Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Feb. 28, 2021 | Mar. 31, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | AEHR TEST SYSTEMS | |
Entity Central Index Key | 0001040470 | |
Document Type | 10-Q | |
Document Period End Date | Feb. 28, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --05-31 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | CA | |
Entity File Number | 000-22893 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 23,597,730 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 | [1] |
ASSETS | |||
Cash and cash equivalents | $ 4,738 | $ 5,433 | |
Accounts receivable, net | 2,721 | 3,717 | |
Inventories | 8,339 | 7,989 | |
Prepaid expenses and other current assets | 571 | 512 | |
Total current assets | 16,369 | 17,651 | |
Property and equipment, net | 617 | 663 | |
Operating lease right-of-use assets | 1,763 | 2,107 | |
Other assets | 142 | 153 | |
Total assets | 18,891 | 20,574 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Line of Credit | 1,400 | 0 | |
Accounts payable | 1,086 | 945 | |
Accrued expenses | 1,624 | 1,439 | |
Operating lease liabilities, short-term | 722 | 658 | |
Customer deposits and deferred revenue, short-term | 587 | 170 | |
Current portion of long-term debt | 1,492 | 653 | |
Total current liabilities | 6,911 | 3,865 | |
Operating lease liabilities, long-term | 1,185 | 1,605 | |
Long-term debt, net of current portion | 187 | 1,026 | |
Deferred revenue, long -term | 80 | 22 | |
Other long-term liabilities | 43 | 0 | |
Total liabilities | 8,406 | 6,518 | |
Aehr Test Systems shareholders' equity: | |||
Common stock, $0.01 par value: Authorized: 75,000 shares; Issued and outstanding: 23,598 shares and 23,107 shares at February 28, 2021 and May 31, 2020, respectively | 236 | 231 | |
Additional paid-in capital | 87,174 | 85,898 | |
Accumulated other comprehensive (loss) income | (45) | 2,234 | |
Accumulated deficit | (76,880) | (74,286) | |
Total Aehr Test Systems shareholders' equity | 10,485 | 14,077 | |
Noncontrolling interest | 0 | (21) | |
Total shareholders' equity | 10,485 | 14,056 | |
Total liabilities and shareholders' equity | $ 18,891 | $ 20,574 | |
[1] | The condensed consolidated balance sheet at May 31, 2020 has been derived from the audited consolidated financial statements at that date. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Feb. 28, 2021 | May 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in thousands) | 75,000 | 75,000 |
Common stock, shares issued (in thousands) | 23,598 | 23,107 |
Common stock, shares outstanding (in thousands) | 23,598 | 23,107 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 5,267 | $ 6,111 | $ 8,962 | $ 18,518 |
Cost of sales | 3,373 | 3,120 | 6,464 | 10,054 |
Gross profit | 1,894 | 2,991 | 2,498 | 8,464 |
Operating expenses: | ||||
Selling, general and administrative | 1,643 | 1,891 | 4,658 | 5,856 |
Research and development | 903 | 845 | 2,623 | 2,532 |
Total operating expenses | 2,546 | 2,736 | 7,281 | 8,388 |
(Loss) income from operations | (652) | 255 | (4,783) | 76 |
Interest (expense) income, net | (10) | 13 | (35) | 27 |
Net gain from dissolution of Aehr Test Systems Japan | 0 | 0 | 2,186 | 0 |
Other (expense) income, net | (39) | (9) | (139) | 6 |
(Loss) income before income tax (expense) benefit | (701) | 259 | (2,771) | 109 |
Income tax (expense) benefit | (34) | (14) | 177 | (26) |
Net (loss) income | (735) | 245 | (2,594) | 83 |
Less: Net income attributable to the noncontrolling interest | 0 | 0 | 0 | 0 |
Net (loss) income attributable to Aehr Test System common shareholders | $ (735) | $ 245 | $ (2,594) | $ 83 |
Net (loss) income per share: | ||||
Basic | $ (0.03) | $ 0.01 | $ (0.11) | $ 0 |
Diluted | $ (0.03) | $ 0.01 | $ (0.11) | $ 0 |
Shares used in per share calculations: | ||||
Basic (in thousands) | 23,525 | 22,937 | 23,390 | 22,823 |
Diluted (in thousands) | 23,525 | 23,130 | 23,390 | 22,940 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (735) | $ 245 | $ (2,594) | $ 83 |
Other comprehensive income (loss), net of tax: | ||||
Net change in cumulative translation adjustment | 39 | 5 | 143 | (15) |
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan | 0 | 0 | (2,401) | 0 |
Total comprehensive (loss) income | (696) | 250 | (4,852) | 68 |
Less: Comprehensive income (loss) attributable to the noncontrolling interest | 0 | 0 | 21 | (1) |
Comprehensive (loss) income, attributable to Aehr Test Systems common shareholders | $ (696) | $ 250 | $ (4,873) | $ 69 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Aehr Test Systems Shareholders' Equity | Noncontrolling Interest | Total | |
Beginning balance, shares (in thousands) at May. 31, 2019 | 22,669 | |||||||
Beginning balance, amount at May. 31, 2019 | $ 227 | $ 84,499 | $ 2,230 | $ (71,484) | $ 15,472 | $ (19) | $ 15,453 | |
Issuance of common stock under employee plans, shares (in thousands) | 346 | |||||||
Issuance of common stock under employee plans, amount | $ 3 | 420 | 423 | 423 | ||||
Stock-based compensation | 611 | 611 | 611 | |||||
Net (loss) income | 83 | 83 | 83 | |||||
Foreign currency translation adjustment | (14) | (14) | (1) | (15) | ||||
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan | 0 | |||||||
Ending balance, shares (in thousands) at Feb. 29, 2020 | 23,015 | |||||||
Ending balance, amount at Feb. 29, 2020 | $ 230 | 85,530 | 2,216 | (71,401) | 16,575 | (20) | 16,555 | |
Beginning balance, shares (in thousands) at Nov. 30, 2019 | 22,914 | |||||||
Beginning balance, amount at Nov. 30, 2019 | $ 229 | 85,194 | 2,211 | (71,646) | 15,988 | (20) | 15,968 | |
Issuance of common stock under employee plans, shares (in thousands) | 101 | |||||||
Issuance of common stock under employee plans, amount | $ 1 | 129 | 130 | 130 | ||||
Stock-based compensation | 207 | 207 | 207 | |||||
Net (loss) income | 245 | 245 | 245 | |||||
Foreign currency translation adjustment | 5 | 5 | 5 | |||||
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan | 0 | |||||||
Ending balance, shares (in thousands) at Feb. 29, 2020 | 23,015 | |||||||
Ending balance, amount at Feb. 29, 2020 | $ 230 | 85,530 | 2,216 | (71,401) | 16,575 | (20) | 16,555 | |
Beginning balance, shares (in thousands) at May. 31, 2020 | 23,107 | |||||||
Beginning balance, amount at May. 31, 2020 | $ 231 | 85,898 | 2,234 | (74,286) | 14,077 | (21) | 14,056 | [1] |
Issuance of common stock under employee plans, shares (in thousands) | 491 | |||||||
Issuance of common stock under employee plans, amount | $ 5 | 478 | 483 | 483 | ||||
Stock-based compensation | 798 | 798 | 798 | |||||
Net (loss) income | (2,594) | (2,594) | (2,594) | |||||
Foreign currency translation adjustment | 144 | 144 | (1) | 143 | ||||
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan | (2,423) | (2,423) | 22 | (2,401) | ||||
Ending balance, shares (in thousands) at Feb. 28, 2021 | 23,598 | |||||||
Ending balance, amount at Feb. 28, 2021 | $ 236 | 87,174 | (45) | (76,880) | 10,485 | 0 | 10,485 | |
Beginning balance, shares (in thousands) at Nov. 30, 2020 | 23,487 | |||||||
Beginning balance, amount at Nov. 30, 2020 | $ 235 | 86,786 | (62) | (76,167) | 10,792 | 0 | 10,792 | |
Issuance of common stock under employee plans, shares (in thousands) | 111 | |||||||
Issuance of common stock under employee plans, amount | $ 1 | 117 | 118 | 118 | ||||
Stock-based compensation | 271 | 271 | 271 | |||||
Net (loss) income | (735) | (735) | (735) | |||||
Foreign currency translation adjustment | 17 | 22 | 39 | 39 | ||||
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan | 0 | |||||||
Ending balance, shares (in thousands) at Feb. 28, 2021 | 23,598 | |||||||
Ending balance, amount at Feb. 28, 2021 | $ 236 | $ 87,174 | $ (45) | $ (76,880) | $ 10,485 | $ 0 | $ 10,485 | |
[1] | The condensed consolidated balance sheet at May 31, 2020 has been derived from the audited consolidated financial statements at that date. |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (2,594) | $ 83 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 798 | 611 |
Depreciation and amortization | 239 | 298 |
Gain on disposal of fixed asset | 0 | (2) |
Net gain from dissolution of Aehr Test Systems Japan | (2,186) | 0 |
Income tax benefit related to dissolution of Aehr Test Systems Japan | (215) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,063 | 1,360 |
Inventories | (349) | (157) |
Prepaid expenses and other assets | (45) | 170 |
Accounts payable | 78 | (1,033) |
Accrued expenses | 179 | (674) |
Customer deposits and deferred revenue | 475 | (1,315) |
Other long-term liabilities | 43 | 0 |
Income taxes payable | 3 | 19 |
Net cash used in operating activities | (2,511) | (640) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (205) | (151) |
Proceeds from sale of property and equipment | 0 | 2 |
Net cash used in investing activities | (205) | (149) |
Cash flows from financing activities: | ||
Proceeds from issuance of common stock under employee plans, net of taxes paid related to share settlement of equity awards | 483 | 423 |
Line of credit borrowings, net | 1,400 | 0 |
Net cash provided by financing activities | 1,883 | 423 |
Effect of exchange rates on cash, cash equivalents and restricted cash | 138 | (4) |
Net decrease in cash, cash equivalents and restricted cash | (695) | (370) |
Cash, cash equivalents and restricted cash, beginning of period | 5,513 | 5,508 |
Cash, cash equivalents and restricted cash, end of period | 4,818 | 5,138 |
Supplemental disclosure of non-cash flow information: | ||
Transfers of property and equipment to inventories | $ 0 | $ 112 |
1. BASIS OF PRESENTATION AND SU
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES | 1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES 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 (the “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, 2020 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 consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2020. 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. The Company (as defined below) has been impacted by the outbreak of the novel coronavirus, known as COVID-19, which has spread throughout the world. Due to the impact of the COVID-19 pandemic on customers and customers’ customers, the Company experienced a drop in customer orders and revenues in the three and nine months ended February 28, 2021. In response, the Company has implemented cost reduction initiatives to mitigate operating losses, including mandatory vacation days, shutdown days, and executive staff pay reductions. The Company continues to monitor the situation. As of the date of this report, the Company cannot predict with certainty the potential effects the COVID-19 pandemic may have on the Company’s business and its operating results. While the overall environment remains uncertain, the Company continues to invest in priority areas with the objective of driving profitable growth over the long term. PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company"). On November 18, 2020, the Company established a wholly owned new subsidiary, Aehr Test Systems Philippines, which is in full operation as of March 2021. All significant intercompany balances have been eliminated in consolidation. For the Company’s majority owned subsidiary, Aehr Test Systems Japan K.K. (“ATS-Japan”), the noncontrolling interest of the portion the Company does not own was reflected on the Condensed Consolidated Balance Sheets in Shareholders’ Equity and in the Condensed Consolidated Statements of Operations. As discussed in Note 16, the liquidation of ATS-Japan was completed on July 31, 2020. 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. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates. SUMMARY OF 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, 2020. There have been no significant changes in the Company’s significant accounting policies during the three and nine months ended February 28, 2021. |
2. RECENT ACCOUNTING PRONOUNCEM
2. RECENT ACCOUNTING PRONOUNCEMENTS | 9 Months Ended |
Feb. 28, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
2. RECENT ACCOUNTING PRONOUNCEMENTS | 2. RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Not Yet Adopted Financial Instruments In June 2016, the FASB issued an accounting standard update (“ASU”) 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 collectability of the reported amount. Due to a subsequent ASU in November 2019, the accounting standard will be effective for the Company beginning in the first quarter of fiscal 2024 on a modified retrospective basis, and early adoption is permitted. The Company does not expect a material impact of this accounting standard on its consolidated financial statements. |
3. REVENUE
3. REVENUE | 9 Months Ended |
Feb. 28, 2021 | |
Revenue from Contract with Customer [Abstract] | |
3. REVENUE | 3. REVENUE Revenue recognition The Company recognizes revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below. Performance obligations include sales of systems, contactors, spare parts, and services, as well as installation and training services included in customer contracts. A contract’s transaction price is allocated to each distinct performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. The Company generally does not grant return privileges, except for defective products during the warranty period. For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services and pricing practices in different geographies. Revenue for systems and spares are recognized at a point in time, which is generally upon shipment or delivery. Revenue from services is recognized over time as services are completed or ratably over the contractual period of generally one year or less. The Company has elected the practical expedient to not assess whether a contract has a significant financing component as the Company’s standard payment terms are less than one year. Disaggregation of revenue The following tables show revenues by major product categories. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flow are substantially similar. The Company’s revenues by product category are as follows (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Type of good / service: Systems $ 2,435 $ 2,138 $ 3,407 $ 8,099 Contactors 1,930 3,094 3,330 7,790 Services 902 879 2,225 2,629 $ 5,267 $ 6,111 $ 8,962 $ 18,518 Product lines: Wafer-level $ 4,993 $ 5,408 $ 7,804 $ 16,570 Test During Burn-In 274 703 1,158 1,948 $ 5,267 $ 6,111 $ 8,962 $ 18,518 The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Geographic region: United States $ 1,113 $ 5,014 $ 3,124 $ 12,698 Asia 4,122 891 5,723 4,758 Europe 32 206 115 1,062 $ 5,267 $ 6,111 $ 8,962 $ 18,518 With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at a point in time when control transfers to customers. The following presents revenue based on timing of recognition (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Timing of revenue recognition: Products and services transferred at a point in time $ 4,944 $ 5,485 $ 7,728 $ 16,666 Services transferred over time 323 626 1,234 1,852 $ 5,267 $ 6,111 $ 8,962 $ 18,518 Contract balances A receivable is recognized in the period the Company delivers goods or provides services or when the Company’s right to consideration is unconditional. The Company usually does not record contract assets because the Company has an unconditional right to payment upon satisfaction of the performance obligation, and therefore, a receivable is more commonly recorded than a contract asset. Contract liabilities include payments received in advance of performance under a contract and are satisfied as the associated revenue is recognized. Contract liabilities are reported on the Condensed Consolidated Balance Sheets at the end of each reporting period as a component of deferred revenue. Contract liabilities as of February 28, 2021 and May 31, 2020 were $667,000 and $192,000, respectively. During the three and nine months ended February 28, 2021, the Company recognized $29,000 and $154,000 respectively, of revenues that were included in contract liabilities as of May 31, 2020. Remaining performance obligations On February 28, 2021, the Company had $129,000 of remaining performance obligations, which were comprised of deferred service contracts and extended warranty contracts not yet delivered. The Company expects to recognize approximately $49,000 within one year from the balance sheet date and $80,000 thereafter. The foregoing excludes the value of other remaining performance obligations as they have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation. Costs to obtain or fulfill a contract The Company generally expenses sales commissions when incurred as a component of selling, general and administrative expense as the amortization period is typically less than one year. Additionally, the majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory and fixed assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing process. |
4. EARNINGS PER SHARE
4. EARNINGS PER SHARE | 9 Months Ended |
Feb. 28, 2021 | |
Net (loss) income per share: | |
4. EARNINGS PER SHARE | 4. 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, restricted stock units (“RSUs”), and Amended and Restated 2006 Employee Stock Purchase Plan (“ESPP”) shares) outstanding during the period using the treasury stock method. The following table presents the computation of basic and diluted net (loss) income per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Numerator: Net (loss) income $ (735) $ 245 $ (2,594) $ 83 Denominator for basic net (loss) income per share: Weighted average shares outstanding 23,525 22,937 23,390 22,823 Shares used in basic net (loss) income per share calculation 23,525 22,937 23,390 22,823 Effect of dilutive securities 193 117 Denominator for diluted net (loss) income per share 23,525 23,130 23,390 22,940 Basic net (loss) income per share $ (0.03) $ 0.01 $ (0.11) $ 0.00 Diluted net (loss) income per share $ (0.03) $ 0.01 $ (0.11) $ 0.00 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 nine months ended February 28, 2021 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 2,804,000 shares of common stock, RSUs for 143,000 shares and ESPP rights to purchase 139,000 ESPP shares were outstanding as of February 28, 2021, 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 2,505,000 shares of common stock were outstanding as of February 29, 2020 but were not included in the computation of diluted net income per share, because the inclusion of such shares would be anti-dilutive. |
5. FAIR VALUE OF FINANCIAL INST
5. FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Feb. 28, 2021 | |
Fair Value Disclosures [Abstract] | |
5. FAIR VALUE OF FINANCIAL INSTRUMENTS | 5. 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 February 28, 2021 (in thousands): Balance as of February 28, 2021 Level 1 Level 2 Level 3 Money market funds $ 80 $ 80 $ $ Assets $ 80 $ 80 $ $ The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2020 (in thousands): Balance as of May 31, 2020 Level 1 Level 2 Level 3 Money market funds $ 80 $ 80 $ $ Assets $ 80 $ 80 $ $ Included in money market funds as of February 28, 2021 and May 31, 2020 is $80,000 restricted cash representing a security deposit for the Company’s United States manufacturing and office space lease which is included in other assets in the consolidated balance sheets. There were no financial liabilities measured at fair value as of February 28, 2021 and May 31, 2020. There were no transfers between Level 1 and Level 2 fair value measurements during the three and nine months ended February 28, 2021. 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. |
6. ACCOUNTS RECEIVABLE, NET
6. ACCOUNTS RECEIVABLE, NET | 9 Months Ended |
Feb. 28, 2021 | |
Receivables [Abstract] | |
6. ACCOUNTS RECEIVABLE, NET | 6. ACCOUNTS RECEIVABLE, NET Accounts receivable represent customer trade receivables. As of February 28, 2021 and May 31, 2020, there were no allowances for doubtful accounts. 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. |
7. INVENTORIES
7. INVENTORIES | 9 Months Ended |
Feb. 28, 2021 | |
Inventory Disclosure [Abstract] | |
7. INVENTORIES | 7. INVENTORIES Inventories are comprised of the following (in thousands): February 28, May 31, 2021 2020 Raw materials and sub-assemblies $ 5,626 $ 5,055 Work in process 2,713 2,917 Finished goods 17 $ 8,339 $ 7,989 |
8. PRODUCT WARRANTIES
8. PRODUCT WARRANTIES | 9 Months Ended |
Feb. 28, 2021 | |
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 nine months ended February 28, 2021 and February 29, 2020 (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Balance at the beginning of the period $ 244 $ 190 $ 246 $ 154 Accruals for warranties issued during the period 78 26 270 167 Adjustments to previously existing warranty accruals 259 346 Consumption of reserves (81 ) (30 ) (362 ) (135 ) Balance at the end of the period $ 500 $ 186 $ 500 $ 186 The accrued warranty balance is included in accrued expenses on the accompanying condensed consolidated balance sheets. |
9. CUSTOMER DEPOSITS AND DEFERR
9. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM | 9 Months Ended |
Feb. 28, 2021 | |
Customer Deposits And Deferred Revenue Short-term | |
9. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM | 9. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM Customer deposits and deferred revenue, short-term (in thousands): February 28, May 31, 2021 2020 Customer deposits $ 471 $ Deferred revenue 116 170 $ 587 $ 170 |
10. INCOME TAXES
10. INCOME TAXES | 9 Months Ended |
Feb. 28, 2021 | |
Income Tax Disclosure [Abstract] | |
10. INCOME TAXES | 10. 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. On March 27, 2020, the “Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was passed into law. The CARES Act includes several significant business tax provisions including modification to the taxable income limitation for utilization of net operating losses (“NOLs”) incurred in 2018, 2019 and 2020 and the ability to carry back NOLs from those years for a period of up to five years, an increase to the limitation on deductibility of certain business interest expense, bonus depreciation for purchases of qualified improvement property and special deductions on certain corporate charitable contributions. The Company is currently analyzing the impact of these changes and therefore an estimate of the impact to income taxes is not yet available. On June 29, 2020, Assembly Bill 85 (AB 85) was signed into law as part of the California 2020 Budget Act, which temporarily suspends the use of California net operating losses and imposes a cap on the amount of business incentive tax credits that companies can utilize against their net income for tax years 2020, 2021, and 2022. The Company analyzed the provisions of AB 85 and determined there was no impact on its provision for income taxes for the current period and will continue to evaluate the impact, if any, AB 85 may have on the Company’s condensed consolidated financial statements and disclosures. |
11. LEASES
11. LEASES | 9 Months Ended |
Feb. 28, 2021 | |
Leases [Abstract] | |
11. LEASES | 11. LEASES The Company has only operating leases for real estate including corporate offices, warehouse space and certain equipment. A lease with an initial term of 12 months or less is generally not recorded on the condensed consolidated balance sheet, unless the arrangement includes an option to purchase the underlying asset, or renew the arrangement that the Company is reasonably certain to exercise (short-term leases). The Company recognizes lease expense on a straight-line basis over the lease term for short-term leases that the Company does not record on its balance sheet. The Company’s operating leases have remaining lease terms of 1 month to 5 years. The Company determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. The weighted-average remaining lease term for the Company’s operating leases was 2.6 years at February 28, 2021 and the weighted-average discount rate was 5.4%. The Company’s operating lease cost was $193,000 and $568,000 for the three and nine months ended February 28, 2021, respectively. For the three and nine months ended February 29, 2020, operating lease cost was $183,000 and $548,000, respectively. The following table presents supplemental cash flow information related to the Company’s operating leases (in thousands): Nine Months Ended February 28, 2021 February 29, 2020 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 579 $ 550 The following table presents the maturities of the Company’s operating lease liabilities as of February 28, 2021 (in thousands): Fiscal year Operating Leases 2021 (excluding the first nine months of 2021) $ 199 2022 810 2023 826 2024 164 2025 31 Thereafter 19 Total future minimum operating lease payments $ 2,049 Less: imputed interest (142 ) Present value of operating lease liabilities $ 1,907 |
12. BORROWING AND FINANCING ARR
12. BORROWING AND FINANCING ARRANGEMENTS | 9 Months Ended |
Feb. 28, 2021 | |
Debt Disclosure [Abstract] | |
12. BORROWING AND FINANCING ARRANGEMENTS | 12. BORROWING AND FINANCING ARRANGEMENTS On January 16, 2020, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Silicon Valley Bank (“SVB”). Pursuant to the Loan Agreement, the Company may borrow up to (a) the lesser of (i) the revolving line of $4.0 million or (ii) the amount available under the borrowing base minus (b) the outstanding principal balance of any advances, under a revolving line of credit which is collateralized by all the Company’s assets except intellectual property. The borrowing base is 80% of eligible accounts, as determined by SVB from the Company’s most recent borrowing base statement; provided, however, SVB has the right to decrease the foregoing percentage in its good faith business judgment to mitigate the impact of certain events or conditions, which may adversely affect the collateral or its value. Subject to an event of default, the principal amount outstanding under the revolving line of credit will accrue interest at a floating per annum rate equal to the greater of (a) the prime rate plus an additional percentage of up to 1%, which additional percentage depends on the Company’s adjusted quick ratio, and (b) 4.75%. Interest is payable monthly on the last calendar day of each month and the outstanding principal amount, the unpaid interest and all other obligations are due on the maturity date, which is 364 days from the effective date of January 13, 2020. On January 14, 2021, the Company entered into the First Amendment to Loan and Security Agreement (the “Amendment”) with Silicon Valley Bank. The Amendment, among other things, extends the Revolving Line Maturity Date to July 14, 2021; provided, however, that if the Company achieves specified operating metrics on a consolidated basis on or prior to May 31, 2021 the Amended Revolving Line Maturity Date is extended to January 13, 2022. At February 28, 2021, the Company had drawn $1,400,000 against the credit facility and was in compliance with all covenants related to obligations to meet reporting requirements. The balance available to borrow under the line at February 28, 2021 was $349,000. There are no financial covenants in the agreement. |
13. LONG-TERM DEBT
13. LONG-TERM DEBT | 9 Months Ended |
Feb. 28, 2021 | |
Long-term Debt, Unclassified [Abstract] | |
13. LONG-TERM DEBT | 13. LONG-TERM DEBT: On April 23, 2020, the Company obtained a Paycheck Protection Program Loan (the “PPP Loan”) in the aggregate amount of $1,679,000 from SVB. The PPP Loan was evidenced by a promissory note dated April 23, 2020 (the “Note”) that matures on April 23, 2022 and bears interest at a rate of 1% per annum. The PPP Loan proceeds were used for payroll, health care benefits, rent and utilities. Under the terms of the CARES Act, PPP loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP. Such forgiveness will be determined, subject to limitations, based on the use of loan proceeds for payment of payroll costs, covered rent and mortgage obligations, and covered utility payments incurred by the Company. The Company applied on November 6, 2020 for loan forgiveness for the full amount of the borrowing and accrued interest. While the Small Business Administration has not yet reviewed and approved the application, going beyond 90 days after submission, the Company believes the expenses met the criteria for forgiveness. However, no assurance can be given that the Company will obtain forgiveness of the amount due under the loan in whole or in part. |
14. STOCK-BASED COMPENSATION
14. STOCK-BASED COMPENSATION | 9 Months Ended |
Feb. 28, 2021 | |
Share-based Payment Arrangement [Abstract] | |
14. STOCK-BASED COMPENSATION | 14. STOCK-BASED COMPENSATION Stock-based compensation expense consists of expenses for stock options, RSUs, and ESPP purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is 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 Note 11 in the Company’s Annual Report on Form 10-K for fiscal 2020 filed on August 28, 2020 for further information regarding the 2016 Equity Incentive Plan (the “2016 Plan”) and the ESPP. The following table summarizes the stock-based compensation expense for the three and nine months ended February 28, 2021 and February 29, 2020 (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: Cost of sales $ 14 $ 19 $ 45 $ 58 Selling, general and administrative 194 137 593 401 Research and development 63 51 160 152 Total stock-based compensation $ 271 $ 207 $ 798 $ 611 As of February 28, 2021 and February 29, 2020, there were no stock-based compensation expenses capitalized as part of inventory. During the three months ended February 28, 2021 and February 29, 2020, the Company recorded stock-based compensation expense related to stock options and RSUs under the 2016 Plan of $253,000 and $166,000, respectively. During the nine months ended February 28, 2021 and February 29, 2020, the Company recorded stock-based compensation expense related to stock options and RSUs of $736,000 and $480,000, respectively. As of February 28, 2021, the total compensation expense related to unvested stock-based awards under the 2016 Plan, but not yet recognized, was approximately $1,151,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 2.6 years. During the three months ended February 28, 2021 and February 29, 2020, the Company recorded stock-based compensation expense related to the ESPP of $18,000 and $41,000, respectively. During the nine months ended February 28, 2021 and February 29, 2020, the Company recorded stock-based compensation expense related to the ESPP of $62,000 and $131,000, respectively. As of February 28, 2021, the total compensation expense related to purchase rights under the ESPP but not yet recognized was approximately $29,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 1.0 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 based on weighted average of the expected term of 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 expense 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 values of the Company’s stock options granted to employees for the three and nine months ended February 28, 2021 and February 29, 2020, were estimated using the following weighted average assumptions in the Black-Scholes option valuation model: Three Months Ended Nine Months Ended February 29, February 28, February 29, 2020 2021 2020 Expected term (in years) 5 6 5 Volatility 0.72 0.72 0.71 Risk-free interest rate 1.57 % 0.39 % 1.85 % Weighted average grant date fair value $ 1.37 $ 1.09 $ 0.98 There were no stock options granted during the three months ended February 28, 2021. The fair values of the ESPP purchase rights granted for the nine months ended February 28, 2021 and February 29, 2020 were estimated using the following assumptions: Nine Months Ended February 28, February 29, 2021 2020 Expected term (in years) 0.5-2.0 0.5-2.0 Volatility 0.74-0.82 0.62-0.71 Expected dividend $ 0.00 $ 0.00 Risk-free interest rate 0.10%-0.14 % 1.56%-1.81 % Weighted average grant date fair value $ 0.44 $ 0.80 There were no ESPP purchase rights granted to employees for the three months ended February 28, 2021 and February 29, 2020. During the nine months ended February 28, 2021 and February 29, 2020, ESPP purchase rights of 81,000 and 38,000 were granted, respectively. Total ESPP shares issued during the nine months ended February 28, 2021 and February 29, 2020 were 72,000 and 71,000 shares, respectively. As of February 28, 2021, there were 511,000 ESPP shares available for issuance. As of February 29, 2020, there were 299,000 ESPP shares available for issuance. The following tables summarize the Company’s stock option and RSU transactions during three and nine months ended February 28, 2021 (in thousands): Available Shares Balance, May 31, 2020 1,650 Options granted (200 ) RSUs granted (196 ) Options cancelled 188 RSUs cancelled 2 Options expired (125 ) Balance, August 31, 2020 1,319 Options granted (73 ) RSUs granted (57 ) Options cancelled 185 Options expired (162 ) Balance, November 30, 2020 1,212 RSUs granted (42 ) Shares withheld for taxes and not issued 4 Options cancelled 21 Balance, February 28, 2021 1,195 The following table summarizes the stock option transactions during the three and nine months ended February 28, 2021 (in thousands, except per share data): Outstanding Options Weighted Number Average Aggregate of Exercise Intrinsic Shares Price Value Balances, May 31, 2020 3,153 $ 2.17 $ 102 Options granted 200 $ 1.86 Options cancelled (188 ) $ 2.18 Options exercised (148 ) $ 1.30 Balances, August 31, 2020 3,017 $ 2.19 $ 148 Options granted 73 $ 1.44 Options cancelled (185 ) $ 2.42 Options exercised (19 ) $ 1.67 Balances, November 30, 2020 2,886 $ 2.16 $ 56 Options cancelled (21 ) $ 1.86 Options exercised (61 ) $ 2.07 Balances, February 28, 2021 2,804 $ 2.16 $ 1,994 Options fully vested and expected to vest at February 28, 2021 2,769 $ 2.17 $ 1,967 The options outstanding and exercisable at February 28, 2021 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at February 28, 2021 at February 28, 2021 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 $ 1.22-$1.34 133 6.30 $ 1.27 36 6.36 $ 1.28 $ 1.64-$1.86 1,047 5.04 $ 1.70 589 4.50 $ 1.69 $ 2.03-$2.46 1,017 3.25 $ 2.21 781 2.86 $ 2.19 $ 2.63-$2.81 405 0.66 $ 2.71 404 0.65 $ 2.71 $ 3.46-$3.93 202 3.41 $ 3.86 184 3.41 $ 3.85 $ 1.22-$3.93 2,804 3.70 $ 2.16 1,994 3.01 $ 2.28 $ 1,224 The total intrinsic value of options exercised during the three and nine months ended February 28, 2021 was $57,000 and $151,000, respectively. The total intrinsic value of options exercised during the three and nine months ended February 29, 2020 was $92,000 and $159,000, respectively. The weighted average remaining contractual life of the options exercisable and expected to be exercisable at February 28, 2021 was 3.68 years. The weighted average remaining contractual life of the options exercisable and expected to be exercisable at February 29, 2020 was 3.78 years. During the three months ended February 28, 2021, RSUs for 4,000 shares, net of 4,000 shares withheld to settle payroll taxes, were granted and fully vested to employees. The market value on the date of the grant of these RSUs was $2.25 per share. During the nine months ended February 28, 2021, RSUs for 165,000 shares, net of 4,000 shares withheld to settle payroll taxes, were granted to employees. The weighted average market value on the date of the grant of these RSUs was $1.87 per share. During the three and nine months ended February 28, 2021, 19,000 and 34,000 RSUs became fully vested, respectively. As of February 28, 2021, 143,000 RSUs remain unvested which had an intrinsic value of $400,000. There were no RSUs granted to employees during the three and nine months ended February 29, 2020. During the three and nine months ended February 29, 2020, 3,000 and 10,000 RSUs became fully vested, respectively. As of February 29, 2020, 13,000 RSUs remain unvested which had an intrinsic value of $27,000. During the three months ended February 28, 2021, RSUs for 34,000 shares were granted to members of the Company’s Board of Directors for Board fees. The market value on the date of the grant of these RSUs was $2.25 per share. During the nine months ended February 28, 2021, RSUs for 126,000 shares were granted to members of the Company’s Board of Directors for Board fees. The weighted average market value on the date of the grant of these RSUs was $1.73 per share. All of these RSUs were immediately fully vested. There were no RSUs granted to members of the Company’s Board of Directors during the three and nine months ended February 29, 2020. |
15. SEGMENT INFORMATION
15. SEGMENT INFORMATION | 9 Months Ended |
Feb. 28, 2021 | |
Segment Reporting [Abstract] | |
15. SEGMENT INFORMATION | 15. SEGMENT INFORMATION The Company has only one reportable segment. The information for revenue category by type, product line, geography and timing of revenue recognition, is summarized in Note “3. REVENUE.” Property and equipment information is based on the physical location of the assets. The following table presents property and equipment information for geographic areas (in thousands): February 28, May 31, 2021 2020 United States $ 612 $ 662 Asia 5 1 Europe $ 617 $ 663 As of February 28, 2021, the operating lease right-of-use assets of $1,763,000 were allocated in the United States. There were no revenues through distributors for the three and nine months ended February 28, 2021 and February 29, 2020. Sales to the Company’s five largest customers accounted for approximately 95% and 82% of its net sales in the three and nine months ended February 28, 2021, respectively. Four customers accounted for approximately 55%,15%, 11% and 11% of the Company’s net sales in the three months ended February 28, 2021. Four customers accounted for approximately 33%,15%, 14% and 11% of the Company’s net sales in the nine months ended February 28, 2021. Sales to the Company’s five largest customers accounted for approximately 94% and 89% of its net sales in the three and nine months ended February 29, 2020, respectively. One customer accounted for approximately 71% of the Company’s net sales in the three months ended February 29, 2020. Two customers accounted for approximately 51% and 18% of the Company’s net sales in the nine months ended February 29, 2020. No other customers represented more than 10% of the Company’s net sales in the three and nine months ended February 28, 2021 and February 29, 2020. |
16. DISSOLUTION OF AEHR TEST SY
16. DISSOLUTION OF AEHR TEST SYSTEMS JAPAN | 9 Months Ended |
Feb. 28, 2021 | |
Dissolution of Aehr Test Systems Japan | |
16. DISSOLUTION OF AEHR TEST SYSTEMS JAPAN | 16. DISSOLUTION OF AEHR TEST SYSTEMS JAPAN On July 31, 2020, the Company completed the liquidation of ATS-Japan, a majority owned subsidiary. Accordingly, the Company deconsolidated ATS-Japan and recognized an aggregate net gain of $2,401,000 for the period ended August 31, 2020. The net gain was mainly due to cumulative translation adjustment reclassified into earnings of $2,186,000 and the residual income tax effect in connection with the cumulative translation adjustment released into income tax benefits of $215,000. |
1. BASIS OF PRESENTATION AND _2
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Feb. 28, 2021 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCCOUNTING POLICIES 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 (the “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, 2020 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 consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended May 31, 2020. 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. The Company (as defined below) has been impacted by the outbreak of the novel coronavirus, known as COVID-19, which has spread throughout the world. Due to the impact of the COVID-19 pandemic on customers and customers’ customers, the Company experienced a drop in customer orders and revenues in the three and nine months ended February 28, 2021. In response, the Company has implemented cost reduction initiatives to mitigate operating losses, including mandatory vacation days, shutdown days, and executive staff pay reductions. The Company continues to monitor the situation. As of the date of this report, the Company cannot predict with certainty the potential effects the COVID-19 pandemic may have on the Company’s business and its operating results. While the overall environment remains uncertain, the Company continues to invest in priority areas with the objective of driving profitable growth over the long term. |
PRINCIPLES OF CONSOLIDATION | PRINCIPLES OF CONSOLIDATION. The condensed consolidated financial statements include the accounts of Aehr Test Systems and its subsidiaries (collectively, the "Company"). On November 18, 2020, the Company established a wholly owned new subsidiary, Aehr Test Systems Philippines, which is in full operation as of March 2021. All significant intercompany balances have been eliminated in consolidation. For the Company’s majority owned subsidiary, Aehr Test Systems Japan K.K. (“ATS-Japan”), the noncontrolling interest of the portion the Company does not own was reflected on the Condensed Consolidated Balance Sheets in Shareholders’ Equity and in the Condensed Consolidated Statements of Operations. As discussed in Note 16, the liquidation of ATS-Japan was completed on July 31, 2020. |
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. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results could differ materially from those estimates. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | SUMMARY OF 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, 2020. There have been no significant changes in the Company’s significant accounting policies during the three and nine months ended February 28, 2021. |
2. RECENT ACCOUNTING PRONOUNC_2
2. RECENT ACCOUNTING PRONOUNCEMENTS (Policies) | 9 Months Ended |
Feb. 28, 2021 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS Accounting Standards Not Yet Adopted Financial Instruments In June 2016, the FASB issued an accounting standard update (“ASU”) 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 collectability of the reported amount. Due to a subsequent ASU in November 2019, the accounting standard will be effective for the Company beginning in the first quarter of fiscal 2024 on a modified retrospective basis, and early adoption is permitted. The Company does not expect a material impact of this accounting standard on its consolidated financial statements. |
3. REVENUE (Tables)
3. REVENUE (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The Company’s revenues by product category are as follows (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Type of good / service: Systems $ 2,435 $ 2,138 $ 3,407 $ 8,099 Contactors 1,930 3,094 3,330 7,790 Services 902 879 2,225 2,629 $ 5,267 $ 6,111 $ 8,962 $ 18,518 Product lines: Wafer-level $ 4,993 $ 5,408 $ 7,804 $ 16,570 Test During Burn-In 274 703 1,158 1,948 $ 5,267 $ 6,111 $ 8,962 $ 18,518 The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Geographic region: United States $ 1,113 $ 5,014 $ 3,124 $ 12,698 Asia 4,122 891 5,723 4,758 Europe 32 206 115 1,062 $ 5,267 $ 6,111 $ 8,962 $ 18,518 With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at a point in time when control transfers to customers. The following presents revenue based on timing of recognition (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Timing of revenue recognition: Products and services transferred at a point in time $ 4,944 $ 5,485 $ 7,728 $ 16,666 Services transferred over time 323 626 1,234 1,852 $ 5,267 $ 6,111 $ 8,962 $ 18,518 |
4. EARNINGS PER SHARE (Tables)
4. EARNINGS PER SHARE (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Net (loss) income per share: | |
Earnings per share | The following table presents the computation of basic and diluted net (loss) income per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Numerator: Net (loss) income $ (735) $ 245 $ (2,594) $ 83 Denominator for basic net (loss) income per share: Weighted average shares outstanding 23,525 22,937 23,390 22,823 Shares used in basic net (loss) income per share calculation 23,525 22,937 23,390 22,823 Effect of dilutive securities 193 117 Denominator for diluted net (loss) income per share 23,525 23,130 23,390 22,940 Basic net (loss) income per share $ (0.03) $ 0.01 $ (0.11) $ 0.00 Diluted net (loss) income per share $ (0.03) $ 0.01 $ (0.11) $ 0.00 |
5. FAIR VALUE OF FINANCIAL IN_2
5. FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
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 February 28, 2021 (in thousands): Balance as of February 28, 2021 Level 1 Level 2 Level 3 Money market funds $ 80 $ 80 $ $ Assets $ 80 $ 80 $ $ The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2020 (in thousands): Balance as of May 31, 2020 Level 1 Level 2 Level 3 Money market funds $ 80 $ 80 $ $ Assets $ 80 $ 80 $ $ |
7. INVENTORIES (Tables)
7. INVENTORIES (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories are comprised of the following (in thousands): February 28, May 31, 2021 2020 Raw materials and sub-assemblies $ 5,626 $ 5,055 Work in process 2,713 2,917 Finished goods 17 $ 8,339 $ 7,989 |
8. PRODUCT WARRANTIES (Tables)
8. PRODUCT WARRANTIES (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
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 nine months ended February 28, 2021 and February 29, 2020 (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Balance at the beginning of the period $ 244 $ 190 $ 246 $ 154 Accruals for warranties issued during the period 78 26 270 167 Adjustments to previously existing warranty accruals 259 346 Consumption of reserves (81 ) (30 ) (362 ) (135 ) Balance at the end of the period $ 500 $ 186 $ 500 $ 186 |
9. CUSTOMER DEPOSITS AND DEFE_2
9. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Customer Deposits And Deferred Revenue Short-term | |
Customer deposits and deferred revenue | Customer deposits and deferred revenue, short-term (in thousands): February 28, May 31, 2021 2020 Customer deposits $ 471 $ Deferred revenue 116 170 $ 587 $ 170 |
11. LEASES (Tables)
11. LEASES (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Leases [Abstract] | |
Supplemental cash flow information related to leases | The following table presents supplemental cash flow information related to the Company’s operating leases (in thousands): Nine Months Ended February 28, 2021 February 29, 2020 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 579 $ 550 |
Maturity of operating lease liabilities | The following table presents the maturities of the Company’s operating lease liabilities as of February 28, 2021 (in thousands): Fiscal year Operating Leases 2021 (excluding the first nine months of 2021) $ 199 2022 810 2023 826 2024 164 2025 31 Thereafter 19 Total future minimum operating lease payments $ 2,049 Less: imputed interest (142 ) Present value of operating lease liabilities $ 1,907 |
14. STOCK-BASED COMPENSATION (T
14. STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Compensation costs related to the Company's stock-based compensation | The following table summarizes the stock-based compensation expense for the three and nine months ended February 28, 2021 and February 29, 2020 (in thousands): Three Months Ended Nine Months Ended February 28, February 29, February 28, February 29, 2021 2020 2021 2020 Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: Cost of sales $ 14 $ 19 $ 45 $ 58 Selling, general and administrative 194 137 593 401 Research and development 63 51 160 152 Total stock-based compensation $ 271 $ 207 $ 798 $ 611 |
Fair value assumptions for option valuation model | Fair Value. The fair values of the Company’s stock options granted to employees for the three and nine months ended February 28, 2021 and February 29, 2020, were estimated using the following weighted average assumptions in the Black-Scholes option valuation model: Three Months Ended Nine Months Ended February 29, February 28, February 29, 2020 2021 2020 Expected term (in years) 5 6 5 Volatility 0.72 0.72 0.71 Risk-free interest rate 1.57 % 0.39 % 1.85 % Weighted average grant date fair value $ 1.37 $ 1.09 $ 0.98 |
Fair value assumption of the ESPP Purchase Rights | The fair values of the ESPP purchase rights granted for the nine months ended February 28, 2021 and February 29, 2020 were estimated using the following assumptions: Nine Months Ended February 28, February 29, 2021 2020 Expected term (in years) 0.5-2.0 0.5-2.0 Volatility 0.74-0.82 0.62-0.71 Expected dividend $ 0.00 $ 0.00 Risk-free interest rate 0.10%-0.14 % 1.56%-1.81 % Weighted average grant date fair value $ 0.44 $ 0.80 |
Stock option and RSU transactions | The following tables summarize the Company’s stock option and RSU transactions during three and nine months ended February 28, 2021 (in thousands): Available Shares Balance, May 31, 2020 1,650 Options granted (200 ) RSUs granted (196 ) Options cancelled 188 RSUs cancelled 2 Options expired (125 ) Balance, August 31, 2020 1,319 Options granted (73 ) RSUs granted (57 ) Options cancelled 185 Options expired (162 ) Balance, November 30, 2020 1,212 RSUs granted (42 ) Shares withheld for taxes and not issued 4 Options cancelled 21 Balance, February 28, 2021 1,195 |
Stock option transactions | The following table summarizes the stock option transactions during the three and nine months ended February 28, 2021 (in thousands, except per share data): Outstanding Options Weighted Number Average Aggregate of Exercise Intrinsic Shares Price Value Balances, May 31, 2020 3,153 $ 2.17 $ 102 Options granted 200 $ 1.86 Options cancelled (188 ) $ 2.18 Options exercised (148 ) $ 1.30 Balances, August 31, 2020 3,017 $ 2.19 $ 148 Options granted 73 $ 1.44 Options cancelled (185 ) $ 2.42 Options exercised (19 ) $ 1.67 Balances, November 30, 2020 2,886 $ 2.16 $ 56 Options cancelled (21 ) $ 1.86 Options exercised (61 ) $ 2.07 Balances, February 28, 2021 2,804 $ 2.16 $ 1,994 Options fully vested and expected to vest at February 28, 2021 2,769 $ 2.17 $ 1,967 |
Options outstanding | The options outstanding and exercisable at February 28, 2021 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at February 28, 2021 at February 28, 2021 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 $ 1.22-$1.34 133 6.30 $ 1.27 36 6.36 $ 1.28 $ 1.64-$1.86 1,047 5.04 $ 1.70 589 4.50 $ 1.69 $ 2.03-$2.46 1,017 3.25 $ 2.21 781 2.86 $ 2.19 $ 2.63-$2.81 405 0.66 $ 2.71 404 0.65 $ 2.71 $ 3.46-$3.93 202 3.41 $ 3.86 184 3.41 $ 3.85 $ 1.22-$3.93 2,804 3.70 $ 2.16 1,994 3.01 $ 2.28 $ 1,224 |
15. SEGMENT INFORMATION (Tables
15. SEGMENT INFORMATION (Tables) | 9 Months Ended |
Feb. 28, 2021 | |
Segment Reporting [Abstract] | |
Property and equipment by geographic region | Property and equipment information is based on the physical location of the assets. The following table presents property and equipment information for geographic areas (in thousands): February 28, May 31, 2021 2020 United States $ 612 $ 662 Asia 5 1 Europe $ 617 $ 663 |
3. REVENUE (Details)
3. REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Net sales | $ 5,267 | $ 6,111 | $ 8,962 | $ 18,518 |
Systems | ||||
Net sales | 2,435 | 2,138 | 3,407 | 8,099 |
Contactors | ||||
Net sales | 1,930 | 3,094 | 3,330 | 7,790 |
Services | ||||
Net sales | 902 | 879 | 2,225 | 2,629 |
Wafer-level | ||||
Net sales | 4,993 | 5,408 | 7,804 | 16,570 |
Test During Burn-In | ||||
Net sales | $ 274 | $ 703 | $ 1,158 | $ 1,948 |
3. REVENUE (Details 1)
3. REVENUE (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Net sales | $ 5,267 | $ 6,111 | $ 8,962 | $ 18,518 |
United States | ||||
Net sales | 1,113 | 5,014 | 3,124 | 12,698 |
Asia | ||||
Net sales | 4,122 | 891 | 5,723 | 4,758 |
Europe | ||||
Net sales | $ 32 | $ 206 | $ 115 | $ 1,062 |
3. REVENUE (Details 2)
3. REVENUE (Details 2) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Net sales | $ 5,267 | $ 6,111 | $ 8,962 | $ 18,518 |
Products and Services Transferred at a Point in Time | ||||
Net sales | 4,944 | 5,485 | 7,728 | 16,666 |
Services Transferred Over Time | ||||
Net sales | $ 323 | $ 626 | $ 1,234 | $ 1,852 |
3. REVENUE (Details Narrative)
3. REVENUE (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2021 | Feb. 28, 2021 | May 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |||
Contract liabilities | $ 667 | $ 667 | $ 192 |
Recognition of contract liabilities | 29 | 154 | |
Remaining performance obligations | 129 | 129 | |
Remaining performance obligation revenue recognition within one year | 49 | 49 | |
Remaining performance obligation revenue recognition thereafter | $ 80 | $ 80 |
4. EARNINGS PER SHARE (Details)
4. EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Net (loss) income per share: | ||||
Numerator: Net (loss) income | $ (735) | $ 245 | $ (2,594) | $ 83 |
Denominator for basic net (loss) income per share: Weighted average shares outstanding (in thousands) | 23,525 | 22,937 | 23,390 | 22,823 |
Shares used in basic net (loss) income per share calculation (in thousands) | 23,525 | 22,937 | 23,390 | 22,823 |
Effect of dilutive securities (in thousands) | 0 | 193 | 0 | 117 |
Denominator for diluted net (loss) income per share (in thousands) | 23,525 | 23,130 | 23,390 | 22,940 |
Basic net (loss) income per share | $ (0.03) | $ 0.01 | $ (0.11) | $ 0 |
Diluted net (loss) income per share | $ (0.03) | $ 0.01 | $ (0.11) | $ 0 |
4. EARNINGS PER SHARE (Details
4. EARNINGS PER SHARE (Details Narrative) - shares | 9 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Employee Stock Purchase Plan | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 139 | 0 |
Stock Options | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 2,804 | 2,505 |
Restricted Stock Units | ||
Options not included in the computation of diluted net (loss) income per share (in thousands) | 143 | 0 |
5. FAIR VALUE OF FINANCIAL IN_3
5. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 |
Assets | ||
Investment securities | $ 80 | $ 80 |
Level 1 | ||
Assets | ||
Investment securities | 80 | 80 |
Level 2 | ||
Assets | ||
Investment securities | 0 | 0 |
Level 3 | ||
Assets | ||
Investment securities | 0 | 0 |
Money Market Funds | ||
Assets | ||
Investment securities | 80 | 80 |
Money Market Funds | Level 1 | ||
Assets | ||
Investment securities | 80 | 80 |
Money Market Funds | Level 2 | ||
Assets | ||
Investment securities | 0 | 0 |
Money Market Funds | Level 3 | ||
Assets | ||
Investment securities | $ 0 | $ 0 |
5. FAIR VALUE OF FINANCIAL IN_4
5. FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 |
Fair Value Disclosures [Abstract] | ||
Restricted cash representing a security deposit | $ 80 | $ 80 |
Financial liabilities at fair value | 0 | $ 0 |
Transfers between Level 1 and Level 2 fair value measurements | $ 0 |
6. ACCOUNTS RECEIVABLE, NET (De
6. ACCOUNTS RECEIVABLE, NET (Details Narrative) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 |
Accounts Receivable, after Allowance for Credit Loss, Current [Abstract] | ||
Allowance for doubtful accounts customer trade receivables | $ 0 | $ 0 |
7. INVENTORIES (Details)
7. INVENTORIES (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 | |
Inventory, Net [Abstract] | |||
Raw materials and sub-assemblies | $ 5,626 | $ 5,055 | |
Work in process | 2,713 | 2,917 | |
Finished goods | 0 | 17 | |
Inventories | $ 8,339 | $ 7,989 | [1] |
[1] | The condensed consolidated balance sheet at May 31, 2020 has been derived from the audited consolidated financial statements at that date. |
8. PRODUCT WARRANTIES (Details)
8. PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||||
Balance at the beginning of the period | $ 244 | $ 190 | $ 246 | $ 154 |
Accruals for warranties issued during the period | 78 | 26 | 270 | 167 |
Adjustments to previously existing warranty accruals | 259 | 0 | 346 | 0 |
Consumption of reserves | (81) | (30) | (362) | (135) |
Balance at the end of the period | $ 500 | $ 186 | $ 500 | $ 186 |
8. PRODUCT WARRANTIES (Details
8. PRODUCT WARRANTIES (Details Narrative) | 9 Months Ended |
Feb. 28, 2021 | |
Product Warranties Disclosures [Abstract] | |
Product warranties disclosures | The standard warranty period is one year for systems and ninety days for parts and service. |
9. CUSTOMER DEPOSITS AND DEFE_3
9. CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 |
Customer Deposits And Deferred Revenue Short-term | ||
Customer deposits | $ 471 | $ 0 |
Deferred revenue | 116 | 170 |
Total | $ 587 | $ 170 |
11. LEASES (Details)
11. LEASES (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Cash paid for amounts included in measurement of operating lease liabilities: | ||
Operating cash flows from operating leases | $ 579 | $ 550 |
11. LEASES (Details 1)
11. LEASES (Details 1) $ in Thousands | Feb. 28, 2021USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
2021 (excluding the first nine months of 2021) | $ 199 |
2022 | 810 |
2023 | 826 |
2024 | 164 |
2025 | 31 |
Thereafter | 19 |
Total future minimum operating lease payments | 2,049 |
Less: imputed interest | (142) |
Present value of operating lease liabilities | $ 1,907 |
11. LEASES (Details Narrative)
11. LEASES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Operating lease, weighted-average remaining lease term | 2 years 7 months 6 days | 2 years 7 months 6 days | ||
Operating lease, weighted-average discount rate | 5.40% | 5.40% | ||
Operating lease, cost | $ 193 | $ 183 | $ 568 | $ 548 |
Minimum | ||||
Operating lease term | 1 month | 1 month | ||
Maximum | ||||
Operating lease term | 5 years | 5 years |
12. BORROWING AND FINANCING A_2
12. BORROWING AND FINANCING ARRANGEMENTS (Details Narrative) - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Borrowing under revolving credit facility | $ 1,400 | $ 0 |
Silicon Valley Bank | ||
Line of credit, maximum borrowing capacity | $ 4,000 | |
Variable interest rate | The greater of (a) the prime rate plus an additional percentage of up to 1%, which additional percentage depends on the Company’s adjusted quick ratio, and (b) 4.75%. | |
Borrowing under revolving credit facility | $ 1,400 | |
Balance available to borrow under the line of credit | $ 349 |
13. LONG-TERM DEBT (Details Nar
13. LONG-TERM DEBT (Details Narrative) - Silicon Valley Bank $ in Thousands | Apr. 23, 2020USD ($) |
PPP loan | $ 1,679 |
Interest rate | 1.00% |
14. STOCK-BASED COMPENSATION (D
14. STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | $ 271 | $ 207 | $ 798 | $ 611 |
Cost of Sales | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | 14 | 19 | 45 | 58 |
Selling, General and Administrative | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | 194 | 137 | 593 | 401 |
Research and Development | ||||
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in: | ||||
Total stock-based compensation | $ 63 | $ 51 | $ 160 | $ 152 |
14. STOCK-BASED COMPENSATION _2
14. STOCK-BASED COMPENSATION (Details 1) - Stock Options - $ / shares | 3 Months Ended | 9 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Expected term (in years) | 5 years | 6 years | 5 years |
Volatility | 72.00% | 72.00% | 71.00% |
Risk-free interest rate | 1.57% | 0.39% | 1.85% |
Weighted average grant date fair value | $ 1.37 | $ 1.09 | $ .98 |
14. STOCK-BASED COMPENSATION _3
14. STOCK-BASED COMPENSATION (Details 2) - Employee Stock Purchase Plan - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Feb. 28, 2021 | Feb. 29, 2020 | |
Expected dividend | $ 0 | $ 0 |
Estimated forfeiture rate | 0.00% | 0.00% |
Weighted-average grant date fair value | $ .44 | $ .80 |
Minimum | ||
Expected term (in years) | 6 months | 6 months |
Volatility | 74.00% | 62.00% |
Risk-free interest rates | 0.10% | 1.56% |
Maximum | ||
Expected term (in years) | 2 years | 2 years |
Volatility | 82.00% | 71.00% |
Risk-free interest rates | 0.14% | 1.81% |
14. STOCK-BASED COMPENSATION _4
14. STOCK-BASED COMPENSATION (Details 3) - Stock Option and RSU Transactions - shares | 3 Months Ended | 9 Months Ended | ||
Feb. 28, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | Feb. 28, 2021 | |
Available shares, beginning (in thousands) | 1,212 | 1,319 | 1,650 | 1,650 |
Options granted (in thousands) | 0 | (73) | (200) | |
RSUs granted (in thousands) | (42) | (57) | (196) | |
Shares withheld for taxes and not issued (in thousands) | 4 | 0 | 0 | 4 |
Options cancelled (in thousands) | 21 | 185 | 188 | |
RSUs cancelled (in thousands) | 0 | 0 | 2 | |
Options expired (in thousands) | 0 | (162) | (125) | |
Available shares, ending (in thousands) | 1,195 | 1,212 | 1,319 | 1,195 |
14. STOCK-BASED COMPENSATION _5
14. STOCK-BASED COMPENSATION (Details 4) - Outstanding Options Stock Option Transactions - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Feb. 28, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | |
Options outstanding, beginning (in thousands) | 2,886 | 3,017 | 3,153 |
Options granted (in thousands) | 0 | 73 | 200 |
Options cancelled (in thousands) | (21) | (185) | (188) |
Options exercised (in thousand) | (61) | (19) | (148) |
Options outstanding, ending (in thousands) | 2,804 | 2,886 | 3,017 |
Options fully vested and expected to vest (in thousands) | 2,769 | ||
Weighted average exercise price outstanding, beginning | $ 2.16 | $ 2.19 | $ 2.17 |
Weighted average exercise price granted | 1.44 | 1.86 | |
Weighted average exercise price cancelled | 1.86 | 2.42 | 2.18 |
Weighted average exercise price exercised | 2.07 | 1.67 | 1.30 |
Weighted average exercise price outstanding, ending | 2.16 | $ 2.16 | $ 2.19 |
Weighted average exercise price for options fully vested and expected to vest, ending | $ 2.17 | ||
Aggregate intrinsic value, beginning balance | $ 56 | $ 148 | $ 102 |
Aggregate intrinsic value, ending balance | 1,994 | $ 56 | $ 148 |
Aggregate intrinsic value for options fully vested and expected to vest, ending | $ 1,967 |
14. STOCK-BASED COMPENSATION _6
14. STOCK-BASED COMPENSATION (Details 5) $ / shares in Units, $ in Thousands | 9 Months Ended |
Feb. 28, 2021USD ($)$ / sharesshares | |
$1.22-$1.34 | |
Options outstanding, ending (in thousands) | shares | 133 |
Weighted average remaining contractual life (years) options outstanding | 6 years 3 months 18 days |
Weighted average exercise price outstanding, ending | $ / shares | $ 1.27 |
Options exercisable shares, ending (in thousands) | shares | 36 |
Weighted average remaining contractual life (years) options exercisable | 6 years 4 months 10 days |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 1.28 |
$1.64-$1.86 | |
Options outstanding, ending (in thousands) | shares | 1,047 |
Weighted average remaining contractual life (years) options outstanding | 5 years 14 days |
Weighted average exercise price outstanding, ending | $ / shares | $ 1.7 |
Options exercisable shares, ending (in thousands) | shares | 589 |
Weighted average remaining contractual life (years) options exercisable | 4 years 6 months |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 1.69 |
$2.03-$2.46 | |
Options outstanding, ending (in thousands) | shares | 1,017 |
Weighted average remaining contractual life (years) options outstanding | 3 years 3 months |
Weighted average exercise price outstanding, ending | $ / shares | $ 2.21 |
Options exercisable shares, ending (in thousands) | shares | 781 |
Weighted average remaining contractual life (years) options exercisable | 2 years 10 months 10 days |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 2.19 |
$2.63-$2.81 | |
Options outstanding, ending (in thousands) | shares | 405 |
Weighted average remaining contractual life (years) options outstanding | 7 months 28 days |
Weighted average exercise price outstanding, ending | $ / shares | $ 2.71 |
Options exercisable shares, ending (in thousands) | shares | 404 |
Weighted average remaining contractual life (years) options exercisable | 7 months 24 days |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 2.71 |
$3.46-$3.93 | |
Options outstanding, ending (in thousands) | shares | 202 |
Weighted average remaining contractual life (years) options outstanding | 3 years 4 months 28 days |
Weighted average exercise price outstanding, ending | $ / shares | $ 3.86 |
Options exercisable shares, ending (in thousands) | shares | 184 |
Weighted average remaining contractual life (years) options exercisable | 3 years 4 months 28 days |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 3.85 |
$1.22-$3.93 | |
Options outstanding, ending (in thousands) | shares | 2,804 |
Weighted average remaining contractual life (years) options outstanding | 3 years 8 months 12 days |
Weighted average exercise price outstanding, ending | $ / shares | $ 2.16 |
Options exercisable shares, ending (in thousands) | shares | 1,994 |
Weighted average remaining contractual life (years) options exercisable | 3 years 4 days |
Weighted average exercise price for options exercisable, ending | $ / shares | $ 2.28 |
Aggregate intrinsic value for options exercisable | $ | $ 1,224 |
14. STOCK-BASED COMPENSATION _7
14. STOCK-BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2021 | Nov. 30, 2020 | Aug. 31, 2020 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Stock Option and RSU Transactions | ||||||
Intrinsic value of options exercised | $ 57 | $ 92 | $ 151 | $ 159 | ||
Weighted average remaining contractual life of the options exercisable and expected to be exercisable | 3 years 8 months 5 days | 3 years 9 months 11 days | ||||
Restricted stock units granted (in thousands) | 4 | 165 | ||||
Shares withheld for taxes and not issued (in thousands) | 4 | 0 | 0 | 4 | ||
Market value on the date of the grant | $ 2.25 | $ 1.87 | ||||
Restricted stock units vested (in thousands) | 19 | 3 | 34 | 10 | ||
Restricted stock units unvested (in thousands) | 143 | 13 | 143 | 13 | ||
Restricted stock units unvested intrinsic value | $ 400 | $ 27 | $ 400 | $ 27 | ||
Stock Option and RSU Transactions | Board of Directors | ||||||
Restricted stock units granted (in thousands) | 34 | 126 | ||||
Market value on the date of the grant | $ 2.25 | $ 1.73 | ||||
2016 Equity Incentive Plan | ||||||
Stock-based compensation costs capitalized as part of inventory | $ 0 | 0 | $ 0 | 0 | ||
Stock-based compensation expense related to stock options and RSUs | 253 | 166 | 736 | 480 | ||
Unrecognized stock-based compensation | 1,151 | $ 1,151 | ||||
Weighted average period for recognition of costs | 2 years 7 months 6 days | |||||
Employee Stock Purchase Plan | ||||||
Weighted average period for recognition of costs | 1 year | |||||
Stock-based compensation related to the ESPP | 18 | $ 41 | $ 62 | $ 131 | ||
Compensation cost related to purchase rights under the ESPP but not yet recognized | $ 29 | $ 29 | ||||
ESPP purchase right granted (in thousands) | 0 | 0 | 81 | 38 | ||
ESPP shares issued (in thousands) | 72 | 71 | ||||
ESPP shares available for issuance (in thousands) | 511 | 299 | 511 | 299 |
15. SEGMENT INFORMATION (Detail
15. SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | Feb. 28, 2021 | May 31, 2020 | |
Property and equipment, net | $ 617 | $ 663 | [1] |
United States | |||
Property and equipment, net | 612 | 662 | |
Asia | |||
Property and equipment, net | 5 | 1 | |
Europe | |||
Property and equipment, net | $ 0 | $ 0 | |
[1] | The condensed consolidated balance sheet at May 31, 2020 has been derived from the audited consolidated financial statements at that date. |
15. SEGMENT INFORMATION (Deta_2
15. SEGMENT INFORMATION (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Feb. 28, 2021 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | May 31, 2020 | [1] | |
Operating lease right-of-use assets | $ 1,763 | $ 1,763 | $ 2,107 | |||
Five Largest Customers | ||||||
Customers accounted for 10% or more of total revenues | 95.00% | 94.00% | 82.00% | 89.00% | ||
Customer A | ||||||
Customers accounted for 10% or more of total revenues | 55.00% | 71.00% | 33.00% | 51.00% | ||
Customer B | ||||||
Customers accounted for 10% or more of total revenues | 15.00% | 15.00% | 18.00% | |||
Customer C | ||||||
Customers accounted for 10% or more of total revenues | 11.00% | 14.00% | ||||
Customer D | ||||||
Customers accounted for 10% or more of total revenues | 11.00% | 11.00% | ||||
[1] | The condensed consolidated balance sheet at May 31, 2020 has been derived from the audited consolidated financial statements at that date. |
16. DISSOLUTION OF AEHR TEST _2
16. DISSOLUTION OF AEHR TEST SYSTEMS JAPAN (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Feb. 28, 2021 | Aug. 31, 2020 | Feb. 29, 2020 | Feb. 28, 2021 | Feb. 29, 2020 | |
Dissolution of Aehr Test Systems Japan | |||||
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Japan | $ 0 | $ (2,401) | $ 0 | $ (2,401) | $ 0 |
Net gain from dissolution of Aehr Test Systems Japan | $ 0 | (2,186) | $ 0 | (2,186) | 0 |
Income tax benefit related to dissolution of Aehr Test Systems Japan | $ (215) | $ (215) | $ 0 |