems, Inc. and Subsidiaries

Public Company Accounting Oversight Board

Power Semiconductor

PR Hoffman

Proxy Statement

R2D

RD&E

Registrant

ROU

SEC

Securities Act

Semi

SEO

SG&A

SiC

SiC/LED

SMT

SoLayTec

SSP

Subsidiaries

Tempress

TTV

U.S.

The fundamental component of modern power electronic circuitry. Power semiconductors perform the

same tasks as regular semiconductors — only on a much larger scale. These high-performance
components are capable of handling extremely high electrical currents, voltages, and frequencies.
They are used in, but not limited to the following applications: electric vehicles, wireless
communication, advanced control of electric drives, advanced computer systems, antennas, automobile
sensors, broadband wireless, consumer and industrial electronics, and more. They form an
indispensable part of electrical appliances, machines, and systems.

P.R. Hoffman Machine Products, Inc.

Amtech’s Proxy Statement to be filed with the SEC in connection with its 2023 Annual Meeting of

Shareholders

R2D Automation SAS

Research, development and engineering

Amtech Systems, Inc.

Radio Frequency

Right-of-use

Securities and Exchange Commission

Securities Act of 1933, as amended

Semiconductor

Search engine optimization

Selling, general and administrative expenses

Silicon carbide

Our former SiC/LED reportable segment

Surface-mount technology

SoLayTec B.V.

Standalone selling price

Subsidiaries of Amtech Systems, Inc. listed on Exhibit 21 hereto

Tempress Systems, Inc.

Total thickness variation

United Kingdom

Amtech Systems, Inc. and Subsidiaries

The United States of America

USA PATRIOT act

The Uniting and Strengthening America by Providing Appropriate Tools to Restrict, Intercept, and

xEV

Obstruct Terrorism Act of 2001

Amtech Systems, Inc. and Subsidiaries

Hybrid and electric vehicles

Cautionary Note Regarding Forward-Looking Statements

Our discussion and analysis in this Annual Report on Form 10-K, our 2022 Annual Report to Shareholders, our other reports that we file with the SEC, our press releases and in
public statements of our officers and corporate spokespersons contain “forward-looking” statements within the meaning of Section 27A of the Securities Act, Section 21E of the
Exchange Act, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements give our or our officers’ current expectations or forecasts of future events.
You can identify these statements by the fact that they do not relate strictly to historical or current events. You can also identify forward-looking statements by discussions of
strategy, plans or intentions of management. We have tried, wherever possible, to identify such statements by using words such as “may,” “plan,” “anticipate,” “seek,” “will,”
“expect,” “intend,” “estimate,” “believe,” “continue,” “predict,” “potential,” “project,” “should,” “would,” “could,” “likely,” “future,” “target,” “forecast,” “goal,” “observe,”
and “strategy” or the negative thereof or variations thereon or similar terminology relating to the uncertainty of future events or outcomes. Any expectations based on these
forward-looking statements are subject to risks and uncertainties and other important factors. Some factors that could cause actual results to differ materially from those
anticipated include, among others, future economic conditions, including changes in the markets in which we operate; changes in demand for our services and products; our
revenue and operating performance; difficulties in successfully executing our growth initiatives; difficulties in executing on our strategic efforts with respect to our material and
substrate business segment; the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants
into our markets and transfers of resources by competitors into our markets; the cyclical nature of the semiconductor industry; pricing and gross profit pressures; control of costs
and expenses; risks associated with new technologies and the impact on our business; legislative, regulatory, and competitive developments in markets in which we operate;
possible future claims, litigation or enforcement actions and the results of any such claim, litigation proceeding, or enforcement action; business interruptions, including those
related to the COVID-19 pandemic and the cybersecurity incident that occurred in April 2021; the potential impacts of the COVID-19 pandemic, including ongoing logistical
and supply chain challenges, and any future pandemic on our business operations, financial results and financial position; the severity, magnitude and duration of the COVID-
19 pandemic, including impacts of the pandemic and of businesses’ and governments’ responses to the pandemic on our operations and personnel, including any future Chinese
government mandated shutdown in Shanghai; risks of future cybersecurity incidents; and the other factors included in this Annual Report on Form 10-K, including those
referenced under the headings “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or referenced from
time to time in our filings with the SEC. The occurrence of the events described, and the achievement of expected results, depend on many events, some or all of which are not
predictable or within our control. These and many other factors could affect Amtech’s future operating results and financial condition and could cause actual results to differ
materially from expectations based on forward-looking statements made in this document or elsewhere by Amtech or on its behalf.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based on our or our officers’ current beliefs, expectations and
assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject to certain risks and uncertainties. In light of these risks and uncertainties, there can be no assurance that the
forward-looking information contained in this Annual Report on Form 10-K will in fact transpire or prove to be accurate. You should not place undue reliance on these
forward-looking statements, which speak only as of the date they were made.

The Company undertakes no obligation to update or publicly revise any forward-looking statement whether as a result of new information, future developments or otherwise
after the date of this Annual Report on Form 10-K. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by this cautionary statement. You are advised, however, to consult any further disclosures we make on related subjects in our subsequently
filed Form 10-Q and Form 8-K reports and our other filings with the SEC. Also note that we provide a cautionary discussion of risks, uncertainties and possibly inaccurate
assumptions relevant to our business under “Item 1A. Risk Factors” of this Annual Report on Form 10-K. We note these factors for investors as permitted by the Private
Securities Litigation Reform Act of 1995. You should understand it is not possible to predict or identify all such factors.

Unless the context indicates otherwise, the terms “Amtech,” the “Company,” “we,” “us” and “our” refer to Amtech Systems, Inc., an Arizona corporation, together with its
subsidiaries.

ITEM 1. BUSINESS

OUR COMPANY

PART I

We are a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used in fabricating semiconductor
devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes (LEDs). We sell these products to
semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe. Our strategic focus is on semiconductor growth opportunities in
power electronics, sensors and analog devices leveraging our strength in our core competencies in thermal and substrate processing. We are a market leader in the high-end
power chip market (SiC substrates, 300mm horizontal thermal reactors, and electronic assemblies used in power, RF, and other advanced applications), developing, and
supplying essential equipment and consumables used in the semiconductor industry.

We categorize each of our subsidiaries into one of two reportable segments, based primarily on the industries they serve:

Reportable Segment
Semiconductor

Material and Substrate

These reportable segments are comprised of the following four wholly-owned subsidiaries:

Semiconductor:

% of 2022
Consolidated Net
Revenue

83 %

17 %

•Bruce Technologies, a Massachusetts corporation based in North Billerica, Massachusetts, acquired in July 2004; and

•BTU, a Delaware corporation based in North Billerica, Massachusetts, with operations in China, Malaysia and the UK, acquired in January 2015.

Material and Substrate:

•PR Hoffman, an Arizona corporation based in Carlisle, Pennsylvania, acquired in July 1997; and

•Intersurface Dynamics, a Connecticut corporation based in Bethel, Connecticut, acquired in March 2021.

Our strategic focus in the semiconductor industry is the development of equipment for thermal processing and deposition for semiconductor manufacturing, specifically focusing
on substrate, fabrication, packaging and surface-mount technology (“SMT”). The markets we serve are experiencing technological advances and are, historically, cyclical.
Therefore, future profitability and growth depend on our ability to invest in, develop and/or acquire and market new technology products and on our ability to adapt to cyclical
trends.

Integrated circuits, optoelectronic, sensor, and discrete (O-S-D) components, such as power chips, LEDs, and some MEMS, are semiconductor devices fabricated on silicon and
compound semiconductor wafer substrates, such as silicon carbide. Semiconductor chips are part of the circuitry of many products including inverters, onboard charging,
computers, telecommunications devices, automotive electronics and sensors, consumer electronics, and industrial automation and control systems. LEDs manufactured using
our equipment are used in industrial, commercial and residential lighting. Our thermal processing and consumable products currently address the diffusion and deposition steps
used in the fabrication of semiconductors, LEDs, MEMS and the polishing of newly sliced silicon and compound semiconductor wafers, as well as the packaging and assembly
of the electronic components and assemblies. Our reflow ovens provide key thermal processing steps for both semiconductor packaging and electronics assembly. Key

end-markets for these packages and assemblies include: electric vehicles and charging infrastructure, renewable energy, communications, automotive electronics and sensors,
computing and networking, and consumer and industrial electronics.

Our Material and Substrate segment provides solutions to the lapping and polishing marketplace for SiC power chip applications, LED, optics, ceramics and photonics.
Lapping and polishing are the processes of abrading components with a high degree of precision for flatness, parallelism, and surface finish. Common applications for this
technology are silicon wafers for semiconductor products, compound substrates, like silicon carbide wafers, for LED and power device applications, sapphire substrates for
LED lighting and mobile devices, various glass and silica components for 3D image transmission, quartz and ceramic components for telecommunications devices, medical
device components and optical and photonics applications.

We believe our product portfolio, developed through a track record of technological innovation as well as the successful integration of key acquisitions, provides exceptional
value to semiconductor manufacturing by increasing yields, efficiency and throughput. We have been providing manufacturing solutions to the semiconductor industry for over
30 years and have leveraged our semiconductor technology and industry presence to capitalize on growth opportunities. Our customers use our equipment to manufacture
semiconductor chips, silicon and compound semiconductor wafers and MEMS, which are used in end markets such as telecommunications (5G), consumer and industrial
electronics (IoT and embedded devices), computing (data centers), automotive electronics and sensors (xEV), and mobile devices (smart devices). To complement our research
and development efforts, we also sell our equipment to, and coordinate certain development efforts with, research institutes, universities and customers.

The semiconductor industry is cyclical and historically has experienced significant fluctuations. Our revenue is impacted by these broad industry trends.

In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization, and the outbreak became increasingly widespread, including in all
of the markets in which we operate. We continue to monitor the impact of COVID-19 on all aspects of our business. We are a company operating in a critical infrastructure
industry, as defined by the U.S. Department of Homeland Security. Consistent with federal guidelines and with foreign government, state and local orders to date, we have
continued to operate across our footprint throughout the COVID-19 pandemic. Following the onset of COVID-19 and its negative effects on our business, most prominently
reflected in our second, third and fourth quarter fiscal 2020 results, global economic conditions improved during fiscal 2021, resulting in increased demand for our products and
services, which led to our earnings for fiscal 2021 substantially exceeding our fiscal 2020 results. There remain many unknowns and we continue to monitor the expected trends
and related demand for our products and services and have and will continue to adjust our operations accordingly.

On March 28, 2022, the Chinese government issued a mandatory shutdown in Shanghai, the location of one of our manufacturing facilities. The factory was allowed to partially
reopen in May 2022 and was fully reopened on June 1, 2022. Upon reopening on June 1, 2022, the factory was able to operate at near full capacity for the entire month of June.
We were able to make up the shipments missed in the fourth quarter and are now operating at normal capacity levels. Additionally, given the uncertainty surrounding the
COVID-19 pandemic and the emergence of variations thereof, there can be no assurance that our Shanghai facility will be allowed to remain open on a consistent basis.

For information regarding net revenue, operating income and identifiable assets attributable to each of our two reportable segments, see Note 18 of the Notes to Consolidated
Financial Statements included in “Item 8. Financial Statements and Supplementary Data” and “Item 7. Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in this Annual Report. For information on the products of each reportable segment, see “Semiconductor Products” and “Material and Substrate
Products” within this “Item 1. Business” section. For information regarding risks to our business, see “Item 1A. Risk Factors.”

Our fiscal year is from October 1 to September 30. Unless otherwise stated, references to the years 2022, 2021 and 2020 relate to the fiscal years ended September 30, 2022,
2021 and 2020, respectively.

ACQUISITION

GROWTH AND INVESTMENT STRATEGY

We continue to invest in research and development and have introduced new products in fiscal 2022, with additional new products expected in fiscal 2023, to expand our
offerings and addressable market. As we move past the pandemic interruptions, we have a renewed objective to grow our revenue and expand our operations through organic
growth, while at the same time pursuing strategic acquisitions. Historically, we have grown our business primarily through acquisitions, including the businesses that currently
comprise our two reportable segments in the Semiconductor and Material and Substrate industries: Bruce Technologies, BTU, PR Hoffman and Intersurface Dynamics. The
businesses we own and operate today have provided substantial returns on our original investments. Our acquisition of BTU demonstrates our ability to unlock value in a
company, to grow revenue and improve the performance of acquired assets. Our 2021 acquisition of Intersurface Dynamics bolstered our offerings in the substrate consumables
space and incorporated wafer processing coolants and chemicals to our existing consumable and machine product lines. While we continue to believe this inorganic growth
strategy is the backbone of who Amtech is as a company, we also have a complimentary strategy of pursuing organic growth, particularly during times when we lacked
sufficient capital resources to pursue growth through acquisitions. We intend to accomplish these parallel objectives through the pursuit of the following strategies:

Grow consumables revenue to reduce vulnerability to semiconductor business cycles. The semiconductor industry is highly cyclical, and the conditions of this industry
remain volatile. All participants have been subject to these fluctuations in demand, but they can be particularly problematic for equipment suppliers who rely on capacity
expansion for many orders. These sharp business cycles not only impact short-term financial results but can also weaken the strength of suppliers as they reduce their
organizations to align with the reduced production demand. Our line of consumables products, including templates, carriers, polishing-related chemicals and spare parts,
generates continuous revenue streams regardless of capacity expansions as they are used in equipment already in service. In an effort to minimize both the financial shortfalls
and organizational harm of these business cycles, we are seeking to increase the consumables portion of our business. Our initial focus is on aggressively growing the
consumable business in our Materials and Substrate division, which was approximately 15% of our consolidated revenue in fiscal 2022. In addition, we are working to
transform the aftermarket sales business in our Semiconductor division, leveraging the strength of our expansive installed base to increase higher-margin sales of replacement
parts and services. Similar efforts will be made at our Material and Substrate segment, though the existing installed base is on a much smaller scale.

Increase the portion of our product line portfolio tied to high-growth, megatrend end markets such as EV. We believe the opportunity for organic growth through strategic
alignment to projects tied to megatrends is an opportunity that exists across all our divisions. In the Material and Substrate division, processing of SiC substrates is directly tied
to the production of power modules used in electric vehicles and in other green technology applications such as wind and solar power. Our Semiconductor division has
multiple intersections with EV production, including the use of our diffusion furnaces and surface-mount technology reflow products to manufacture power semiconductors and
our high-temp furnaces used in Direct Bond Copper (DBC) applications used in power modules. In order to increase the portion of our business tied to these high-growth
megatrends, we are employing multiple tactics and strategies, including strategic selling and customer-centric product development.

Enhance and invest in legacy business operations. Our legacy business is key to funding both organic and inorganic growth opportunities across our divisions. Throughout
2022, we have been re-enforcing Amtech’s core values, purpose and methods across all divisions and locations, including an emphasis on continuous improvement and
problem-solving. We have increased cross-divisional sharing of resources and expertise, such as best practices and global sourcing. This strategy has been developed by our
CEO and CFO, in conjunction with our Vice President of Operations, Vice President of Sales and Customer Service, Segment Managers and Corporate Director of Strategic

Marketing, to ensure these advancements are implemented uniformly across all Amtech operations. Additionally, we have made capacity investments at several of our locations
and expect to make future investments upon the expiration of the two-year leaseback of our Massachusetts facility (see Note 8). We are also evaluating our management
information systems and needs in order to allow for greater efficiencies and to ensure our infrastructure can support our future growth plans. During fiscal 2023, we intend to
focus on further investments to strengthen and expand our manufacturing capacity, including evaluating back-up and alternative manufacturing sites as well as contract
manufacturing, to meet anticipated growth demands from the Silicon Carbide industry segment, and to both increase our efficiency and reduce single-point failure risks to our
business.

Pursue strategic acquisitions that complement our strong platform. As discussed above, we have historically pursued an acquisition strategy consistent with our focus of
maintaining market leadership and technology innovation that addresses the continued growth in the semiconductor industry. As part of this strategy, we continually evaluate
potential technology, product and business acquisitions or joint ventures that we believe will increase our existing market share in the semiconductor and SiC industries and
expand our addressable market. In evaluating these opportunities, our objectives include enhancing our earnings and cash flows, adding complementary product offerings,
expanding our geographic footprint, improving our production efficiency and expanding our customer base. As a result, we continue to manage our balance sheet to maintain
adequate liquidity so that we may react quickly as these opportunities arise. During 2021, we completed the acquisition of Intersurface Dynamics, which incorporated numerous
coolants and chemical products to our existing consumable and machine product lines.

SEMICONDUCTOR AND MATERIAL AND SUBSTRATE OPERATIONS

We provide diffusion and reflow thermal systems as well as wafer polishing equipment and related services to leading semiconductor manufacturers. Our products include
horizontal diffusion furnaces used to produce semiconductors, such as analog, sensors, and discrete devices, and MEMS, as well as double-sided lapping and polishing
equipment, double-sided lapping and polishing carriers, and single side polishing templates.

As demand for increasingly sophisticated electronic devices continues, new technologies such as electric vehicles, artificial intelligence, advanced power management, advances
in consumer electronics, 5G communications, and IoT will help drive future growth. Electronic equipment continues to become more complex, yet end users demand smaller,
lighter and less expensive devices. This trend, in turn, requires increased performance and reduced cost of ownership requirements of electronic assemblies, printed circuit
boards and semiconductors. In response to these developments, manufacturers are increasingly employing more sophisticated production and assembly techniques requiring
more advanced manufacturing equipment, such as that supplied by our subsidiary, BTU.

Although the semiconductor market has experienced significant growth over the past fifteen years, it remains cyclical by nature. The market is characterized by short-term
periods of under or over utilization of capacity for most semiconductors, including microprocessors, memory, power management chips and other logic devices. When capacity
utilization decreases due to the addition of excess capacity, semiconductor manufacturers typically slow their purchasing of capital equipment. Conversely, when capacity
utilization increases, so does capital spending. We believe the continued expansion of our consumable product offerings, primarily in our Material and Substrate segment, will
enable us to partially offset some of these cyclical effects.

SEMICONDUCTOR PRODUCTS

Our furnace equipment is manufactured in our facilities in Massachusetts and China. The following paragraphs describe the products that comprise our current product lines in
our semiconductor business:

Horizontal Diffusion Furnaces. Through Bruce Technologies, we produce and sell 200mm and 300mm horizontal diffusion and deposition furnaces. Our horizontal furnaces
currently address several steps in the semiconductor manufacturing process, including diffusion, high temperature oxidation (used in silicon power chips), and annealing.

Our horizontal furnaces generally consist of three large modules: the load station, where the loading of the wafers occurs; the furnace section, which is comprised of one to four
thermal reactor chambers; and the gas distribution cabinet, where the flow of gases into the reactor chambers is controlled and is often configured through a range of options to
meet the requirements of our customers’ particular process needs. The horizontal furnaces utilize a

combination of existing industry and proprietary technologies and are sold primarily to semiconductor customers. Our products are capable of processing all currently existing
wafer sizes.

Continuous Thermal Processing Systems. Through BTU, we produce and sell thermal processing systems used in the solder reflow and curing stages of printed circuit board
assembly as well as systems for the thermal processes used in advanced semiconductor packaging. Our printed circuit board assembly products are used primarily in the
advanced, high-density segments of the market that utilize surface mount technology.

Flip-chip reflow provides the physical and electronic bond of the semiconductor device to its package. Our range of convection reflow systems, utilizing patented closed loop
convection technology, are rated at up to 400°C and operate in air or nitrogen atmospheres. These products are manufactured at our ISO 9001:2015 certified facility in
Shanghai, China and utilize forced impingement convection technology to transfer heat to the substrate. Using configurable heating elements of up to eight kilowatts, they can
process substrates in dual lane, dual speed configurations, thereby enabling our customers to double production without increasing the machine’s footprint. These products are
available in four models based on the heated lengths of thermal processing chambers. Heated length is based on the required production rate and loading requirements.

High-Temperature Belt Furnace. We also produce and sell high-temperature belt furnaces, which have been manufactured in Massachusetts for over six decades with ISO
9001:2015 quality certification safe-guarding that each unit is subject to exacting build and test criteria. These furnaces operate at temperatures up to 1180°C and are capable of
processing in controlled atmospheres, such as nitrogen, argon and hydrogen. Applications include direct bond copper, furnace brazing, annealing, glass to metal sealing,
sintering and heat-treating for diverse markets including automotive, semiconductors, aerospace and medical.

Aqua Scrub Flux Management. In 2021, we began offering our innovative Aqua Scrub Flux Management technology for our reflow ovens. The system continuously extracts
flux-laden oven atmosphere from the reflow oven process chamber which is then passed through the Aqua Scrub system removing flux and returning clean atmosphere back to
the reflow oven chamber. The aqueous-based scrubbing solution utilizes industry standard detergents for the rinse agent concentrate making it environmentally friendly. The
system can be easily retrofitted to existing reflow ovens in the field due to its stand-alone design and small footprint.

Selective Soldering. In March 2021, BTU entered into a distribution agreement with Hentec Industries, making BTU the exclusive distributor for Hentec products in Asia.
BTU’s primary focus will be on the Hentec selective soldering product lines.

FUTURE SEMICONDUCTOR PRODUCTS

The following paragraphs describe products currently in the final stages of development that we expect to begin offering to customers during fiscal year 2023 as part of our
Semiconductor product lines:

Reflow. Our BTU division has begun a project to replace the current Pyramax reflow product with a next-generation platform. This updated platform will address areas of the
market not currently served by the Pyramax line and provide existing customers with additional enhancements and capabilities. This next-generation platform will be launched
in mid-2023 with full production commencing early 2024.

APEX Host Management System. Our horizontal diffusion furnaces utilize a supervisory software system called APEX. We are nearing the final stages of a project to replace
the current version, as it runs on a Unix operating system. This updated version will provide several new enhancements to our horizontal diffusion product line. This version
will also provide an upgrade option for our existing base of customers.

MATERIAL AND SUBSTRATE PRODUCTS

Our Material and Substrate segment manufactures the products described below in Pennsylvania and Connecticut and sells them under our PR Hoffman and Intersurface
Dynamics brand names.

Substrate Carriers. We manufacture carriers in a variety of sizes and materials. Sizes range from 3 to 38 inches in diameter using a variety of special steels, laminates and
extruded polymer raw materials. Silicon wafers, compound semiconductor wafers, and large optics require these special insert carriers. These carriers combine the strength of
hardened steel as the processing backbone with a softer plastic material in the work holes known as an insert. Inserts are permanently molded into the work holes via a
pressurized process. These inserted work holes provide smoother processing, improved wafer total thickness variation (TTV) and improved wafer edge quality. Insert carriers
are available for all wafer sizes from 75mm to 450mm and can be made from hardened and tempered carbon steel or specialized stainless steel when metal contamination is a
processing concern. Insert carriers are widely accepted as the industry solution for both prime wafer and reclaim wafer manufacturers when dual sided lapping or polishing are
utilized in their front-end wafer process.

Substrate Polishing Templates. Our polishing templates are used to securely hold silicon carbide, silicon, sapphire or other wafer materials in place during single-sided wax-
free polishing processes. Polishing templates are customized for specific applications and are manufactured to extremely tight tolerances. We offer a variety of options to
provide the best solution for each specific process. Polishing templates are manufactured for all brands of tools and virtually any wax-free customer process. Critical front-end
wafer surface specifications are finalized during the polishing process.

Double-Sided Lapping and Polishing Machines. Double-sided lapping and polishing machines are designed to process materials such as silicon wafers, sapphire and other
wafer-like materials, precision optics, computer disks, ceramic components, specialty metal products to exact tolerances of thickness, flatness, parallelism and surface finish. On
average, we believe that we offer our surface processing systems with a lower cost of ownership than systems offered by our competitors. We target the compound substrate,
semiconductor, optical sapphire, glass, quartz, ceramics, medical, computer disk and metal-working markets. Our largest double-sided polishing machine was introduced in
fiscal 2022, and has the capacity to handle 8-inch wafers, representing a 25% increase over our next largest tool. In addition, several enhancements have been added to provide
our customers the ability to use the system for compound semiconductor substrates such as SiC. True 4-way planetary motion allows us to increase material removal rate and
provide better flatness. We designed this new system with increased downforce to provide the necessary pressure when lapping or polishing compound semiconductors. We
have also developed other enhancements, such as chilled base plates to keep the system at lower temperatures during the processing cycles.

Single-Sided Polisher. We have developed a new single-side batch polisher to specifically to address the challenges in polishing compound semiconductor substrates, such as
silicon carbide. Silicon carbide material is much harder than traditional silicon and requires additional capabilities not found on existing batch polishing systems in the market.
Our single-side polishing equipment was designed to handle SiC wafers with a low cost of ownership and has enhanced throughput and cost of ownership when compared to
single wafer CMP systems.

Substrate Process Chemicals. Through Intersurface Dynamics, we produce and sell substrate process chemicals which are used to achieve specific surface morphologies on a
variety of materials. Our substrate process chemical customers include some of the world's largest manufacturers of semiconductor devices, silicon wafers, precision optics,
ophthalmic lens, advanced displays and flat glass. We offer three different product lines: Tensor Series Products, Vector Series Products, and Challenge Series Products. Tensor
Series Products are used by manufacturers of integrated circuits in applications such as cleaning, etching, dicing and CMP. Vector Series Products were designed specifically
for grinding, sawing, lapping, cleaning, etching and polishing semiconductor materials such as silicon wafers. Challenge Series Products address similar processes for
manufacturers of precision optics, technical ceramics and advanced displays helping to achieve optimum yields.

MANUFACTURING, RAW MATERIALS AND SUPPLY CHAIN

Our semiconductor manufacturing activities consist primarily of engineering design to meet specific and evolving customer needs and procurement and assembly of various
commercial and proprietary components into finished thermal processing systems in North Billerica, Massachusetts and Shanghai, China.

Our manufacturing activities in the polishing business include laser-cutting and other fabrication steps in producing lapping and polishing consumables, including carriers,
templates, gears, wear items and spare parts in our ISO 9001:2015 certified facility in Carlisle, Pennsylvania, from raw materials manufactured to our specifications by our

suppliers. These products are engineered and designed for specific applications and to meet the increasingly tight tolerances required by our customers. Many items, such as
proprietary components for our semiconductor equipment and lapping plates, are purchased from suppliers who manufacture these items to our specifications. Additional
manufacturing activities related to our polishing and lapping machines include procurement and assembly of various commercial and proprietary components into finished
polishing and lapping machines.

Final assembly and tests of our machines are performed within our manufacturing facilities. Quality control is maintained through inspection of incoming materials and
components, in-process inspection during equipment assembly, testing of assemblies and final inspection and, when practical, operation of manufactured equipment prior to
shipment.

Since much of our polishing supplies know-how relates to the manufacture of these products, our Carlisle facility is equipped to perform a significantly higher percentage of the
fabrication steps required in the production of its products. However, injection molding for our insert carriers and the manufacture of raw cast iron plates and machine motors
are subcontracted out to various third parties. Our polishing supplies business relies on key suppliers for certain materials, including specialized steel mills in Germany and
Japan, an injection molding machine, a single-sourced pad supplier from Japan and an adhesive manufacturer. To minimize the risk of production and service interruptions
and/or shortages of key parts, we seek to maintain appropriate inventory levels of key raw materials and parts.

Beginning in 2019 and throughout 2022, we experienced increased lead-times for various parts and services across both our reportable segments. In response to these increased
lead-times, we have increased the amount of on-hand inventory and purchase order commitments related to long lead-time items. We have also increased on-hand inventory of
certain parts as part of a strategy to mitigate supply chain risk. Despite these strategic increases, there can be no assurance that we will have enough inventory on-hand at the
time we receive orders and that we will not incur delays in production time. Additionally, we may order items prior to receiving a customer order, which could result in
increased inventory reserve expenses.

During 2021 and 2022, we were also affected by the global shipping container shortage, which resulted in logistical challenges primarily related to shipments to and from China
and, to a lesser extent, in other geographies including the U.S. and Europe. These challenges led to shipment delays to our customers as well as increased freight charges for
both customer and vendor shipments. While improving, we expect these shipping trends to continue into fiscal 2023.

CUSTOMERS AND SEASONALITY

Our customers are primarily manufacturers of semiconductor substrates and devices and electronic assemblies. Additionally, our Material and Substrate segment also serves
customers in the ceramics and optics industries. During 2022, 64% of our net revenue came from customers outside of North America. This group represented 73% of
revenues in 2021. In 2022, net revenue was distributed among customers in different geographic regions as follows:

•North/South America 36% (27% of which is in the United States)

•Asia 44% (including 17% in China, 14% in Taiwan and 7% in Malaysia)

•20% in Europe (including 10% in Austria and 4% in Germany)

Two Semiconductor customers accounted for 14% and 12% of our net revenues in 2022. In 2021, two Semiconductor customers accounted for 14% and 13% of our net
revenues.

Our business is not seasonal in nature, but is cyclical based on the capital equipment investment patterns of semiconductor manufacturers. These expenditure patterns are based
on many factors, including capacity utilization, anticipated demand, the development of new technologies and global and regional economic conditions. Historically, these
cycles typically last between 10-17 quarters, with each complete cycle made up of a contraction phase of about 4-6 quarters, followed by an expansion phase of approximately
6-11 quarters.

SALES AND MARKETING

Due to the highly technical nature of our products, we market our products primarily by direct customer contact through our sales personnel and through a network of domestic
and international independent sales representatives and distributors that specialize in semiconductor equipment and supplies. Our promotional activities include direct sales
contacts, participation in trade shows, advertising in trade magazines and digital marketing including website SEO and pay-per-click advertising.

We use a mix of direct sales, representatives and distributors globally. Manufacturer representatives provide sales coverage in specific geographic regions and are paid a
commission when products are sold. Sales to distributors are generally on terms comparable to sales to end-user customers, as our distributors generally quote their customers
after first obtaining a quote from us and have an order from the end-user before placing an order with us. Our sales to distributors are not contingent on their future sales and do
not include a general right of return. Historically, returns have been rare. Distributors of our semiconductor equipment do not stock a significant amount of our products, as the
inventory they hold is generally limited to parts needed to provide timely repairs to customers. Our manufacturer representatives and distributors are closely managed by our
global sales team.

Historically, each of our segments have been responsible for their own sales and marketing activities, including managing sales personnel and representative and distributor
relationships, however, as we continue to refocus and grow our organization, we are developing opportunities for increased collaboration and teamwork across our divisions.
These cross-segment collaboration opportunities will continue to be a focus at all levels and departments of our organization, as we believe they can lead to greater efficiencies
while reducing operating costs. These efforts are further coordinated by our Vice President of Sales and Customer Service, who oversees all sales and marketing activities at
each division.

RESEARCH, DEVELOPMENT AND ENGINEERING

The markets we serve are characterized by rapidly-evolving industry standards and technological change. To compete effectively, we must continually maintain or exceed the
pace of such change by improving our products and our process technologies and by developing new technologies and products that are competitive based on price and
performance. To assure that these technologies and products address current and future customer requirements, we obtain as much customer cooperation and input as possible,
thus increasing the efficiency and effectiveness of our research and development efforts. In addition, we look for strategic acquisitions that will provide us with new
technologies to compete effectively in the markets in which we operate.

RD&E expenses may vary from period to period depending on the engineering projects in process. Expenses related to engineers working on strategic projects or sustaining
engineering projects are recorded in RD&E. However, from time to time we add functionality to our products or develop new products during engineering and manufacturing to
fulfill specifications in a customer’s order, in which case the cost of development, along with other costs of the order, are charged to cost of goods sold.

In 2022, 2021 and 2020, we recorded RD&E expense of $6.4 million, $6.0 million and $3.3 million, respectively. We plan to continue to develop new products and invest in
upgrades to existing products to stay competitive in the markets we serve. As a result, we saw increased RD&E expenses in 2021 and 2022 and expect to continue to increase
our capital expenditures and RD&E expenses in fiscal 2023 and beyond for these upgrades as well as for the development of new products. As a result of these RD&E efforts,
we introduced several new products as well as upgraded products during fiscal 2022, with additional products expected in fiscal 2023. We periodically receive research grants
for research and development of products, which are netted against our research, development and engineering costs. Grants received were immaterial in 2022, 2021 and 2020.

COMPETITION

We compete in several distinct equipment markets for semiconductor devices, semiconductor substrates, MEMS, semiconductor packaging, and electronics assembly, as well as
the markets for supplies used in power semiconductor applications. Each of these markets is highly competitive. Our ability to compete depends on our ability to continually

improve our products, processes and services, as well as our ability to develop new products that meet constantly evolving customer requirements. Significant competitive
factors for succeeding in these markets include the product’s technical capability, productivity, cost-effectiveness, overall reliability, ease of use and maintenance,
contamination and defect control and the level of technical service and support.

The Semiconductor and MEMS Markets. Equipment produced by our Semiconductor reportable segment primarily competes with those produced by other original equipment
manufacturers. Some of these manufacturers are well-established firms that are much larger and have substantially greater financial and other resources than we have with
which to pursue development, engineering, manufacturing, marketing and distribution of their products. Additionally, these manufacturers may generally be better situated to
withstand adverse economic or market conditions. Competitors of our horizontal diffusion furnaces include Centrotherm GmbH and CVD Equipment, Inc.

Our principal competitors for printed circuit board assembly equipment and advanced semiconductor packaging vary by product application. The principal competitors for
solder reflow systems are ITW/EAE Vitronics-Soltec, Heller, Folungwin, ERSA, Shenzhen JT Automation Equipment Co., Ltd. and Rehm. The principal competitors for
advanced semiconductor packaging are ITW/EAE Vitronics-Soltec and Heller. Our in-line, controlled atmosphere furnaces compete primarily against products offered by
Centrotherm and SierraTherm/Schmid Thermal Systems. We also face competition from emerging low-cost Asian manufacturers and other established European
manufacturers.

Although price is a factor in buying decisions, we believe that technological leadership, process capability, throughput, safer designs, uptime, mean time-to-repair, cost of
ownership and after-sale support have become increasingly important factors to purchasers of our products. As such, we believe we compete primarily on the basis of these
criteria, rather than on the basis of price alone.

General Industrial Lapping and Polishing Machines, Supplies and Semiconductor Substrate Markets. Our Material and Substrate reportable segment experiences price
competition for wafer carriers from foreign manufacturers for which there is very little publicly available information. As a result, we are intensifying our efforts to reduce the
cost of our carriers and will compete with other manufacturers of carriers by continuing to update our product line to keep pace with the rapid changes in our customers’
requirements and by providing a high level of quality and customer service. We produce steel carriers, including insert carriers, on advanced laser-cutting tools, which reduces
our costs and lead times and increases our control over quality. Competitors of our lapping and polishing machines and consumable supplies include Lapmaster Wolters (aka
PSS), Speedfam Co. Ltd., Hamai Co., Ltd., Onse, Inc. and Eminess Technologies, Inc. Our new single-sided polishing machine, introduced in fiscal 2022, will compete with
products offered by Gigamat, Applied Materials, Inc. and Revasum, Inc. However, we believe the automation options available with our new machine will differentiate our
product from others in the market. Our strategy to enhance our sales of wafer carriers and templates includes developing new applications in close collaboration with our
customers, continuous improvement of our existing products and providing a high level of customer support and products that deliver greater value to our customers.

The competitive landscape in the substrate process chemical industry is varied, ranging from large multinational companies to small regional or regionally-focused companies.
Intersurface Dynamics competes with much larger companies, such as Entegris, Inc. and Cabot. Our acquisition of Intersurface Dynamics coupled with PR Hoffman's product
line allows us to be our customers' sole provider for their polishing processes, by providing the machinery, carriers, templates and slurry.

HUMAN CAPITAL

The Amtech Values

Amtech is focused on growth: company growth and employee growth. To encourage that growth, Amtech’s Chief Executive Officer and Chief Financial Officer developed
Amtech’s core values, which are communicated to employees on a regular basis. These core values include the following:

•360° Accountability – Hold yourself and others accountable, even if they are at levels above you in the organization; accountability is not one direction.

•Goal Oriented – Actions and work are driven by established goals, whether self-created or management-driven.

•Sense of Urgency – We perform our work each day with a sense of immediate action and speed, without sacrificing quality. We look for and resolve problems quickly
and proactively.

•Trust in Each Other – We can be confident in our expectations of each other in terms of performance, commitment, and follow-through.

Amtech’s Employees

Our employees are critical to our success as a leading, global manufacturer of capital equipment and related consumables used in fabricating semiconductor devices. To
continue producing and delivering high-quality products and services to our customers, and to compete and succeed in the highly competitive and continually evolving markets
in which we operate, it is critical that we continue to attract, retain and develop a diverse group of talented individuals at all levels of our organization.

Our management seeks to align employment levels with the needs of our business. We believe we have the appropriate human capital resources to successfully operate and
execute our growth and investment strategy. As of September 30, 2022, we employed 327 people. We also employ individuals on a temporary full-time basis and use the
services of contractors as necessary. Of our 327 total employees, 36% were engaged in manufacturing, 20% were engaged in sales and service, 14% were engaged in research,
development and engineering, and 30% were engaged in other roles. Our employees were based out of the following locations:

•Tempe, Arizona corporate offices — 11

•Bethel, Connecticut manufacturing plant — 6

•North Billerica, Massachusetts manufacturing plant — 99

•Carlisle, Pennsylvania manufacturing plant — 49

•Shanghai, China manufacturing plant — 142

•Other Asia-Pacific offices — 11

•UK office — 9

Of the 49 people employed at our Carlisle, Pennsylvania facility, 24 were represented by the United Auto Workers Union - Local 1443. We have a three-year agreement with
this union, which expires on September 30, 2025. We expect this agreement to be renewed prior to expiration. We have never experienced a work stoppage or strike, and other
than employees at the Carlisle facility, no other employees are represented by a union. At select business units, we have hired certain highly specialized employees under
employment contracts that specify a term of employment, pay and other benefits. We consider our employee relations to be good.

Talent Acquisition and Retention

The future growth and success of our company largely depends on our ability to attract, train and retain qualified professionals. As part of our effort to do so, we offer
competitive rewards, compensation and benefits, including an employee equity award program, performance-based bonuses, health and wellness benefits, retirement benefits,
flexible schedules and holiday and paid time off. We understand that effective compensation and benefits programs are important in retaining high-performing and qualified
individuals. Management is currently working with a consulting firm to study the competitiveness of our compensation programs for non-executive employees relative to their
roles and responsibilities and the geographies they work in. Additionally, we continue to assess our healthcare and retirement benefits each year in order to provide competitive
benefits to our employees.

We know that retention of high-performing employees benefits us and our customers. We are committed to helping our employees develop in their careers and thrive within the
Company. Management provides regular performance reviews to ensure our employees are receiving timely and constructive feedback, as well as rewards based on their
performance. These performance reviews also assess each employee’s performance as it relates to Amtech’s Values. We believe these programs and efforts contribute to
attracting and retaining a talented and driven workforce.

Turnover

In 2022, our total employee turnover was 12.4%, of which approximately 71.1% was voluntary. Approximately 14.8% of voluntary turnover were employees that retired from
the workforce. The average tenure of our employees is approximately 10 years and approximately 46.5% of our employees have been employed with us for more than 10
years. In 2021, our total employee turnover was 14.9%, of which approximately 75.0% was voluntary. Approximately 18.2% of voluntary turnover were employees that retired
from the workforce.

Diversity, Equity, and Inclusion

Amtech is dedicated to building a diverse workforce, fostering a culture built on the principle of inclusion, and maintaining a workplace free from discrimination. We strongly
believe that a diversity of experience, perspectives and backgrounds will lead to a better environment for our employees and better products and service for our customers.
Amtech’s commitment to diversity covers our Board of Directors, our leadership team and all teams and functions across our global locations.

Health and Safety

It is our highest priority to keep our employees, customers and suppliers safe. We provide our employees with ongoing safety training to ensure safety policies and procedures
are communicated and implemented in an effective and timely manner.

During the ongoing COVID-19 pandemic, it is and has been our top priority to protect the safety and well-being of our employees and their families, our customers and our
communities. Our commitment to this was evidenced by our response to the pandemic. We implemented work-from-home options for all our office personnel, where possible,
and added additional shifts to reduce personnel in the building. Additionally, at all of our facilities we followed enhanced safety and health protocols, including performing
health checks and temperature screenings, practicing social distancing, providing personal protective equipment and increasing facility cleanings.

PATENTS

The following table shows our material patents and the expiration date of each patent:

Product
Ultrafast gas bearing-based reactive ion etching
Convection furnace thermal profile enhancement
Lapping machine adjustable mechanism
RFID-containing carriers used for silicon wafer quality
Polishing machine wafer holder
Devices, Systems and Methods for Flux Removal from Furnace
Process Gas

Europe
United States
Various
United States
Various
Various

Countries

Expiration Date or
Pending Approval

2030
2023
2027
2030
2037
2038

To our knowledge, there are currently no pending lawsuits against us regarding infringement of any existing patents or other intellectual property rights or any material
unresolved claims made by third parties that allege we are infringing the intellectual property rights of such third parties.

AVAILABLE INFORMATION

We file our annual report on Form 10-K, quarterly reports on Form 10-Q, Current Reports on Form 8-K, proxy statements, and other documents (including registration
statements) with the SEC under the Securities Exchange Act of 1934 or the Securities Act of 1933, as applicable. Our SEC filings are available to the public on the SEC’s
website at www.sec.gov and through The Nasdaq Global Select Market, 165 Broadway, New York, New York 10006, on which our common stock is listed.

AMTECH WEBSITE

In addition to the information contained in this Report, extensive information about Amtech can be found at www.amtechsystems.com, including information about our
management team, products and services, and corporate governance practices. The corporate governance information on our website includes our Code of Conduct, Corporate
Governance guidelines and the charters for each of the committees of the Board. In addition, amendments to these documents and waivers granted to directors and executive
officers under the Code of Conduct, if any, will be posted in this area of the website. In addition, our filings with the SEC, as well as Section 16 filings made by any of our
executive officers or directors with respect to Amtech's common stock, are available free of charge on our website as soon as reasonably practicable after the filing is
electronically filed with, or furnished to, the SEC.

These details about our website and its content are only for information. The contents of our website are not, nor shall they be deemed to be, incorporated by reference in this
Report. Further, our references to website URLs are intended to be inactive textual references only.

ITEM 1A. RISK FACTORS

There are many factors that affect our business, financial condition, operating results and cash flows, as well as the market price for our securities. The following is a
description of important factors that may cause our actual results of operations in future periods to differ materially from those currently expected or discussed in forward-
looking statements set forth in this Report. The risks and uncertainties described below are not the only risks we face. We operate in a continually changing business
environment. Additional risks and uncertainties not presently known to us or that we may currently deem immaterial also may impair our business operations. Forward-looking
statements and such risks, uncertainties and other factors speak only as of the date of this Report, and we expressly disclaim any obligation or undertaking to update or revise
any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on
which any such statement is based, except to the extent otherwise required by law. The following risk factors should be read in conjunction with all of the other information in
this Annual Report on Form 10-K, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial
statements and related notes.

Risks Related to the Semiconductor Industry

There is ongoing volatility in the semiconductor equipment industry.

The semiconductor equipment industry is highly cyclical and volatile. As such, demand for, and the profitability of, our products can change significantly from period to period
as a result of numerous factors, including the following:

•changes in global and regional economic conditions;
•the shift of semiconductor production to Asia, where there often is increased price competition;
•tariffs, quotas and international trade barriers;
•changes in capacity utilization and production volume of manufacturers of semiconductors, silicon wafers and MEMS;
•the profitability and capital resources of those manufacturers; and
•challenges associated with marketing and selling manufacturing equipment and services to a diverse and diffuse customer base.

The purchasing decisions of our customers are highly dependent on their capacity utilization, which changes when new facilities are put into production and with the level of
demand for our products, as well as our customers’ capital expenditure budgets. Purchasing decisions are also impacted by changes in the economies of the countries served by
our customers, as well as the state of the worldwide industries in which we operate or expect to operate in the future. The timing, length and severity of the up-and-down cycles
in the semiconductor equipment industry are difficult to predict. Additionally, we generally experience a one-to-two quarter lag between upturns/downturns experienced by
larger equipment manufacturers.

When cyclical fluctuations result in lower than expected revenue levels, our operating results are adversely affected. Cost reduction measures may be necessary in order for us
to remain competitive and financially sound. During a down cycle, our operating results may be adversely affected if we are unable to make timely adjustments to our cost and
expense structure to correspond to the prevailing market conditions, effectively manage our supply chain, and motivate and retain key employees. In addition, during periods of
rapid growth, our operating results may be adversely affected if we are unable to increase manufacturing capacity and personnel to meet customer demand, which may require
additional liquidity. We can provide no assurance that we can timely and effectively respond to the industry cycles, and our failure to do so could have a material adverse effect
on our business.

The semiconductor equipment industry is highly competitive and, because we are relatively small in size and have fewer financial and other resources compared to our
competitors, we may not be able to compete successfully with them.

Our industry includes large manufacturers with substantial resources to support customers worldwide. Our future performance depends, in part, upon our ability to continue to
compete successfully in these markets. Some of our competitors are diversified companies with extensive financial resources and research, engineering, manufacturing,

marketing and customer service and support capabilities that are greater than ours. We face competition from companies whose strategy is to provide a broad array of products,
some of which compete with the products and services we offer. These competitors may bundle their products in a manner that discourages customers from purchasing our
products. In addition, we face competition from emerging semiconductor equipment companies whose strategy is to provide a portion of the products and services that we offer
often at a lower price than ours and use innovative technology to sell products into specialized markets. We also face competition from Chinese equipment manufacturers that
may receive greater support than we do from Chinese customers and governmental agencies because they are locally based. In addition, our local Chinese competitors may
offer lower prices and more liberal payment terms than ours. Loss of our competitive position due to any of these factors could impair our prices, customer orders, revenue,
gross margin and market share, any of which would negatively affect our business, financial position and results of operations.

Risks Related to Our Business and Our Operations

Business interruptions, including those related to COVID-19, have had an adverse impact on our operations, including among others, our manufacturing and supply
chain, sales and product development, and could have an adverse impact on our business, financial condition and results of operations in future periods.

The COVID-19 pandemic and the resulting containment measures have caused economic and financial disruptions globally, including in most of the regions in which we sell
our products and conduct our business operations. Beginning in the second half of fiscal 2020, the COVID-19 pandemic negatively impacted consumer and business spending
generally and has significantly contributed to deteriorating macroeconomic conditions. We continue to experience significant supply constraints seen industry-wide due to
component shortages which have resulted in extended lead times and higher supply chain costs. The magnitude and duration of the disruption, its continuing impact on us, and
resulting decline in global business activity is uncertain.

While we continue to monitor and assess the impact on our business from the spread of COVID-19 and related new strains and the ever evolving actions implemented by
governments across the globe, our global operations have returned to normal. The degree to which COVID-19 impacts our future business and operations will depend on future
developments, which are highly uncertain and cannot be predicted with confidence, including the duration, spread and severity of the outbreak, new information which may
emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. In particular, the continued spread and/or resurgence of
COVID-19 globally and/or the emergence of new strains of COVID-19, such as the Omicron BA.5 variant, could result in a widespread health crisis and/or change in consumer
behavior that could adversely affect the global economy and financial markets, resulting in an economic downturn, and could also adversely impact our operations, including,
without limitation, our manufacturing and supply chain, sales and product development operations, particularly our prospective sales if the Semiconductor and Material and
Substrate segments we seek to serve suffer long-term damage. Such an economic downturn could have an adverse impact on the successful and timely implementation of our
strategic growth plan and on our business, financial condition and results of operations. We are similarly unable to predict the extent to which the pandemic impacts our
customers, suppliers and other partners and their financial conditions, but adverse effects on these parties could also adversely affect us.

Finally, the impact of COVID-19 can also exacerbate other risks discussed in this Risk Factors section and throughout this report, which could in turn have a material adverse
effect on us. Developments related to COVID-19 have been unpredictable, and additional impacts and risks may arise that we are not aware of or able to respond to
appropriately.

We may not be able to generate sufficient cash flows or obtain access to external financing necessary to fund existing operations and our growth plan.

Cash flows may be insufficient to provide adequate working capital in the future and we may require additional financing to fund existing operations as well as our growth plan.
There is no assurance that any additional financing will be available if and when required, or, even if available, that it would not materially dilute the ownership percentage of
our then existing shareholders, result in increased expenses or result in covenants or special rights that would restrict our operations.

We may not be able to manage our business successfully through severe business cycles.

We may be unable to successfully expand or contract our business to meet fluctuating demands. Market fluctuations place significant strain on our management, personnel,
systems and resources. To successfully manage our growth through such market fluctuations, we believe we must effectively:

•maintain the appropriate number and mix of permanent, part-time, temporary and contract employees to meet the fluctuating demand for our products;
•train, integrate and manage personnel, particularly process engineers, field service engineers, sales and marketing personnel, and financial and information technology
personnel to maintain and improve skills and morale;
•retain key management and augment our management team, particularly if we lose key members;
•continue to enhance our customer resource and manufacturing management systems to maintain high levels of customer satisfaction and efficiencies, including inventory
control;
•implement and improve existing and new administrative, financial and operations systems, procedures and controls;
•expand and upgrade our technological capabilities; and
•manage multiple relationships with our customers, suppliers and other third parties.

We may encounter difficulties in effectively managing the budgeting, forecasting and other process control issues presented by rapidly changing business cycles. If we are
unable to effectively manage our business through these cycles, we may not be able to take advantage of market opportunities, develop new technologies and other products,
satisfy customer requirements, execute our business plan or respond to competitive pressures.

Our inability to attract, train and retain effective employees and management could harm our business.

Our success depends upon the continued contributions of our executive officers and certain other employees, many of whom have many years of experience with us and would
be extremely difficult to replace. We must also attract and retain experienced and highly skilled engineering, sales and marketing and managerial personnel. Competition for
qualified personnel is intense in our industry, and we may not be successful in hiring and retaining these people. If we lost the services of our executive officers or our other
highly qualified and experienced employees or cannot attract and retain other qualified personnel, our business could suffer as a result of less effective management due to loss
of accumulated knowledge of our business or through less successful products due to a reduced ability to design, manufacture and market our products.

Acquisitions can result in an increase in our operating costs, divert management’s attention away from other operational matters and expose us to other risks.

We continually evaluate potential acquisitions and consider acquisitions an important part of our future growth strategy. In the past, we have made acquisitions of, or significant
investments in, other businesses with synergistic products, services and technologies and plan to continue to do so in the future. Acquisitions involve numerous risks, including,
but not limited to:

•difficulties and increased costs in connection with integration of geographically diverse personnel, operations, technologies and products;
•disruption of our ongoing operations and diversion of management’s attention from other operational matters;
•the potential loss of our key employees and the key employees of acquired companies or difficulty in integrating employees;
•the potential loss of our key customers and suppliers and the key customers and suppliers of acquired companies;
•disagreement with joint venture or strategic alliance partners;
•failure to comply with laws and regulations as well as industry or technical standards of the overseas markets into which we expand;

•our inability to achieve the intended cost efficiency, level of profitability or other intended strategic goals for the acquisitions, strategic investments, joint ventures or
other strategic alliances;
•lack of synergy, or inability to realize expected synergies, resulting from the acquisition;
•the likelihood that the issuance of our common stock, if any, in an acquisition or merger could be dilutive to our existing shareholders;
•impairment of acquired assets as a result of technological advancements or worse-than-expected performance of the acquired company;
•inability to complete proposed transactions as anticipated or at all and any ensuing obligation to pay a termination fee and any other associated transaction expenses;
•the potential impact of the announcement or consummation of a proposed transaction on relationships with third parties;
•potential changes in our credit rating, which could adversely impact our access to and cost of capital;
•potential litigation that may arise in connection with an acquisition;
•reductions in cash balances and/or increases in debt obligations to finance activities associated with a transaction, which reduce the availability of cash flow for general
corporate or other purposes;
•inadequacy or ineffectiveness of an acquired company’s internal financial controls, disclosure controls and procedures, and/or environmental, health and safety, anti-
corruption, human resource or other policies or practices; and
•unknown, underestimated and/or undisclosed commitments or liabilities and other risks associated with acquired businesses or assets.

Any of these risks could have a material adverse effect on our business, results of operations, financial condition, or cash flows, particularly in the case of a large acquisition.
Moreover, our resources are limited and our decision to pursue a transaction has opportunity costs; accordingly, if we pursue a particular transaction, we may need to forgo the
prospect of entering into other transactions that could help us achieve our financial or strategic objectives. No assurance can be given that we will be able to successfully
complete future strategic acquisitions if we cannot reach agreement on acceptable terms or for other reasons. We may have to incur debt, issue equity securities or a
combination of the foregoing to pay for any future acquisitions, the issuance of which could involve the imposition of restrictive covenants or be dilutive to our existing
shareholders.

Our reliance on sales to a few major customers, often on credit terms, places us at financial risk.

We currently sell to a relatively small number of customers and expect to do so for the foreseeable future. Therefore, our operating results depend on the ability of these
customers to sell products that require our equipment in their manufacture. Many of our customer relationships have developed over a short period of time and certain ones are
in the early stages of development. The loss of sales to any of these customers would have a significant negative impact on our business. Additionally, our customers may
cancel their agreements with us if we fail to meet certain product specifications, materially breach agreements or encounter insolvency or bankruptcy. They also may seek to
renegotiate the terms of current agreements or renewals. We cannot be certain our existing customers will generate significant revenue for us in the future or that these new
customer relationships will continue to develop. If we are unable to maintain or expand our customer base, we may not be able to maintain or increase our revenue.

In addition to having a relatively limited number of customers, we manufacture a limited number of products for each of our customers. If we lose any of our largest customers
(as we have in the past from time to time), experience a significant reduction in sales to any such customers or no longer manufacture a particular product line for one of our
largest customers, we would experience a significant reduction in our revenue.

As of September 30, 2022, one Semiconductor customer individually represented 12% of our accounts receivable. A concentration of our receivables from one or a small
number of customers places us at risk. In such a scenario, a significant change in the liquidity or financial position of any of our customers that purchase large systems could
have a material impact on the collectability of our accounts receivable and our future operating results. We attempt to manage this credit risk by requiring significant partial
payments prior to shipment, where appropriate, and by actively monitoring collections. We also require letters of credit from certain customers depending on the size of the
order, type of customer or its creditworthiness and its country of domicile. Our major customers may seek and, on occasion, may receive pricing, payment or other commercial
terms that are less favorable to us than the current terms we

customarily obtain. If any one or more of our major customers were to seek to re-negotiate their agreements on more favorable terms, or not pay us or continue business with
us, it could adversely affect our business, financial position and results of operations.

Our customers could cancel or fail to accept a large system order.

Our backlog includes orders for large systems, such as our horizontal diffusion furnaces, with system prices of up to and in excess of $1.0 million, depending on the system
configuration, options and any other configuration requirements of the customer. Some orders include multiple systems. Because our orders are typically subject to
cancellation or delay by the customer, our backlog at any particular point in time is not necessarily representative of actual sales for succeeding periods. Our financial position
and results of operations could be materially and adversely affected should any large systems order be canceled prior to shipment or not be accepted by the customer.
Cancellations may result in inventory that we may not be able to quickly resell. We have experienced cancellations in the past. We cannot provide any assurance that we will
realize revenue or profit from our backlog.

Manufacturing interruptions or delays could affect our ability to meet customer demand and lead to higher costs.

Our business depends on timely supply of equipment, services and related products that meet the rapidly changing technical and volume requirements of our customers. Some
key parts to our products are subject to long lead times and/or are obtainable only from a single supplier or limited group of suppliers. Cyclical industry conditions and the
volatility of demand for manufacturing equipment increase capital, technical, operational and other risks for us and for companies throughout our supply chain. Further, these
conditions may cause some suppliers to scale back operations, exit businesses, merge with other companies, file for bankruptcy protection or possibly cease operations. We also
may experience significant interruptions of our manufacturing operations, delays in our ability to deliver products or services or increased costs as a result of any of the
following:

•the failure or inability of suppliers to deliver sufficient quantities of quality parts on a cost-effective and timely basis;
•volatility in the availability and cost of materials, including rare earth elements;
•difficulties or delays in obtaining required import or export approvals;
•information technology or infrastructure failures; and
•natural disasters or other events beyond our control (such as earthquakes, floods or storms, regional economic downturns, pandemics, social unrest, political instability,
terrorism, or acts of war), particularly where we conduct manufacturing operations.

Because we depend on revenue from international customers, our business may be adversely affected by changes in the economies and policies of the countries or regions
in which we do business.

In 2022, 64% of our net revenue came from customers outside of North America as follows: Asia - 44% (including China - 17%, Taiwan - 14% and Malaysia - 7%); and
Europe - 20%.

Each geographic region in which we, our customers, and our suppliers operate exhibits unique characteristics that can cause capital equipment investment patterns to vary
significantly from period to period. Our business and results of operations could be negatively affected by periodic local or international economic downturns, trade balance
issues and political, social and military instability in countries such as China, Russia, India, South Korea, Taiwan, Ukraine and possibly elsewhere. In addition, we face
competition from a number of suppliers based in Asia that have certain advantages over suppliers from outside of Asia. These advantages include lower operating, shipping
and regulatory costs, proximity to customers, favorable tariffs and other government policies that favor local suppliers. Additionally, the marketing and sale of our products to
international markets expose us to a number of risks, including the following:

•increased costs associated with maintaining the ability to understand the local markets and follow their trends and customs, as well as developing and maintaining an
effective marketing and distributing presence;
•limitations on our ability to require advance payments from our customers;
•difficulty in providing customer service and support in local markets;

•difficulty in staffing and managing overseas operations;
•longer sales cycles and collection periods;
•fewer or weaker legal protections for our intellectual property rights;
•failure to develop appropriate risk management and internal control structures tailored to overseas operations;
•difficulty and costs relating to compliance with the different or changing commercial and legal requirements of our overseas markets;
•fluctuations in foreign currency exchange and interest rates;
•failure to obtain or maintain certifications for our products or services in these markets; and
•international trade barriers such as export requirements, tariffs, taxes and other restrictions and expenses.

Our business may be adversely affected by significant exchange rate fluctuations.

Though our business has not been materially affected in the past by currency fluctuations, there is a risk that it may be materially adversely affected in the future. Such risk
includes possible losses due to currency exchange rate fluctuations, future prohibitions against repatriation of earnings, or proceeds from disposition of investments.

We are exposed to risks associated with an uncertain global economy.

Uncertain global economic conditions and slowing growth in China, Europe and the United States, along with difficulties in the financial markets, national debt concerns and
government austerity measures in certain regions, pose challenges to the industries in which we operate. Related factors, including unemployment, inflation and fuel prices,
exacerbate negative trends in business and consumer spending and may cause our customers to delay, cancel, or refrain from placing orders for equipment or services. These
actions may, in turn, reduce our net sales, reduce backlog, and negatively affect our ability to convert backlog to sales. Uncertain market conditions, difficulties in obtaining
capital, or reduced profitability also may cause some customers to scale back operations, exit businesses, merge with other manufacturers, or file for bankruptcy protection and
potentially cease operations, which can result in lower sales and/or additional inventory or bad debt expense for us. These conditions may similarly affect key suppliers,
impairing their ability to deliver parts and potentially causing delays or added costs for delivery of our products. In addition, these conditions may lead to strategic alliances by,
or consolidation of, other equipment manufacturers, which could adversely affect our ability to compete effectively. Uncertainty about future economic and industry conditions
also makes it more challenging for us to forecast our operating results, make business decisions, and identify and prioritize the risks that may affect our businesses, sources and
uses of cash, financial condition and results of operations. We may be required to implement additional cost reduction efforts, including restructuring activities, and/or modify
our business model, which may adversely affect our ability to capitalize on opportunities in a market recovery. If we do not timely and appropriately adapt to changes resulting
from these uncertain macroeconomic environment and industry conditions, or to difficulties in the financial markets, our business, financial condition and results of operations
may be materially and adversely affected.

If we fail to maintain optimal inventory levels, our inventory obsolescence costs could increase, our liquidity could be significantly reduced or our revenue could decrease.

While we must maintain sufficient inventory levels to operate our business successfully, meet our customers’ demands, and mitigate the possible impact of supply chain issues,
accumulating excess inventory may have a significant unfavorable impact on our operating results and financial condition. Changing customer demands, supplier lead times and
uncertainty surrounding new product launches expose us to risks associated with excess inventory or shortages. Our products are manufactured using a wide variety of
purchased parts and raw materials and we must maintain sufficient inventory levels to meet the demand for the products we sell, which can change rapidly and unexpectedly.
During peak years of our business, increases in demand for capital equipment result in longer lead times for many important system components. Future increases in demand
could cause delays in meeting the shipment requirements or expectations of our customers. Because of the variability and uniqueness of customer orders, we try to avoid
maintaining an extensive inventory of materials for manufacturing. However, long lead times for important system components during industry upturns sometimes require us to
carry higher levels of inventory and make larger purchase commitments than we otherwise would make. We may be unable to sell sufficient quantities of products in the event
that market demand changes, resulting in increased risk of excess inventory that could lead to obsolescence

or reduced liquidity as we fulfill our purchase commitments. Conversely, if we do not have a sufficient inventory of a product to fulfill customer orders, we may lose orders or
customers, which may adversely affect our business, financial condition and results of operations. We may not be able to accurately predict market demand to avoid inventory
shortages or build inventories and issue purchase commitments in excess of our current requirements.

Supplier capacity constraints, supplier production disruptions, supplier quality issues or price increases could increase our operating costs and adversely impact the
competitive positions of our products.

We use numerous suppliers covering a wide range of materials and services in the production of our products including custom electronic and mechanical components. Key
vendors include suppliers of controllers, quartz and silicon carbide for our diffusion systems, steel mills capable of producing the types of steel to the tolerances needed for our
wafer carriers, an injection molding machine that molds plastic inserts into our steel carriers, an adhesive manufacturer that supplies the critical glue and a pad supplier that
produces a unique material used in the manufacture of our polishing templates. We also rely on third parties for certain machined parts, steel frames and metal panels and other
components used particularly in the assembly of our production equipment. Although we strive to ensure that parts are available from multiple suppliers, we procure some key
parts from a single supplier or a limited number of suppliers. Thus, at times, certain parts may not be available in sufficient quantities, or on a timely and cost-efficient basis, to
adequately meet our needs and the needs of our customers.

In the event of supplier capacity constraints, production disruptions, or failure to meet our requirements concerning quality, cost or performance factors, we may transfer our
business to alternative sourcing which could lead to further delays, additional costs or other difficulties. If, in the future, we do not receive, in a timely and cost-effective
manner, a sufficient quantity and quality of parts to meet our production requirements, our business, financial position and results of operations may be materially and adversely
affected.

Our income taxes are subject to variables beyond our control.

Our net income and cash flow may be adversely affected by conditions affecting income taxes which are outside our control. Examples of the potential uncontrollable
circumstances that could affect our tax rate are as follows:

•We sell and operate globally in the United States, Europe and Asia. Disagreement could occur on the jurisdiction of income and taxation among different governmental
tax authorities. Potential areas of dispute may include transfer pricing, intercompany charges and intercompany balances.
•We are subject to a Chinese withholding tax on certain non-tangible charges made under our transfer pricing agreements. The interpretation of what charges are subject
to the tax and when the liability for the tax occurs has varied and could change in the future.
•Tax rates may increase or new tax rates may be implemented (i.e., a global minimum rate), and, therefore, have a material adverse effect on our earnings and cash flows.

Our officers, directors and largest shareholders could choose to act in their best interests and not necessarily those of our other shareholders.

Our directors, executive officers and holders of five percent or more of our outstanding common stock and their affiliates represent a significant portion of our common stock
held as of September 30, 2022, and, therefore, have significant influence over our management and corporate policies. These shareholders have significant influence over all
matters submitted to our shareholders, including the election of our directors and approval of business combinations, and could potentially initiate or delay, deter or prevent a
change of control. Circumstances may occur in which the interests of these shareholders may conflict with the interests of Amtech or those of our other shareholders, and these
shareholders may cause us to take actions that align with their interests. Should conflicts of interest arise, we can provide no assurance that these shareholders would act in the
best interests of our other shareholders or that any conflicts of interest would be resolved in a manner favorable to our other shareholders. In addition, involvement of certain
activist shareholders may impact our ability to recruit and retain talent or otherwise distract management or make decisions that we believe are in the long-term interest of all
shareholders.

Information security breaches or failures of our information technology systems may have a negative impact on our operations and our reputation.

We may be subject to information security breaches or failures of our information technology systems caused by advanced persistent threats, unauthorized access, sabotage,
vandalism, terrorism or accident. Compromises and failure to our information technology networks and systems could result in unauthorized release of our confidential or
proprietary information, or that of our customers and suppliers, as well as employee personal data. The costs to protect against or alleviate breaches and systems failures require
significant human and financial capital expenditures, which in turn could potentially disrupt our continuing operations, increase our liability as a result of compromises to
personally identifiable information, and may lead to a material and adverse effect on our financial reporting, reputation and business.

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries. Following an
investigation by our retained external counsel and third-party forensic, incident response, and security professionals, we determined that the unauthorized third-party gained
access to certain personal information relating to employees and their beneficiaries for some of our operations. There was no indication of any misuse of this information.
Working alongside our security professionals, we were able to bring our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next
generation anti-virus and endpoint detection and response tool, as well as Managed Detection & Response services. We remain committed to protecting the security of the
personal information entrusted to us and providing high-quality products and service to our customers; however, there can be no guarantees that these measures will be
successful in preventing future incidents.

This incident could still result in future legal claims or proceedings, regulatory investigations or actions, and other types of liability under laws that protect the privacy and
security of personal information, including federal, state and foreign data protection and privacy regulations, violations of which could result in significant judgments against us,
penalties and fines. The cost of investigating, mitigating and responding to data incidents and complying with any applicable breach notification obligations to individuals,
regulators, customers and others, including the April 2021 data incident, could be significant. We recorded approximately $1.1 million of expense related to this incident, which
is included in selling, general and administrative expenses, in fiscal 2021. We filed an insurance claim during the fourth quarter of fiscal 2021 related to the incident and during
2022 signed a final settlement agreement with our insurer resulting in total reimbursement of approximately $0.6 million, which has been paid in full. Such insurance may not
be available to us in the future on economically reasonable terms, or at all. Further, defending a suit, regardless of its merit, could be costly, divert management attention and
harm our reputation.

Natural disasters, outbreaks of infectious diseases, terrorist attacks, wars and threats of war may negatively impact our operations, revenue, costs, and stock price.

Natural disasters such as earthquakes, floods, severe weather conditions, outbreaks of infectious diseases in addition to COVID-19 or other catastrophic events may severely
affect our operations or those of our suppliers and customers. Acts of terrorism, as well as events occurring in response or connection to them, including potential future
terrorist attacks, rumors or threats of war, actual military conflicts or trade disruptions impacting our domestic or foreign customers or suppliers, may negatively impact our
operations by causing, among other things, delays, or losses in the delivery of supplies or finished goods and decreased sales of our products. More generally, any of these
events could cause consumer confidence and spending to decrease and/or result in increased volatility in the worldwide financial markets and economy. They also could result in
economic recession either globally or in the markets in which we operate. Any of these occurrences could have a significant adverse impact on our business, financial position
and results of operations.

The extended closure of our Shanghai manufacturing facility as a result of the Chinese government’s mandatory shutdown of Shanghai may have an adverse impact on
our operations, including among others, our ability to manufacture products from that location and meet customer demand and other contractual requirements, and may
have an adverse impact on our business, financial condition and results of operations.

On March 28, 2022, the Chinese government issued a mandatory shutdown in Shanghai, the location of one of our manufacturing facilities. The factory was allowed to partially
reopen in May 2022 and fully reopened on June 1, 2022. After the reopening on June 1, 2022, the factory was able to operate at near full capacity for the entire month of June.
We were able to make up the shipments missed in the fourth quarter and are now operating at normal capacity levels. Additionally, there can be no assurance that this facility
will be allowed to remain open on a consistent basis. If additional shutdowns occur in the future or if we are unable to establish manufacturing alternatives, our business,
financial condition and results of operations may be adversely impacted.

Risks Related to Regulations and Litigation

Our business may be adversely affected by changes in or failure to comply with foreign and domestic laws.

Our operations are subject to numerous foreign and domestic regulatory regimes, including taxation policies, governance and audit requirements, employment and labor laws,
transportation regulations, import and export regulations and tariffs, possible foreign exchange restrictions and international monetary fluctuations. Our policies, procedures and
internal controls are designed to help us comply with all applicable foreign and domestic laws, accounting and reporting requirements, regulations and tax requirements. We
could be subject to legal or regulatory action in the event of our failure to comply with any of the foregoing requirements, which could be expensive to defend and resolve and
be disruptive to our business. Any changes in regulations, the imposition of additional regulations or the enactment of any new legislation that affects us may increase the
complexity of the legal and regulatory environment in which we operate and the related costs of compliance.

We are subject to U.S. and certain non-U.S. anti-corruption/anti-bribery, export and import controls, sanctions, embargoes, anti-money laundering, anti-terrorist
financing, and other similar laws and regulations. Compliance with these legal standards could impair our ability to compete in domestic and international markets. We can
face criminal liability and other serious consequences for violations of these laws and regulations which can harm our business.

We are a U.S.-based multinational company with extensive operations in Asia and elsewhere. We operate in several high-risk jurisdictions, including, but not limited to China.
Various U.S. and certain non-U.S. anti-corruption/anti-bribery and other international trade laws and regulations apply to our company entities and businesses. These laws and
regulations may include, among others, the Foreign Corrupt Practices Act of 1977, as amended, the U.S. Travel Act, domestic anticorruption laws such as 18 U.S.C. §201, the
Money Laundering Control Act of 1986, the USA PATRIOT Act, the U.S. Export Control Reform Act of 2018, the U.S. Export Administration Regulations (15 C.F.R. §§730
et seq.), U.S. sanctions contained in 31 C.F.R. Parts 500-599, the U.S. International Emergency Economic Powers Act, the U.S. Trading with the Enemy Act, the International
Boycott Provisions (Section 999) of the U.S. Internal Revenue Code, the UK Bribery Act 2010, the UK Proceeds of Crime Act 2002, and certain other anti-corruption, anti-
bribery, anti-kickback, anti-fraud, anti-money laundering, anti-terrorist financing, anti-narcotics, anti-boycott, export control, sanctions, embargo, import control, customs, tax,
insider trading, insurance, banking, false claims, anti-racketeering, and other laws, regulations, decrees, government or executive orders, or judicial or administrative decisions
or determinations to the extent applicable.

These laws and regulations are interpreted very broadly and will impact and raise legal compliance risks for our business in the various jurisdictions where we operate.
Violations of any of these laws and regulations may result in substantial civil and/or criminal fines and penalties, imprisonment, the loss of export or import privileges,
debarment, tax reassessments, breach of contract and fraud litigation, reputational harm, and other consequences.

Anti-corruption/anti-bribery and the other laws and regulations referenced above are actively enforced by U.S. and other government agencies. Among various matters, anti-
corruption/anti-bribery laws prohibit our companies, subsidiaries, directors, officers, employees, and business partners, as well as third parties acting for or on our behalf, from
authorizing, promising, offering, providing, soliciting, or accepting, whether directly or indirectly, improper payments or anything else of value to or from recipients in the
public or private sector. We may engage vendors and

third-party business partners to sell our products or services and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals. We have direct or
indirect interactions with officials and employees of government agencies or government-affiliated organizations. These activities raise our anti-corruption/anti-bribery risk
exposure. We can be held liable for the corrupt or other illegal activities of our officers, directors, employees, and business partners, as well as the conduct of third parties acting
for or on our behalf, even if we do not explicitly authorize or have actual knowledge of their misconduct. The application of these laws to us also may place us at a competitive
disadvantage to foreign companies that are not subject to similar laws/regulations.

The United States could withdraw from or materially modify certain international trade agreements, or change tariff, trade, or tax provisions related to the global
manufacturing and sales of our products in ways that we currently cannot predict.

A portion of our business activities are conducted in foreign countries, including China, Malaysia and Taiwan. Our business benefits from free trade agreements, and we also
rely on various U.S. corporate tax provisions related to international commerce as we build, market and sell our products globally. Changes in U.S. or international social,
political, regulatory and economic conditions could impact our business, reputation, financial condition and results of operations. In particular, political and economic
instability, geopolitical conflicts, political unrest, civil strife, terrorist activity, acts of war, public corruption, expropriation, nationalism and other economic or political
uncertainties in the United States or internationally could interrupt and negatively affect the sale of our products or other business operations. Any negative sentiment toward the
United States as a result of any such changes could also adversely affect our business. In addition, changes in laws and policies governing foreign trade, manufacturing,
development and investment in the territories or countries where we currently sell our products or conduct our business could adversely affect our business. U.S. presidential
administrations have instituted or proposed changes in trade policies that include the negotiation or termination of trade agreements, the imposition of higher tariffs on imports
into the U.S., economic sanctions on individuals, corporations or countries, and other government regulations affecting trade between the U.S. and other countries where we
conduct our business. It may be time-consuming and expensive for us to alter our business operations in order to adapt to or comply with any such changes. Changes or
proposed changes in U.S. or other countries' trade policies may result in restrictions and economic disincentives on international trade. Tariffs and other changes in U.S. trade
policy have in the past and could in the future trigger retaliatory actions by affected countries, and certain foreign governments have instituted or are considering imposing
retaliatory measures on certain U.S. goods. Further, any emerging protectionist or nationalist trends either in the United States or in other countries could affect the trade
environment. Amtech, similar to many other multinational corporations, does a significant amount of business that would be impacted by changes to the trade policies of the
United States and foreign countries (including governmental action related to tariffs, international trade agreements, or economic sanctions). Such changes have the potential to
adversely impact the U.S. economy or certain sectors thereof or the economy of another country in which we conduct operations, our industry and the global demand for our
products, and as a result, could have a material adverse effect on our business, financial condition and results of operations. We are continuing to evaluate the impact of the
announced and other proposed tariffs on products that we import from China, and we may experience a material increase in the cost of our products, which may result in our
products becoming less attractive relative to products offered by our competitors.

These developments, or the perception that any of them could occur, may have a material adverse effect on global economic conditions and the stability of global financial
markets, and may significantly reduce global trade and, in particular, trade between the impacted nations and the United States. Any of these factors, or any changes to U.S.
corporate tax policies related to international commerce, could depress economic activity and have a material adverse effect on our business, financial condition and results of
operations.

We are subject to expanded export control restrictions recently adopted by the U.S. Department of Commerce’s Bureau of Industry and Security that could negatively
impact our business in China.

The United States and certain other countries in which we do business maintain government controls that may restrict our ability to import or export our products and services or
increase the cost of our operations through the imposition of tariffs, new controls, outright bans, or otherwise, that could harm our business and negatively impact our financial
position and results of operations. For example, the U.S. Department of Commerce has added numerous China-based entities to the U.S. Entity List, including many entities
active in the semiconductor industry in China, restricting our ability to provide products and services to such entities without an export license. Even if we apply for licenses to
sell our products or provide services to companies on the U.S. Entity List, there can be no assurance that licenses will be

granted. In addition, the U.S. Department of Commerce has imposed new export licensing requirements on exports to China-based customers engaged in development or
production in China of advanced semiconductors and supercomputers, military end uses, support for military end users, or where Commerce has determined there is a risk of
diversion to a military end use, as well as requiring our customers to obtain export licenses when they use certain semiconductor capital equipment based on U.S. technology to
manufacture products connected to certain entities on the U.S. Entity List. The U.S. Department of Commerce has also imposed restrictions on the activities of U.S. persons
supporting or facilitating transactions with projects in China for the development or production of advanced semiconductors and supercomputers. To date, these new rules have
not significantly impacted our operations, but we are continually monitoring their impact. If additional companies are added to the U.S. Entity List, or other licensing
requirements or restrictions are imposed, thereby limiting our ability to sell our products or services to other customers in China, our business could be significantly harmed.
Similar actions by the U.S. government or another country could impact our ability to provide our products and services to existing and potential customers.

We are subject to environmental regulations, and our inability or failure to comply with these regulations could result in significant costs or the suspension of our ability to
operate portions of our business.

We are subject to environmental regulations in connection with our business operations, including regulations related to manufacturing and our customers’ use of our products.
From time to time, we receive notices regarding these regulations. It is our policy to respond promptly to these notices and to take any necessary corrective action. Our failure or
inability to comply with existing or future environmental regulations could result in significant remediation liabilities, the imposition of fines and/or the suspension or
termination of development, manufacturing or use of certain of our products or facilities, each of which could damage our financial position and results of operations.

We face a risk of product liability claims or other litigation, which could be expensive and may divert management’s attention from running our business.

Amtech and our subsidiaries are defendants from time to time in actions for matters arising out of our business operations. The manufacture and sale of our products, which, in
our customers’ operations, involve toxic materials and robotic machinery, involve the risk of product liability claims. In addition, a failure of one of our products at a customer
site could interrupt the business operations of our customer. Our existing insurance coverage limits may not be adequate to protect us from all liabilities that we might incur in
connection with the manufacture and sale of our products if a successful product liability claim or series of product liability claims were brought against us. As of September
30, 2022 and 2021, our accrued warranty costs amounted to $0.9 million and $0.5 million, respectively. Our assumptions regarding the durability and reliability of our products
may not be accurate, and because our products have relatively long warranty periods, we cannot assure you that the amount of accrued warranty by us for our products will be
adequate in light of the actual performance of our products or that we won't experience higher than expected warranty claims. If we experience a significant increase in warranty
claims, we may incur significant repair and replacement costs associated with such claims. Furthermore, widespread product underperformances or failures will damage our
reputation and customer relationships and may cause our sales to decline, which in turn could have a material adverse effect on our business, financial condition and results of
operations.

We also may be involved in other legal proceedings or claims and experience threats of legal action from time to time in the ordinary course of our business. For example,
securities class action litigation is often brought against companies following periods of volatility in the market price of its securities or in connection with strategic transactions.
We may in the future be the target of securities litigation due to volatility in the market price of our common stock or for other reasons. Any securities litigation could result in
substantial costs and could divert the attention and resources of our management.

Where appropriate, we intend to vigorously defend all claims. However, any actual or threatened claims, even if not meritorious or material, could result in the expenditure of
significant financial and managerial resources. The continued defense of these claims and other types of lawsuits could divert management’s attention away from running our
business. In addition, amounts required to be paid in settlement of any claims, and the legal fees and other costs associated with their defense or settlement, cannot be estimated
and could, individually or in the aggregate, materially harm our financial condition.

Risks Related to Our Research and Development and Intellectual Property Activities

We may not be able to keep pace with the rapid change in the technology needed to meet customer requirements.

Success in the semiconductor equipment industry depends, in part, on continual improvement of existing technologies and rapid innovation of new solutions. For example, the
semiconductor industry continues to shrink the size of semiconductor devices. This and other evolving customer needs require us to continually respond with new product
developments. Technical innovations are inherently complex and require long development cycles and appropriate professional staffing. Our future business success depends on
our ability to develop and introduce new products, or new uses for existing products, that successfully address changing customer needs and win market acceptance. We also
must manufacture these new products in a timely and cost-effective manner. To realize future growth through technical innovations in the semiconductor industry, we must
acquire the technology through product development, merger and acquisition activity or through the licensing of products from our technology partners. Potential disruptive
technologies could have a material adverse effect on our business if we do not successfully develop and introduce new products, technologies or uses for existing products in a
timely manner and continually find ways of reducing the cost to produce them in response to changing market conditions or customer requirements.

Our research and development investments may not result in timely new products that can be sold at favorable prices and obtain market acceptance.

The rapid change in technology in our industry requires that we continue to make investments in research and development in order to enhance the performance, functionality
and cost of ownership of our products to keep pace with competitors’ products and to satisfy customer demands for improved performance, features and functionality. We
cannot provide assurance that revenue from future products or enhancements will be sufficient to recover the development costs associated with such products or enhancements,
or that we will be able to secure the financial resources necessary to fund future development. Research and development costs are typically incurred before we confirm the
technical feasibility and commercial viability of a product, and not all development activities result in commercially viable products. We cannot assure that products or
enhancements will receive market acceptance, or that we will be able to sell these products at prices that are favorable to us, or at all. If we do not successfully manage our
investments in research and development, our business, financial condition and results of operations could be materially and adversely affected.

Third parties may violate our proprietary rights, in which we have made significant investments, resulting in a loss of value of some of our intellectual property or costly
litigation.

Our success is dependent in part on our technology and other proprietary rights. We own various U.S. and international patents and have additional pending patent applications
relating to some of our products and technologies. Protecting and defending our patents domestically, and especially internationally, is costly. In addition, the process of
seeking patent protection is lengthy and expensive. Therefore, we cannot be certain that pending or future applications will result in issued patents, or that issued patents will be
of sufficient scope or strength to provide meaningful protection or commercial advantage to us. Other companies and individuals, including our larger competitors, may develop
technologies that are similar or superior to our technology or design around the patents we own or license. In addition, the patent for the technology that we license and use in
our manufacture of insert carriers has expired, which, along with the other risks related to our patents described above, may have the effect of diminishing or eliminating any
competitive advantage we may have with respect to our manufacturing process.

We also maintain trademarks on certain of our products and claim copyright protection for certain proprietary software and documentation. We can give no assurance,
however, that our trademarks and copyrights will be upheld or will successfully deter infringement by third parties.

We attempt to protect our trade secrets and other proprietary information through confidentiality agreements with our customers, suppliers, employees and consultants and
through other security measures. We also maintain exclusive and non-exclusive licenses with third parties for the technology used in certain products. However, these
employees, consultants and third parties may breach these agreements, and we may not have adequate remedies for wrongdoing. In addition, the laws of certain territories, such
as China, in which we develop, manufacture or sell our products may not protect our intellectual property rights to the same extent as do the laws of the United States.

We may face intellectual property infringement claims that could be time-consuming and costly to defend and could result in our loss of significant rights and the
assessment of treble damages.

From time to time, we have received communications from other parties asserting the existence of patent rights or other intellectual property rights that they believe cover
certain of our products, processes, technologies or information. Some of these claims may lead to litigation. We cannot assure that we will prevail in these actions, or that other
actions alleging misappropriation or misuse by us of third-party trade secrets, infringement by us of third-party patents and trademarks or the validity of our patents, will not be
asserted or prosecuted against us. If there is a successful claim of infringement against us, we may be required to pay substantial damages (including treble damages if we were
to be found to have willfully infringed a third party’s patent) to the party claiming infringement, incur costs to develop non-infringing technology, stop selling or using
technology that contains the allegedly infringing intellectual property, or enter into royalty or license agreements that may not be available on acceptable or commercially
practical terms, if at all. Intellectual property litigation, regardless of outcome, is expensive and time-consuming, and could divert management’s attention from our business.
Our failure to successfully defend against infringement claims, or to develop non-infringing technologies or license the proprietary rights on a timely basis, could have a material
negative effect on our business, operating results or financial condition.

Risks Related to Our Common Stock

We have experienced, and may continue to experience, significant volatility in our stock price.

A variety of factors may cause the price of our stock to be volatile. For example, our results of operations are difficult to predict and have fluctuated from time to time in the
past. We expect that our results of operations may continue to fluctuate from time to time in the future. It is possible that our results of operations in some reporting periods will
be below market expectations. If our results of operations for a particular reporting period are lower than the market expectations for such reporting period, investors may react
negatively and, as a result, the price of our stock may materially decline.

Furthermore, the stock market in general, and the market for shares of high-technology companies in particular, including ours, have experienced extreme price fluctuations,
which have often been unrelated to the operating performance of affected companies. During the two-year period ended September 30, 2022, the price of our common stock has
ranged from $15.78 to $4.90. The price of our stock may be more volatile than the stock of other companies due to, among other factors, the unpredictable, volatile and
seasonal nature of the industries in which we operate, our significant customer concentration, intense competition, our fluctuating backlog and our relatively low daily stock
trading volume. As a result, the market price of our common stock is likely to continue to fluctuate significantly in the future, including fluctuations related and unrelated to our
performance.

Additional factors may affect our stock price, including sales of our common stock by us or our existing shareholders as well as changes to the coverage and/or rating of our
stock by securities analysts.

Shareholder activists could cause a disruption to our business.

An activist investor may indicate disagreement with our strategic direction or capital allocation policies and may seek representation on our Board of Directors. Our business,
operating results or financial condition could be adversely affected and may result in, among other things:

•increased operating costs, including increased legal expenses, insurance, administrative expenses and associated costs incurred in connection with director election
contests;
•uncertainties as to our future direction, which could result in the loss of potential business opportunities and could make it more difficult to attract, retain, or motivate
qualified personnel, and strain relationships with investors and customers; and
•reduction or delay in our ability to effectively execute our current business strategy and to implement new strategies.

There are provisions in our corporate governing documents that could make an acquisition of the Company more difficult and limit attempts by our shareholders to replace
or remove our current management.

Our amended and restated articles of incorporation and our amended and restated bylaws, as well as Arizona law contain provisions that may have the effect of deterring
takeovers or delaying or preventing a change in control of us or changes in our management that a shareholder might deem to be in his or her best interest. Our amended and
restated articles of incorporation and amended and restated bylaws contain provisions that:

•authorize “blank check” preferred stock, which could be issued by our Board of Directors without shareholder approval and may contain voting, liquidation, dividend
and other rights superior to our common stock;
•specify that special meetings of our shareholders can be called only by our Board of Directors, the Chairperson of our Board of Directors, our Chief Executive Officer,
or a majority of the Board of Directors;
•provide that vacancies on our Board of Directors may be filled only by a majority of directors then in office, though not less than a quorum;
•specify that only our Board of Directors may change the size of our Board of Directors;
•establish an advance notice procedure for shareholder proposals to be brought before an annual meeting of our shareholders, including proposed nominations of persons
for election to our Board of Directors; and
•expressly authorize our Board of Directors to modify, alter or repeal our bylaws.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management or our Board of Directors.

In addition, because we are incorporated in the State of Arizona, we are governed by the provisions of the Arizona Revised Statutes Section 10-274, which prohibits certain
business combinations between us and certain interested shareholders unless specified conditions are met. These provisions may also have the effect of delaying or preventing a
change in control of Amtech.

Any provision of our amended and restated articles of incorporation or amended and restated bylaws or Arizona law that has the effect of delaying or deterring a change in
control could limit the opportunity for our shareholders to receive a premium for their shares of our common stock, and could also affect the price that some investors are
willing to pay for our common stock.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

We believe that our properties are adequate for our current needs. In addition, we believe that adequate space can be obtained to meet our foreseeable business needs. The
following chart identifies the principal properties which we own or lease.

Location

Use

Own or Lease

Size

Corporate

Tempe, Arizona

Semiconductor Segment

North Billerica, Massachusetts
Ashvale, Surrey, United Kingdom
Shanghai, China
Penang, Malaysia

Material and Substrate Segment

Carlisle, Pennsylvania
Bethel, Connecticut

Corporate Headquarters

Office, Mfg. & Warehouse
Office
Office, Mfg. & Warehouse
Office

Office & Mfg.
Office & Mfg.

Own

Lease
Lease
Lease
Lease

Lease
Lease

15,000 sf

150,000 sf
1,900 sf
76,530 sf
1,570 sf

40,500 sf
18,830 sf

ITEM 3. LEGAL PROCEEDINGS

Amtech and its subsidiaries are defendants from time to time in actions for matters arising out of their business operations. We do not believe that any matters or proceedings
presently pending will have a material adverse effect on our consolidated financial position, results of operations or liquidity.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES

MARKET INFORMATION

Our common stock, par value $0.01 per share (Common Stock), is trading on the NASDAQ Global Select Market, under the symbol “ASYS.” The stock price details can be
obtained from the Nasdaq website at www.nasdaq.com.

ISSUER PURCHASES OF EQUITY SECURITIES

Share Repurchase Programs

On February 10, 2022, the Board approved a stock repurchase program, pursuant to which we may repurchase up to $5 million of our outstanding Common Stock over a one-
year period, commencing on February 16, 2022. Repurchases under the program will be made in open market transactions at prevailing market prices, in privately negotiated
transactions, or by other means in compliance with the rules and regulations of the SEC; however, we have no obligation to repurchase shares and the timing, actual number, and
value of shares to be repurchased is subject to management’s discretion and will depend on our stock price and other market conditions. We may, in the sole discretion of the
Board, terminate the repurchase program at any time while it is in effect. Repurchased shares may be retired or kept in treasury for further issuance. During the year ended
September 30, 2022, we repurchased 143,430 shares of our Common Stock on the open market at a total cost of approximately $1.4 million (an average price of $9.78 per
share). All repurchased shares have been retired.

On February 9, 2021, the Board approved a stock repurchase program, pursuant to which we may repurchase up to $4 million of our outstanding Common Stock over a one-
year period, commencing on February 16, 2021. Repurchases under the program were to be made in open market transactions at prevailing market prices, in privately negotiated
transactions, or by other means in compliance with the rules and regulations of the SEC; however, we had no obligation to repurchase shares and the timing, actual number, and
value of shares to be repurchased was subject to management’s discretion and depended on our stock price and other market conditions. We could have, in the sole discretion of
the Board, terminated the repurchase program at any time while it was in effect. Repurchased shares were to be retired or kept in treasury for further issuance. During the quarter
ended December 31, 2021, we repurchased 291,383 shares of our Common Stock on the open market at a total cost of approximately $2.7 million (an average price of $9.31
per share). All repurchased shares have been retired. The term of this repurchase program expired during the quarter ended March 31, 2022.

During the three months ended September 30, 2022, we did not repurchase any of our equity securities nor did we sell any equity securities that were not registered under the
Securities Act of 1933, as amended. As of September 30, 2022, $3.6 million remains available for repurchases.

HOLDERS

As of November 9, 2022, there were 319 shareholders of record of our Common Stock. Based upon a recent survey of brokers, we estimate there were approximately an
additional 6,889 beneficial shareholders who held shares in brokerage or other investment accounts as of that date.

DIVIDENDS

We have never paid dividends on our Common Stock. Our present policy is to apply cash to investments in product development and upgrades, acquisitions or expansion;
consequently, we do not expect to pay dividends on our Common Stock in the foreseeable future. However, once the above priorities have been met, we will evaluate the
returning of capital to shareholders, as we have done in the past.

UNREGISTERED SALES OF EQUITY SECURITIES

There were no unregistered sales of equity securities in fiscal 2022.

COMPARISON OF STOCK PERFORMANCE

The following line graph and related information shall not be deemed “soliciting material” or “filed” with the SEC, nor shall such information be incorporated by reference
into any future filings under the Securities Act of 1933 or the Exchange Act, each as amended, except to the extent that we specifically incorporated by reference it into such
filing.

The following line graph compares cumulative total shareholder return, assuming reinvestment of dividends, for our Common Stock, the NASDAQ Composite Index and the
NASDAQ Industrial Index. Because we did not pay dividends on our Common Stock during the measurement period, the calculation of the cumulative total shareholder return
on our Common Stock did not include dividends. The following graph assumes that $100 was invested on October 1, 2017.

ITEM 6. RESERVED

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our Consolidated Financial Statements and the accompanying notes
included in "Item 8. Financial Statements and Supplementary Data” in this Annual Report on Form 10-K. This discussion contains forward-looking statements, which involve
risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of certain factors including, but not
limited to, those described in “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Please refer to page 5 for further information regarding forward-looking
statements and “Item 1A. Risk Factors” for a description of our risk factors.

Overview

We are a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing and related consumables used in fabricating semiconductor
devices, such as silicon carbide ("SiC") and silicon power devices, analog and discrete devices, electronic assemblies, and light-emitting diodes ("LEDs"). We sell these
products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We operate in two reportable segments, based primarily on the industries they serve: (i) Semiconductor and (ii) Material and Substrate. In our Semiconductor segment, we
supply thermal processing equipment, including solder reflow ovens, horizontal diffusion furnaces, and custom high-temp belt furnaces for use by semiconductor, electronics
and electro/mechanical assembly manufacturers. Our semiconductor customers are primarily manufacturers of integrated circuits and optoelectronic sensors and discrete ("O-S-
D") components used in analog, power and radio frequency ("RF"). In our Material and Substrate segment, we produce substrate consumables, chemicals and machinery for
lapping (fine abrading) and polishing of materials, such as silicon wafers for semiconductor products, sapphire wafers for LED applications, and compound substrates, like
silicon carbide wafers, for power device applications.

The semiconductor industry is cyclical, but not seasonal, and historically has experienced fluctuations. Our revenue is impacted by these broad industry trends.

Strategy

We continue to focus on our plans to profitably grow our business and have developed a strategic growth plan and a capital allocation plan that we believe will support our
growth objectives. Our Power Semiconductor strategic growth plan leverages our experience, products and capabilities in pursuit of growth, profitability and sustainability. Our
core focus areas are:

•Emerging opportunities in the SiC industry – We believe we are well-positioned to take part in this significant growth area, specifically as it relates to silicon carbide
wafer capacity expansion. We are working closely with our customers to understand their SiC growth plans, needs and opportunities. We are investing in our capacity,
next generation product development, and in our people. During 2021, we completed the acquisition of Intersurface Dynamics, which added numerous coolants and
chemical products to our existing consumable and machine product lines. We believe these investments will help fuel our growth in the emerging growth SiC industry.

•300mm Horizontal Diffusion Furnace – We have a highly successful and proven 300mm horizontal diffusion furnace solution used for power semiconductor device
manufacturing applications. We have a strong foundation with the leading 300mm power chip manufacturer, and, in the last three years, we have received 23 orders from
top-tier customers. We believe we have a strong opportunity to continue expanding our customer base and grow revenue with our 300mm solution.

•As the largest revenue contributor to our organization, we expect our subsidiary, BTU, will continue to track semiconductor industry growth cycles for our advanced
semi-packaging and SMT products, in addition to specialized custom belt furnaces used in automotive and other specialized industrial applications. We believe that our
investments in product innovation will provide BTU with opportunities

to grow further, especially in high growth applications of consumer and industrial electronics, IoT, electric vehicles and 5G communications.

We anticipate future investments will be required to meet the expected demand from our growing served markets to achieve our revenue growth targets, including investments
in research and development as well as capital expenditures, which also includes further investments in capacity expansion, talent, and management information systems. In
June 2022, we completed the sale of the real property where our manufacturing facility in Massachusetts is located. In connection with this sale, we entered into a two-year
leaseback of the facility. This sale-leaseback transaction resulted in a net cash inflow of approximately $14.9 million, after repayment of the existing mortgage and settlement of
related sale expenses. During the two-year leaseback period, we will conduct a search for a new manufacturing facility more in line with the needs of our Semiconductor
product lines. In the fourth quarter of 2021, we completed the move of our Shanghai facility to a new location. This new location increases our capacity and allows us to
streamline our manufacturing processes, thus reducing our lead times. In addition, we are evaluating our management information systems and needs in order to allow for
greater efficiencies and to ensure our infrastructure can support our future growth plans. As a capital equipment manufacturer, we will continue to invest in our business to drive
future growth.

In addition to investments in our organic growth, another key aspect of our capital allocation policy is our plan to grow through acquisitions. We have the expertise and track
record to identify complimentary and synergistic acquisition targets in the Semiconductor and SiC growth environments and to execute transactions and integrations to provide
for value creating, profitable growth in both the short-term and long-term. On March 3, 2021, we acquired Intersurface Dynamics, a Connecticut-based manufacturer of
substrate process chemicals used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics. As of the date of the
filing of this Annual Report on Form 10-K, we do not have an agreement to acquire any acquisition target.

Cybersecurity Incident

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries. Upon learning of
the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and determine the
full scope of this incident. We also notified law enforcement officials and confirmed that the incident is covered by our insurance. We have completed the investigation of the
data incident with assistance from our outside professionals, and indications were that the unauthorized third-party gained access to certain personal information relating to
employees and their beneficiaries for some of our operations. There was no indication of any misuse of this information.

Despite this disruption, production continued in our facilities. Our previously disabled subsidiary network is now back up and running securely. Working alongside our
security professionals, we were able to bring our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and
endpoint detection and response tool, as well as Managed Detection & Response services. We remain committed to protecting the security of the personal information entrusted
to us and providing high-quality products and service to our customers.

We recorded approximately $1.1 million of expense in 2021 related to this incident, which is included in selling, general and administrative expenses. The expense is primarily
related to third-party service providers, including security professionals as well as legal and response teams. We may make additional investments in the future to further
strengthen our cybersecurity. We filed an insurance claim during the fourth quarter of fiscal 2021 related to the incident. During the second quarter of 2022, we signed a final
settlement agreement with our insurer resulting in total reimbursement of approximately $0.6 million, which included $0.4 million received during the quarter ended December
31, 2021 and $0.2 million received during the quarter ended March 31, 2022. No portion of the reimbursement remains outstanding as of September 30, 2022.

COVID-19

the impact of COVID-19 on all aspects of our business. We are a company operating in a critical infrastructure industry, as defined by the U.S. Department of Homeland
Security. Consistent with federal guidelines and with foreign government, state and local orders to date, we have continued to operate across our footprint throughout the
COVID-19 pandemic. Following the onset of COVID-19 and its negative effects on our business, most prominently reflected in our second, third and fourth quarter fiscal 2020
results, global economic conditions improved during fiscal 2021, resulting in increased demand for our products and services, which led to our earnings for fiscal 2021
substantially exceeding our fiscal 2020 results. There remain many unknowns and we continue to monitor the expected trends and related demand for our products and services
and have and will continue to adjust our operations accordingly. Please see additional information in “Item 1A. Risk Factors.”

On March 28, 2022, the Chinese government issued a mandatory shutdown in Shanghai, the location of one of our manufacturing facilities. The factory was allowed to partially
reopen in May 2022 and fully reopened on June 1, 2022. After the reopening on June 1, 2022, the factory was able to operate near full capacity for the entire month of June.
We were able to make up the shipments missed in the fourth quarter and are now operating at normal capacity levels. Given the uncertainty surrounding the COVID-19
pandemic, there can be no assurance that our Shanghai facility will be allowed to remain open on a consistent basis.

Segment Reporting Changes

Upon the acquisition of Intersurface Dynamics in the second quarter of 2021, we evaluated our organizational structure and concluded that we have two reportable segments
following the acquisition. Our Material and Substrate segment includes our former SiC/LED segment in addition to Intersurface Dynamics beginning at the date of acquisition.

Industry Fluctuations

Our quarterly and annual operating results have been and will continue to be impacted by the timing of large system orders. Further, the semiconductor equipment industry is
highly cyclical, and the conditions of this industry remain volatile. Therefore, our order flow fluctuates quarter to quarter. For additional information regarding the risks related
to our business and industry, please refer to "Item 1A. Risk Factors" within this Form 10-K.

Fiscal Year

Results of Operations

The following table sets forth certain financial data as a percentage of net revenue for the periods indicated:

Net revenue
Cost of sales

Gross margin

Selling, general and administrative
Research, development and engineering
Gain on sale of fixed assets

Operating income

Interest income (expense) and other, net

Income before income taxes

Income tax provision
Net income

Years Ended September 30,

2022

2021

100 %
63 %
37 %
27 %
6 %
(12 %)
16 %
1 %
17 %
1 %
16 %

100 %
59 %
41 %
29 %
7 %
— %
5 %
(1 %)
4 %
2 %
2 %

Fiscal 2022 compared to Fiscal 2021

Net Revenue

Net revenue consists of revenue recognized upon shipment or delivery of equipment. Spare parts sales are recognized upon shipment and service revenue is recognized upon
completion of the service activity, which is generally ratable over the term of the service contract. Since the majority of our revenue is generated from large system sales,
revenue, gross profit and operating income can be significantly impacted by the timing of system shipments. See “Critical Accounting Policies – Revenue Recognition”
included in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations."

Our net revenue by reportable segment for the years ended September 30, 2022 and 2021 were as follows, dollars in thousands:

Segment
Semiconductor
Material and Substrate
Total net revenue

Years Ended September 30,

2022

2021

Increase
(Decrease)

% Change

87,982 $
18,316
106,298 $

72,086 $
13,119
85,205 $

15,896
5,197
21,093

22 %
40 %

25 %

Net revenue for the years ended September 30, 2022 and 2021 were $106.3 million and $85.2 million, respectively, an increase of $21.1 million or 25%. Revenue from the
Semiconductor segment increased $15.9 million, or 22%, over the prior year period. Our Semiconductor results for 2022 reflect the closure of our Shanghai manufacturing
facility, which partially reopened in mid-May and fully reopened on June 1, 2022. The Shanghai facility was able to return to normal capacity during the fourth quarter of fiscal
2022, however, the order trends in the overall market have slowed since the April 2022 shutdown. Revenue from our Material and Substrate segment increased $5.2 million, or
40%, due to increased shipments of consumables resulting from capacity expansion and production increases by our customers.

Orders and Backlog

New orders booked in the years ended September 30, 2022 and 2021 were as follows, dollars in thousands:

Segment
Semiconductor
Material and Substrate
Total new orders

Years Ended September 30,

2022

94,268 $
19,685
113,953 $

2021
101,988 $
13,456
115,444 $

Increase
(Decrease)

% Change

(7,720 )
6,229
(1,491 )

Our backlog as of September 30, 2022 and 2021 was as follows, dollars in thousands:

Segment
Semiconductor
Material and Substrate

Total backlog

September 30,
2022

September 30,
2021

Increase
(Decrease)

% Change

48,011 $

2,769
50,780 $

42,743 $

1,400
44,143 $

5,268

1,369
6,637

(8 )%
46 %

(1 )%

12 %
98

15 %

At the end of 2022, three customers individually accounted for 21%, 17% and 14% of our total backlog. No other customer accounted for more than 10% of our backlog as of
September 30, 2022. The orders included in our backlog are generally credit approved customer purchase orders believed to be firm and are generally expected to ship within
the next twelve months. Because our orders are typically subject to cancellation or delay by the customer, our backlog at any particular point in time is not necessarily
representative of actual sales for succeeding periods, nor is backlog any assurance that we will realize profit from completing these orders.

Gross Profit and Gross Margin

Gross profit is the difference between net revenue and cost of goods sold. Cost of goods sold consists of purchased material, labor and overhead to manufacture equipment and
spare parts and the cost of service and support to customers for installation, warranty and paid service calls. Gross margin is gross profit as a percent of net revenue. Our gross
profit and gross margin by reportable segment for the years ended September 30, 2022 and 2021 were as follows, dollars in thousands:

Segment
Semiconductor
Material and Substrate
Total gross profit

2022
$ 30,880
8,631
$ 39,511

Years Ended September 30,
Gross
Margin

2021
35 % $ 30,336
47 %
4,194
37 % $ 34,530

Gross
Margin

Increase
(Decrease)

% Change

42 % $
32 %
41 % $

544
4,437
4,981

2 %
106 %

14 %

Gross profit for the years ended September 30, 2022 and 2021 was $39.5 million and $34.5 million, respectively, representing an increase of $5.0 million, or 14%. Gross margin
for 2022 and 2021 was 37% and 41%, respectively. Gross margin for the Semiconductor segment decreased to 35% in 2022, compared to 42% in 2021, due primarily to the
above-mentioned closure of our Shanghai manufacturing facility. This closure resulted in decreased utilization during the closure period as we continued to pay our employees
while ceasing production entirely for the first eight weeks of the third quarter of fiscal 2022. Additionally, Semiconductor material costs increased approximately 39% over the
2021 period due to product mix changes and rising prices. We continue to take steps to manage our inventory price risk, including purchasing long lead-time items in advance
and onboarding additional source suppliers. In the Material and Substrate segment, gross margin increased to 47% in 2022, compared to 32% in 2021 due primarily to improved
capacity utilization resulting from higher consumable sales and the usage of previously reserved inventory slightly offset by increased material costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (“SG&A”) consists of the cost of employees, consultants and contractors, facility costs, sales commissions, shipping costs,
promotional marketing expenses, legal and accounting expenses and bad debt expense.

Total SG&A expenses for the years ended September 30, 2022 and 2021 were $28.3 million and $24.7 million, respectively, representing an increase of $3.6 million or 14.4%.
This increase was primarily due to increases of $2.1 million in employee-related expenses and $1.6 million in freight expenses, driven by higher revenues and increased shipping
rates. SG&A expense includes $0.5 million and $0.4 million of non-cash stock-based compensation expense for 2022 and 2021, respectively.

Gain on Sale of Fixed Assets

Gain on sale of fixed assets consists primarily of the gain on the sale of BTU's building in Massachusetts. The sale price was $20.6 million, of which $0.7 million was deducted
at closing for commission and other closing expenses. In connection with the sale, BTU recognized a pre-tax gain on sale of $12.5 million.

Research, Development and Engineering

Research, development and engineering (“RD&E”) expenses consist of the cost of employees, consultants and contractors who design, engineer and develop new products and
processes as well as materials and supplies used in producing prototypes. RD&E expenses may vary from period to period depending on the engineering projects in process.
Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time we add functionality to our
products or develop new products during engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of development, along with other
costs of the order, are charged to cost of goods sold. Occasionally, we receive reimbursements through governmental research and development grants which are netted against
these expenses when certain conditions have been met.

RD&E expenses, net of grants earned, for the years ended September 30, 2022 and 2021 were $6.4 million and $6.0 million, respectively, an increase of $0.4 million. This
increase is due to the timing of purchases related to specific strategic-development projects at our Semiconductor segment. We expect most of these strategic projects to be
completed throughout fiscal 2023, resulting in new or updated product offerings in fiscal 2023 and 2024. Grants earned are immaterial in all periods presented.

Restructuring Charges

We recorded restructuring charges of $0.1 million in 2021. These one-time charges relate to staff reductions in our Semiconductor and Material and Substrate operations.

Income Taxes

Our effective tax rate was 7.5% and 56.1% in 2022 and 2021, respectively. The effective tax rate is the ratio of total income tax expense to pre-tax income. The effective tax
rates for 2022 and 2021 were lower and higher than the U.S. statutory rate, respectively. The 2022 effective tax rate was lower than the statutory rate due to a substantial portion
of the earnings in the US resulting from the gain on the sale of our Massachusetts property for which no tax expense was recognized due to the utilization of net operating losses
and foreign tax credits, which are fully valued. The 2021 effective tax rate was higher than the statutory rate due primarily to higher taxes on income in foreign jurisdictions,
state income taxes and domestic losses for which no tax benefit was recorded.

In 2022 and 2021, we recorded income tax expense of $1.4 million and $1.9 million, respectively. The income tax provisions are based upon estimates of annual income,
annual permanent differences, statutory tax rates and credits in the various jurisdictions in which we operate. Significant judgments and estimates are required in the
determination of the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in
taxable or deductible amounts in the future. U.S. GAAP requires that a valuation allowance be established when it is “more likely than not” that all or a portion of deferred tax
assets will not be realized. A review of all available positive and negative evidence needs to be considered, including scheduled reversals of deferred tax liabilities, projected
future taxable income, tax-planning strategies and results of recent operations. According to those principles, it is difficult to conclude that a valuation allowance is not needed
when the negative evidence includes cumulative losses in recent years. Based on the consideration of all available evidence, we have concluded that we will maintain a full
valuation allowance for all U.S. net deferred tax assets and a portion of foreign deferred tax assets. We will continue to monitor our cumulative income and loss positions in the
U.S. and foreign jurisdictions to determine whether valuation allowances on deferred tax assets are appropriate. We expect to pay minimal U.S federal cash taxes for the
foreseeable future as a result of our U.S. net operating losses that are carried forward.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across our global
operations. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon
examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. We currently have $1.0 million of unrecognized tax benefits
recorded within our financial statements. We record unrecognized tax benefits as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes
as a result of the evaluation of new information not previously available.

Our future effective income tax rate depends on various factors, such as the amount of income (loss) in each tax jurisdiction, tax regulations governing each region, non-
deductible expenses incurred as a percent of pre-tax income and the effectiveness of our tax planning strategies.

Selected Quarterly Data (Unaudited)

The following table sets forth selected unaudited consolidated quarterly financial information for the years ended September 30, 2022 and 2021, in thousands, except
percentages and per share amounts:

First
Quarter

Fiscal Year 2022

Second
Quarter

Third
Quarter

Fourth
Quarter

Revenue, net
Cost of sales

Gross profit

Selling, general and administrative
Research, development and engineering
Gain on sale of fixed assets

Operating income

Interest (expense) income and other, net

Income before income taxes

Income tax provision
Net income

Gross margin
Operating margin
Income Per Share:
Net income per basic share
Weighted average shares outstanding - basic
Net income per diluted share
Weighted average shares outstanding - diluted

Revenue, net
Cost of sales

Gross profit

Selling, general and administrative
Research, development and engineering
Restructuring charges
Operating income

Interest (expense) income and other, net

Income before income taxes

Income tax provision
Net income (loss)

Gross margin
Operating margin
Income (Loss) Per Share:
Net income (loss) per basic share
Weighted average shares outstanding - basic
Net income (loss) per diluted share
Weighted average shares outstanding - diluted

Liquidity and Capital Resources

Liquidity

26,463
16,565
9,898
7,086
1,572
—
1,240

(83 )

1,157
160
997

37.4 %
4.7 %

0.07
14,254
0.07
14,485

27,556 $
16,396
11,160
6,765
1,800
—
2,595
30
2,625
660
1,965 $
40.5 %
9.4 %

0.14 $

13,979

0.14 $

14,144

19,964 $
14,064
5,900
7,157
1,646
(12,465 )
9,562
680
10,242
20
10,222 $
29.6 %
47.9 %

0.74 $

13,889

0.73 $

14,026

First
Quarter

Fiscal Year 2021

Second
Quarter

Third
Quarter

Fourth
Quarter

17,975 $
10,463
7,512
5,213
1,245
—
1,054
(255 )
799
80
719 $
41.8 %
5.9 %

0.05 $

14,072

0.05 $

14,117

19,790 $
12,062
7,728
5,688
1,869
—
171
73
244
490
(246 ) $
39.1 %
0.9 %

(0.02 ) $

14,151

(0.02 ) $

14,151

23,100 $
13,021
10,079
7,281
1,523
71
1,204
(155 )
1,049
680
369 $
43.6 %
5.2 %

0.03 $

14,176

0.03 $

14,373

32,315
19,762
12,553
7,292
1,372
—
3,889
872
4,761
578
4,183

38.8 %
12.0 %

0.30
13,933
0.30
14,080

24,340
15,129
9,211
6,558
1,342
15
1,296
46
1,342
676
666

37.8 %
5.3 %

0.05
14,190
0.05
14,387

We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our obligations
through our industry cycles, under both normal and stressed

conditions. We manage our liquidity to provide access to sufficient funding to meet our business needs and financial obligations throughout business cycles. We operate in the
semiconductor capital equipment industry, which is cyclical, and we must ensure we have sufficient liquidity during the down cycles and varying macroeconomic conditions.
Our liquidity plans are established within the context of our financial and strategic planning processes and consider the liquidity necessary to fund our operating commitments,
which include purchase obligations for inventory and equipment, payroll and general expenses. We also take into consideration our capital allocation and growth objectives,
including investing in research and development and capital expenditures (including capacity assessments and IT systems).

The success of our growth strategy is dependent upon the availability of additional capital resources on terms satisfactory to management. Our sources of capital in the past have
included the sale of equity securities, which includes common stock sold in private transactions and public offerings, and cash generated from operations. There can be no
assurance that we can raise such additional capital resources when needed or on satisfactory terms. We believe that our principal sources of liquidity discussed above are
sufficient to support operations for at least the next twelve months.

Capital Allocation

Our capital allocation strategy focuses on building shareholder value. We do this by first investing in ourselves and growing our capabilities. We then look to supplement and
strengthen our capabilities through acquisitions and strategic investments. And finally, we provide the return realized by the investments to our stockholders. These three
priorities are detailed as follows:

•Invest in R&D and capital expenditures to strengthen our competitive position. Historically, our R&D efforts have focused on upgrades to existing product platforms as
well as new product designs. Capital expenditures consist primarily of capacity expansion as well as investments in IT systems.

•Invest in strategic acquisitions that will complement our strong platform of product offerings. In evaluating these opportunities, our objectives include enhancing our
earnings and cash flows, adding complementary product offerings, expanding our geographic footprint, improving our production efficiency and expanding our customer
base. As a result, we continue to manage our balance sheet to maintain adequate liquidity so that we may react quickly as opportunities arise.

•Once the above priorities have been met, we evaluate the return of capital to shareholders, as we have done in the past. We have never paid dividends on our common
stock, and we do not expect to pay dividends on common stock in the foreseeable future. However, our Board has authorized annual stock repurchase plans since 2018.

Cash and Cash Flow

The following table sets forth for the periods presented certain consolidated cash flow information, in thousands:

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash (used in) provided by financing activities
Effect of exchange rate changes on cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash, beginning of year*
Cash, cash equivalents and restricted cash, end of year

2022

Years Ended September 30,
2021

2020

5,204 $
18,773 $
(8,267 ) $
(1,672 ) $
14,038 $
32,836 $
46,874 $

(5,962 ) $
(8,094 ) $
1,166 $
656 $
(12,234 ) $
45,070 $
32,836 $

(1,664 )
(12,616 )
(1,502 )
1,718
(14,064 )
59,134
45,070

$
$
$
$
$
$
$

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Consolidated Balance Sheets for periods prior to January 22, 2020.

As of September 30, 2022 and 2021, cash and cash equivalents were $46.9 million and $32.8 million, respectively. We had no restricted cash at September 30, 2022 and 2021.
Our working capital was $80.3 million as of September 30, 2022 and $65.8 million as of September 30, 2021. Our ratio of current assets to current liabilities was 4.5:1 as of
September 30, 2022, and 5.4:1 as of September 30, 2021.

During periods of weakening demand, we typically generate cash from operating activities. Conversely, we are more likely to use operating cash flows for working capital
requirements during periods of higher growth. The $14.0 million increase in consolidated cash during 2022 was primarily due to increases in cash from the sale of our
Massachusetts property as well as customer deposits received in 2022 for upcoming shipments in 2023, partially offset by cash used to repay long-term debt and cash used to
repurchase stock. We maintain cash accounts denominated in currencies other than our reporting currency, which expose us to foreign exchange rate fluctuations.

Cash Flows from Operating Activities

Cash provided by operating activities was $5.2 million in 2022 compared to cash used in operating activities of $6.0 million in 2021 and cash used in operating activities of $1.7
million in 2020. During 2022, we received several large customer deposits, primarily related to orders of our horizontal diffusion and high temp furnaces, which are expected to
ship over the next four quarters. During 2021, we increased our inventory balances in preparation for shipments scheduled for the first half of fiscal 2022. Additionally, our
accounts receivable increased during this period as most of our shipments occurred late in the fourth quarter and our customers generally have payment terms of 60-90 days.
During 2020, we increased our inventory balances to mitigate risks in our supply chain resulting from the COVID-19 pandemic, as well as in preparation for a large shipment
that occurred in the first quarter of fiscal 2021.

Cash Flows from Investing Activities

Cash provided by investing activities was $18.8 million in 2022, primarily consisting of $19.9 million in proceeds from the sale of our real property in Massachusetts. Cash
used in investing activities was $8.1 million in 2021, primarily consisting of $5.1 million net cash paid for the acquisition of Intersurface Dynamics and capital expenditures
primarily related to the relocation of our Shanghai manufacturing facility. Cash used in investing activities was $12.6 million in 2020, primarily related to the divestiture of our
solar businesses and capital expenditures for our new Material and Substrate building in Pennsylvania. Investing activities in 2022, 2021 and 2020 included capital
expenditures of $1.1 million, $3.0 million and $2.7 million, respectively. We expect capital expenditures to increase in 2023 as we make targeted investments in our production
capacity and IT systems.

Cash Flows from Financing Activities

In 2022, cash used in financing activities was $8.3 million, comprised of $4.1 million of cash used for the repurchase of common stock and payments on long-term debt of $4.9
million, partially offset by $0.7 million of proceeds received from the exercise of stock options. Payments in long-term debt include the full repayment of the $4.5 million
mortgage balance on the real property in Massachusetts. In 2021, cash provided by financing activities was $1.2 million, consisting of approximately $1.5 million of proceeds
received from the exercise of stock options, partially offset by payments on long-term debt of $0.4 million. In 2020, cash used in financing activities was $1.5 million,
consisting of $0.9 million of proceeds received from the exercise of stock options, which was fully offset by $2.0 million used for stock repurchases and payments on long-term
debt of $0.4 million.

Off-Balance Sheet Arrangements

As of September 30, 2022, we had no off-balance sheet arrangements as defined in Item 303(a)(4) of Regulation S-K promulgated by the SEC that have or are reasonably likely
to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources that are material to investors.

Contractual Obligations and Commercial Commitments

We had the following contractual obligations and commercial commitments as of September 30, 2022, in thousands:

Contractual obligations
Debt obligations
Lease obligations:

Buildings
Office equipment
Vehicles

Total operating lease obligations
Purchase obligations
Total

Acquisitions

Total

Less than
1 year

1-3 years

3-5 years

More than
5 years

352

119 $

152 $

81 $

15,110
8
28
15,146
19,975
35,473

2,513
5
17
2,535
19,929
22,583 $

3,100
3
11
3,114
46
3,312 $

1,634
—
—
1,634
—
1,715 $

—

7,863
—
—
7,863
—
7,863

Our business strategy includes the possible acquisition of or investments in other businesses to expand or complement our operations. The magnitude, timing and nature of any
future acquisitions or investments will depend on a number of factors, including the availability of suitable candidates, the negotiation of acceptable terms, our financial
capabilities and general economic and business conditions. Financing for future transactions would result in the utilization of cash, incurrence of additional debt, issuance of
stock or some combination of the foregoing.

Critical Accounting Policies

See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of our consolidated financial statements that have been
prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to
make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the consolidated financial statements, the disclosure of contingent assets
and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

On an on-going basis, we evaluate our estimates and judgments, including those related to revenue recognition, income taxes, inventory valuation, and goodwill. We base our
estimates and judgments on historical experience, expectations regarding the future and on various other factors that we believe to be reasonable under the circumstances. The
results of these estimates and judgments form the basis for making conclusions about the carrying value of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or conditions.

A critical accounting policy is one that is both important to the presentation of our financial position and results of operations, and requires management’s most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. These uncertainties are discussed in
“Item 1A. Risk Factors.” We believe the following critical accounting policies encompass the more significant judgments and estimates used in the preparation of our
consolidated financial statements.

Revenue Recognition. We recognize revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in
exchange for those goods or services. A performance obligation is a promise in a contract to transfer a product or service to the customer. The transaction price of a contract is
allocated to each distinct performance obligation based upon the relative standalone selling price for each performance obligation and is recognized as revenue upon satisfaction
of the performance obligation, either at a point in time or over time.

Equipment and related product revenues (e.g., furnace systems, system add-ons, machinery, consumables and spare parts) are recognized at a point in time, when they are
shipped or delivered, depending on contractual terms.

Revenue is recorded net of customer discounts or rebates, if any. Assurance-type warranties are not considered a performance obligation.

Occasionally, our customers earn a commission on the purchase and/or resale of our products. These payments to customers are recorded as a reduction of revenue and are less
than 5% of our total revenues in all periods presented.

In substantially all of our sales transactions, we incur incremental costs to obtain contracts with customers, in the form of sales commissions. We maintain a commission
program which rewards our sales representatives for system sales and our employees for system sales and other individual goals. We have elected a practical expedient to allow
for the recognition of commission expense when incurred if the amortization period of the asset that the entity otherwise would have recognized is one year or less. Based on the
nature of our contracts with customers, we expense all commissions as incurred based upon the expectation that the amortization period would be one year or less.

Income Taxes. We file consolidated federal income tax returns in the United States for all subsidiaries except those in China and the UK, where separate returns are filed. The
calculation of tax liabilities for all jurisdictions involves significant judgment in identifying uncertain tax positions, estimating the amount of deferred tax assets that will be
realized in the future and the impact of uncertainties in the application of complex tax laws. Resolution of these uncertainties in a manner inconsistent with our expectations
could have a material impact on our operations and financial condition.

Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in
taxable or deductible amounts in the future. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. In
evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled
reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and results of recent operations. It is difficult to conclude that a valuation allowance
is not needed when the negative evidence includes cumulative losses in recent years. If we were to determine that it is more likely than not that we would not be able to realize
all or part of our net deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to earnings in the period such determination is made. Likewise,
if we later determine that it is more likely than not that all or part of the net deferred tax assets would be realized, a tax benefit would be realized when all or part of the
previously provided valuation allowance would be reversed. As of September 30, 2022, we have significant U.S. deferred tax assets that have a full valuation allowance and
foreign deferred tax assets that have a partial valuation allowance. Any changes to the judgments related to our valuation allowance could have a material impact on our results
of operations.

Inventory Valuation. We value our inventory at the lower of cost or net realizable value. Inventory cost includes the purchase price of parts or finished goods and freight and/or
other overhead costs incurred to receive the inventory into our manufacturing facilities. We regularly review inventory quantities and record a write-down to net realizable
value for excess and obsolete inventory. The write-down is primarily based on historical inventory usage adjusted for expected changes in product demand and production
requirements. Our industry is characterized by customers in highly-cyclical industries, rapid technological changes, frequent new product developments and rapid product
obsolescence. Changes in demand for our products could result in further write-downs.

Goodwill. We perform an annual impairment test as of September 30, or more frequently if indicators of potential impairment exist, to determine whether the fair value of a
reporting unit in which goodwill resides is less than its carrying value. We perform the first step of the goodwill impairment test, which compares the fair value of the reporting
unit to its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets assigned to that unit, goodwill is not considered impaired and we are
not required to perform additional analysis. If

the carrying value of the net assets assigned to the reporting unit exceeds the fair value of the reporting unit, we would recognize an impairment charge for the amount by which
the carrying amount exceeds the reporting unit’s fair value (although the loss would not exceed the total amount of goodwill allocated to the reporting unit).

Determining the fair value of a reporting unit involves the use of significant estimates and assumptions. Our goodwill impairment test uses a weighting of the income approach
and the market approach to estimate a reporting unit’s fair value. The income approach is based on a discounted future cash flow analysis that uses certain assumptions
including: projections of revenues and expenses and related cash flows based on assumed long-term growth rates and demand trends; expected future investments and working
capital requirements to sustain and grow the business; and estimated discount rates based on the reporting unit’s weighted average cost of capital as derived by the Capital Asset
Pricing Model and other methods, which includes observable market inputs and other data from identified comparable companies. The same estimates are also used internally
for our capital budgeting process, and for long-term and short-term business planning and forecasting. We test the reasonableness of the inputs and outcomes of our discounted
cash flow analysis against available comparable market data.

The market approach is based on the application of appropriate market-derived multiples selected from (i) comparable publicly-traded companies and/or (ii) the implied
transaction multiples derived from identified merger and acquisition activity in the market. Multiples are then selected based on a comparison of the reviewed data to that of the
reporting unit and applied to relevant historical and forecasted financial parameters such as levels of revenues, EBITDA, EBIT or other metrics.

If actual results differ significantly from our projections, we may be required to record a material impairment charge.

Impact of Recently Issued Accounting Pronouncements

For discussion of recently issued accounting pronouncements, see “Recently Issued Accounting Pronouncements” within "Note 1. Summary of Operations and Significant
Accounting Policies” in “Item 8. Financial Statements and Supplementary Data.”

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act and in Item 10(f)(1) of Regulation S-K, we are electing scaled disclosure reporting obligations
and, therefore, are not required to provide the information requested by this Item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following documents are filed as part of this Annual Report on Form 10-K:

Financial Statements

Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248)
Report of Independent Registered Public Accounting Firm (PCAOB ID Number 199)
Consolidated Balance Sheets: September 30, 2022 and 2021
Consolidated Statements of Operations: Years ended September 30, 2022, 2021 and 2020
Consolidated Statements of Comprehensive Income (Loss): Years ended September 30, 2022, 2021 and 2020
Consolidated Statements of Shareholders’ Equity: Years ended September 30, 2022, 2021 and 2020
Consolidated Statements of Cash Flows: Years ended September 30, 2022, 2021 and 2020
Notes to Consolidated Financial Statements

47
48
50
51
52
53
54
55

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Amtech Systems, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheet of Amtech Systems, Inc. (an Arizona corporation) and subsidiaries (the “Company”) as of September 30, 2022,
the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the year ended September 30, 2022, and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of September 30, 2022, and the results of its operations and its cash flows for the year ended September 30, 2022, in conformity with accounting principles generally
accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our
audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audit provides a reasonable basis for our opinion.

Critical audit matters

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit
committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex
judgments. We determined that there are no critical audit matters.

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2021.

Phoenix, Arizona

November 30, 2022

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Shareholders of:

AMTECH SYSTEMS, INC. AND SUBSIDIARIES

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Amtech Systems, Inc. and Subsidiaries (the Company) as of September 30, 2021, and the related consolidated
statements of operations, comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended September 30, 2021 and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company
as of September 30, 2021, and the results of its operations and its cash flows for each of the two years in the period ended September 30, 2021 in conformity with accounting
principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an
audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the
purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included
evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe
that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be
communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the financial statements and (ii) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are
not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.

Accounting for Income Taxes in Foreign Jurisdictions

As described in Note 12 to the consolidated financial statements, the Company is subject to income taxes in the United States, as well as China and a number of other foreign
jurisdictions. The application of tax laws to the Company’s operations can be complex and subject to different interpretations by the Company and respective governmental
taxing authorities. The Company exercises judgment for the interpretation of current tax regulations. We identified the auditing of the accounting for income taxes as a critical
audit matter.

The principal consideration for our determination that the auditing of income taxes was a critical audit matter was the complex auditor judgment required when evaluating the
foreign income tax provisions and use of specialized knowledge and experience necessary in evaluating the completeness of the foreign tax provisions and uncertain tax
positions primarily due to the Company’s multinational presence in numerous foreign jurisdictions with varying complexity in tax laws and regulations.

The primary procedures we performed to address this critical audit matter included:

•Testing the income tax provision in each significant foreign taxable jurisdiction, including performing procedures designed to test the completeness and accuracy of the
permanent and temporary differences by obtaining an understanding of the tax laws applicable in the respective jurisdiction and evaluating communications with tax
advisors, accounting records, and tax returns.

•Evaluating and testing the appropriateness of the methods and assumptions used in the Company’s identification of deferred tax assets and liabilities and assessment of
the valuation of uncertain tax positions in each of its foreign taxable jurisdictions, including the determination of whether the methods were consistent with the
requirements of U.S. GAAP, whether the data was appropriately used, and whether the significant assumptions were reasonable and appropriately applied within the
methods.

•Engaging tax professionals with specialized skill and knowledge who assisted in (1) obtaining an understanding of the tax laws in each respective jurisdiction; (2)
assessing the Company’s tax positions, 3) evaluating the Company’s interpretation of tax law and its assessment and measurement of certain tax uncertainties and
expected outcomes by interpreting tax laws and evaluating and reading advice obtained from the Company.

/s/ MAYER HOFFMAN MCCANN P.C.

We served as the Company's auditor from 2005 to 2021.

Phoenix, Arizona
November 17, 2021

PART I. FINANCIAL INFORMATION
ITEM 1. Consolidated Financial Statements
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share and per share data)

Assets
Current Assets

Cash and cash equivalents
Accounts receivable - Net
Inventories
Income taxes receivable
Other current assets

Total current assets

Property, Plant and Equipment - Net
Right-of-Use Assets - Net
Intangible Assets - Net
Goodwill
Deferred Income Taxes - Net
Other Assets

Total Assets

Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable
Accrued compensation and related taxes
Accrued warranty expense
Other accrued liabilities
Current maturities of finance lease liabilities and long-term debt
Current portion of long-term operating lease liabilities
Contract liabilities
Income taxes payable

Total current liabilities

Finance Lease Liabilities and Long-Term Debt
Long-Term Operating Lease Liabilities
Income Taxes Payable
Other Long-Term Liabilities

Total Liabilities

Commitments and Contingencies (Note 16)
Shareholders’ Equity

Preferred stock; 100,000,000 shares authorized; none issued
Common stock; $0.01 par value; 100,000,000 shares authorized; shares
issued and outstanding: 13,994,154 and 14,304,492 in
2022 and 2021, respectively
Additional paid-in capital
Accumulated other comprehensive (loss) income
Retained deficit

Total Shareholders’ Equity

Total Liabilities and Shareholders’ Equity

The accompanying notes are an integral part of these consolidated financial statements.

September 30,

2022

2021

46,874
25,013
25,488
—
5,561
102,936
6,552
11,258
758
11,168
79
783
133,534

7,301
4,109
871
900
107
2,101
7,231
6
22,626
220
9,395
2,849
76
35,166

32,836
22,502
22,075
1,046
2,407
80,866
14,083
8,646
858
11,168
631
661
116,913

8,229
2,881
545
903
396
531
1,624
—
15,109
4,402
8,389
3,277
102
31,279

—

140
124,458

(1,767 )
(24,463 )
98,368
133,534

143
126,380
14
(40,903 )
85,634
116,913

AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(in thousands, except per share data)

Revenue, net
Cost of sales

Gross profit

Selling, general and administrative
Research, development and engineering
Gain on sale of fixed assets
Severance expense

Operating income (loss)
Loss on sale of subsidiary
Interest income (expense) and other, net

Income (loss) from continuing operations before income taxes

Income tax provision

Income (loss) from continuing operations, net of tax
Loss from discontinued operations, net of tax

Net income (loss)

Income (Loss) Per Basic Share:

Basic income (loss) per share from continuing operations
Basic loss per share from discontinued operations

Net income (loss) per basic share

Income (Loss) Per Diluted Share:

Diluted income (loss) per share from continuing operations
Diluted loss per share from discontinued operations

Net income (loss) per diluted share

Weighted average shares outstanding - basic
Weighted average shares outstanding - diluted

The accompanying notes are an integral part of these consolidated financial statements.

2022

$
$
$

Years Ended September 30,
2021

2020

106,298 $
66,787
39,511
28,300
6,390
(12,465 )
—
17,286
—
1,499
18,785
1,418
17,367
—
17,367 $

1.24 $
— $
1.24 $

1.22 $
— $
1.22 $

85,205 $
50,675
34,530
24,740
5,979
—
86
3,725
—
(291 )
3,434
1,926
1,508
—
1,508 $

0.11 $
— $
0.11 $

14,014
14,184

14,189
14,340

65,463
41,022
24,441
21,397
3,312
—
217
(485 )
(2,793 )
162
(3,116 )
791
(3,907 )
(11,816 )
(15,723 )

(0.28 )
(0.83 )
(1.11 )

14,159
14,159

AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
(in thousands)

Net income (loss)
Foreign currency translation adjustment
Reclassification adjustment for net foreign currency translation
losses included in net loss
Comprehensive income (loss)

The accompanying notes are an integral part of these consolidated financial statements.

2022

Years Ended September 30,
2021

2020

17,367 $
(1,781 )

—
15,586 $

1,508 $
660

—
2,168 $

(15,723 )
1,790

8,797
(5,136 )

AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
(in thousands)

Balances at September 30, 2019

Net loss

Translation adjustment
Stock compensation expense
Repurchase of treasury stock
Retirement of treasury stock
Stock options exercised

Balances at September 30, 2020

Net income
Translation adjustment
Stock compensation expense
Stock options exercised

Balances at September 30, 2021

Net income

Translation adjustment
Stock compensation expense
Repurchase of treasury stock
Retirement of treasury stock
Stock options exercised

Balances at September 30, 2022

Common Stock

Treasury Stock

Par
Value

Shares
14,2

Cost

Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Income (Loss)

Retained
Deficit

(26,5

Total
Shareholders’
Equity

143

—

125,098

(11,233 ) $

56 ) $

—
—
—
—

(366 )
160
14,0

—
—
—
—
(4 )
2

—
—
—
(366 )
366
—

—
—
—
(2,000 )
2,000
—

—
—
326
—
(1,864 )
875

—
10,587
—
—
—
—

141

—
—
—

—

—
—
—

—

—
—
—

—

124,435

—
—
401

1,544

143

—

126,380

—
—
—
—
(4 )
1

—
—
—
(434 )
434
—

—
—
—
(4,115 )
4,115
—

—
—
543
—
(3,184 )
719

—
—
—

241
14,3

—
—
—
—

(434 )
124
13,9

(15,7

23 )
—
—
—
(132 )
—

(42,4

11 ) $

(646 ) $
—
660
—

1,508
—
—

—

(40,9

03 ) $

—
(1,781 )
—
—
—
—

17,36

7
—
—
—
(927 )
—

(24,4

87,452

(15,723 )
10,587
326
(2,000 )
—
877

81,519

1,508
660
401

1,546

85,634

17,367
(1,781 )
543
(4,115 )
—
720

98,368

140

—

124,458

(1,767 ) $

63 ) $

The accompanying notes are an integral part of these consolidated financial statements.

AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)

Operating Activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:

Depreciation and amortization
Write-down of inventory
(Reversal of) provision for allowance for doubtful accounts
Deferred income taxes
Non-cash share-based compensation expense
Loss on sales of subsidiaries
Gain on sale of fixed assets
Other, net

Changes in operating assets and liabilities:

Accounts receivable
Inventories
Contract and other assets
Accounts payable
Accrued income taxes
Accrued and other liabilities
Contract liabilities

Net cash provided by (used in) operating activities

Investing Activities

Purchases of property, plant and equipment
Proceeds from sale of property, plant and equipment
Net cash disposed of in sales of subsidiaries
Acquisition, net of cash and cash equivalents acquired
Net cash provided by (used in) investing activities

Financing Activities

Proceeds from the exercise of stock options
Repurchase of common stock
Payments on long-term debt
Net cash (used in) provided by financing activities

Effect of Exchange Rate Changes on Cash, Cash Equivalents and
Restricted Cash
Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash
Cash, Cash Equivalents and Restricted Cash, Beginning of Year*
Cash, Cash Equivalents and Restricted Cash, End of Year

Supplemental Cash Flow Information:

Income tax payments, net
Interest paid, net of capitalized interest

Supplemental Non-cash Financing and Investing Activities:
Transfer of inventory to property, plant, and equipment
Leased assets obtained in exchange for new operating lease liabilities
Leased assets obtained in exchange for new finance lease liabilities
Accrued for asset retirement obligation

2022

Years Ended September 30,
2021

2020

17,367

1,508

(15,723 )

1,729
102
(32 )
592
543
—

(12,465 )

—

(2,479 )
(3,684 )
(2,203 )
(1,080 )
623
584
5,607
5,204

(1,135 )
19,908
—
—
18,773

720
(4,115 )
(4,872 )
(8,267 )

(1,672 )
14,038
32,836
46,874

386
164

$
$

169
3,686
42
—

$
$
$
$

1,398
544
44
(65 )
401
—
—
43

(11,023 )
(5,180 )
(686 )
5,472
353
829
400
(5,962 )

(3,012 )
—
—
(5,082 )
(8,094 )

1,546
—
(380 )
1,166

656
(12,234 )
45,070
32,836

1,868
241

$
$

39
3,680
160
36

$
$
$
$

1,258
733
24
218
326
13,709
—
55

1,359
(913 )
324
(3,620 )
(2,701 )
4,658
(1,371 )
(1,664 )

(2,676 )
—
(9,940 )
—
(12,616 )

877
(2,000 )
(379 )
(1,502 )

1,718
(14,064 )
59,134
45,070

2,116
265

37
5,262
—
—

$
$

$
$
$
$

* Includes Cash, Cash Equivalents and Restricted Cash that are included in Held-For-Sale Assets on the Consolidated Balance Sheets for periods prior to January 22, 2020.

The accompanying notes are an integral part of these consolidated financial statements.

Notes to Consolidated Financial Statements
For the Years Ended September 30, 2022, 2021 and 2020

1. Summary of Operations and Significant Accounting Policies

Description of Business – Amtech is a leading, global manufacturer of capital equipment, including thermal processing and wafer polishing, and related consumables used
in fabricating semiconductor devices, such as silicon carbide (SiC) and silicon power devices, analog and discrete devices, electronic assemblies and light-emitting diodes
(LEDs). We sell these products to semiconductor device and module manufacturers worldwide, particularly in Asia, North America and Europe.

We serve niche markets in industries that are experiencing technological advances, and which historically have been very cyclical. Therefore, future profitability and growth
depend on our ability to develop or acquire and market profitable new products and on our ability to adapt to cyclical trends.

In March 2020, the outbreak of COVID-19 was recognized as a pandemic by the World Health Organization, and the outbreak became increasingly widespread, including in
all of the markets in which we operate. We continue to monitor the impact of COVID-19 on all aspects of our business. We are a company operating in a critical
infrastructure industry, as defined by the U.S. Department of Homeland Security. Consistent with federal guidelines and with foreign government, state and local orders to
date, we have continued to operate across our footprint throughout the COVID-19 pandemic. Following the onset of COVID-19 and its negative effects on our business,
most prominently reflected in our second, third and fourth quarter fiscal 2020 results, global economic conditions improved during fiscal 2021, resulting in increased
demand for our products and services, which led to our earnings for fiscal 2021 substantially exceeding our fiscal 2020 results. There remain many unknowns and we
continue to monitor the expected trends and related demand for our products and services and have and will continue to adjust our operations accordingly.

On March 28, 2022, the Chinese government issued a mandatory shutdown in Shanghai, the location of one of our manufacturing facilities. The factory was allowed to
partially reopen in May 2022 and was fully reopened on June 1, 2022. Upon reopening on June 1, 2022, the factory was able to operate at near full capacity for the entire
month of June. We were able to make up the shipments missed in the fourth quarter and are now operating at normal capacity levels. Additionally, given the uncertainty
surrounding the COVID-19 pandemic and the emergence of variations thereof, there can be no assurance that this facility will be allowed to remain open on a consistent
basis.

Principles of Consolidation – The consolidated financial statements include the accounts of the Company and our wholly-owned subsidiaries. All intercompany balances
and transactions have been eliminated in consolidation.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America
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
date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Reclassifications – Certain reclassifications have been made to prior year financial statement footnotes to conform to the current year presentation. These reclassifications
had no effect on the previously reported consolidated financial statements for any period.

Divestitures – Significant accounting policies associated with a decision to dispose of a business are discussed below:

Discontinued Operations – A business is classified as discontinued operations if the disposal represents a strategic shift that will have a major effect on operations or
financial results and meets the criteria to be classified as held for sale or is disposed of by sale or otherwise. Significant judgments are involved in determining whether a
business meets the criteria for discontinued operations reporting and the period in which these criteria are met. If a business is reported as a discontinued operation, the
results of operations through the date of sale, including any gain or loss recognized on the disposition, are presented on a separate line of the Consolidated Statement of
Operations. Interest on debt directly attributable to the discontinued operation is allocated to discontinued operations.

Assets Held for Sale – An asset or business is classified as held for sale when (i) management commits to a plan to sell and it is actively marketed; (ii) it is available for
immediate sale and the sale is expected to be completed within one year; and (iii) it is unlikely significant changes to the plan will be made or that the plan will be
withdrawn. In isolated instances, assets held for sale may exceed one year due to events or circumstances beyond our control. The assets and related liabilities are
aggregated and reported on separate lines of the Consolidated Balance Sheets.

Cash and Cash Equivalents – We consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Our cash and cash
equivalents consist of amounts invested in U.S. money market funds and various U.S. and foreign bank operating and time deposit accounts.

We maintain our cash, cash equivalents and restricted cash in multiple financial institutions. Balances in the United States, which account for approximately 84% and 83%
of total cash balances as of September 30, 2022 and 2021, respectively, are primarily invested in AAA-rated U.S Treasury and U.S. Government Agency repo money market
mutual funds, which have a constant net asset value and consist of direct U.S. Treasuries and/or U.S. Government Agencies with repurchase agreements backed by U.S.
Treasury or U.S. Government Agency collateral only, or are in financial institutions insured by the FDIC. The remainder of our cash is maintained with financial institutions
with reputable credit in China, the United Kingdom and Malaysia. We maintain cash in bank accounts in amounts which at times may exceed federally insured limits. We
have not experienced any losses on such accounts.

Accounts Receivable and Allowance for Doubtful Accounts – Accounts receivable are recorded at the sales price of products sold to customers on trade credit terms.
Accounts receivable are considered past due when payment has not been received from the customer within the normal credit terms extended to that customer. A valuation
allowance is established for accounts when collection is no longer probable. Accounts are written off against the allowance when the probability of collection is remote.
Historically, these write-offs have been immaterial.

Inventories – We value our inventory at the lower of cost (first-in, first-out method) or net realizable value. Inventory cost includes the purchase price of parts or finished
goods, labor, overhead and any freight cost incurred to receive the inventory into our manufacturing facilities. We regularly review inventory quantities and record a write-
down to net realizable value for excess and obsolete inventory. The write-down is primarily based on historical inventory usage adjusted for expected changes in product
demand and production requirements. Our industry is characterized by customers in highly-cyclical industries, rapid technological changes, frequent new product
developments and rapid product obsolescence. Changes in demand for our products could result in further write-downs.

Property, Plant and Equipment – Property, plant and equipment are recorded at cost upon acquisition. We begin depreciation and amortization when an asset is both in
the location and condition for its intended use. Maintenance and repairs are charged to expense as incurred. The cost of property retired or sold and the related accumulated
depreciation and amortization are removed from the applicable accounts when disposition occurs and any gain or loss is recognized. Depreciation and amortization are
computed using the straight-line method over the estimated useful life of the asset. Useful lives for equipment and machinery range from three to seven years; for leasehold
improvements from three to fifteen years; for furniture and fixtures from five to ten years; and for buildings from 20 to 30 years.

Reviews are regularly performed to determine whether facts and circumstances exist which indicate that the useful life is shorter than originally estimated or the carrying
amount of assets may not be recoverable. Impairment, if any, is based on the excess of the carrying amount over the estimated fair value of those assets.

Leases – We determine if a contract or arrangement is, or contains, a lease at inception. Balances related to operating leases are included in right-of-use ("ROU") assets in
our Consolidated Balance Sheets. Balances related to financing leases are immaterial and are included in property, plant and equipment and finance lease liabilities and
long-term debt in our Consolidated Balance Sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation
to make lease payments arising from the lease.

ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As none of our leases provide an
implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The
ROU asset includes any prepaid lease payments and additional direct costs and excludes lease incentives. Our lease terms may

include options to extend or terminate the lease, which we include in the recognition of the ROU asset and lease liability, when it is reasonably certain that we will exercise
that option.

We lease office space, buildings, land, vehicles and equipment. We made an accounting policy election not to separate non-lease components from lease components for all
existing classes of underlying assets with the exception of land and buildings. Lease agreements with an initial term of 12 months or less with no renewal options are not
recorded on the balance sheet. Instead, we recognize the lease expense as incurred over the lease term. Our lease agreements do not contain any material residual value
guarantees or material restrictive covenants. We have one lease that requires the underlying asset to be returned to its original condition at the end of the lease term. The
related asset retirement obligation, which is immaterial, is reflected within other long-term liabilities in our Consolidated Balance Sheets.

Certain lease agreements include one or more options to renew, with individual option terms that can extend the lease term from one to five years. The exercise of lease
renewal options is at our sole discretion. Some equipment leases also include options to purchase the leased property. The estimated life of assets and leasehold improvements
are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

In June 2022, we entered into a sale-leaseback transaction to facilitate a future move of our Massachusetts operations, pursuant to which we sold the property to a third party
and agreed to lease the property back for two years. To determine whether the transfer of the property should be accounted for as a sale, we evaluated whether we transferred
control to the third party in accordance with the revenue recognition guidance set forth in ASC 606. The transfer was deemed to be a sale at market terms. Therefore, we
recognized the transaction price for the sale based on the cash proceeds received, derecognized the carrying amount of the underlying assets and recognized a gain in the
Consolidated Statements of Operations for the difference between the carrying value of the asset and the transaction price. We then accounted for the leaseback in accordance
with our lease accounting policy.

Intangible Assets – Intangible assets acquired in business combinations are capitalized and subsequently amortized on a straight-line basis over their estimated useful life.
We regularly perform reviews to determine if facts and circumstances exist which indicate that the useful lives of our intangible assets are shorter than originally estimated
or the carrying amount of these assets may not be recoverable. Impairment, if any, is based on the excess of the carrying amount over the estimated fair value of those
assets. Patent costs consist primarily of legal and filing fees incurred to file patents on proprietary methods and technology we developed. Patent costs are expensed when
incurred, as they are insignificant.

Goodwill – Goodwill is recorded when the purchase price paid for an acquisition exceeds the estimated fair value of net identified tangible and intangible assets acquired.
Goodwill is not subject to amortization but is tested for impairment annually or when it is determined that it is more likely than not that the fair value of a reporting unit is
less than its carrying amount. If it is concluded that there is a potential impairment, we would recognize an impairment charge for the amount by which the carrying amount
exceeds the reporting unit’s fair value (although the loss would not exceed the total amount of goodwill allocated to the reporting unit).

Revenue Recognition – We recognize revenue when a customer obtains control of promised goods or services in an amount that reflects the consideration expected to be
received in exchange for those goods or services. A performance obligation is a promise in a contract to transfer a product or service to the customer. The transaction price of
a contract is allocated to each distinct performance obligation based upon the relative standalone selling price ("SSP") for each performance obligation and is recognized as
revenue upon satisfaction of the performance obligation. To record revenue properly, we apply the following five steps:

1) Identify the contract with the customer

A contract with a customer exists when (i) we enter into an enforceable contract with a customer that defines each party’s rights regarding the goods or services to be
transferred and identifies the related payment terms, (ii) the contract has commercial substance, and (iii) we determine that collection of substantially all consideration for
goods and services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration.

2) Identify the performance obligations in the contract

Performance obligations are identified based on the goods and services that will be transferred to the customer that are both (i) capable of being distinct, whereby the
customer can benefit from the good or service either on its own or together with other available resources, and (ii) are distinct in the context of the contract, whereby the
transfer of the good or service is separately identifiable from other promises to the customer in the contract. To the extent a contract includes multiple promised goods and
services, we must apply judgment to determine whether promised goods and services are capable of being distinct and distinct in the context of the contract. If these criteria
are not met, the promised goods and services are accounted for as a combined performance obligation.

Our equipment sales consist of multiple promises, including the delivery of the system itself and obligations that are not delivered simultaneously with the system, such as
installation services and training. In most cases, these services require minimal effort and are immaterial in the context of the contract. Therefore, equipment and related
services are treated as one performance obligation. Customers who purchase new systems are provided an assurance-type warranty, generally for periods of 12 to 36
months. Assurance-type warranties are not considered a performance obligation.

We account for shipping and handling activities that occur after control of the related good transfers as fulfillment activities instead of assessing such activities as
performance obligations.

Our remaining performance obligations as of September 30, 2022, have an original duration of one year or less. Our obligations for returns and/or refunds are immaterial in
all periods presented.

3) Determine the transaction price

The transaction price is determined based on the consideration to which we will be entitled in exchange for transferring goods and services to the customer.

The transaction price is based on the price reflected in the individual customer’s purchase order.

4) Allocate the transaction price to performance obligations in the contract

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple
performance obligations require an allocation of the transaction price to each distinct performance obligation.

When required, the SSP for each performance obligation is based on observable data from standalone sales. To determine the SSP for labor-related performance obligations,
we use directly observable inputs based on the standalone sale prices for these services.

5) Recognize revenue when, or as, we satisfy a performance obligation

We satisfy performance obligations either over time or at a point in time. Revenue is recognized over time if either (i) the customer simultaneously receives and consumes
the benefits provided by our performance, (ii) our performance creates or enhances an asset that the customer controls as the asset is created or enhanced, or (iii) our
performance does not create an asset with an alternative use to the entity and we have an enforceable right to payment for performance completed to date. If we do not
satisfy a performance obligation over time, the related performance obligation is satisfied at a point in time by transferring the control of a promised good or service to a
customer. For over time recognition, we are required to select a single revenue recognition method for the performance obligation that faithfully depicts our performance in
transferring control of the goods and services.

Revenue for maintenance services are recognized over time based on hours incurred, as the hours incurred align to the maintenance activities performed.

We exclude from the transaction price all sales taxes that are assessed by a governmental authority and that are imposed on and concurrent with a specific revenue-
producing transaction and collected from a customer (for example, sales, use, value added, and certain excise taxes). Sales taxes are presented on a net basis (excluded from
revenues) in our Consolidated Statements of Operations. Our remaining performance obligations as of September 30, 2022, have an original duration of one year or less.
Our customers generally have payment terms of 60-90 days. We do not have any payment terms that exceed one year from the point we have satisfied the related
performance obligations.

Management reviews disaggregated revenue at the reportable segment level. Revenue-generating transactions vary between our reportable segments due to several factors.
For example, lead times vary among our reportable segments and among our products. Most of the revenue for our Material and Substrate segment results from the sale of
consumables, rather than equipment sales. These consumables have a much shorter production period than equipment produced by our other reportable segment. Due to
these variations between reportable segments, management determined that disaggregated revenue by reportable segment sufficiently depicts how economic factors affect
the nature, amount, timing and uncertainty of our revenue and cash flows. See Note 18 for additional information on our reportable segments.

Contract Assets – Contract assets consist of amounts we are not legally able to invoice but have completed the related performance obligation. These amounts generally
arise from variances between the contractual payment terms and the transaction price assigned to the open performance obligations (e.g., we have recognized revenue in an
amount greater than the amount that is billable under the contract). There were no contract assets at September 30, 2022 and 2021.

Contract Liabilities – Contract liabilities are reflected in current liabilities on the Consolidated Balance Sheets as all performance obligations are expected to be satisfied
within the next 12 months. Contract liabilities include customer deposits and deferred profit, if any. Contract liabilities relate to payments invoiced or received in advance
of completion of performance obligations under a contract. Contract liabilities are recognized as revenue upon the fulfillment of performance obligations. Contract liabilities
consist of customer deposits as of September 30, 2022 and 2021. Of the $1.6 million contract liabilities recorded at September 30, 2021, the entire $1.6 million was
recorded as revenue for the year ended September 30, 2022. Of the $1.2 million contract liabilities recorded at September 30, 2020, the entire $1.2 million was recorded as
revenue for the year ended September 30, 2021. Of the $1.4 million contract liabilities recorded at September 30, 2019, the entire $1.4 million was recorded as revenue for
the year ended September 30, 2020.

Warranty – A limited warranty is provided free of charge, generally for periods of 12 to 36 months to all purchasers of our new products and systems. Accruals are
recorded for estimated warranty costs at the time revenue is recognized, generally upon shipment or acceptance, as determined under the revenue recognition policy above.
On occasion, we have been required and may be required in the future to provide additional warranty coverage to ensure that the systems are ultimately accepted or to
maintain customer goodwill. While our warranty costs have historically been within our expectations and we believe that the amounts accrued for warranty expenditures are
sufficient for all systems sold through September 30, 2022, we cannot guarantee that we will continue to experience a similar level of predictability with regard to warranty
costs. In addition, technological changes or previously unknown defects in raw materials or components may result in more extensive and frequent warranty service than
anticipated, which could result in an increase in our warranty expense.

The following is a summary of activity in accrued warranty expense at our continuing operations, in thousands:

Beginning balance
Additions for warranties issued during the period
Reductions in the liability for payments made under
the warranty
Changes related to pre-existing warranties
Currency translation adjustment
Ending balance

2022

Years Ended September 30,
2021

2020

545 $
821

(36 )
(459 )
—
871 $

380 $
250

(9 )
(76 )
—
545 $

556
393

(433 )
(121 )
(15 )
380

Shipping Expense – Shipping expenses at our continuing operations of $2.4 million, $0.8 million and $0.5 million for 2022, 2021 and 2020, respectively, are included in
selling, general and administrative expenses.

Advertising Expense – Advertising costs are expensed as incurred. Advertising expenses at our continuing operations of $0.4 million, $0.2 million and $0.3 million for
2022, 2021 and 2020, respectively, are included in selling, general and administrative expenses.

Stock-Based Compensation – We measure compensation costs relating to share-based payment transactions based upon the grant-date fair value of the award. Those costs
are recognized as expense over the requisite service period, which is generally the vesting period, with forfeitures recognized as they occur. We estimate the fair value of
stock option awards on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model requires us to apply estimates, including expected stock
price volatility, expected life of the option and the risk-free interest rate.

Research, Development and Engineering Expenses – RD&E expenses consist of the cost of employees, consultants and contractors who design, engineer and develop
new products and processes as well as materials and supplies used in producing prototypes. RD&E expenses may vary from period to period depending on the engineering
projects in process. Expenses related to engineers working on strategic projects or sustaining engineering projects are recorded in RD&E. However, from time to time we
add functionality to our products or develop new products during engineering and manufacturing to fulfill specifications in a customer’s order, in which case the cost of
development, along with other costs of the order, are charged to cost of goods sold. When certain contract requirements are met, governmental research and development
grants are netted against research, development and engineering expenses. The following is a summary of our research, development and engineering expense, thousands:

Research, development and engineering
Grants earned
Net research, development and engineering

2022

Years Ended September 30,
2021

2020

6,390 $
—
6,390 $

5,979 $
—
5,979 $

3,689
(377 )
3,312

Foreign Currency Transactions and Translation – We use the U.S. dollar as our reporting currency. Our operations in the UK, China and other countries are primarily
conducted in their functional currencies, the Euro, Renminbi, or the local country currency, respectively. Accordingly, assets and liabilities of the subsidiaries are translated
into U.S. dollars at the exchange rate in effect at the balance sheet dates. Income and expense items are translated at the average exchange rate for each month within the
year. The resulting translation adjustments are recorded directly in accumulated other comprehensive income (loss), net of tax - foreign currency translation adjustments as a
separate component of shareholders’ equity. Net foreign currency transaction gains/losses, including transaction gains/losses on intercompany balances that are not of a
long-term investment nature and non-functional currency cash balances, are reported as a separate component of non-operating (income) expense in our Consolidated
Statements of Operations.

Income Taxes – We file consolidated federal income tax returns in the United States for all subsidiaries except those in China and the UK, where separate returns are filed.
We account for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax

consequences of events that have been included in the financial statements. Under this method, we determine deferred tax assets and deferred tax liabilities on the basis of
the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to
reverse. The effect of a change in tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all
available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies,
carryback potential if permitted under the tax law and results of recent operations. If we determine that we would not be able to realize our deferred tax assets in the future
in excess of their net recorded amount, we would make an adjustment to the deferred tax asset through recognizing a valuation allowance, which would increase the
provision for income taxes.

We record uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) we determine whether it is more likely than not that the tax
positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, we
recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. We recognize interest
and penalties related to uncertain tax benefits on the income tax expense line in the accompanying consolidated statement of operations. Accrued interest and penalties are
included on the income taxes payable long-term line in the Consolidated Balance Sheets.

Concentrations of Credit Risk – Our customers are primarily manufacturers of semiconductor substrates and devices and electronic assemblies. Financial instruments that
potentially subject us to significant concentrations of credit risk consist principally of cash and trade accounts receivable. Credit risk is managed by performing credit
evaluations of the customers’ financial condition, by requiring significant deposits where appropriate, and by actively monitoring collections. Letters of credit are required
of certain customers depending on the size of the order, type of customer or its creditworthiness, and country of domicile.

As of September 30, 2022, one Semiconductor customer individually represented 12% of accounts receivable. As of September 30, 2021, one Semiconductor customer
individually represented 14% of accounts receivable.

Refer to Note 20 for information regarding revenue and assets in other countries subject to fluctuation in foreign currency exchange rates.

Fair Value of Financial Instruments – We group our financial assets and liabilities measured at fair value on a recurring basis into three levels, based on the markets in
which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are:

Level 1 – Valuation is based upon quoted market price for identical instruments traded in active markets.

Level 2 – Valuation is based on quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not
active, and model-based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model-based techniques that use significant assumptions not observable in the market. Valuation techniques include use of
discounted cash flow models and similar techniques.

It is our policy to use observable inputs whenever reasonably practicable in order to minimize the use of unobservable inputs when developing fair value measurements.
When available, we use quoted market prices to measure fair value. If market prices are not available, the fair value measurement is based on models that use primarily
market-based parameters including interest rate yield curves, option volatilities and currency rates. In certain cases, where market rate assumptions are not available, we are
required to make judgments about assumptions market participants would use to estimate the fair value of a financial instrument. Changes in the underlying assumptions
used, including discount rates and estimates of future cash flows, could significantly affect current or future valuations.

Cash, Cash Equivalents and Restricted Cash – Included in cash and cash equivalents and restricted cash in the Consolidated Balance Sheets are money market funds
invested in treasury bills, notes and other direct obligations of the U.S. Treasury and foreign bank operating and time deposit accounts. Cash equivalents are classified as
Level 1 in the fair value hierarchy.

Receivables and Payables – The recorded amounts of these financial instruments, including accounts receivable and accounts payable, approximate their fair value because
of the short maturities of these instruments.

Debt – Due to the relatively short-term nature of the debt, we believe that the carrying value approximated fair value. We paid this debt in full on June 23, 2022 upon the
closing of the sale of our Massachusetts manufacturing facility (see Note 8).

Recently Issued Accounting Pronouncements

There were no new accounting pronouncements issued or effective as of September 30, 2022 that had or are expected to have a material impact on our consolidated
financial statements.

2. Acquisition

On March 3, 2021, we acquired 100% of the issued and outstanding capital stock of Intersurface Dynamics, a Connecticut-based manufacturer of substrate process chemicals
used in various manufacturing processes, including semiconductors, silicon and compound semiconductor wafers, and optics, for a cash purchase price of $5.3 million. The
total fair value of net assets acquired was approximately $0.7 million, including $0.4 million of identifiable intangible assets consisting of customer relationships and trade
name, which are amortized using the straight-line method over their estimated useful lives of ten and three years, respectively. Goodwill acquired approximated $4.5 million,
which was recorded in our Material and Substrate segment. Intersurface Dynamics's results of operations are included in our Material and Substrate segment from the date of
acquisition. Our historical results would not have been materially affected by the acquisition of Intersurface Dynamics.

3. Cybersecurity Incident

On April 12, 2021, we detected a data incident in which attackers acquired data and disabled some of the technology systems used by one of our subsidiaries. Upon learning
of the incident, we immediately engaged external counsel and retained a team of third-party forensic, incident response, and security professionals to investigate and
determine the full scope of this incident. We also notified law enforcement officials and confirmed that the incident is covered by our insurance. We completed the
investigation of the data incident with assistance from our outside professionals, and indications were that the unauthorized third-party gained access to certain personal
information relating to employees and their beneficiaries for some of our operations. There was no indication of any misuse of this information.

Despite this disruption, production continued in our facilities. Our previously disabled subsidiary network is now back up and running securely. Working alongside our
security professionals, we were able to bring our subsidiary’s systems online with enhanced security controls. We have deployed an advanced next generation anti-virus and
endpoint detection and response tool, as well as Managed Detection & Response services. We remain committed to protecting the security of the personal information
entrusted to us and providing high-quality products and service to our customers.

We recorded approximately $1.1 million of expense related to this incident, which was included in selling, general and administrative expenses, during 2021. The expense
was primarily related to third-party service providers, including security professionals as well as legal and response teams. We may make additional investments in the future
to further strengthen our cybersecurity. We filed an insurance claim during 2021 related to the incident. During 2022, we signed a final settlement agreement with our insurer
resulting in total reimbursement of approximately $0.6 million, which included $0.4 million received during the quarter ended December 31, 2021 and $0.2 million received
during the quarter ended March 31, 2022. No portion of the reimbursement remains outstanding as of September 30, 2022.

4. Earnings Per Share & Diluted Earnings Per Share

Basic EPS is computed by dividing net income (loss) available to common shareholders by the weighted average number of common shares outstanding for the period.
Diluted EPS is computed similarly to basic EPS except that the denominator is increased to include the number of additional common shares that would have been
outstanding if potentially dilutive common shares had been issued. In the case of a net loss, diluted EPS is calculated in the same manner as basic EPS.

For the years 2022, 2021 and 2020, options for 189,000, 101,000 and 642,000 weighted average shares, respectively, were excluded from the diluted EPS calculations because
they were anti-dilutive. These shares could become dilutive in the future.

A reconciliation of the denominators of the basic and diluted EPS calculations follows, in thousands, except per share amounts:

Numerator:

Net income (loss) from continuing operations
Net loss from discontinued operations
Net income (loss)

Denominator:

Weighted-average shares used to compute basic EPS
Common stock equivalents (1)
Weighted-average shares used to compute diluted EPS

Basic income (loss) per share from continuing operations
Basic loss per share from discontinued operations
Net income (loss) per basic share

Diluted income (loss) per share from continuing operations
Diluted loss per share from discontinued operations
Net income (loss) per diluted share

2022

Years Ended September 30,
2021

2020

$
$
$

$
$
$
$
$
$

17,367
—
17,367

$
$
$

14,014
170
14,184

1.24
—
1.24

1.22
—
1.22

$
$
$
$
$
$

1,508 $
— $
1,508 $

14,189
151
14,340

0.11 $
— $
0.11 $
0.11 $
— $
0.11 $

(3,907 )
(11,816 )
(15,723 )

14,159
—
14,159

(0.28 )
(0.83 )
(1.11 )

(1) The number of common stock equivalents is calculated using the treasury stock method and the average market price during the period.

5. Severance

The table below details the severance activity for the years ended September 30, 2022 and 2021. The activity during 2021 is the result of staff reductions in our
Semiconductor and Material and Substrate operations. The outstanding obligations as of September 30, 2022 and 2021 are as follows, in thousands:

Balance at beginning of the year
Severance expense, net of adjustments
Cash payments
Balance at the end of the year

Years Ended September 30,
2022

2021

17 $
—
(17 )
— $

102
86
(171 )
17

6. Inventories

The components of inventories are as follows, in thousands:

Purchased parts and raw materials
Work-in-process
Finished goods

7. Property, Plant and Equipment

The following is a summary of property, plant and equipment, in thousands:

Land
Buildings
Building and leasehold improvements
Equipment and machinery
Furniture and fixtures

Accumulated depreciation and amortization

September 30,

2022

2021

15,377 $
6,146
3,965
25,488 $

12,647
4,865
4,563
22,075

September 30,

2022

2021

189 $
717
2,694
7,238
2,307
13,145
(6,593 )
6,552 $

3,240
5,396
4,622
6,261
2,458
21,977
(7,894 )
14,083

Depreciation was $1.6 million, $1.2 million and $0.8 million in 2022, 2021 and 2020, respectively.

8. Sale and Leaseback of Real Estate

On June 23, 2022, BTU completed the sale and leaseback of its building in Massachusetts (the “Property”). The sale price was $20.6 million, of which $0.7 million was
deducted at closing for commission and other closing expenses. Simultaneously with the closing, BTU entered into a two-year leaseback of the Property. The lease terms
include annual base rent of $1.5 million in an absolute triple net lease. In connection with the sale, BTU recognized a pre-tax gain on sale of $12.5 million, which is recorded
within operating expenses on the Consolidated Statement of Operations. This sale-leaseback transaction resulted in a net cash inflow of approximately $14.9 million, after
repayment of the existing mortgage and settlement of related sale expenses.

9. Leases

The following table provides information about the financial statement classification of our lease balances reported within the Consolidated Balance Sheets as of September
30, 2022 and 2021, in thousands:

Assets

Right-of-use assets - operating
Right-of-use assets - finance
Total right-of-use assets

Liabilities
Current

Operating lease liabilities
Finance lease liabilities
Total current portion of long-term lease liabilities

Long-term

Operating lease liabilities
Finance lease liabilities
Total long-term lease liabilities

Total lease liabilities

September 30,

2022

2021

11,258 $
149
11,407 $

2,101 $
71
2,172

9,395
76
9,471
11,643 $

8,646
174
8,820

470
61
531

8,279
110
8,389
8,920

The following table provides information about the financial statement classification of our lease expenses reported in the Consolidated Statements of Operations for the
years ended September 30, 2022 and 2021, in thousands:

Lease cost
Operating lease cost
Operating lease cost
Operating lease cost
Finance lease cost

Finance lease cost
Short-term lease cost
Total lease cost

Classification
Cost of sales
Selling, general and administrative expenses
Research, development and engineering
Cost of sales

Selling, general and administrative expenses
Cost of sales

Years Ended September 30,

2022

2021

2020

822
359
14
4

71
—
1,270

536 $
256
—
5

17
191
1,005 $

208
84
—

16
8
164
480

Future minimum lease payments under non-cancelable leases as of September 30, 2022 are as follows, in thousands:

Operating Leases

Finance Leases

Total

2023
2024
2025
2026
2027
Thereafter
Total lease payments
Less: Interest
Present value of lease liabilities

2,535
2,136
978
861
773
7,863
15,146
3,650
11,496

76
57
9
9
3
—
154
7
147

2,611
2,193
987
870
776
7,863
15,300
3,657
11,643

Operating lease payments include $6.2 million related to options to extend lease terms that are reasonably certain of being exercised.

The following table provides information about the remaining lease terms and discount rates applied as of September 30, 2022 and 2021:

Weighted average remaining lease term

Operating leases
Finance leases

Weighted average discount rate

Operating leases
Finance leases

10. Intangible Assets

Intangible assets consist of the following, in thousands:

September 30,

2022

2021

12.65 years
2.45 years

4.17 %
4.17 %

16.92 years
2.79 years

4.17 %
4.17 %

Customer lists
Trade names

Accumulated amortization
Intangible assets, net

6-10 years
3-15 years

1,609
879
2,488
(1,730 )
758

1,609
879
2,488
(1,630 )
858

Useful Life

2022

2021

September 30,

During each fiscal year, we periodically assessed whether any indicators of impairment existed related to our intangible assets. As of each interim period end during each
fiscal year, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of intangible assets below their carrying value.

Amortization expense related to intangible assets at our continuing operations was $0.1 million, $0.2 million and $0.3 million in 2022, 2021 and 2020, respectively. Future
amortization expense for the remaining unamortized balance as of September 30, 2022 is estimated as follows, in thousands:

Years Ending September 30,
2023
2024
2025
2026
2027
Thereafter
Total

Amortization
Expense

100
98
97
97
97
269
758

11. Goodwill

The changes in the carrying amount of goodwill, by reportable segment, for the year ended September 30, 2022 are as follows, in thousands:

Goodwill
Accumulated impairment losses

Balance at September 30, 2021
Goodwill acquired during 2022
Impairment of goodwill during 2022
Balance at September 30, 2022

Goodwill
Accumulated impairment losses

Balance at September 30, 2022

$
$

Semiconductor

Material and Substrate

Total Goodwill

5,905 $
—
5,905
—
—
5,905 $
5,905 $
—
5,905 $

5,263 $
—
5,263
—
—
5,263 $
5,263 $
—
5,263 $

11,168
—
11,168
—
—
11,168

11,168
—
11,168

On March 3, 2021, we acquired Intersurface Dynamics, which has been integrated into our Material and Substrate segment. Under the purchase method of accounting, the
purchase price for the acquisition was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values. The
excess purchase price over fair value of net assets acquired of approximately $4.5 million was recorded as goodwill in the Material and Substrate segment. The primary driver
for this acquisition was to bolster our offerings in the substrate consumables space and incorporate wafer processing coolants and chemicals to our existing consumable and
machine product lines.

During each fiscal year, we periodically assessed whether any indicators of impairment existed which would require us to perform an interim impairment review. As of each
interim period end during each fiscal year, we concluded that a triggering event had not occurred that would more likely than not reduce the fair value of our reporting units
below their carrying values. We performed our annual test of goodwill for impairment as of September 30. The results of the goodwill impairment test indicated that the fair
values of our Semiconductor and Material and Substrate reporting units were in excess of the carrying values, and, thus, we did not require an impairment charge. While the
quantitative analysis indicated no impairment of Semiconductor and Material and Substrate segment goodwill existed as of September 30, 2022, if the future performance of
these reporting units fall short of our expectations or if there are significant changes in operations due to changes in market conditions, we could be required to recognize
material impairment charges in future periods.

12. Income Taxes

Income Tax Provision

The following note related to income taxes summarizes the results from both continuing and discontinued operations. The components of income (loss) before provision for
income taxes are as follows, in thousands:

Domestic
Foreign

2022

Years Ended September 30,
2021

2020

15,275 $
3,510

18,785

(3,320 ) $
6,754
3,434

(18,652 )
3,673
(14,979 )

The components of the provision for income taxes are as follows, in thousands:

Current:

Domestic federal
Foreign
Foreign withholding taxes
Domestic state

Total current
Deferred:

Domestic Federal
Foreign
Total deferred
Total provision

2022

Years Ended September 30,
2021

2020

— $

711
255
77
1,043

(39 )
414
375
1,418 $

1,999
292
(300 )
1,991

—
(65 )
(65 )
1,926 $

(239 )
1,407
201
(59 )
1,310

—
(566 )
(566 )
744

The CARES Act, which was signed into law on March 27, 2020, included a provision for a five-year carryback of net operating losses. We have assessed the benefit of the
provision and utilized a portion of the 2019 net operating loss carryback to offset income from 2018. The income tax provision as of and for the year ended September 30,
2020 reflects such impact.

Due to the tax treatment relating to the sale of Tempress, we realized an income tax benefit of $11.1 million, which is reflected in our discontinued operations in 2020. We
realized income tax expense of $0.2 million for the sale of R2D, which is reflected in our continuing operations in 2020. The income tax (benefit) expense is fully offset by a
valuation allowance.

A reconciliation of actual income taxes to income taxes at the expected U.S. federal corporate income tax rate is as follows, in thousands, except percentages:

Federal statutory rate
Tax expense (benefit) at the federal statutory rate
Effect of permanent book-tax differences
State tax provision
Valuation allowance for net deferred tax assets

Uncertain tax items
Tax rate differential
Other items

2022

Years Ended September 30,
2021

2020

21.0 %
3,945 $
11
554

(3,138 )
55
535
(544 )
1,418 $

21.0 %
722 $
54
24

842
(276 )
267
293
1,926 $

21.0 %
(3,146 )
145
34

3,775
(47 )
222
(239 )
744

Deferred Income Taxes and Valuation Allowance

Deferred income taxes reflect the tax effects of temporary differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect
for the year in which the differences are expected to be realized. The components of deferred tax assets and deferred tax liabilities are as follows, in thousands:

Deferred tax assets:

Net operating loss carryforwards
Accruals and reserves
Foreign tax credit
Operating lease liabilities
Foreign service fee
Other assets

Total deferred tax assets
Valuation allowance

Deferred tax assets, net of valuation allowance
Deferred tax liabilities:

Goodwill and identifiable intangible assets
Property and equipment, net
Operating lease, right-of-use assets
Prepaid assets

Total deferred tax liabilities
Total deferred tax assets (liabilities)

Changes in the deferred tax valuation allowance are as follows, in thousands:

Balance at the beginning of the year
(Reductions) additions to valuation allowance
Balance at the end of the year

September 30,

2022

2021

17,180 $
1,441
811
2,492
1,579
467

23,970
(20,000 )
3,970

(321 )
(758 )
(2,494 )
(318 )
(3,891 )
$
79

20,650
1,250
1,207
1,119
1,635
1,092
26,953
(23,292 )
3,661

(499 )
(1,201 )
(1,119 )
(211 )
(3,030 )
631

Years Ended September 30,
2021
2022

23,292
(3,292 )
20,000

21,733
1,559
23,292

The deferred tax valuation allowance decreased by $3.3 million and increased by $1.6 million for the years ended September 30, 2022 and 2021, respectively. In assessing
the realizability of deferred tax assets, we consider whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We
consider the scheduled reversal of deferred tax liabilities, projected future income and tax planning strategies in making this assessment. We have established valuation
allowances on all net U.S. deferred tax assets, after considering all of the available objective evidence, both positive and negative, historical and prospective, with greater
weight given to historical evidence, and determined it is not more likely than not that these assets will be realized. We have established a partial valuation allowance on
certain foreign deferred tax assets that we consider it is more likely than not will not be realized.

We intend to permanently reinvest undistributed earnings of our foreign subsidiaries. It is not practicable to estimate the amount of tax that might be payable on the
undistributed amounts.

Net Operating Losses

As of September 30, 2022, we have federal net operating loss carryforwards of approximately $10.0 million that expire at various times between 2032 and 2035. The
utilization of those federal net operating losses is limited to approximately $0.8 million per year. Additionally, we have federal net operating loss carryforwards of
approximately $68.0 million that have an indefinite carryforward period. The utilization of those federal net operating losses is limited to 80% of taxable income after 2021.
We have no foreign net operating loss carryforwards as of September 30, 2022. We have approximately $14.0 million of state net operating loss carryforwards, with various
expiration dates and limitations on utilization, depending on the state. As of September 30, 2022, we have approximately $0.8 million of Foreign Tax Credit carryforwards
that expire in 2030 and 2031.

Uncertain Tax Positions

We have included all of our liabilities for uncertain tax positions with income taxes payable long-term. A reconciliation of the beginning and ending amount of our
unrecognized tax benefits is summarized as follows (in thousands):

Balance at beginning of the year

Additions related to tax positions taken in prior years
Reductions due to resolution of uncertain tax position

Balance at the end of the year

2022

Years Ended September 30,
2021

2020

949

55
—

1,004

1,225

—
(276 )
949

1,272
—
(47 )
1,225

Approximately $1.0 million of our total unrecognized tax benefits, inclusive of penalties and interest, represents the amount that, if recognized, would favorably affect our
effective income tax rate in future periods. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net (benefit)
expense for interest and penalties of $0.1 million, $(0.1) million and $4,000 for 2022, 2021 and 2020, respectively. Income taxes payable long-term on the Consolidated
Balance Sheets includes a cumulative accrual for potential interest and penalties of $0.7 million and $0.6 million as of September 30, 2022 and 2021, respectively. We do not
expect that the amount of our tax reserves for uncertain tax positions will materially change in the next 12 months other than the continued accrual of interest and penalties.

Tax Return Matters

We file income tax returns in China and other foreign jurisdictions, as well as the U.S. and various states in the U.S. We have not signed any agreements with the Internal
Revenue Service, any state or foreign jurisdiction to extend the statute of limitations for any fiscal year. As such, the number of open years is the number of years dictated by
statute in each of the respective taxing jurisdictions. U.S. Federal tax returns generally have a 3-year statute of limitations. Therefore, U.S. federal returns for tax years ending
on or after September 30, 2019 remain open for examination. In addition, the statute for a tax year for which a loss was carried back to remains open for the same period as
the year the loss originated. Because the Company filed a net operating loss carryback claim for the tax year ended September 30, 2016 for a loss originating in the tax year
ended September 30, 2019, the statute for the carryback claim in 2016 will remain open until 2023. Furthermore, the IRS may adjust attribute carryforwards utilized in an
open year even though the year the attributes originated may be closed. State and foreign statutes are generally 3 to 5 years but vary by jurisdiction. These open years contain
certain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenues and
expenses, or the sustainability of income tax positions of Amtech and our subsidiaries.

13. Long-Term Debt

We had a mortgage note secured by BTU’s real property in Massachusetts, which was paid in full upon the closing of the sale of this facility in June 2022 (see Note 8). Our
remaining long-term debt consists of an equipment finance agreement. Annual maturities relating to our long-term debt as of September 30, 2022 are as follows (in
thousands):

2023
2024
2025
2026
2027
Thereafter
Total long-term debt

Annual
Maturities

36
38
40
41
25
—
180

Interest expense on long-term debt was $0.1 million, $0.2 million and $0.2 million in 2022, 2021 and 2020, respectively.

14. Equity and Stock-Based Compensation

Stock Repurchase Plans

The following table summarizes information related to our stock repurchase plans, in thousands, except share and per share amounts:

Name of Stock
Repurchase Plan

Date Approved by
Board

Plan
Term Amount Authorized ($)

Amount Used for
Repurchases ($)

Average Price
Paid per Share
($)

Shares Repurchased (#)

Amount Available for
Repurchases ($)

Plan Status

Fiscal Year of
Repurchases

2022 Stock
Repurchase Plan
2021 Stock
Repurchase Plan
2020 Stock
Repurchase Plan
2019 Stock
Repurchase Plan

2/10/2022 1 year

2/9/2021 1 year

2/4/2020 1 year

11/29/2018 1 year

All repurchased shares have been retired.

Stock-Based Compensation Expense

5,000

4,000

1,400

2,700

2,000

9.78

9.31

5.46

—

143,430

291,383

366,000

—

3,600

Open

—

Expired

—

Expired

—

Expired

2022

2020

Stock-based compensation expenses of $0.5 million, $0.4 million and $0.3 million for 2022, 2021 and 2020, respectively, are included in selling, general and administrative
expenses. As of September 30, 2022, total compensation cost related to non-vested stock options not yet recognized is $0.7 million, which is expected to be recognized over
the next 1.19 years on a weighted-average basis.

Amtech Equity Compensation Plans

The 2022 Plan, under which 1,000,000 shares could be granted, was adopted by the Board of Directors in November 2021, and approved by the shareholders in March 2022.

The 2007 Plan, under which 500,000 shares could be granted, was adopted by the Board in April 2007, and approved by the shareholders in May 2007. The 2007 Plan was
amended in 2009, 2014 and 2015 to add 2,500,000 shares. The

plan was also amended in 2019 to extend the term of the plan and allow for the grant of restricted stock units. Upon the adoption of the 2022 Plan, no further awards will be
granted from the 2007 Plan. Previously issued awards will remain outstanding in accordance with their terms.

The Non-Employee Directors Stock Option Plan was approved by the shareholders in 1996 for issuance of up to 100,000 shares of common stock to directors. The Non-
Employee Directors Stock Option Plan was amended in 2005, 2009 and 2014 to add 400,000 shares. The plan was also amended in 2020 to extend the term of the plan. Upon
the adoption of the 2022 Plan as stated above, no further awards will be granted from the Non-Employee Directors Stock Option Plan. Previously issued awards will remain
outstanding in accordance with their terms.

Equity compensation plans as of September 30, 2022 are summarized in the table below:

Name of Plan

2022 Plan
2007 Plan
Non-Employee Directors Stock Option Plan

Stock Options

Shares
Authorized

1,000,000
3,000,000

500,000

Shares
Available for
Grant

Options
Outstanding

946,000
—
—

946,000

Plan
Expiration

Mar. 2032
Mar. 2024

Mar. 2024

54,000
397,341

138,000
589,341

Stock options issued under the terms of our equity compensation plans have, or will have, an exercise price equal to or greater than the fair market value of the common stock
at the date of the option grant and expire no later than 10 years from the date of grant. Options issued under the plans vest over 1 to 3 years. We estimated the fair value of
stock option awards on the date of grant using the Black-Scholes option pricing model using the following assumptions:

Risk free interest rate
Expected life
Dividend rate
Volatility

The following table summarizes our stock option activity during 2022, 2021 and 2020:

2022
2%
5 years
0%
57%

Years Ended September 30,
2021
1%
6 years
0%
58%

2020
1%
6 years
0%
58%

Outstanding at beginning of period
Granted
Exercised
Forfeited/expired
Outstanding at end of period

Exercisable at end of period

Weighted average grant-date
fair value of options granted
during the period

2022

Years Ended September 30,
2021

2020

Weighted
Average
Exercise
Price

6.48
12.80
5.78
6.92

8.06

6.92

Weighted
Average
Exercise
Price

7.00
6.25
6.40
13.01

6.48

6.87

Options

696,665 $
204,000 $
(241,320 ) $
(51,076 ) $
$

608,269
403,853 $

Options

$
608,269
135,500
$
(124,475 ) $
(29,953 ) $

589,341

358,343

Weighted
Average
Exercise
Price

7.04
5.34
5.47
7.94

7.00

7.19

Options

1,068,665 $
32,500 $
(160,375 ) $
(244,125 ) $
$

696,665
611,542 $

6.39

3.33

2.89

The following table summarizes information for stock options outstanding and exercisable as of September 30, 2022:

Range of Exercise Prices

Number
Outstanding

Options Outstanding

Options Exercisable

Remaining
Contractual
Life
(in years)

Weighted
Average
Exercise
Price Per
Share

Number
Exercisable

Weighted
Average
Exercise
Price Per
Share

$2.95-$4.90
$5.07-$5.52
$5.67-$5.67
$5.75-$7.01
$7.40-$9.98
$9.99-$9.99
$10.22-$10.22
$10.71-$10.71
$11.51-$11.51
$15.43-$15.43
$2.95-$15.43

62,000
86,883
113,958
77,000
114,000
6,000
24,000
6,000
18,000
81,500

589,341

5.72
5.80
8.13
2.20
4.98
8.87
9.42
2.52
8.48
9.13

$
$
$
$
$
$
$
$
$
$

6.30

4.64
5.38
5.67
6.70
8.75
9.99
10.22
10.71
11.51
15.43

8.06

62,000 $
66,717 $
38,626 $
77,000 $
84,000 $
6,000 $
—
6,000 $
18,000 $
—

358,343 $

4.64
5.39
5.67
6.70
9.12
9.99
—
10.71
11.51
—

6.92

The aggregate intrinsic values of options outstanding and options exercisable as of September 30, 2022 were approximately $1.0 million and $0.7 million, respectively, which
represents the total pre-tax intrinsic value, based on our closing stock price of $8.50 per share as of September 30, 2022, the last business day of our fiscal year, which would
have been received by the option holders had all option holders exercised their options as of that date. The total intrinsic value of stock options exercised during the fiscal
years ended September 30, 2022, 2021 and 2020 was $0.8 million, $0.8 million and $0.1 million, respectively.

15. Benefit Plans

We have retirement plans covering substantially all our employees. The principal plans are our defined contribution plan that covers substantially all of our employees in the
United States and the multi-employer pension plan for hourly union employees in Pennsylvania. Expense related to both plans is insignificant.

Defined Contribution Plan – Domestic employees of Amtech and its subsidiaries who meet certain eligibility requirements may participate, at the employee’s option, in the
401(k) Plan. The 401(k) Plan is a defined contribution plan subject to the provisions of ERISA. We match employee contributions to the 401(k) Plan equal to 60% of the
participants' elective deferrals, up to 3.6% of the participants’ eligible compensation each payroll period. Employees are auto-enrolled upon eligibility at a 6% contribution
rate, however, an employee may opt out at their election. The match expense was $0.4 million in 2022 and $0.3 million in 2021 and 2020.

Pension Plan – Our hourly union employees in Pennsylvania participate in a multi-employer pension plan, the NIGPP, in accordance with the union agreement between PR
Hoffman and the United Automobile, Aerospace and Agriculture Implement Workers of America. The agreement was renewed in 2022 for a three-year term that expires
September 30, 2025. Every company participating in the plan pays a contribution per hour worked for each employee of the company that is eligible to participate in the
NIGPP. Our contributions to the NIGPP were $38,000, $39,000 and $44,000 in 2022, 2021 and 2020, respectively.

16. Commitments and Contingencies

Purchase Obligations – As of September 30, 2022, we had unrecorded purchase obligations in the amount of $20.0 million. These purchase obligations consist of
outstanding purchase orders for goods and services. While the amount represents purchase agreements, the actual amounts to be paid may be less in the event that any
agreements are renegotiated, canceled or terminated.

Legal Proceedings and Other Claims – From time to time, we are a party to claims and actions for matters arising out of our business operations. We regularly evaluate the
status of the legal proceedings and other claims in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss, or an additional
loss, may have been incurred and determine if accruals are appropriate. If accruals are not appropriate, we further evaluate

each legal proceeding to assess whether an estimate of possible loss or range of possible loss can be made for disclosure. Although the outcome of claims and litigation is
inherently unpredictable, we believe that we have adequate provisions for any probable and estimable losses. It is possible, nevertheless, that our consolidated financial
position, results of operations or liquidity could be materially and adversely affected in any particular period by the resolution of a claim or legal proceeding. Legal expenses
related to defense, negotiations, settlements, rulings and advice of outside legal counsel are expensed as incurred.

Employment Contracts – We have employment contracts and change in control agreements with, and severance plans covering, certain officers and management employees
under which severance payments would become payable in the event of specified terminations without cause or terminations under certain circumstances after a change in
control. If severance payments under the current employment contracts or severance plans were to become payable, the severance payments would generally range from six to
twelve months of salary.

17. Cash Flows

Non-cash investing activities may include capital expenditures in accounts payable, representing additions purchased at period end but not yet paid in cash. Non-cash
investing activities for the year ended September 30, 2022 included $0.2 million of capital expenditures in accounts payable. There were no non-cash capital expenditures in
accounts payable for the year ended September 30, 2021. Non-cash investing activities for the year ended September 30, 2020 included $80,000 of capital expenditures in
accounts payable.

18. Reportable Segments

Upon the acquisition of Intersurface Dynamics in 2021 (see Note 2), we evaluated our organizational structure and concluded that we have two reportable segments following
the acquisition.

Amtech has two operating segments that are structured around the types of product offerings provided to our customers. In addition, the operating segments may be further
distinguished by the Company’s respective brands. These two operating segments comprise our two reportable segments discussed below. Our two reportable segments are as
follows:

Semiconductor – We design, manufacture, sell and service thermal processing equipment and related controls for use by leading semiconductor manufacturers, and in
electronics, automotive and other industries.

Material and Substrate – We produce consumables and machinery for lapping (fine abrading) and polishing of materials, such as sapphire substrates, optical components,
silicon wafers, numerous types of crystal materials, ceramics and metal components. Our Material and Substrate segment includes our former SiC/LED segment in addition to
Intersurface Dynamics, as they sell complementary products to a similar market.

Information concerning our reportable segments is as follows, in thousands:

Net revenue:
Semiconductor
Material and Substrate
Non-segment related

Operating income (loss):
Semiconductor
Material and Substrate
Non-segment related

2022

Years Ended September 30,
2021

2020

87,982 $
18,316
—
106,298 $

20,672 $
3,728
(7,114 )
17,286 $

72,086 $
13,119
—
85,205 $

8,585 $
278
(5,138 )
3,725 $

54,516
10,304
643
65,463

4,168
684
(5,337 )
(485 )

Capital expenditures:
Semiconductor
Material and Substrate
Non-segment related

Depreciation and amortization expense:
Semiconductor
Material and Substrate
Non-segment related

Identifiable assets:
Semiconductor
Material and Substrate
Non-segment related*

* Non-segment related assets include cash, property and other assets.

19. Major Customers and Sales by Country

2022

Years Ended September 30,
2021

2020

452 $
411
272
1,135 $

1,101 $
565
63
1,729 $

2,264 $
695
53
3,012 $

905 $
438
55
1,398 $

912
1,724
39
2,675

821
197
60
1,078

September 30,

2022

2021

75,622 $
22,032
35,880
133,534 $

70,631
19,541
26,741
116,913

In 2022, two Semiconductor customers accounted for 14% and 12% of net revenues. In 2021, two Semiconductor customers accounted for 14% and 13% of net revenues. In
2020, one Semiconductor customer accounted for 11% of net revenues.

Our net revenues for 2022, 2021 and 2020 were to customers in the following geographic regions:

United States
Other

Total Americas

China
Malaysia
Taiwan
Other

Total Asia

Germany
Austria
Other

Total Europe

2022

Years Ended September 30,
2021

2020

27 %
9 %
36 %
17 %
7 %
14 %
6 %
44 %
4 %
10 %
6 %
20 %
100 %

22 %
5 %
27 %
29 %
3 %
15 %
11 %
58 %
5 %
3 %
7 %
15 %
100 %

28 %
7 %
35 %
25 %
5 %
15 %
7 %
52 %
3 %
— %
10 %
13 %
100 %

20. Geographic Regions

We have continuing operations in the United States and China, as well as satellite offices in Europe and Asia. Revenues, operating income (loss) and identifiable assets by
geographic region are as follows, in thousands:

Net revenue:

United States*
China
Other

Operating income (loss):

United States*
China
Other

2022

Years Ended September 30,
2021

2020

89,197 $
13,854
3,247
106,298 $

14,163 $
2,003
1,120
17,286 $

58,937 $
22,828
3,440
85,205 $

(4,174 ) $
6,958
941
3,725 $

48,089
13,510
3,864
65,463

(5,814 )
4,744
585
(485 )

* United States revenue includes $22.7 million, $19.7 million and $14.9 million in 2022, 2021 and 2020, respectively, related to the products manufactured in our China facility but sold through our

Massachusetts facility.

Net property, plant and equipment:

United States
China

21. Supplementary Financial Information

The following is a summary of the activity in our allowance for doubtful accounts, in thousands:

Balance at beginning of year
Provision
Write offs
Adjustment
Balance at end of year

(1)

(1) Primarily foreign currency translation adjustments.

September 30,

2022

2021

4,981 $

11,990

1,571
6,552 $

2,093
14,083

2022

Years Ended September 30,
2021

2020

188 $
(34 )
6
(46 )
114 $

159 $
44
(2 )
(13 )
188 $

172
86
(26 )
(73 )
159

Our net accounts receivable as of September 30, 2022, 2021 and 2020 was $25.0 million, $22.5 million and $11.2 million, respectively.

22. Discontinued Operations and Disposals

Discontinued Operations

In April 2019, we announced that the Board determined that it was in the long-term best interest of Amtech to exit the solar business segment and focus our strategic efforts
on our non-Solar segments in order to more fully realize the opportunities presented in those areas. The Board made its decision, effective March 28, 2019, after analyzing
current market conditions and the strategic outlook for its Solar segment, which operates in a highly competitive market among lower cost manufacturers, particularly in
China.

The divestiture of our solar business included our Tempress and SoLayTec subsidiaries, which comprised substantially all of our Solar segment. We adopted a plan to sell our
Solar operations on or before March 31, 2020. As such, we

classified substantially all of the Solar segment as held for sale in our Consolidated Balance Sheets and reported its results as discontinued operations in our Consolidated
Statements of Operations. SoLayTec was sold in fiscal 2019.

Effective January 22, 2020 (“Tempress Sale Date”), we completed the sale of Tempress for nominal consideration to a third party located in the Netherlands. In connection
with this sale transaction, we provided an unsecured term loan to Tempress in the principal sum of $2.25 million, to be used to fund Tempress’ working capital requirements
and to facilitate the restructuring of Tempress’ operations. We forgave $0.5 million of the loan in accordance with the terms of the loan agreement. The balance of the loan
was paid in full during 2020. We recorded a pre-tax loss on sale of approximately $10.9 million, of which approximately $7.2 million was the recognition of previously
recorded accumulated foreign currency translation losses. The total pre-tax loss did not have a material effect on our cash balances at our continuing operations. We also
recognized a significant tax benefit relating to this loss, which can be carried over to future years. Effective on the Tempress Sale Date, Tempress is no longer included in our
consolidated financial statements.

Operating results of our discontinued solar operations were as follows, in thousands:

Revenue, net
Cost of sales

Gross profit

Selling, general and administrative
Research, development and engineering
Restructuring charges
Operating loss

Loss on sale of subsidiary
Interest expense and other, net

Loss from discontinued operations before income taxes

Income tax benefit
Net loss

Year Ended September 30,
2020

7,442
5,969
1,473
1,814
540
37
(918 )
(10,916 )
(29 )
(11,863 )
(47 )
(11,816 )

Amtech’s Consolidated Statement of Cash flows combines cash flows from discontinued operations with cash flows from continuing operations within each cash flow
statement category. The following table summarizes selected cash flow information for discontinued operations, in thousands:

Loss from discontinued operations, net of tax
Depreciation and amortization
Reversal of allowance for doubtful accounts, net
Loss on sale of subsidiary
Purchases of property, plant and equipment

$
$
$
$
$

Year Ended September 30,
2020

(11,816 )
180
(62 )
(10,916 )
1

Other Disposal

R2D – On December 13, 2019 (“R2D Sale Date”), we finalized the sale of R2D to certain members of R2D’s management team. Upon the sale, we recognized a loss of
approximately $2.8 million, which we reported as loss on sale of subsidiary in our Consolidated Statements of Operations for the year ended September 30, 2020. Effective
on the R2D Sale Date, R2D is no longer included in our consolidated financial statements. R2D did not meet the discontinued operations or held-for-sale criteria.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), has carried out an evaluation of the effectiveness of our disclosure
controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e). Based upon that evaluation, our CEO and CFO have concluded that our disclosure
controls and procedures in place were effective as of September 30, 2022.

Management’s Report on Internal Control Over Financial Reporting

To the Shareholders of Amtech Systems, Inc.

The management of Amtech Systems, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange
Act Rules 13a-15(f) and 15d-15(f). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, our controls and procedures may not prevent or detect misstatements. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the controls system are met. Because of the inherent limitations in all controls systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

Our management evaluated the effectiveness of our internal control over financial reporting as of September 30, 2022. In making this evaluation, we used the criteria set forth
by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013). Based on our evaluation we believe
that, as of September 30, 2022, our internal control over financial reporting was effective based on those criteria.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act)
during the quarter ended September 30, 2022 that materially affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

Pursuant to Paragraph G(3) of the General Instructions to Form 10-K, the information required by Part III of Form 10-K is incorporated by reference to the Proxy Statement to
be filed within 120 days of September 30, 2022, our fiscal year end. In the event the Proxy Statement is not filed within 120 days, the information required by Part III of this
Form 10-K will be filed pursuant to an amendment to this Annual Report on Form 10-K within the 120-day period.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND GOVERNANCE

The information required by this item (i) is incorporated herein by reference to the Proxy Statement or (ii) will be filed pursuant to an amendment to this Annual Report on
Form 10-K, in each case, within 120 days of September 30, 2022, our fiscal year end.

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and Schedules

The consolidated financial statements required by this item are set forth on the pages indicated in Item 8.

PART IV

All financial statement schedules are omitted because they are either not applicable or because the required information is shown in the consolidated financial statements or
notes thereto.

(b) Exhibits

The exhibits filed as part of this Annual Report on Form 10-K are listed on the Exhibit Index immediately preceding the signature page hereto, which is incorporated herein by
reference.

ITEM 16. FORM 10-K SUMMARY

None.

EXHIBIT
NO.

EXHIBIT DESCRIPTION

3.1

3.2

3.3

4.1

10.1

10.1a

10.2

10.2a

10.3

Amended and Restated Articles of Incorporation, as
amended through February 6, 2012

Amended and Restated Bylaws of Amtech Systems, Inc.,
dated as of September 23, 2020

First Amendment to Amended and Restated and Restated
Bylaws (effective as of November 16, 2021)

Description of Capital Stock

Non-Employee Directors Stock Option Plan, effective July
8, 2005 as amended through May 8, 2014*

Amendment to the Non-Employee Directors Stock Option
Plan, effective March 4, 2020*

2007 Employee Stock Incentive Plan of Amtech Systems,
Inc., as amended, effective April 9, 2015*

Amendment to 2007 Employee Stock Incentive Plan of
Amtech Systems, Inc., effective March 6, 2019*

Second Amended and Restated Employment Agreement
between Amtech Systems, Inc. and Jong S. Whang, dated
February 9, 2012*

EXHIBIT INDEX

INCORPORATED BY REFERENCE

FORM

10-Q

8-K

FILE
NO.

000-11412

EXHIBIT
NO.

FILING
DATE

FILED
HEREWITH

3.1

February 9, 2012

September 25, 2020

November 19, 2021

8-K

000-11412

10.1

May 14, 2014

DEF14A

000-11412

Appendix A

January 24, 2020

8-K

000-11412

10.4

April 10, 2015

DEF14A

000-11412

Appendix A

January 25, 2019

10-Q

000-11412

10.1

February 9, 2012

10.4

10.5

10.6

10.7

10.8

10.9

21.1

23.1

23.2

31.1

31.2

32.1

32.2

Amendment, dated as of July 1, 2012, to the Second
Amended and Restated Employment Agreement between
Amtech Systems, Inc. and Jong S. Whang, dated as of
February 9, 2012*

Second Amendment, dated June 28, 2013, to the Second
Amended and Restated Employment Agreement between
Amtech Systems, Inc. and Jong S. Whang, dated as of
February 9, 2012*

Fourth Amendment to Employment Agreement between
Amtech Systems, Inc. and Jong S. Whang, dated April 9,
2015*

Fifth Amendment to Employment Agreement, dated
November 19, 2015, by and between the Company and Jong
S. Whang*

10-Q

000-11412

10.2

August 9, 2012

10-Q

000-11412

10.15

August 8, 2013

8-K

000-11412

10.1

April 10, 2015

8-K

000-11412

10.1

November 19, 2015

Amtech Systems, Inc. 2022 Equity Incentive Plan*

S-8

333-263875

99.1

March 25, 2022

Jong S. Whang Separation Agreement*

Subsidiaries of the Registrant

Consent of Independent Registered Public Accounting Firm
- Grant Thornton LLP

Consent of Independent Registered Public Accounting Firm
- Mayer Hoffman McCann P.C.

Powers of Attorney

Certification Pursuant to Rule 13a-14(a)/15d-14(a) of the
Securities Exchange Act of 1934, as Amended

Certification Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002

101.INS

Inline XBRL Instance Document – the instance document
does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document

101.SCH Inline XBRL Taxonomy Extension Schema Document
101.PRE Inline Taxonomy Presentation Linkbase Document
101.CAL Inline XBRL Taxonomy Calculation Linkbase Document
101.LAB Inline XBRL Taxonomy Label Linkbase Document
101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase
Document
The cover page for the Company’s Annual Report on Form
10-K for the year ended September 30, 2021, has been
formatted in Inline XBRL

104

* Indicates management contract or compensatory plan.

X
X
X
X
X

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

SIGNATURES

November 30, 2022

AMTECH SYSTEMS, INC.

By:

/s/ Lisa D. Gibbs
Lisa D. Gibbs, Vice President, Chief Financial Officer and Director
(Principal Financial Officer and Duly Authorized Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report on Form 10-K has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

SIGNATURE

TITLE

Michael Whang

/s/ Lisa D. Gibbs
Lisa D. Gibbs

Robert C. Daigle

Robert M. Averick

Michael Garnreiter

Sukesh Mohan

Jong S. Whang

Chief Executive Officer and Director
(Principal Executive Officer)

Vice President, Chief Financial Officer and Director

(Principal Financial Officer and Principal Accounting Officer)

Chairman of the Board

Director

*By: /s/ Lisa D. Gibbs
Lisa D. Gibbs, Attorney-In-Fact**

** By authority of the power of attorney filed as Exhibit 24 hereto.

DATE

November 30, 2022

DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934

Exhibit 4.1

Amtech Systems, Inc. (“Amtech,” “we,” “our” or “us”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common
stock.

The following summary of the terms of our capital stock is based upon our Amended and Restated Articles of Incorporation, as amended through February 6, 2012 (the
“Articles of Incorporation”) and our Amended and Restated Bylaws, as amended (the “Bylaws”). The summary is not complete and is qualified by reference to our Articles of
Incorporation and our Bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our
Articles of Incorporation, our Bylaws and the applicable provisions of the Arizona Revised Statutes for additional information.

DESCRIPTION OF CAPITAL STOCK

Authorized Shares of Capital Stock

Our authorized capital stock consists of 100,000,000 shares of common stock, $0.01 par value, and 100,000,000 shares of preferred stock. As of November 23, 2022, there were
14,000,154 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. The outstanding shares of our common stock are duly
authorized, validly issued, fully paid, and nonassessable.

Listing

Our common stock trades on the Nasdaq Global Select Market, under the symbol “ASYS.”

Voting Rights

Each outstanding share of our common stock is entitled to one vote per share of record on all matters submitted to a vote of shareholders and to vote together as a single class
for the election of directors and in respect of other corporate matters. At a meeting of shareholders at which a quorum is present, all questions other than the contested election
of directors shall be decided by determining if the votes cast by shareholders favoring the action exceed the votes casts by shareholders opposing the action, without regard to
abstentions, unless the matter is one upon which a different vote is required by express provision of Arizona law, the NASDAQ or our articles of incorporation or bylaws.
Directors, in a contested election, will be elected by a plurality of the votes of the shares present at a meeting. Holders of shares of common stock have cumulative voting rights
with respect to the election of directors.

Dividend Rights

Holders of our common stock are entitled to receive dividends or other distributions when, as and if declared by our board of directors. The right of our board of directors to
declare dividends, however, is subject to any rights of the holders of other classes of our capital stock and the availability of sufficient funds under Arizona law to pay
dividends.

Preemptive Rights

The holders of our common stock do not have preemptive rights to purchase or subscribe for any of our capital stock or other securities.

Redemption

The shares of our common stock are not subject to redemption by operation of a sinking fund or otherwise.

Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Company, subject to the rights, if any, of the holders of other classes of our capital stock, the holders of shares
of our common stock are entitled to receive any of our assets available for distribution to our shareholders ratably in proportion to the number of shares held by them.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is Computershare Investor Services, P.O. Box 43006, Providence, RI 02940-3006.

Certain Provisions of Arizona Law and The Company’s Articles of Incorporation and Bylaws

Certain provisions of our articles of incorporation and bylaws and Arizona law could make our acquisition by a third party, a change in our incumbent management or a similar
change in control more difficult, including:

•an acquisition of us by means of a tender or exchange offer;
•an acquisition of us by means of a proxy contest or otherwise; or
•the removal of a majority or all of our incumbent officers and directors.

These provisions, which are summarized below, are likely to discourage certain types of coercive takeover practices and inadequate takeover bids. These provisions are also
designed to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that these provisions help to protect our potential ability
to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us, and that this benefit outweighs the potential disadvantages of discouraging
such a proposal because our ability to negotiate with the proponent could result in an improvement of the terms of the proposal. The existence of these provisions which are
described below could limit the price that investors might otherwise pay in the future for our securities. This description is intended as a summary only and is qualified in its
entirety by reference to our articles of incorporation and bylaws, as well as Arizona law.

Articles of Incorporation, Bylaws and Arizona Law

Authorized But Unissued Capital Stock. We have shares of common stock and preferred stock available for future issuance without shareholder approval, subject to any
limitations imposed by the listing standards of the NASDAQ. We may utilize these additional shares for a variety of corporate purposes, including for future public offerings to
raise additional capital or facilitate corporate acquisitions or for payment as a dividend on our capital stock. The existence of unissued and unreserved common stock and
preferred stock may enable our board of directors to issue shares to persons friendly to current management or to issue preferred stock with terms that could have the effect of
making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a controlling interest in the Company by means of a merger,
tender offer, proxy contest or otherwise. In addition, if we issue preferred stock, the issuance could adversely affect the likelihood that such holders will receive dividend
payments and payments upon liquidation.

Blank Check Preferred Stock. Our board of directors, without shareholder approval, has the authority under our articles of incorporation to issue preferred stock with rights
superior to the rights of the holders of common stock. As a result, preferred stock could be issued quickly and easily, could impair the rights of holders of common stock and
could be issued with terms calculated to delay or prevent a change in control or make removal of management more difficult.

Number of Directors; Removal; Filling Vacancies. Our articles of incorporation provide that the number of directors shall be fixed by the bylaws which our board of directors
can amend without shareholder approval. Our bylaws default to Arizona law with respect to the removal of directors. Arizona law provides that directors may be removed with
or without cause where the votes cast by shareholders opposing the action would not be sufficient to elect the director under cumulative voting. A vote to remove one or more
directors must be taken at a shareholder’s meeting at which a quorum is present where one of the purposes of the meeting is to remove one or more directors. A director cannot
be removed by written consent of shareholders unless written consents are obtained from the holders of all the outstanding shares entitled to vote on the removal of the director.
Our bylaws provide that vacancies on our board of directors may be filled by a majority vote of the remaining directors, though not less than a quorum. Arizona law also
provides that shareholders may fill any vacancy on our board of directors.

Shareholder Meetings and Action. Our bylaws provide that shareholder meetings can only be called by the Chairman of the Board, the Chief Executive Officer or the Secretary
at the request of a majority of the board of directors. Shareholders are specifically denied the right to call special meetings. Our bylaws also provide that the business of special
meetings of shareholders shall be confined to the purposes stated in the notice of the meeting. These provisions may discourage another person or entity from making a tender
offer, unless it acquired a majority of our outstanding voting stock, because the person or entity could only take action at a duly called shareholders’ meeting relating to the
business specified in the notice of meeting and not by written consent. Arizona law provides that shareholders may act outside of a meeting if one or more written consents
describing the action taken are signed by the holders of outstanding shares having one hundred percent (100%) of the votes entitled to be cast at a meeting at which all shares
entitled to vote on the action were present and voted.

Anti-Takeover Effects of Various Provisions of Arizona Law

Arizona Revised Statutes (“ARS”) Sections 10-2701 et seq. were adopted by the Arizona legislature in an attempt to prevent corporate “greenmail” and restrict the ability of a
potential suitor to acquire domestic corporations. These statutes generally apply to business combinations or control share acquisitions of “issuing public corporations,” which
defined term includes Amtech. The provisions summarized below could discourage, deter, delay or impede a tender offer or other attempt to acquire control of Amtech.

Arizona Business Combination Statute. The Arizona business combination statute would limit our ability to engage in Business Combinations with Interested Shareholders (each
as defined below).

Business Combination” means any (A) merger or consolidation of Amtech or any subsidiary of Amtech with an Interested Shareholder, (B) exchange of shares of the Amtech’s
common stock or any subsidiary for shares of an Interested Shareholder, or (C) sale, lease, transfer or other disposition to or with an Interested Shareholder of 10% or more of
the consolidated assets of Amtech.

Interested Shareholder” means any person other than Amtech or a subsidiary of Amtech that is either (A) a direct or indirect beneficial owner of 10% or more of the voting
power of the outstanding common stock of Amtech or (B) an affiliate of Amtech who at any time during the three years immediately before the date in question was the
beneficial owner of 10% or more of the voting power of the then outstanding common stock of Amtech.

Share Acquisition Date” means the date that a person first becomes an Interested Shareholder of Amtech.

Business Combinations within Three Years After Share Acquisition Date. For three years after an Interested Shareholder’s Share Acquisition Date, Amtech may not directly or
indirectly engage in any Business Combination with an Interested Shareholder or any affiliate of an Interested Shareholder unless, before the Interested Shareholder’s Share
Acquisition Date, a committee of disinterested directors approved either:

•the Business Combination; or
•the acquisition of common stock made by the Interested Shareholder on the Interested Shareholder’s Share Acquisition Date.

Business Combinations More Than Three Years After Share Acquisition Date. If a committee of disinterested directors has not approved the Business Combination or the
acquisition of common stock as provided above, Amtech may not directly or indirectly engage in any Business Combination with an Interested Shareholder or any affiliate of an
Interested Shareholder unless:

· the Business Combination is consummated no earlier than three years after the Interested Shareholder’s Share Acquisition Date, and before the Share Acquisition Date,

Amtech’s Board of Directors approved either

o the Business Combination; or
o the acquisition of common stock made by the Interested Shareholder on the Share Acquisition Date;

· the Business Combination is approved no earlier than three years after the Interested Shareholder’s Share Acquisition Date by the affirmative vote of a majority of the
outstanding voting shares of the common stock of Amtech (excluding shares of common stock beneficially owned by the Interested Shareholder or any affiliate
thereof); or

· the Business Combination is consummated no earlier than three years after the Interested Shareholder’s Share Acquisition Date and meets certain specified conditions

designed to ensure against discriminatory pricing.

Arizona Control Share Acquisition Statute. The Arizona control share acquisition statute would limit the voting rights of a person who acquires shares of Amtech under certain
circumstances in a control share acquisition (as defined below).

Control Share Acquisition means an acquisition, directly or indirectly (in one or more transactions within 120 days or pursuant to a plan), by a person of beneficial ownership of
shares of common stock of Amtech that would, but for the limitations in the control share acquisition statute, entitle the acquiring person to exercise a new range of voting
power within the following specified ranges: (A) at least 20% but less than 33-1/3%, (B) at least 33-1/3% but less than or equal to 50% and (C) over 50%.

Within ten days after a Control Share Acquisition, the acquiring person must deliver to the corporation an information statement specifying, among other things, the range of
voting power in the election of directors that, but for the limitations in the statute, the acquiring person believes would result from the Control Share Acquisition. At the time of
delivery of the information statement, the acquiring person may request that a special meeting of shareholders be called to consider the voting rights of “excess” shares (referred
to below).

To the extent that shares of common stock of Amtech acquired in a Control Share Acquisition exceed the threshold of voting power of any of the next specified range of voting
power, such “excess” shares will have the same voting rights as other shares of common stock for election of directors but will not have the right to vote on other matters unless
approved by a shareholder resolution at an annual or special meeting. Such resolution must be approved by the affirmative vote of a majority of the outstanding voting shares of
common stock (excluding shares owned by the acquiring person, its affiliates or any officer or director of Amtech).

The status of voting rights of “excess” shares is not required to be presented for consideration at any meeting of shareholders unless, at the time of delivery of the information
statement referred to above, the acquiring person has entered into a definitive financing agreement for any financing of the acquisition not to be provided by monies of the
acquiring person.

If an acquiring person fails to deliver the required information statement within ten days after a Control Share Acquisition or if the Companies’ shareholders have voted not to
accord voting rights to an acquiring person’s “excess” shares referred to above, then Amtech may call for the redemption of such “excess” shares at the fair market value of
those shares at the time the call for redemption is given.

Limitation of Liability and Indemnification

Pursuant to Amtech’s articles of incorporation, Amtech shall indemnify any and all of its existing and former directors, officers, employees and agents against all expenses
incurred by them and each of them, including, but not limited to legal fees, judgments, penalties and amounts paid in settlement or compromise, which may arise or be incurred,
rendered, or levied in any legal action brought or threatened against any of them for or on account of any action or

omission alleged to have been committed while acting within the scope of employment as director, officer, employee or agent of the Company, whether or not any action is or
has been filed against them and whether or not any settlement or compromise is approved by a court, indemnification shall be made by the Company whether the legal action
brought or threatened is by or in the right of the Company or by any other person. Whenever any existing or former director, officer, employee, or agent shall report to the
President of the Company or the chairman of the board of directors that he or she has incurred or may incur expenses, including, but not limited to, legal fees, judgments,
penalties and amounts paid in settlement or compromise in a legal action brought or threatened against him or her for or on account of any action or omission alleged to have
been committed by him or her while acting within the scope of his or her employment as a director, officer, employee or agent of the Company, the board of directors shall, at
its next regular or at a special meeting held within a reasonable time thereafter, determine in good faith, whether in regard to the matter involved in the action or contemplated
action, such person acted, failed to act, or refused to act willfully or with gross negligence or with fraudulent or criminal intent. If the board of directors determines, in good
faith, that such person did not act, fail to act, or refuse to act willfully or with gross negligence or with fraudulent or criminal intent, in regard to the matter involved in the action
or contemplated action, such person acted, failed to act, or refused to act willfully or with gross negligence or with fraudulent criminal intent, indemnification shall be
mandatory and shall be automatically extended as specified herein; provided, that the Company shall have the right to refuse indemnification in any instance in which the
person to whom indemnification would otherwise have been applicable shall have unreasonably refused to permit the Company, at its own expense and through counsel of its
own choosing, to defend him or her in the action.

Section 10-851 of Arizona’s Revised Statutes enables a corporation to eliminate or limit personal liability of members of its board of directors for violations of their fiduciary
duty of care. However, Arizona law does not permit the elimination of a director’s or officer’s liability: (i) in connection with a proceeding by or in the right of the corporation in
which the director was adjudged liable to the corporation; and (ii) in connection with any other proceeding charging improper financial benefit to the director, whether or not
involving action in the director’s official capacity, in which the director was adjudged liable on the basis that financial benefit was improperly received by the director.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling Amtech pursuant to the foregoing
provision, Amtech has been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is therefore
unenforceable.

Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii)
would be competitively harmful is publicly disclosed.

Amtech Systems, Inc.
131 South Clark Drive
Tempe, Arizona 85281

Exhibit 10.9

August 4, 2022

Jong S. Whang
Amtech Systems, Inc.
131 South Clark Drive
Tempe, Arizona 85281

RE: Letter Agreement Regarding Board Retirement and Related Terms

Dear JS,

As you know, we’ve been discussing your retirement from the Board of Directors (the “Board”) of Amtech Systems, Inc. (the “Company”),
payments that would be made to you by the Company upon such retirement, your role with the Company thereafter, and the mutual termination
of your employment agreement. The purpose of this letter agreement (this “Agreement”) is to set forth the terms with respect to the foregoing
and to obtain your agreement to the same.

Mutual Termination of Employment Agreement

Effective upon your execution of this Agreement (the “Effective Date”), the Company and you each agree that the Second Amended and
Restated Employment Agreement between the Company and you, dated February 9, 2012 (as theretofore amended, the “Employment
Agreement”), is hereby terminated and of no further force or effect. The Company and you agree that effective December 31, 2023 (the
“Separation Date”), your employment with the Company will automatically terminate.

Role with Amtech

During the period between the Effective Date and the Separation Date (the “Transition Period”), you will remain employed full-time by the
Company. The Company will employ you to serve solely in an M&A support role, reporting to the Chief Executive Officer of the Company
(the “CEO”). Your duties in this role will be determined from time to time by and at the discretion of the CEO. You will receive an annual
base salary of $100,000, payable in accordance with the Company’s payroll practices. During this Transition Period, you will be provided such
employee benefits as are provided to other employees of the Company in accordance with Company policy. The Company reserves the right to
amend or terminate any employee benefit plan, practice, or program at any time in its sole discretion, subject to the terms of any underlying
plan document or applicable law. If you are terminated without “Cause” prior to the Separation Date, you shall be entitled to receive the
aforementioned base salary during the period stemming from such termination date to the Separation Date, payable in accordance with the
Company’s normal payroll

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DISCLOSED

Jong S. Whang
Amtech Systems, Inc.
August 4, 2022
Page 2

practices. For purposes of this Agreement, the term “Cause” shall have the same meaning as set forth in the Employment Agreement, which is
set forth as follows for ease of reference: The term “Cause” shall mean (i) your willful, repeated or negligent failure to perform your duties
hereunder and to comply with any reasonable or proper direction given by or on behalf of the CEO and the continuation of such failure
following twenty (20) days written notice to such effect, (ii) you being guilty of serious misconduct on the Company's premises or elsewhere,
whether during the performance of your duties or not, which is reasonably likely to cause material damage to the reputation of the Company or
render it materially more difficult for you to satisfactorily continue to perform your duties and the continuation or a second instance of such
serious misconduct following twenty (20) days written notice to such effect; (iii) you being found guilty in a criminal court of any offense of a
nature which is reasonably likely to materially adversely affect the reputation of the Company or to materially prejudice its interests if you were
to continue to be employed by the Company; or (iv) your commission of any act of fraud or theft involving the Company or its business, or any
intentional tort against the Company. Notwithstanding the foregoing, “Cause” shall only be deemed to exist if it is so determined by a
resolution duly adopted by the Board, at a duly noticed meeting at which you and your counsel are first given the opportunity to address the
Board with respect to such determination.

You agree and acknowledge that as of the Separation Date, you shall not hold yourself out as an employee, agent, or authorized representative
of the Company, negotiate or enter into any agreements on behalf of the Company, or otherwise attempt to bind Company.

The extension of your employment beyond the Separation Date, or your engagement as a consultant to the Company thereafter, in each case
shall be subject to the review and approval of the Board. The terms of any consulting arrangement shall be subject to the mutual agreement of
you and the Company.

Board Retirement

[****]. Although your employment with the Company may continue through the Separation Date, you agree to voluntarily retire from the
Board effective at the close business, Arizona time, on December 31, 2022.

Upon your retirement from the Board, (a) the Company will pay you a lump sum payment equal to $400,000.00 in recognition of your service,
which will be subject to applicable deductions required by law and will be paid upon your retirement from the Board (i.e., December 31, 2022),
and (b) you will be eligible to receive additional incentive compensation, the amount of which is dependent upon [****]. If [****], the
Company will pay you a lump sum payment equal to fifty percent (50%) of [****], subject to a cap of $200,000.00, which payment will be
subject to applicable deductions required by law and will be paid within sixty (60) days after [****].

In exchange for the payment of the $400,000.00 discussed in the paragraph above, and as a condition of receipt of any such payment, you agree
to execute no later than December 31, 2022, and not to revoke the release attached hereto, of any and all claims against the Company and any
parent, subsidiary, affiliate or other related party with respect to all matters arising out of your

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DISCLOSED]

Jong S. Whang
Amtech Systems, Inc.
August 4, 2022
Page 3

employment, or termination thereof (a “Release”). Should you, for whatever reason, fail to execute, or you revoke, the Release, you shall not
be entitled to any portion of the compensation discussed in this paragraph, and you further acknowledge and agree that your entitlement to any
future such amounts shall be forfeited.

Misc.

You and the Company agree to keep the terms of this Agreement confidential; provided, that you and the Company may disclose the terms of
this Agreement to your respective counsel, accountants and advisers and as may be necessary to comply with any legal requirement, including,
without limitation, any tax reporting obligations or disclosure obligations required by the Securities and Exchange Commission. You and the
Company agree to instruct their advisors that they must similarly agree to keep the details of this Agreement confidential.

This Agreement shall be governed and construed in accordance with the internal laws of the State of Arizona, without application of choice of
law or conflicts of law principles. All disputes arising hereunder shall be resolved exclusively in state or federal courts located in Maricopa
County, Arizona, to which jurisdiction and venue you and the Company irrevocably consent.

Very truly yours,

/s/ Robert C. Daigle

Robert C. Daigle
Chairman of the Board

ACKNOWLEDGED AND AGREED TO:

/s/ Jong S. Whang____________

Jong S. Whang

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DISCLOSED]

WAIVER AND RELEASE AGREEMENT

This Waiver and Release Agreement (“Release”) is entered into by and between J.S. Whang (“Employee”) and Amtech Systems, Inc.
(the “Company”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement (as defined below).

WHEREAS, Employee has entered into a letter agreement with the Company (the “Agreement”) to which this Release was attached, pursuant
to which Employee is eligible to receive incentive compensation relating to the Kingston Receivable (as defined in the Agreement),
conditioned in part on Employee’s execution of this Release; and

WHEREAS, in order to induce the Company to enter into the Agreement, Employee has agreed to execute and deliver this Release, and,
accordingly, the Company and Employee (collectively, the “Parties”) desire to execute this Release.

NOW, THEREFORE, in consideration of the mutual agreements and promises contained herein and other good and valuable consideration,
the receipt of which is hereby acknowledged, the Parties hereby agree as follows:

1.General Release of Claims. In exchange for the Kingston Receivable incentive compensation, the sufficiency of which is hereby
acknowledged, Employee, on behalf of himself and his heirs, legal representatives, successors and assigns, waives and releases (i.e., gives up)
all known and unknown claims which he may have, that arise out of or relate to anything that occurred before the date that Employee signed
this Release, against the Company, its parent companies, subsidiaries, and affiliates, and their respective past, present and future officers,
directors, managers, managing member, partners, general partners, limited partners, managing directors, members, trustees, shareholders,
representatives, employees, principals, agents, affiliates, parents, subsidiaries, joint ventures, predecessors, successors, assigns, beneficiaries,
heirs, executors, personal or legal representatives, insurers and attorneys of any of them (each, a “Released Party” and collectively, the
“Released Parties”). For example, and without limitation, Employee is releasing the Released Parties from:

a.any and all claims relating to or arising from his employment relationship with the Released Parties;

b.any and all claims of breach of contract, both express and implied, breach of the covenant of good faith and fair dealing, retaliation claims
including but not limited to workers’ compensation retaliation claims, promissory estoppel, fraudulent, negligent or intentional infliction of
emotional distress, negligent or intentional misrepresentation, negligent or intentional interference with contract or prospective economic
advantage, unfair business practices, defamation, libel, slander, negligence, personal injury, assault, battery, invasion of privacy, false
imprisonment, conversion, and any other claim for tort or wrongful treatment;

c.any and all claims for violation of any federal, state, county, municipal or local statute, regulation, code or ordinance, including, but not
limited to, Title VII of the Civil Rights

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Act of 1964, as amended (42 U.S.C. §§2000e et seq.); the Civil Rights Act of 1991, as amended; Sections 1981 and 1983 of the Civil Rights
Act of 1866, as amended (42 U.S.C. §§1981, 1983); the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended (29 U.S.C.
§§621 et seq.); the Americans with Disabilities Act of 1990 (“ADA”), as amended (42 U.S.C. §§12101 et seq.); the Rehabilitation Act of
1973, as amended (29 U.S.C. §§701 et seq.); the Genetic Information Nondiscrimination Act of 2008, as amended (42 U.S.C. § 2000ff); the
Employee Retirement Income Security Act of 1974 (“ERISA”), as amended (29 U.S.C. §§1001 et seq.); the Uniformed Services
Employment and Reemployment Rights Act of 1994 (“USERRA”), as amended, (38 U.S.C. §§4301 et seq.); the Vietnam Era Veterans’
Readjustment Assistance Act of 1974 (“VEVRAA”), as amended (38 U.S.C. §§4211 et seq.); Executive Order 11246, as amended, the
Sarbanes-Oxley Act of 2002, as amended; the Family and Medical Leave Act of 1993 (“FMLA”), as amended (29 U.S.C. §§2601 et seq.);
the National Labor Relations Act, as amended (29 U.S.C. §§151 et seq.), the Worker Adjustment and Retraining Notification Act
(“WARN”), as amended (29 U.S.C. §§2101 et seq.) and any similar state or local plant closing laws, as amended, the Equal Pay Act of
1963, as amended (29 U.S.C. §§206(d)); the False Claims Act, as amended (31 U.S.C. § 3729 et seq.); and any other wage and hour claims
that can be waived; the statutes, laws, ordinances, regulations, or common laws of the State of Arizona, including but not limited to, Arizona
wage laws, Arizona equal pay laws, the Arizona Employment Protection Act, the Arizona Civil Rights Act, the Arizona Occupational
Health and Safety Act, Arizona right to work laws, Arizona employee drug testing laws, the Arizona Medical Marijuana Act, Arizona
genetic testing laws, the Arizona criminal code, all as amended and including their implementing regulations;

d.Specific ADEA Waiver and Release. By signing this Release, Employee specifically waives and releases any claims he may have against
the Released Parties under the ADEA, which prohibits discrimination on the basis of age against individuals ages 40 and older, with the
exception of any rights or claims that may arise under the ADEA after the date that Employee signs this Release.

e.any and all claims arising out of any other federal, state or local laws and regulations, and any and all common law claims, relating to
employment or employment discrimination, harassment or retaliation; and

f.any and all claims for attorneys’ fees and costs.

2.Unknown Claims. This Release extends to all claims Employee may now have, even claims unknown at this time. Employee understands
that after signing this Release he may discover claims or facts different from or in addition to those which he now knows or believes to exist,
and which, if known or suspected at the time of entering into this Release, may have materially affected this Release or his decision to sign it.
Nevertheless, the waiver and release in this Release shall remain effective in all respects regardless of any such different or additional facts.

3.Claims Not Released. By signing this Release, Employee is not waiving any rights he may have to: (a) his own vested accrued employee
benefits, if any, as of the date that Employee signed this Release, under the Company’s health and welfare and retirement benefit plans; (b)
benefits

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under applicable workers’ compensation statutes or government-provided unemployment benefits; and (c) claims that the law does not permit
Employee to waive by signing this Release. In addition, nothing in this Release shall prohibit or prevent Employee from filing a charge with or
participating, testifying or assisting in any investigation, hearing or other proceeding before the U.S. Equal Employment Opportunity
Commission (“EEOC”) or a state or local fair employment practices agency, except that the Employee may not recover any monetary benefits
or other relief in connection with any such claim, charge or proceeding filed by him or filed by others on his behalf. Finally, nothing in this
Release shall be construed to waive Employee’s right to enforce any provision of this Release or challenge the validity of this Release under the
ADEA.

4.Agreement Not to Sue. Employee represents and agrees that he has not filed any complaint, charge, claim, action or lawsuit (collectively,
“Actions”) against the Released Parties with any federal, state or local agency or court. Except as provided in Paragraphs 2 and 3, Employee
represents and agrees that: (a) he will not file any Actions at any time, regarding any claim that he has released in this Release; and (b) if
Employee files an Action asserting any claim that he has released in this Release, he understands and agrees the Released Parties will be
entitled to recover from him their attorneys’ fees, other defense costs, and any other damages that his suit or action causes, as applicable.
Nothing in this Release prevents Employee from reporting possible violations of applicable law to any governmental agency or from providing
truthful information to a court of competent jurisdiction, to an administrative agency, or to an investigatory body.

5.Representations. As part of this Release, Employee represents and agrees that: (a) he has not assigned or transferred any claims described in
this Release to any third parties; (b) he has not suffered any job-related wrongs or injuries for which he might still be entitled to compensation
or relief in the future; (c) he is not aware of or has disclosed to the Company any alleged impropriety or wrongdoing on the part of the
Released Parties; (d) he has fully complied with Employee’s obligations under the Company policies and any agreement between Employee
and the Company regarding confidentiality and/or intellectual property; (e) he has properly reported all hours that he worked, if applicable;
and (f) he has been paid all wages, overtime, commissions, compensation, benefits, and other amounts that the Company should have paid him
before the date that Employee signed this Release.

6.No Admission of Liability. Employee acknowledges and agrees that nothing contained in this Release shall be construed as an admission by
the Company of any: (a) liability; (b) violation of any federal, state, or local law, regulation or order; (c) breach of contract, actual or implied,
(d) commission of any tort; or (e) other wrongdoing.

7.Severability. A determination by a court that any provision of this Release is invalid, illegal or unenforceable shall not affect the validity,
legality or enforceability of any other provision of this Release. In addition, if any provision contained in this Release is found to be invalid,
illegal or unenforceable, the Parties agree that such invalid, illegal or unenforceable provision shall be modified and replaced with a new
provision that, to the extent permissible, achieves substantially the same practical or economic effect and which is valid and enforceable.

8.No Waiver. The failure of either Party to insist, in any one or more instances, on compliance with or performance of any of the terms,
promises or conditions of this Release, or to exercise any

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DISCLOSED]

of its rights, shall not be construed as a waiver or relinquishment of such term, promise, condition or right with respect to further compliance
with or performance.

9.Choice of Law. This Release will be interpreted in accordance with the laws of the State of Arizona, without giving effect to its conflict of
law principles.

10.Entire Agreement. This Release and the Agreement contain all the agreements between Employee and the Company relating to the
Kingston Receivable incentive compensation and supersede any prior agreements or representations between the Parties as to the subjects
covered. This Release may be modified, supplemented or superseded only in a written document signed by Employee and an authorized
representative of the Company.

11.Section 409A. This Release and the payments and benefits provided hereunder are intended to comply with or otherwise be exempt from
the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and shall be construed, interpreted, and
administered in a manner consistent with such intent. Any payment made under this Release will be treated as a separate payment and the right
to a series of installment payments under this Release will be treated as a right to a series of separate payments. If Employee is a “specified
employee” (within the meaning of Section 409A), any payments or benefits that are treated as nonqualified deferred compensation for purposes
of Section 409A and that are payable or provided as a result of Employee’s “separation from service” (within the meaning of Section 409A)
that would otherwise be paid or provided prior to the earliest of the dates set forth in this sentence shall instead be deferred, accumulated, and
paid in a lump sum or provided on the earliest of (i) the first day of the seventh month following Employee’s separation from service or (ii) the
date of Employee’s death.

12.Consideration and Revocation Periods; Effective Date. By signing below, in addition to releasing all claims described herein, Employee
acknowledges and agrees as follows:

a.Consultation with an Attorney. Employee has been specifically advised to consult with an attorney, at his own expense, prior to signing
this Release, and has consulted with such counsel to the extent Employee has deemed necessary before signing this Release.

b.Consideration Period. Employee understands that he can take up to 21 calendar days from the date he was provided this Release to decide
whether to sign it (the “Consideration Period”), and he has been given at least 21 calendar days to consider the actual terms of this Release
and consult with an attorney of Employee's choice. Employee further understands that changes to this Release, whether material or
immaterial, do not restart the running of the 21-day period. Employee understands that to receive the Kingston Receivable incentive
compensation, he must deliver this signed Release to the Company to the person and address listed below so that it is received by the
Company on or before the expiration of the Consideration Period. Employee agrees to waive the balance of the Consideration Period if he
voluntarily executes the Release before the expiration of that period. Employee understands that if he does not sign the Release before the
expiration of the Consideration Period, then this Release shall be automatically withdrawn, revoked and

-4-

[****]=[CONFIDENTIAL PORTION HAS BEEN OMITTED BECAUSE IT (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED]

canceled as well as any offers of the Kingston Receivable incentive compensation associated with it.

c.Revocation Period. Employee understands that he may revoke this Release within seven (7) calendar days from the date that he signed it
(the “Revocation Period”). If Employee does revoke, this Release shall be null and void and of no force and effect on the Company or the
Employee. Employee further understands and acknowledges that to be effective, the revocation must be in writing and must be received by
the person at the address listed below no later than end of the seventh calendar day after Employee signs this Release.

d.Effective Date. This Release shall not become effective or enforceable, i.e., the “Effective Date,” until all of the following contingencies
occur: (i) the Company receives the Release fully executed by Employee in form and substance acceptable to the Company; (ii) the
Revocation Period expires; and (iii) the Release is signed by the Company.

e.Address for Sending Signed Release and Revocation.

J.S. Whang
Amtech Systems, Inc.
131 South Clark Drive
Tempe, Arizona 85281

AND

Lisa D. Gibbs
Chief Financial Officer
131 South Clark Drive
Tempe, Arizona 85281

f.Knowing and Voluntary Execution. Employee states that he has read this Release and that he understands all of its terms. Employee
specifically acknowledges and agrees that he has not relied on any statements, promises or agreements of any kind made to him in
connection with his decision to sign the Release, except for those terms set forth in this Release. Employee represents that he is entering
into and signing this Release knowingly and voluntarily, free of any duress or coercion, with full knowledge of what the Release means.

[****]=[CONFIDENTIAL PORTION HAS BEEN OMITTED BECAUSE IT (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED]

[signature page follows]

-5-

AGREED:

EMPLOYEE: J.S. WHANG

_________________________________ Dated:
(Signature)

AMTECH SYSTEMS, INC.

By: Dated:
(Signature)

(Print Name)

Title:

[****]=[CONFIDENTIAL PORTION HAS BEEN OMITTED BECAUSE IT (I) IS NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY
DISCLOSED]

-6-

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

SUBSIDIARIES OF THE REGISTRANT

Exhibit 21.1

Name
Bruce Technologies, Inc

BTU Europe Ltd.

BTU International, Inc.

BTU Ltd. (Shanghai)

BTU Overseas, Ltd.

BTU Overseas (Shanghai) Co., Ltd.

Intersurface Dynamics, Inc.

P.R. Hoffman Machine Products, Inc.

Tempress Systems, Inc.

Jurisdiction in which incorporated
State of Massachusetts

United Kingdom

State of Delaware

China

State of Delaware

China

State of Connecticut

State of Arizona

State of Texas

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We have issued our report dated November 30, 2022, with respect to the consolidated financial statements in the Annual Report of Amtech Systems, Inc. on Form 10-K for the
year ended September 30, 2022. We consent to the incorporation by reference of said report in the Registration Statements of Amtech Systems, Inc. on Forms S-8 (File Nos.
333-263875, 333-204431, 333-196940, 333-196937, 333-131051, 333-145454, 333-09911, 333-168606, 333-168607).

Exhibit 23.1

/s/ GRANT THORNTON LLP

Phoenix, Arizona
November 30, 2022

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Exhibit 23.2

We consent to the incorporation by reference in Registration Statement on Forms S-8 (Nos. 333-09911, 333-131051, 333-145454, 333-168606, 333-168607, 333-196937, 333-
196940, 333-204431, and 333-263875) of our report dated November 17, 2021, with respect to the consolidated financial statements of Amtech Systems, Inc., as of September
30, 2021, and for each of the two years in the period ended September 30, 2021, included in this Annual Report on Form 10-K for the year ended September 30, 2022.

/s/ MAYER HOFFMAN MCCANN P.C.

Phoenix, Arizona
November 30, 2022

POWER OF ATTORNEY

Exhibit 24

KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS BELOW CONSTITUTES AND APPOINTS MICHAEL WHANG
AND LISA D. GIBBS, AND EACH OF THEM, HIS TRUE AND LAWFUL ATTORNEYS-IN-FACT AND AGENTS, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR HIM AND IN HIS NAME, PLACE AND STEAD, IN ANY AND ALL CAPACITIES, TO SIGN AMTECH SYSTEMS, INC.’S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2022, AND ANY AND ALL AMENDMENTS TO SUCH ANNUAL REPORT ON FORM
10-K, AND TO FILE THE SAME, WITH ALL EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH WITH THE SECURITIES AND
EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND AGENTS, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO
AND PERFORM EACH AND EVERY ACT AND THING REQUISITE AND NECESSARY TO BE DONE IN AND ABOUT THE PREMISES, AS FULLY AND TO ALL
INTENTS AND PURPOSES AS HE MIGHT OR COULD DO IN PERSON HEREBY RATIFYING AND CONFIRMING ALL THAT SAID ATTORNEYS-IN-FACT AND
AGENTS, OR HIS SUBSTITUTE OR SUBSTITUTES, MAY LAWFULLY DO OR CAUSE TO BE DONE BY VIRTUE HEREOF.

Signature

/s/ Michael Whang
Michael Whang

/s/ Lisa D. Gibbs
Lisa D. Gibbs

/s/ Robert C. Daigle
Robert C. Daigle

/s/ Robert M. Averick
Robert M. Averick

/s/ Michael Garnreiter
Michael Garnreiter

/s/ Sukesh Mohan
Sukesh Mohan

/s/ Jong S. Whang
Jong S. Whang

Title

Date

Chief Executive Officer and Director

November 28, 2022

Vice President and Chief Financial Officer and Director

November 28, 2022

(Principal Financial Officer and
Principal Accounting Officer)

Chairman of the Board

November 28, 2022

Director

November 28, 2022

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Exhibit 31.1

I, Michael Whang, certify that:

1.I have reviewed this Annual Report on Form 10-K of Amtech Systems, Inc. (the “registrant”);

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which
this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the
registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and
the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial
reporting.

Date:

/s/ Michael Whang
Michael Whang
Chief Executive Officer
Amtech Systems, Inc.
November 30, 2022

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES
CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

Exhibit 31.2

I, Lisa D. Gibbs, certify that:

1.I have reviewed this Annual Report on Form 10-K of Amtech Systems, Inc. (the “registrant”),

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial
reporting.

Date:

/s/ Lisa D. Gibbs
Lisa D. Gibbs
Vice President and Chief Financial Officer
Amtech Systems, Inc.
November 30, 2022

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.1

In connection with the Annual Report of Amtech Systems, Inc. (the “Company”) on Form 10-K for the period ended September 30, 2022, as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Michael Whang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted
pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:

/s/ Michael Whang
Michael Whang
Chief Executive Officer
November 30, 2022

AMTECH SYSTEMS, INC. AND ITS SUBSIDIARIES

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Exhibit 32.2

In connection with the Annual Report of Amtech Systems, Inc. (the “Company”) on Form 10-K for the period ended September 30, 2022, as filed with the Securities

and Exchange Commission on the date hereof (the “Report”), I, Lisa D. Gibbs, Vice President & Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss.
1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:

/s/ Lisa D. Gibbs
Lisa D. Gibbs
Vice President and Chief Financial Officer
Amtech Systems, Inc.
November 30, 2022