Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Nov. 30, 2016 | Dec. 30, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | AEHR TEST SYSTEMS | |
Entity Central Index Key | 1,040,470 | |
Document Type | 10-Q | |
Document Period End Date | Nov. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 16,643,433 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 | [1] |
ASSETS | |||
Cash and cash equivalents | $ 5,154 | $ 939 | |
Accounts receivable, net | 1,429 | 522 | |
Inventories | 6,069 | 7,033 | |
Prepaid expenses and other current assets | 390 | 254 | |
Total current assets | 13,042 | 8,748 | |
Property and equipment, net | 793 | 1,204 | |
Other assets | 95 | 94 | |
Total assets | 13,930 | 10,046 | |
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | |||
Accounts payable | 1,770 | 1,413 | |
Accrued expenses | 1,366 | 1,553 | |
Customer deposits and deferred revenue, short-term | 1,055 | 1,714 | |
Total current liabilities | 4,191 | 4,680 | |
Long-term debt, net of debt issuance costs | 6,051 | 5,962 | |
Deferred revenue, long-term | 47 | 127 | |
Total liabilities | 10,289 | 10,769 | |
Aehr Test Systems shareholders' equity (deficit): | |||
Common stock, $0.01 par value: Authorized: 75,000 shares; Issued and outstanding: 16,639 shares and 13,216 shares at November 30, 2016 and May 31, 2016, respectively | 167 | 132 | |
Additional paid-in capital | 64,636 | 58,052 | |
Accumulated other comprehensive income | 2,188 | 2,237 | |
Accumulated deficit | (63,331) | (61,124) | |
Total Aehr Test Systems shareholders' equity (deficit) | 3,660 | (703) | |
Noncontrolling interest | (19) | (20) | |
Total shareholders' equity (deficit) | 3,641 | (723) | |
Total liabilities and shareholders' equity (deficit) | $ 13,930 | $ 10,046 | |
[1] | The condensed consolidated balance sheet at May 31, 2016 has been derived from the audited consolidated financial statements at that date. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Nov. 30, 2016 | May 31, 2016 |
Condensed Consolidated Balance Sheets Parenthetical | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 75,000,000 | 75,000,000 |
Common stock, shares issued | 16,639,000 | 13,216,000 |
Common stock, shares outstanding | 16,639,000 | 13,216,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Income Statement [Abstract] | ||||
Net sales | $ 4,216 | $ 4,620 | $ 9,534 | $ 11,253 |
Cost of sales | 2,753 | 2,929 | 5,865 | 6,179 |
Gross profit | 1,463 | 1,691 | 3,669 | 5,074 |
Operating expenses: | ||||
Selling, general and administrative | 1,707 | 1,713 | 3,423 | 3,558 |
Research and development | 1,040 | 923 | 2,100 | 1,985 |
Total operating expenses | 2,747 | 2,636 | 5,523 | 5,543 |
Loss from operations | (1,284) | (945) | (1,854) | (469) |
Interest expense | (181) | (137) | (359) | (272) |
Other income, net | 43 | 55 | 40 | 31 |
Loss before income tax expense | (1,422) | (1,027) | (2,173) | (710) |
Income tax expense | (30) | (21) | (34) | (44) |
Net loss | (1,452) | (1,048) | (2,207) | (754) |
Less: Net income attributable to the noncontrolling interest | 0 | 0 | 0 | 0 |
Net loss attributable to Aehr Test Systems common shareholders | $ (1,452) | $ (1,048) | $ (2,207) | $ (754) |
Net loss per share Basic and Diluted | $ (0.09) | $ (0.08) | $ (0.15) | $ (0.06) |
Shares used in per share calculations: Basic and Diluted (in thousands) | 16,029 | 13,048 | 14,673 | 13,005 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,452) | $ (1,048) | $ (2,207) | $ (754) |
Other comprehensive loss, net of tax: Net change in cumulative translation adjustment | (55) | (60) | (48) | (42) |
Total comprehensive loss | (1,507) | (1,108) | (2,255) | (796) |
Less: Comprehensive income attributable to the noncontrolling interest | 2 | 0 | 1 | 0 |
Comprehensive loss, attributable to Aehr Test Systems common shareholders | $ (1,509) | $ (1,108) | $ (2,256) | $ (796) |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | ||
Cash flows from operating activities: | |||
Net loss | $ (2,207) | $ (754) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation expense | 534 | 573 | |
Provision for doubtful accounts | 12 | 17 | |
Amortization of debt issuance costs | 89 | 82 | |
Depreciation and amortization | 129 | 73 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (972) | (1,196) | |
Inventories | 1,335 | (316) | |
Prepaid expenses and other current assets | (138) | (139) | |
Accounts payable | 721 | 687 | |
Accrued expenses | (201) | 439 | |
Customer deposits and deferred revenue | (739) | (3,328) | |
Income taxes payable | 21 | 9 | |
Net cash used in operating activities | (1,416) | (3,853) | |
Cash flows from investing activities: | |||
Purchases of property and equipment | (88) | (169) | |
Net cash used in investing activities | (88) | (169) | |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock under private placement, net of issuance costs | 5,299 | 0 | |
Proceeds from issuance of common stock under employee plans, net of taxes paid related to share settlement of equity awards | 463 | 460 | |
Net cash provided by financing activities | 5,762 | 460 | |
Effect of exchange rates on cash and cash equivalents | (43) | (10) | |
Net increase (decrease) in cash and cash equivalents | 4,215 | (3,572) | |
Cash and cash equivalents, beginning of period | 939 | [1] | 5,527 |
Cash and cash equivalents, end of period | 5,154 | 1,955 | |
Supplemental disclosure of non-cash flow information | |||
Net change in capitalized share-based compensation | 0 | (20) | |
Fair value of common stock issued to settle accounts payable | 323 | 0 | |
Transfers of property and equipment to inventories | $ 372 | $ 0 | |
[1] | The condensed consolidated balance sheet at May 31, 2016 has been derived from the audited consolidated financial statements at that date. |
1. BASIS OF PRESENTATION
1. BASIS OF PRESENTATION | 6 Months Ended |
Nov. 30, 2016 | |
Disclosure Text Block [Abstract] | |
1. BASIS OF PRESENTATION | 1. BASIS OF PRESENTATION The accompanying financial information has been prepared by Aehr Test Systems, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2016 audited consolidated financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the condensed consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2016. Results for the interim periods presented herein are not necessarily indicative of results which may be reported for any other interim period or for the entire fiscal year. PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company," "we," "us," and "our"). All significant intercompany balances have been eliminated in consolidation. For our majority owned subsidiary, Aehr Test Systems Japan K.K., we reflected the noncontrolling interest of the portion we do not own on our Condensed Consolidated Balance Sheets in Shareholders’ Equity (Deficit) and in the Condensed Consolidated Statements of Operations. ACCOUNTING ESTIMATES. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for sales and revenue allowances, the allowance for doubtful accounts, inventory valuations, income taxes, stock-based compensation expenses, and product warranties, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates. SIGNIFICANT ACCOUNTING POLICIES. The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2016. There have been no changes in our significant accounting policies during the six months ended November 30, 2016. |
2. STOCK-BASED COMPENSATION
2. STOCK-BASED COMPENSATION | 6 Months Ended |
Nov. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
2. STOCK-BASED COMPENSATION | 2. STOCK-BASED COMPENSATION Stock-based compensation expense consists of expenses for stock options, restricted stock units, or RSUs, and employee stock purchase plan, or ESPP, purchase rights. Stock-based compensation cost for stock options and ESPP purchase rights are measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, stock-based compensation cost is based on the fair value of the Company’s common stock at the grant date. All of the Company’s stock-based compensation is accounted for as an equity instrument. See Notes 10 and 11 in the Company’s Annual Report on Form 10-K for fiscal 2016 filed on August 29, 2016 for further information regarding the 2006 Equity Incentive Plan and the 2006 Employee Stock Purchase Plan. In October 2016, the Company’s 2016 Equity Incentive Plan and the Amended and Restated Employee Stock Purchase Plan were approved by the Company’s shareholders. The 2016 Equity Incentive Plan replaces our 2006 Equity Incentive Plan, which was scheduled to expire in October 2016, and will continue in effect until 2026. A total of 2,238,467 shares of common stock have been reserved for issuance under the Company’s 2016 Equity Incentive Plan. The Amended and Restated 2006 Employee Stock Purchase Plan extends the term of the ESPP indefinitely. See the Registration Statement on Form S-8 filed on November 14, 2016 for further information regarding the 2016 Equity Incentive Plan and the ESPP. The following table summarizes the stock-based compensation expense related to the Company’s stock-based incentive plans for the three and six months ended November 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: Cost of sales $ 23 $ 20 $ 47 $ 42 Selling, general and administrative 141 186 388 424 Research and development 51 48 99 107 Total stock-based compensation $ 215 $ 254 $ 534 $ 573 As of November 30, 2016 and 2015, there were no stock-based compensation costs capitalized as part of inventory. During the three months ended November 30, 2016 and 2015, the Company recorded stock-based compensation related to stock options and RSUs of $185,000 and $233,000, respectively. During the six months ended November 30, 2016 and 2015, the Company recorded stock-based compensation related to stock options and RSUs of $464,000 and $518,000, respectively. As of November 30, 2016, the total compensation cost related to unvested stock-based awards under the Company’s 2006 and 2016 Equity Incentive Plans, but not yet recognized, was approximately $1,266,000, which is net of estimated forfeitures of $3,000. This cost will be amortized on a straight-line basis over a weighted average period of approximately 2.4 years. During the three months ended November 30, 2016 and 2015, the Company recorded stock-based compensation related to the ESPP of $30,000 and $21,000, respectively. During the six months ended November 30, 2016 and 2015, the Company recorded stock-based compensation related to the ESPP of $70,000 and $55,000, respectively. As of November 30, 2016, the total compensation cost related to purchase rights under the ESPP but not yet recognized was approximately $72,000. This cost will be amortized on a straight-line basis over a weighted average period of approximately 0.9 years. Valuation Assumptions Valuation and Amortization Method. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation model and a single option award approach. The fair value under the single option approach is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Expected Term. The Company’s expected term represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based on historical experience, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations of future employee behavior as evidenced by changes to the terms of its stock-based awards. Volatility. Volatility is a measure of the amounts by which a financial variable such as stock price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. The Company uses the historical volatility for the past four or five years, which matches the expected term of most of the option grants, to estimate expected volatility. Volatility for each of the ESPP’s four time periods of six months, twelve months, eighteen months, and twenty-four months is calculated separately and included in the overall stock-based compensation cost recorded. Risk-Free Interest Rate. The Company bases the risk-free interest rate used in the Black-Scholes option valuation model on the implied yield in effect at the time of option grant on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock awards including the ESPP. Fair Value. The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2016 and 2015 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model: Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Expected term (in years) 4 4 4 4 Volatility 0.81 0.86 0.81 0.86 Risk-free interest rates 1.10 % 1.21 % 1.02 % 1.21 % Weighted average grant date fair value $ 1.66 $ 1.38 $ 1.09 $ 1.38 There were no RSUs granted to employees for the three months ended November 30, 2016. During the six months ended November 30, 2016, RSUs were granted for 138,000 shares. The market value on the date of the grant was $1.68 per share. There were no ESPP purchase rights granted for the three and six months ended November 30, 2016 and 2015. The following tables summarize the Company’s stock option and RSU transactions during the three and six months ended November 30, 2016 (in thousands): Available Shares Balance, May 31, 2016 1,847 Options granted (318 ) RSUs granted (138 ) Shares cancelled 46 Balance, August 31, 2016 1,437 Additional shares reserved 2,238 Options granted (50 ) Shares cancelled 1 2006 Plan available shares expired (1,438 ) Balance, November 30, 2016 2,188 The following table summarizes the stock option transactions during the three and six months ended November 30, 2016 (in thousands, except per share data): Outstanding Options Weighted Number Average Aggregate of Exercise Intrinsic Shares Price Value Balances, May 31, 2016 3,201 $ 1.66 $ 189 Options granted 318 $ 1.68 Options cancelled (46 ) $ 1.40 Options exercised (91 ) $ 1.32 Balances, August 31, 2016 3,382 $ 1.67 $ 2,694 Options granted 50 $ 2.81 Options cancelled (1 ) $ 2.08 Options exercised (202 ) $ 1.22 Balances, November 30, 2016 3,229 $ 1.72 $ 4,099 Options fully vested and expected to vest at November 30, 2016 3,185 $ 1.72 $ 4,058 The options outstanding and exercisable at November 30, 2016 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at November 30, 2016 at November 30, 2016 Range of Exercise Prices Number Outstanding Shares Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Shares Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value $ 0.59-$0.97 514 2.27 $ 0.66 514 2.27 $ 0.66 $ 1.09-$1.40 899 2.87 $ 1.28 816 2.77 $ 1.28 $ 1.68-$2.06 547 5.63 $ 1.77 240 4.52 $ 1.88 $ 2.10-$2.81 1,269 5.03 $ 2.44 738 4.90 $ 2.45 $ 0.59-$2.81 3,229 4.08 $ 1.72 2,308 3.52 $ 1.58 $ 3,261 The total intrinsic value of options exercised during the three and six months ended November 30, 2016 was $359,000 and $411,000, respectively. The total intrinsic value of options exercised during the three and six months ended November 30, 2015 was $125,000 and $185,000, respectively. The weighted average remaining contractual life of the options exercisable and expected to be exercisable at November 30, 2016 was 4.08 years. |
3. EARNINGS PER SHARE
3. EARNINGS PER SHARE | 6 Months Ended |
Nov. 30, 2016 | |
Earnings Per Share [Abstract] | |
3. EARNINGS PER SHARE | 3. EARNINGS PER SHARE Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, RSUs and ESPP shares) outstanding during the period using the treasury stock method. The following table presents the computation of basic and diluted net loss per share attributable to the Company’s common shareholders (in thousands, except per share data): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Numerator: Net loss $ (1,452 ) $ (1,048 ) $ (2,207 ) $ (754 ) Denominator for basic net loss per share: Weighted average shares outstanding 16,029 13,048 14,673 13,005 Shares used in basic net loss per share calculation 16,029 13,048 14,673 13,005 Effect of dilutive securities — — — — Denominator for diluted net loss per share 16,029 13,048 14,673 13,005 Basic net loss per share $ (0.09 ) $ (0.08 ) $ (0.15 ) $ (0.06 ) Diluted net loss per share $ (0.09 ) $ (0.08 ) $ (0.15 ) $ (0.06 ) For the purpose of computing diluted earnings per share, the weighted average number of potential common shares does not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive. In the three and six months ended November 30, 2016 and 2015 potential common shares have not been included in the calculation of diluted net loss per share as the effect would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share for these periods are the same. Stock options to purchase 3,229,000 shares of common stock, RSUs for 72,000 shares and ESPP rights to purchase 246,000 ESPP shares were outstanding as of November 30, 2016, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. Stock options to purchase 3,385,000 shares of common stock and ESPP rights to purchase 131,000 ESPP shares were outstanding as of November 30, 2015, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. |
4. FAIR VALUE OF FINANCIAL INST
4. FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Nov. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
4. FAIR VALUE OF FINANCIAL INSTRUMENTS | 4. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments are measured at fair value consistent with authoritative guidance. This authoritative guidance defines fair value, establishes a framework for using fair value to measure assets and liabilities, and disclosures required related to fair value measurements. The guidance establishes a fair value hierarchy based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level 1 - instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 - instrument valuations are obtained from readily-available pricing sources for comparable instruments. Level 3 - instrument valuations are obtained without observable market values and require a high level of judgment to determine the fair value. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of November 30, 2016 (in thousands): Balance as of November 30, 2016 Level 1 Level 2 Level 3 Money market funds $ 4,001 $ 4,001 $ — $ — Certificate of deposit 50 — 50 — Assets $ 4,051 $ 4,001 $ 50 $ — The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands): Balance as of May 31, 2016 Level 1 Level 2 Level 3 Money market funds $ 1 $ 1 $ — $ — Certificate of deposit 50 — 50 — Assets $ 51 $ 1 $ 50 $ — There were no financial liabilities measured at fair value as of November 30, 2016 and May 31, 2016. There were no transfers between Level 1 and Level 2 fair value measurements during the three and six months ended November 30, 2016. The carrying amounts of financial instruments including cash, cash equivalents, receivables, accounts payable and certain other accrued liabilities, approximate fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the carrying value of the debt approximates the fair value. The Company has, at times, invested in debt and equity of private companies, and may do so again in the future, as part of its business strategy. |
5. ACCOUNTS RECEIVABLE, NET
5. ACCOUNTS RECEIVABLE, NET | 6 Months Ended |
Nov. 30, 2016 | |
Accounts Receivable, Net, Current [Abstract] | |
5. ACCOUNTS RECEIVABLE | 5. ACCOUNTS RECEIVABLE, NET Accounts receivable represents customer trade receivables and is presented net of allowances for doubtful accounts of $20,000 at November 30, 2016 and $8,000 at May 31, 2016. Accounts receivable are derived from the sale of products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies. The Company’s allowance for doubtful accounts is based upon historical experience and review of trade receivables by aging category to identify specific customers with known disputes or collection issues. Uncollectible receivables are recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received. |
6. INVENTORIES
6. INVENTORIES | 6 Months Ended |
Nov. 30, 2016 | |
Inventory Disclosure [Abstract] | |
6. INVENTORIES | 6. INVENTORIES Inventories are comprised of the following (in thousands): November 30, May 31, 2016 2016 Raw materials and sub-assemblies $ 2,495 $ 2,839 Work in process 3,308 4,151 Finished goods 266 43 $ 6,069 $ 7,033 |
7. SEGMENT INFORMATION
7. SEGMENT INFORMATION | 6 Months Ended |
Nov. 30, 2016 | |
Segment Reporting [Abstract] | |
7. SEGMENT INFORMATION | 7. SEGMENT INFORMATION The Company operates in one reportable segment: the design, manufacture and marketing of advanced test and burn-in products to the semiconductor manufacturing industry. The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands). United States Asia Europe Total Three months ended November 30, 2016: Net sales $ 1,709 $ 2,256 $ 251 $ 4,216 Property and equipment, net 740 39 14 793 Six months ended November 30, 2016: Net sales $ 4,873 $ 4,166 $ 495 $ 9,534 Property and equipment, net 740 39 14 793 Three months ended November 30, 2015: Net sales $ 507 $ 3,768 $ 345 $ 4,620 Property and equipment, net 530 33 13 576 Six months ended November 30, 2015: Net sales $ 1,225 $ 9,149 $ 879 $ 11,253 Property and equipment, net 530 33 13 576 The Company’s Japanese and German subsidiaries primarily comprise the foreign operations. Substantially all of the sales of the subsidiaries are made to unaffiliated Japanese or European customers. Net sales from outside the United States include those of Aehr Test Systems Japan K.K. and Aehr Test Systems GmbH. Sales to the Company’s five largest customers accounted for approximately 96% and 95% of its net sales in the three and six months ended November 30, 2016, respectively. Two customers accounted for approximately 60% and 22% of the Company’s net sales in the three months ended November 30, 2016. Three customers accounted for approximately 50%, 19% and 16% of the Company’s net sales in the six months ended November 30, 2016. Sales to the Company’s five largest customers accounted for approximately 97% and 96% of its net sales in the three and six months ended November 30, 2015, respectively. Two customers accounted for approximately 51% and 36% of the Company’s net sales in the three months ended November 30, 2015. Two customers accounted for approximately 54% and 27% of the Company’s net sales in the six months ended November 30, 2015. No other customers represented more than 10% of the Company’s net sales in the six months ended November 30, 2016 and 2015. |
8. PRODUCT WARRANTIES
8. PRODUCT WARRANTIES | 6 Months Ended |
Nov. 30, 2016 | |
Product Warranties Disclosures [Abstract] | |
8. PRODUCT WARRANTIES | 8. PRODUCT WARRANTIES The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The standard warranty period is one year for systems and ninety days for parts and service. The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Balance at the beginning of the period $ 90 $ 219 $ 155 $ 137 Accruals for warranties issued during the period 11 128 11 237 Accruals and adjustments (change in estimates) related to pre-existing warranties during the period — — (54 ) — Settlement made during the period (in cash or in kind) (29 ) (42 ) (40 ) (69 ) Balance at the end of the period $ 72 $ 305 $ 72 $ 305 The accrued warranty balance is included in accrued expenses on the accompanying condensed consolidated balance sheets. |
9. INCOME TAXES
9. INCOME TAXES | 6 Months Ended |
Nov. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
9. INCOME TAXES | 9. INCOME TAXES Income taxes have been provided using the liability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and net operating loss and tax credit carryforwards measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse or the carryforwards are utilized. Valuation allowances are established when it is determined that it is more likely than not that such assets will not be realized. Since fiscal 2009, a full valuation allowance was established against all deferred tax assets as management determined that it is more likely than not that certain deferred tax assets will not be realized. The Company accounts for uncertain tax positions consistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not expect any material change in its unrecognized tax benefits over the next twelve months. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes. Although the Company files U.S. federal, various state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, Germany and Japan. Tax years 1997 - 2016 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers from those years. |
10. CUSTOMER DEPOSITS AND DEFER
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM | 6 Months Ended |
Nov. 30, 2016 | |
Customer Deposits And Deferred Revenue Short-term | |
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM | 10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM Customer deposits and deferred revenue, short-term (in thousands): November 30, May 31, 2016 2016 Customer deposits $ 692 $ 540 Deferred revenue 363 1,174 $ 1,055 $ 1,714 |
11. LONG-TERM DEBT
11. LONG-TERM DEBT | 6 Months Ended |
Nov. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
11. LONG-TERM DEBT | 11. LONG-TERM DEBT On April 10, 2015, the Company entered into a Convertible Note Purchase and Credit Facility Agreement (the “Purchase Agreement”) with QVT Fund LP and Quintessence Fund L.P. (the “Purchasers”) providing for (a) the Company’s sale to the Purchasers of $4,110,000 in aggregate principal amount of 9.0% Convertible Secured Notes due 2017 (the “Convertible Notes”) and (b) a secured revolving loan facility (the “Credit Facility”) in an aggregate principal amount of up to $2,000,000. On August 22, 2016 the Purchase Agreement was amended to extend the maturity date of the Convertible Notes to April 10, 2019, decrease the conversion price from $2.65 per share to $2.30 per share, decrease the forced conversion price from $7.50 per share to $6.51 per share, and allow for additional equity awards. The Convertible Notes bear interest at an annual rate of 9.0% and will mature on April 10, 2019 unless repurchased or converted prior to that date. Interest is payable quarterly on March 1, June 1, September 1 and December 1 of each year. Debt issuance costs of $356,000, which are being accreted over the term of the original loan using the effective interest rate method, were offset against the loan balance. During the three and six months ended November 30, 2016, $44,000 and $89,000, respectively, of amortization costs were recognized as interest expense. Unamortized debt issuance costs of $59,000 were offset against the loan balance at November 30, 2016. The conversion price for the Convertible Notes is $2.30 per share of the Company’s common stock and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any part of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date. Upon conversion, the Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion. The Company may not redeem the Convertible Notes prior to maturity. On April 14, 2016, $900,000 drawn against the Credit Facility was converted to Convertible Notes. On July 17, 2016, $1,100,000 drawn against the Credit Facility was converted to Convertible Notes. At November 30, 2016 there was no remaining balance available on the Credit Facility. The Company’s obligations under the Purchase Agreement are secured by substantially all of the assets of the Company. Long-term debt, net of debt issuance costs (in thousands): November 30, May 31, 2016 2016 Principal $ 6,110 $ 6,110 Unamortized debt issuance costs (59 ) (148 ) $ 6,051 $ 5,962 |
12. EQUITY
12. EQUITY | 6 Months Ended |
Nov. 30, 2016 | |
Equity [Abstract] | |
12. EQUITY | 12. EQUITY On August 8, 2016 the Company issued 200,000 shares of its common stock to Semics Inc., a semiconductor test equipment provider that produces fully automatic wafer probe systems, in consideration for cancellation of an outstanding invoice of $323,000 for capital equipment. On September 28, 2016, the Company sold 2,721,540 shares of its common stock in a private placement transaction with certain institutional and accredited investors. The purchase price per share of the common stock sold in the private placement was $2.15, resulting in gross proceeds to the Company of $5,851,000, before offering expenses. The net proceeds after offering expenses were $5,299,000. |
13. RECENT ACCOUNTING PRONOUNCE
13. RECENT ACCOUNTING PRONOUNCEMENTS | 6 Months Ended |
Nov. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
13. RECENT ACCOUNTING PRONOUNCEMENTS | 13. RECENT ACCOUNTING PRONOUNCEMENTS In May 2014, as part of its ongoing efforts to assist in the convergence of US GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting Standards Board (“FASB”) issued an accounting standards update related to revenue from contracts with customers. This standard sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety and is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in US GAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services. The standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed completely in the prior accounting guidance. The standard provides alternative methods of initial adoption and will become effective for us beginning in the first quarter of fiscal 2019. The FASB has issued several updates to the standard which i) defer the original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017. ii) clarify the application of the principal versus agent guidance. and iii) clarify the guidance on inconsequential and perfunctory promises and licensing. In May 2016, the FASB issued an update to address certain narrow aspects of the guidance including collectibility criterion, collection of sales taxes from customers, noncash consideration, contract modifications and completed contracts. This issuance does not change the core principle of the guidance in the initial topic issued in May 2014. In December 2016, the FASB issued updated guidance regarding revenue from contracts with customers. Some topics that could impact the Company include corrections and improvements around the following: contract costs impairment testing, disclosure of remaining performance obligations and prior period obligations, contract modifications, and contract asset versus receivable. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements. In August 2014, the FASB issued authoritative guidance related to going concern. This guidance requires management to evaluate the conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern and whether or not it is probable that the entity will be unable to meet its obligations as they become due within one year after the date the financial statements are issued. This guidance will apply to all entities and will be effective for us in fiscal year 2017, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements. In July 2015, the FASB issued an accounting standards update that requires management to measure inventory at the lower of cost or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. This new standard will be effective for us in fiscal year 2018, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements. In November 2015, the FASB issued an accounting standards update related to deferred tax assets and liabilities. This standard simplifies the presentation of deferred income taxes to be classified as noncurrent in the consolidated balance sheet. This new standard will be effective for us in fiscal year 2018, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements. In January 2016, the FASB issued an accounting standards update related to recognition and measurement of financial assets and financial liabilities. This standard changes accounting for equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for financial instruments. In addition, it clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. This standard is effective for us in fiscal year 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In February 2016, the FASB issued authoritative guidance related to Leases. This guidance requires management to present all leases greater than one year on the balance sheet as a liability to make payments and an asset as the right to use the underlying asset for the lease term. This new standard will be effective for us in fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact of adopting this new guidance on its consolidated financial statements. In March 2016, the FASB released an accounting standards update that simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The accounting standard will be effective for the Company beginning the first quarter of fiscal 2018, and early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated financial statements. In June 2016, the FASB issued an accounting standard update that requires measurement and recognition of expected credit losses for financial assets held based on historical experience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2021 on a modified retrospective basis, and early adoption in fiscal 2020 is permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements. In August 2016, the FASB issued authoritative guidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Statements of Cash Flows. In October 2016, the FASB issued an accounting standard update that requires recognition of the income tax consequences of intra-entity transfers of assets (other than inventory) at the transaction date. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements. In November 2016, the FASB issued authoritative guidance related to statements of cash flows. This guidance clarifies that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total amounts shown on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its Consolidated Financial Statements. In December 2016, the FASB issued authoritative guidance related to technical corrections and improvements. This guidance provides minor updates on a variety of codification topics and are not expected to have a significant effect on current accounting practice. Most of these corrections do not have a transition date as they are minor in nature. |
1. BASIS OF PRESENTATION (Polic
1. BASIS OF PRESENTATION (Policies) | 6 Months Ended |
Nov. 30, 2016 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION. The accompanying financial information has been prepared by Aehr Test Systems, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, or SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (GAAP) have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2016 audited consolidated financial statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the condensed consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2016. Results for the interim periods presented herein are not necessarily indicative of results which may be reported for any other interim period or for the entire fiscal year. |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company," "we," "us," and "our"). All significant intercompany balances have been eliminated in consolidation. For our majority owned subsidiary, Aehr Test Systems Japan K.K., we reflected the noncontrolling interest of the portion we do not own on our Condensed Consolidated Balance Sheets in Shareholders’ Equity (Deficit) and in the Condensed Consolidated Statements of Operations. |
ACCOUNTING ESTIMATES | ACCOUNTING ESTIMATES. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used to account for sales and revenue allowances, the allowance for doubtful accounts, inventory valuations, income taxes, stock-based compensation expenses, and product warranties, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES. The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2016. There have been no changes in our significant accounting policies during the six months ended November 30, 2016. |
2. STOCK-BASED COMPENSATION (Ta
2. STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation costs related to the Company's stock-based compensation | The following table summarizes the stock-based compensation expense related to the Company’s stock-based incentive plans for the three and six months ended November 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: Cost of sales $ 23 $ 20 $ 47 $ 42 Selling, general and administrative 141 186 388 424 Research and development 51 48 99 107 Total stock-based compensation $ 215 $ 254 $ 534 $ 573 |
Assumptions for Options Valuation Model | Fair Value. The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2016 and 2015 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model: Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Expected term (in years) 4 4 4 4 Volatility 0.81 0.86 0.81 0.86 Risk-free interest rates 1.10 % 1.21 % 1.02 % 1.21 % Weighted average grant date fair value $ 1.66 $ 1.38 $ 1.09 $ 1.38 |
Stock option and RSU transactions | The following tables summarize the Company’s stock option and RSU transactions during the three and six months ended November 30, 2016 (in thousands): Available Shares Balance, May 31, 2016 1,847 Options granted (318 ) RSUs granted (138 ) Shares cancelled 46 Balance, August 31, 2016 1,437 Additional shares reserved 2,238 Options granted (50 ) Shares cancelled 1 2006 Plan available shares expired (1,438 ) Balance, November 30, 2016 2,188 |
Stock option transactions | The following table summarizes the stock option transactions during the three and six months ended November 30, 2016 (in thousands, except per share data): Outstanding Options Weighted Number Average Aggregate of Exercise Intrinsic Shares Price Value Balances, May 31, 2016 3,201 $ 1.66 $ 189 Options granted 318 $ 1.68 Options cancelled (46 ) $ 1.40 Options exercised (91 ) $ 1.32 Balances, August 31, 2016 3,382 $ 1.67 $ 2,694 Options granted 50 $ 2.81 Options cancelled (1 ) $ 2.08 Options exercised (202 ) $ 1.22 Balances, November 30, 2016 3,229 $ 1.72 $ 4,099 Options fully vested and expected to vest at November 30, 2016 3,185 $ 1.72 $ 4,058 |
Options Outstanding | The options outstanding and exercisable at November 30, 2016 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at November 30, 2016 at November 30, 2016 Range of Exercise Prices Number Outstanding Shares Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Exercisable Shares Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Aggregate Intrinsic Value $ 0.59-$0.97 514 2.27 $ 0.66 514 2.27 $ 0.66 $ 1.09-$1.40 899 2.87 $ 1.28 816 2.77 $ 1.28 $ 1.68-$2.06 547 5.63 $ 1.77 240 4.52 $ 1.88 $ 2.10-$2.81 1,269 5.03 $ 2.44 738 4.90 $ 2.45 $ 0.59-$2.81 3,229 4.08 $ 1.72 2,308 3.52 $ 1.58 $ 3,261 |
3. EARNINGS PER SHARE (Tables)
3. EARNINGS PER SHARE (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | The following table presents the computation of basic and diluted net loss per share attributable to the Company’s common shareholders (in thousands, except per share data): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Numerator: Net loss $ (1,452 ) $ (1,048 ) $ (2,207 ) $ (754 ) Denominator for basic net loss per share: Weighted average shares outstanding 16,029 13,048 14,673 13,005 Shares used in basic net loss per share calculation 16,029 13,048 14,673 13,005 Effect of dilutive securities — — — — Denominator for diluted net loss per share 16,029 13,048 14,673 13,005 Basic net loss per share $ (0.09 ) $ (0.08 ) $ (0.15 ) $ (0.06 ) Diluted net loss per share $ (0.09 ) $ (0.08 ) $ (0.15 ) $ (0.06 ) |
4. FAIR VALUE OF FINANCIAL IN23
4. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value by Hierarchy | The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of November 30, 2016 (in thousands): Balance as of November 30, 2016 Level 1 Level 2 Level 3 Money market funds $ 4,001 $ 4,001 $ — $ — Certificate of deposit 50 — 50 — Assets $ 4,051 $ 4,001 $ 50 $ — The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands): Balance as of May 31, 2016 Level 1 Level 2 Level 3 Money market funds $ 1 $ 1 $ — $ — Certificate of deposit 50 — 50 — Assets $ 51 $ 1 $ 50 $ — |
6. INVENTORIES (Tables)
6. INVENTORIES (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are comprised of the following (in thousands): November 30, May 31, 2016 2016 Raw materials and sub-assemblies $ 2,495 $ 2,839 Work in process 3,308 4,151 Finished goods 266 43 $ 6,069 $ 7,033 |
7. SEGMENT INFORMATION (Tables)
7. SEGMENT INFORMATION (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Segment Reporting [Abstract] | |
Company's operations in different geographic areas | The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands). United States Asia Europe Total Three months ended November 30, 2016: Net sales $ 1,709 $ 2,256 $ 251 $ 4,216 Property and equipment, net 740 39 14 793 Six months ended November 30, 2016: Net sales $ 4,873 $ 4,166 $ 495 $ 9,534 Property and equipment, net 740 39 14 793 Three months ended November 30, 2015: Net sales $ 507 $ 3,768 $ 345 $ 4,620 Property and equipment, net 530 33 13 576 Six months ended November 30, 2015: Net sales $ 1,225 $ 9,149 $ 879 $ 11,253 Property and equipment, net 530 33 13 576 |
8. PRODUCT WARRANTIES (Tables)
8. PRODUCT WARRANTIES (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Product Warranties Disclosures [Abstract] | |
Liability for product warranties | The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 30, 2016 and 2015 (in thousands): Three Months Ended Six Months Ended November 30, November 30, 2016 2015 2016 2015 Balance at the beginning of the period $ 90 $ 219 $ 155 $ 137 Accruals for warranties issued during the period 11 128 11 237 Accruals and adjustments (change in estimates) related to pre-existing warranties during the period — — (54 ) — Settlement made during the period (in cash or in kind) (29 ) (42 ) (40 ) (69 ) Balance at the end of the period $ 72 $ 305 $ 72 $ 305 |
10. CUSTOMER DEPOSITS AND DEF27
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Customer Deposits And Deferred Revenue Short-term Tables | |
Customer deposits and deferred revenue | Customer deposits and deferred revenue, short-term (in thousands): November 30, May 31, 2016 2016 Customer deposits $ 692 $ 540 Deferred revenue 363 1,174 $ 1,055 $ 1,714 |
11. LONG-TERM DEBT (Tables)
11. LONG-TERM DEBT (Tables) | 6 Months Ended |
Nov. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term debt, net of debt issuance costs | Long-term debt, net of debt issuance costs (in thousands): November 30, May 31, 2016 2016 Principal $ 6,110 $ 6,110 Unamortized debt issuance costs (59 ) (148 ) $ 6,051 $ 5,962 |
2. STOCK-BASED COMPENSATION -
2. STOCK-BASED COMPENSATION - Compensation costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Stock-based compensation in the form of employee stock options, RSUs and ESPP shares included in: | ||||
Total stock-based compensation | $ 215 | $ 254 | $ 534 | $ 573 |
Cost of Sales | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP shares included in: | ||||
Total stock-based compensation | 23 | 20 | 47 | 42 |
Selling, General and Administrative | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP shares included in: | ||||
Total stock-based compensation | 141 | 186 | 388 | 424 |
Research and Development | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP shares included in: | ||||
Total stock-based compensation | $ 51 | $ 48 | $ 99 | $ 107 |
2. STOCK-BASED COMPENSATION -
2. STOCK-BASED COMPENSATION - Options (Details 1) - Stock Options - $ / shares | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Expected term (in years) | 4 years | 4 years | 4 years | 4 years |
Volatility | 81.00% | 86.00% | 81.00% | 86.00% |
Risk-free interest rates | 1.10% | 1.21% | 1.02% | 1.21% |
Weighted average grant date fair value | $ 1.66 | $ 1.38 | $ 1.09 | $ 1.38 |
2. STOCK-BASED COMPENSATION - O
2. STOCK-BASED COMPENSATION - Options and RSU transactions (Details 2) - Stock Option and RSU Transactions - shares | 3 Months Ended | 6 Months Ended | |
Nov. 30, 2016 | Aug. 31, 2016 | Nov. 30, 2016 | |
Available Shares, Beginning (in thousands) | 1,437 | 1,847 | 1,847 |
Additional shares reserved (in thousands) | 2,238 | ||
Options granted (in thousands) | (50) | (318) | |
RSUs granted (in thousands) | 0 | (138) | |
Shares cancelled (in thousands) | 1 | 46 | |
2006 Plan available shares expired (in thousands) | (1,438) | ||
Available Shares, Ending (in thousands) | 2,188 | 1,437 | 2,188 |
2. STOCK-BASED COMPENSATION -32
2. STOCK-BASED COMPENSATION - Option Activity (Details 3) - Outstanding Options Stock Option Transactions - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Nov. 30, 2016 | Aug. 31, 2016 | |
Options Outstanding, Beginning (in thousands) | 3,382 | 3,201 |
Options granted (in thousands) | 50 | 318 |
Options cancelled (in thousands) | (1) | (46) |
Options exercised (in thousand) | (202) | (91) |
Options Outstanding, Ending (in thousands) | 3,229 | 3,382 |
Weighted Average Exercise Price Outstanding, Beginning | $ 1.67 | $ 1.66 |
Weighted Average Exercise Price Granted | 2.81 | 1.68 |
Weighted Average Exercise Price Cancelled | 2.08 | 1.40 |
Weighted Average Exercise Price Exercised | 1.22 | 1.32 |
Weighted Average Exercise Price Outstanding, Ending | $ 1.72 | $ 1.67 |
Aggregate Intrinsic Value, beginning balance | $ 2,694 | $ 189 |
Aggregate Intrinsic Value, ending balance | $ 4,099 | $ 2,694 |
Options fully vested and expected to vest, ending (in thousands) | 3,185 | |
Weighted Average Exercise Price for Options fully vested and expected to vest, ending | $ 1.72 | |
Aggregate Intrinsic Value for Options fully vested and expected to vest, ending | $ 4,058 |
2. STOCK-BASED COMPENSATION -33
2. STOCK-BASED COMPENSATION - Options outstanding and exercisable (Details 4) $ / shares in Units, $ in Thousands | 6 Months Ended |
Nov. 30, 2016USD ($)$ / sharesshares | |
$0.59-$0.97 | |
Options Outstanding, Ending (in thousands) | shares | 514 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 2 years 7 months 7 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ .66 |
Options exercisable shares, ending (in thousands) | shares | 514 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 2 years 7 months 7 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ .66 |
$1.09-$1.40 | |
Options Outstanding, Ending (in thousands) | shares | 899 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 2 years 10 months 13 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.28 |
Options exercisable shares, ending (in thousands) | shares | 816 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 2 years 9 months 7 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.28 |
$1.68-$2.06 | |
Options Outstanding, Ending (in thousands) | shares | 547 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 5 years 7 months 17 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.77 |
Options exercisable shares, ending (in thousands) | shares | 240 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 4 years 6 months 7 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.88 |
$2.10-$2.81 | |
Options Outstanding, Ending (in thousands) | shares | 1,269 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 5 years 11 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 2.44 |
Options exercisable shares, ending (in thousands) | shares | 738 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 4 years 10 months 24 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 2.45 |
$0.59-$2.81 | |
Options Outstanding, Ending (in thousands) | shares | 3,229 |
Weighted Average Remaining Contractual Life (Years) Options Outstanding | 4 years 29 days |
Weighted Average Exercise Price Outstanding, Ending | $ / shares | $ 1.72 |
Options exercisable shares, ending (in thousands) | shares | 2,308 |
Weighted Average Remaining Contractual Life (Years) Options Exercisable | 3 years 6 months 7 days |
Weighted Average Exercise Price for Options exercisable, ending | $ / shares | $ 1.58 |
Aggregate Intrinsic Value for Options exercisable, ending | $ | $ 3,261 |
2. STOCK-BASED COMPENSATION (De
2. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Nov. 30, 2016 | Aug. 31, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Stock-based compensation costs capitalized as part of inventory | $ 0 | $ 0 | $ 0 | $ 0 | |
Intrinsic value of options exercised | 359 | 125 | $ 411 | 185 | |
Weighted average remaining contractual life of the options exercisable and expected to be exercisable | 4 years 29 days | ||||
2006 and 2016 Equity Incentive Plans | |||||
Unrecognized stock-based compensation | 1,266 | $ 1,266 | |||
Estimated forfeitures of unvested stock based awards, amount | 3 | $ 3 | |||
Weighted average period for recognition of costs | 2 years 4 months 24 days | ||||
Employee Stock Purchase Plan | |||||
Stock-based compensation related to the ESPP | 30 | $ 21 | $ 70 | $ 55 | |
Compensation cost related to purchase rights under the ESPP but not yet recognized | $ 72 | $ 72 | |||
Weighted average period for recognition of costs | 10 months 24 days | ||||
ESPP purchase right granted | 0 | 0 | 0 | 0 | |
RSU Transactions | |||||
Restricted Stock Units granted (in thousands) | 0 | 138 | |||
Market value on the date of the grant | $ 1.68 | ||||
Stock Option and RSU Transactions | |||||
Shares reserved under 2016 Equity Incentive plan (in thousands) | 2,238 | ||||
Stock-based compensation expense related to stock options and RSUs | $ 185 | $ 233 | $ 464 | $ 518 | |
Restricted Stock Units granted (in thousands) | 0 | 138 |
3. EARNINGS PER SHARE (Details)
3. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Numerator: Net loss | $ (1,452) | $ (1,048) | $ (2,207) | $ (754) |
Denominator for basic net loss per share: Weighted average shares outstanding (in thousands) | 16,029 | 13,048 | 14,673 | 13,005 |
Shares used in basic net loss per share calculation (in thousands) | 16,029 | 13,048 | 14,673 | 13,005 |
Effect of dilutive securities (in thousands) | 0 | 0 | 0 | 0 |
Denominator for diluted net loss per share (in thousands) | 16,029 | 13,048 | 14,673 | 13,005 |
Basic net loss per share | $ (.09) | $ (.08) | $ (.15) | $ (.06) |
Diluted net loss per share | $ (0.09) | $ (0.08) | $ (0.15) | $ (0.06) |
3. EARNINGS PER SHARE (Details
3. EARNINGS PER SHARE (Details Narrative) - shares | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Employee Stock Purchase Plan | ||||
Options not included in the computation of diluted net loss per share (in thousands) | 246 | 131 | 246 | 131 |
Stock Options | ||||
Options not included in the computation of diluted net loss per share (in thousands) | 3,229 | 3,385 | 3,229 | 3,385 |
Restricted Stock Units | ||||
Options not included in the computation of diluted net loss per share (in thousands) | 72 | 72 |
4. FAIR VALUE OF FINANCIAL IN37
4. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 |
Money market funds | $ 4,001 | $ 1 |
Certificate of deposit | 50 | 50 |
Assets | 4,051 | 51 |
Level 1 | ||
Money market funds | 4,001 | 1 |
Certificate of deposit | 0 | 0 |
Assets | 4,001 | 1 |
Level 2 | ||
Money market funds | 0 | 0 |
Certificate of deposit | 50 | 50 |
Assets | 50 | 50 |
Level 3 | ||
Money market funds | 0 | 0 |
Certificate of deposit | 0 | 0 |
Assets | $ 0 | $ 0 |
4. FAIR VALUE OF FINANCIAL IN38
4. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Nov. 30, 2016 | Nov. 30, 2016 | |
Fair Value Of Financial Instruments Details Narrative | ||
Transfers between Level 1 and Level 2 fair value measurements | $ 0 | $ 0 |
5. ACCOUNTS RECEIVABLE NET (Det
5. ACCOUNTS RECEIVABLE NET (Details Narrative) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 |
Accounts Receivable, Net, Current [Abstract] | ||
Allowance for doubtful accounts customer trade receivables | $ 20 | $ 8 |
6. INVENTORIES (Details)
6. INVENTORIES (Details) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 | |
Inventory, Net [Abstract] | |||
Raw materials and sub-assemblies | $ 2,495 | $ 2,839 | |
Work-in-process | 3,308 | 4,151 | |
Finished goods | 266 | 43 | |
Inventory | $ 6,069 | $ 7,033 | [1] |
[1] | The condensed consolidated balance sheet at May 31, 2016 has been derived from the audited consolidated financial statements at that date. |
7. SEGMENT INFORMATION (Details
7. SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Net sales | $ 4,216 | $ 4,620 | $ 9,534 | $ 11,253 |
Property and equipment, net | 793 | 576 | 793 | 576 |
US | ||||
Net sales | 1,709 | 507 | 4,873 | 1,225 |
Property and equipment, net | 740 | 530 | 740 | 530 |
Asia | ||||
Net sales | 2,256 | 3,768 | 4,166 | 9,149 |
Property and equipment, net | 39 | 33 | 39 | 33 |
Europe | ||||
Net sales | 251 | 345 | 495 | 879 |
Property and equipment, net | $ 14 | $ 13 | $ 14 | $ 13 |
7. SEGMENT INFORMATION (Detai42
7. SEGMENT INFORMATION (Details Narrative) | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Sales to the Company's five largest customers percentage of net sales | 96.00% | 97.00% | 95.00% | 96.00% |
Customer A | ||||
Customers accounted for 10% or more of total revenues | 60.00% | 51.00% | 50.00% | 54.00% |
Customer B | ||||
Customers accounted for 10% or more of total revenues | 22.00% | 36.00% | 19.00% | 27.00% |
Customer C | ||||
Customers accounted for 10% or more of total revenues | 16.00% |
8. PRODUCT WARRANTIES (Details)
8. PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Nov. 30, 2016 | Nov. 30, 2015 | Nov. 30, 2016 | Nov. 30, 2015 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at the beginning of the period | $ 90 | $ 219 | $ 155 | $ 137 |
Accruals for warranties issued during the period | 11 | 128 | 11 | 237 |
Accruals and adjustments (change in estimates) related to pre-existing warranties during the period | 0 | 0 | (54) | 0 |
Settlement made during the period (in cash or in kind) | (29) | (42) | (40) | (69) |
Balance at the end of the period | $ 72 | $ 305 | $ 72 | $ 305 |
8. PRODUCT WARRANTIES (Details
8. PRODUCT WARRANTIES (Details Narrative) | 6 Months Ended |
Nov. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Standard warranty period | The standard warranty period is one year for systems and ninety days for parts and service. |
10. CUSTOMER DEPOSITS AND DEF45
10. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Details) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 |
Customer Deposits And Deferred Revenue Short-term Details | ||
Customer deposits | $ 692 | $ 540 |
Deferred revenue | 363 | 1,174 |
Total | $ 1,055 | $ 1,714 |
11. LONG-TERM DEBT (Details)
11. LONG-TERM DEBT (Details) - USD ($) $ in Thousands | Nov. 30, 2016 | May 31, 2016 | |
Debt Disclosure [Abstract] | |||
Principal | $ 6,110 | $ 6,110 | |
Unamortized debt issuance costs | (59) | (148) | |
Long-term debt | $ 6,051 | $ 5,962 | [1] |
[1] | The condensed consolidated balance sheet at May 31, 2016 has been derived from the audited consolidated financial statements at that date. |
11. LONG-TERM DEBT (Details Nar
11. LONG-TERM DEBT (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Nov. 30, 2016 | Nov. 30, 2016 | Nov. 30, 2015 | Jul. 17, 2016 | May 31, 2016 | Apr. 14, 2016 | Apr. 10, 2015 | |
Debt Disclosure [Abstract] | |||||||
Convertible debt, principal amount | $ 6,110 | $ 6,110 | $ 6,110 | ||||
Convertible note, interest rate | 9.00% | ||||||
Convertible note, maturity | Apr. 10, 2019 | ||||||
Convertible note, interest payment | Interest is payable quarterly on March 1, June 1, September 1 and December 1 of each year. | ||||||
Debt issuance costs | 356 | $ 356 | |||||
Amortization of debt issuance costs | 44 | 89 | $ 82 | ||||
Unamortized debt issuance costs | $ (59) | $ (59) | $ (148) | ||||
Initial conversion price for the Convertible Notes | $ 2.30 | $ 2.30 | |||||
Convertible Notes, Terms of Conversion Feature | The conversion price for the Convertible Notes is $2.30 per share of the Company’s common stock and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any part of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date. Upon conversion, the Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion. The Company may not redeem the Convertible Notes prior to maturity. | ||||||
Line of credit, maximum borrowing capacity | $ 2,000 | $ 2,000 | |||||
Balance available to borrow under the line of credit | $ 0 | $ 0 | |||||
Convertible Debt Principal amount | $ 4,110 | ||||||
Conversion from the Credit Facility to Convertible Note | $ 1,100 | $ 900 |
12. EQUITY (Details Narrative)
12. EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 28, 2016 | Aug. 08, 2016 | Nov. 30, 2016 | Nov. 30, 2015 |
Cancellation of invoice | $ 323 | $ 0 | ||
Number of shares sold | 2,721,540 | |||
Purchase price per share of the common stock | $ 2.15 | |||
Gross proceeds from sale of common stock | $ 5,851 | |||
Net proceeds from sale of common stock | $ 5,299 | $ 5,299 | $ 0 | |
Semics Inc, | ||||
Issuance of common stock | 200,000 | |||
Cancellation of invoice | $ 323 |