Aehr Test Systems (AEHR) 10-K 28 Aug 23 2023 FY Annual report Financial data

Cover

Cover - USD ($)	12 Months Ended
	May 31, 2023	Aug. 16, 2023	Jan. 01, 2023
Cover [Abstract]
Entity Registrant Name	AEHR TEST SYSTEMS
Entity Central Index Key	0001040470
Document Type	10-K
Amendment Flag	false
Entity Voluntary Filers	No
Current Fiscal Year End Date	--05-31
Entity Well Known Seasoned Issuer	No
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	May 31, 2023
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2023
Entity Common Stock Shares Outstanding		28,755,426
Entity Public Float			$ 0
Document Annual Report	true
Document Transition Report	false
Entity File Number	000-22893
Entity Incorporation State Country Code	CA
Entity Tax Identification Number	94-2424084
Entity Address Address Line 1	400 KATO TERRACE
Entity Address City Or Town	FREMONT
Entity Address State Or Province	CA
Entity Address Postal Zip Code	94539
City Area Code	510
Local Phone Number	623-9400
Security 12b Title	Common Stock, par value $0.01 per share
Trading Symbol	AEHR
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Icfr Auditor Attestation Flag	false
Auditor Name	BPM LLP
Auditor Location	San Jose, California
Auditor Firm Id	207

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Current assets:
Cash and cash equivalents	$ 30,054	$ 31,484
Short-term investments	17,853	0
Trade and other accounts receivable, net	16,594	12,859
Inventories	23,908	15,051
Prepaid expenses and other current assets	621	613
Total current assets	89,030	60,007
Property and equipment, net	2,759	1,203
Operating lease right-of-use assets	6,123	917
Other assets	231	201
Total assets	98,143	62,328
Current liabilities:
Accounts payable	9,206	4,195
Accrued expenses	4,143	3,610
Operating lease liabilities, short-term	137	794
Customer deposits and deferred revenue, short-term	2,822	2,415
Total current liabilities	16,308	11,014
Operating lease liabilities, long-term	6,163	212
Deferred revenue, long-term	31	69
Other long-term liabilities	41	44
Total liabilities	22,543	11,339
Shareholders' equity:
Preferred stock, $0.01 par value: Authorized: 10,000 shares; Issued and outstanding: none	0	0
Common stock, $0.01 par value: Authorized: 75,000 shares; Issued and outstanding: 28,539 shares and 27,120 shares at May 31, 2023 and 2022 respectively	285	271
Additional paid-in capital	127,776	117,686
Accumulated other comprehensive loss	(155)	(105)
Accumulated deficit	(52,306)	(66,863)
Total shareholders' equity	75,600	50,989
Total liabilities and shareholders' equity	$ 98,143	$ 62,328

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	May 31, 2023	May 31, 2022
CONSOLIDATED BALANCE SHEETS
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000
Common stock, shares issued	28,539,000	27,120,000
Common stock, shares outstanding	28,539,000	27,120,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Net sales	$ 64,961	$ 50,829	$ 16,600
Cost of sales	32,215	27,164	10,568
Gross profit	32,746	23,665	6,032
Operating expenses:
Selling, general and administrative	12,237	10,047	6,562
Research and development	7,134	5,818	3,652
Total operating expenses	19,371	15,865	10,214
Income (loss) from operations	13,375	7,800	(4,182)
Interest income (expense), net	1,245	13	(46)
Net gain from dissolution of Aehr Test Systems Japan	0	0	2,186
Gain from forgiveness of PPP loan	0	1,698	0
Other (expense) income, net	(3)	30	(162)
Income (loss) before income tax (expense) benefit	14,617	9,541	(2,204)
Income tax (expense) benefit	(60)	(91)	177
Net income (loss)	$ 14,557	$ 9,450	$ (2,027)
Earnings (net loss) per share - basic	$ 0.52	$ 0.36	$ (0.09)
Earnings (net loss) per share - diluted	$ 0.50	$ 0.34	$ (0.09)
Shares used in per share calculation - basic	27,785	26,014	23,457
Shares used in per share calculation - diluted	29,215	27,774	23,457

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ 14,557	$ 9,450	$ (2,027)
Other comprehensive income (loss), net of tax:
Foreign currency translation (loss) income	(33)	(77)	160
Net change in unrealized loss on investments	(17)	0	0
Reclassification of cumulative translation adjustment as a result of dissolution of Aehr Test Systems Japan	0	0	(2,401)
Total comprehensive income (loss)	14,507	9,373	(4,268)
Less: Comprehensive income attributable to noncontrolling interest	0	0	21
Comprehensive income (loss)	$ 14,507	$ 9,373	$ (4,289)

CONSOLIDATED STATEMENTS OF SHAR

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated other comprehensive loss	Retained Earnings (Accumulated Deficit)	Noncontrolling Interest	Aher Test Systems Share holders Equity
Balance, shares at May. 31, 2020		23,107
Balance, amount at May. 31, 2020	$ 14,056,000	$ 231,000	$ 85,898,000	$ 2,234,000	$ (74,286,000)	$ (21,000)	$ 14,077,000
Shares repurchased for tax withholdings on vesting of RSUs, share		(9)
Shares repurchased for tax withholdings on vesting of RSUs, amount	(20,000)	$ 0	(20,000)	0	0	0	(20,000)
Issuance of common stock under employee plans, share		627
Issuance of common stock under employee plans, amount	580,000	$ 6,000	574,000	0	0	0	580,000
Stock-based compensation	1,101,000	0	1,101,000	0	0	0	1,101,000
Net Income (Loss)	(2,027,000)	0	0	0	(2,027,000)	0	(2,027,000)
Reclassification of cumulative translation adjustment	(2,401,000)	0	0	(2,401,000)	0	0	(2,401,000)
Foreign currency translation adjustment	160,000	$ 0	0	139,000	0	21,000	139,000
Balance, shares at May. 31, 2021		23,725
Balance, amount at May. 31, 2021	11,449,000	$ 237,000	87,553,000	(28,000)	(76,313,000)	0	11,449,000
Shares repurchased for tax withholdings on vesting of RSUs, share		(62)
Shares repurchased for tax withholdings on vesting of RSUs, amount	(429,000)	$ 0	(429,000)	0	0	0	(429,000)
Issuance of common stock under employee plans, share		1,760
Issuance of common stock under employee plans, amount	3,560,000	$ 17,000	3,543,000	0	0	0	3,560,000
Stock-based compensation	3,006,000	0	3,006,000	0	0	0	3,006,000
Net Income (Loss)	9,450,000	0	0	0	9,450,000	0	9,450,000
Foreign currency translation adjustment	(77,000)	$ 0	0	(77,000)	0	0	(77,000)
Proceeds from public offerings, net of issuance costs, share		1,697
Proceeds from public offerings, net of issuance costs, amount	24,030,000	$ 17,000	24,013,000	0	0	0	24,030,000
Balance, shares at May. 31, 2022		27,120
Balance, amount at May. 31, 2022	50,989,000	$ 271,000	117,686,000	(105,000)	(66,863,000)	0	50,989,000
Shares repurchased for tax withholdings on vesting of RSUs, share		(178)
Shares repurchased for tax withholdings on vesting of RSUs, amount	(2,060,000)	$ (1,000)	(2,059,000)	0	0	0	(2,060,000)
Issuance of common stock under employee plans, share		1,388
Issuance of common stock under employee plans, amount	2,562,000	$ 13,000	2,549,000	0	0	0	2,562,000
Stock-based compensation	2,782,000	0	2,782,000	0	0	0	2,782,000
Net Income (Loss)	14,557,000	0	0	0	14,557,000	0	14,557,000
Foreign currency translation adjustment	(33,000)	$ 0	0	(33,000)	0	0	(33,000)
Proceeds from public offerings, net of issuance costs, share		209
Proceeds from public offerings, net of issuance costs, amount	6,820,000	$ 2,000	6,818,000	0	0	0	6,820,000
Net unrealized loss on investments	(17,000)	$ 0	0	(17,000)	0	0	(17,000)
Balance, shares at May. 31, 2023		28,539
Balance, amount at May. 31, 2023	$ 75,600,000	$ 285,000	$ 127,776,000	$ (155,000)	$ (52,306,000)	$ 0	$ 75,600,000

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Cash flows from operating activities:
Net Income (Loss)	$ 14,557	$ 9,450	$ (2,027)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation	2,748	3,006	1,101
Provision for doubtful accounts	24	0	0
Depreciation and amortization	450	356	328
Non-cash operating lease expense	88	(49)	(18)
Accretion of investment discount	(576)	0	0
Net gain from dissolution of Aehr Test Systems Japan	0	0	(2,186)
Income tax benefit related to dissolution of Aehr Test Systems Japan	0	0	(215)
Gain from forgiveness of PPP loan	0	(1,698)	0
Changes in operating assets and liabilities:
Trade and other accounts receivable	(3,788)	(7,834)	(1,373)
Inventories	(9,469)	(6,674)	(972)
Prepaid expenses and other	28	(71)	(81)
Accounts payable	5,044	1,356	1,877
Accrued expenses	528	1,464	732
Customer deposits and deferred revenue	369	2,196	96
Other long-term liabilities	0	0	47
Income taxes payable	8	6	(10)
Net cash provided by (used in) operating activities	10,011	1,508	(2,701)
Cash flows from investing activities:
Purchases of investments	(33,294)	0	0
Proceeds from maturities of investments	16,000	0	0
Purchases of property and equipment	(1,362)	(416)	(227)
Net cash used in investing activities	(18,656)	(416)	(227)
Cash flows from financing activities:
Line of credit (repayments)borrowings, net	0	(1,400)	(1,400)
Proceeds from issuance of common stock under employee plans	2,562	3,560	580
Shares repurchased for tax withholdings on vesting of restricted stock units	(2,060)	(429)	(20)
Proceeds from issuance of common stock from public offering, net of issuance costs	6,820	24,030	0
Net cash provided by financing activities	7,322	25,761	1,960
Effect of exchange rates on cash, cash equivalents and restricted cash	(37)	49	117
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,360)	26,902	(851)
Cash, cash equivalents and restricted cash, beginning of year	31,564	4,662	5,513
Cash, cash equivalents and restricted cash, end of year	30,204	31,564	4,662
Cash paid during the year for:
Income taxes	21	4	15
Interest	15	12	6
Supplemental disclosure of non-cash flow information:
Net transfer of equipment between inventory and property and equipment	$ 646	$ 472	$ 113

ORGANIZATION AND SUMMARY OF SIG

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	May 31, 2023
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: BUSINESS: Aehr Test Systems (the “Company”) was incorporated in California in May 1977 and primarily designs, engineers and manufactures test and burn-in equipment used in the semiconductor industry. The Company’s principal products are the FOX-XP, FOX-NP, and FOX-CP wafer contact parallel test and burn-in systems, the WaferPak full wafer contactor, the DiePak carrier, the WaferPak aligner, the DiePak autoloader, and test fixtures. CONSOLIDATION: The consolidated financial statements include the accounts of the Company and both its wholly-owned and majority-owned foreign subsidiaries. Intercompany accounts and transactions have been eliminated. FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS: Assets and liabilities of the Company’s foreign subsidiaries and a branch office are translated into U.S. Dollars from their functional currencies of Euros, Philippines Peso and New Taiwan Dollars using the exchange rate in effect at the balance sheet date. Additionally, their net sales and expenses are translated using exchange rates approximating average rates prevailing during the fiscal year. Translation adjustments that arise from translating their financial statements from their local currencies to U.S. Dollars are accumulated and reflected as a separate component of shareholders’ equity. Transaction gains and losses that arise from exchange rate changes denominated in currencies other than the local currency are included in the Consolidated Statements of Operations as incurred. See Note 15, “Other (Expense) Income, Net” for the detail of foreign exchange transaction gains and losses for all periods presented. USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Actual results could differ from those estimates. Significant estimates in the Company’s consolidated financial statements include allowance for doubtful accounts, valuation of inventory at the lower of cost or net realizable value, and warranty reserves. RECLASSIFICATIONS: Certain reclassifications have been made to the previous year consolidated financial statements to conform to the current period presentation. The reclassifications had no impact on net income (loss), total assets, total liabilities, or shareholders’ equity. CASH EQUIVALENTS: Cash equivalents consist of money market instruments purchased with an original maturity of three months or less. These investments are reported at fair value. ACCOUNTS RECEIVABLE AND ALLOWANCE 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. Accounts receivable are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company also reviews its trade receivables by aging category to identify specific customers with known disputes or collection issues. The Company exercises judgment when determining the adequacy of these reserves as the Company evaluates historical bad debt trends, general economic conditions in the United States and internationally, and changes in customer financial conditions. Uncollectible receivables are recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received. During the fiscal year ended May 31, 2023, the Company recorded bad debt expense of $24,000. No significant adjustments to the allowance for doubtful accounts were recorded during the fiscal years ended May 31, 2022 or 2021. CONCENTRATION OF CREDIT RISK: The Company sells its products primarily to semiconductor manufacturers in North America, Asia, and Europe. As of May 31, 2023, approximately 17% and 83% of gross accounts receivable were from customers located in North America and Asia, respectively. As of May 31, 2022, approximately 20% and 80% of gross accounts receivable were from customers located in North America and Asia, respectively. Two customers accounted for 82% and 17% of gross accounts receivable as of May 31, 2023. Three customers accounted for 68%, 18% and 11% of gross accounts receivable as of May 31, 2022. Two customers accounted for 79% and 10% of net sales in fiscal 2023, respectively. One customer accounted for 82% of net sales in fiscal 2022. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company uses letter of credit terms for some of its international customers. The Company’s cash and cash equivalents are generally deposited with major financial institutions in the United States, Philippines, Germany and Taiwan. The Company invests its excess cash in money market funds and U.S. Treasury securities. The money market funds bear the risk associated with each fund. The money market funds have variable interest rates. The Company’s cash and investment balances held at banks and brokerage firms may at time exceed federally insured levels. The Company has not experienced any material losses on its money market funds or short-term cash deposits. CONCENTRATION OF SUPPLY RISK: The Company relies on subcontractors to manufacture many of the components and subassemblies used in its products. Quality or performance failures of the Company’s products or changes in its manufacturers’ financial or business condition could disrupt the Company’s ability to supply quality products to its customers and thereby have a material and adverse effect on its business and operating results. Some of the components and technologies used in the Company’s products are purchased and licensed from a single source or a limited number of sources. The loss of any of these suppliers may cause the Company to incur additional transition costs, result in delays in the manufacturing and delivery of its products, or cause it to carry excess or obsolete inventory and could cause it to redesign its products. INVENTORIES: Inventories include material, labor and overhead, and are stated at the lower of cost (first-in, first-out method) or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less costs of completion, disposal and transportation. Provisions for excess, obsolete and unusable inventories are made after management’s evaluation of future demand and market conditions. The Company adjusts inventory balances to approximate the lower of its manufacturing costs or net realizable value. If actual future demand or market conditions become less favorable than those projected by management, additional inventory write-downs may be required, and would be reflected in cost of sales in the period the revision is made. During fiscal 2023, 2022 and 2021 the Company recognized a provision for inventory reserves of $569,000, $1,031,000, and $176,000, respectively. PROPERTY AND EQUIPMENT: Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the related lease. Furniture and fixtures, machinery and equipment, and test equipment are depreciated on a straight-line basis over their estimated useful lives. The ranges of estimated useful lives are generally as follows: Furniture and fixtures 2 to 6 years Machinery and equipment 3 to 6 years Test equipment 4 to 6 years 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. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. Transfer of control is evidenced upon passage of title and risk of loss to the customer unless we are required to provide additional services. PRODUCT DEVELOPMENT COSTS AND CAPITALIZED SOFTWARE: Costs incurred in the research and development of new products or systems are charged to operations as incurred. Costs incurred in the development of software programs for the Company’s products are charged to operations as incurred until technological feasibility of the software has been established. Generally, technological feasibility is established when the software module performs its primary functions described in its original specifications, contains features required for it to be usable in a production environment, is completely documented and the related hardware portion of the product is complete. After technological feasibility is established, any additional costs are capitalized. Capitalization of software costs ceases when the software is substantially complete and is ready for its intended use. Capitalized costs are amortized over the estimated life of the related software product using the greater of the units of sales or straight-line methods over ten years. No system software development costs were capitalized or amortized in fiscal 2023, 2022 and 2021. IMPAIRMENT OF LONG-LIVED ASSETS: In the event that facts and circumstances indicate that the carrying value of assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying value to determine if a write-down is required. ADVERTISING COSTS: The Company expenses all advertising costs as incurred and the amounts were not material for all periods presented. SHIPPING AND HANDLING OF PRODUCTS: Amounts billed to customers for shipping and handling of products are included in net sales. Costs incurred related to shipping and handling of products are included in cost of sales. INCOME TAXES: Income taxes are accounted for under the asset-and-liability method as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period corresponding to the enactment date. Under ASC 740, a valuation allowance is required when it is more likely than not all or some portion of the deferred tax assets will not be realized through generating sufficient future taxable income. As of May 31, 2023 the Company maintained a full valuation allowance against its deferred tax assets. We will continue to assess whether sufficient future taxable income will be generated to permit the use of deferred tax assets, and will reverse all or a portion of the allowance when there is sufficient evidence to support the reversal. Based upon our prior two fiscal years of profitability, the outlook for the next fiscal year, and absent any additional objective negative evidence, the Company anticipates adjusting the current valuation allowance position in fiscal 2024. FASB ASC Subtopic 740-10, Accounting for Uncertainty of Income Taxes, (“ASC 740-10”) defines the criterion an individual tax position must meet for any part of the benefit of the tax position to be recognized in financial statements prepared in conformity with GAAP. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not such tax position will be sustained on examination by the taxing authorities, based solely on the technical merits of the respective tax position. The tax benefits recognized in the financial statements from such a tax position should be measured based on the largest benefit having a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. In accordance with the disclosure requirements of ASC 740-10, the Company’s policy on income statement classification of interest and penalties related to income tax obligations is to include such items as part of income taxes. COMPREHENSIVE INCOME (LOSS): Comprehensive income (loss) generally represents all changes in shareholders’ equity except those resulting from investments or contributions by shareholders. Unrealized gains and losses from available-for-sale securities and on foreign currency translation adjustments are included in the Company’s components of comprehensive income (loss), which are excluded from net income (loss). In fiscal 2021, the Company recognized a gain of $2,401,000 related to the completed liquidation of ATS-Japan, a majority owned subsidiary, which is deducted from net income (loss) when calculating comprehensive income (loss). Refer to Note 18, “Dissolution of Aehr Test Systems Japan,” for a further discussion of the transaction. Comprehensive income (loss) is included in the statements of comprehensive income (loss). RECENT ACCOUNTING PRONOUNCEMENTS: Accounting Standards Not Yet Adopted In June 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326), 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. The Company does not expect a material impact of this accounting standard on its consolidated financial statements.

REVENUE

REVENUE	12 Months Ended
	May 31, 2023
REVENUE
REVENUE	2. REVENUE: 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): Year Ended May 31, 2023 2022 2021 Type of good / service: Systems $ 38,844 $ 25,224 $ 7,250 Contactors 21,873 22,647 5,837 Services 4,244 2,958 3,513 $ 64,961 $ 50,829 $ 16,600 Product lines: Wafer-level $ 63,531 $ 48,926 $ 15,004 Test During Burn-In 1,430 1,903 1,596 $ 64,961 $ 50,829 $ 16,600 The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands): Year Ended May 31, 2023 2022 2021 Geographic region: United States $ 9,289 $ 5,110 $ 5,386 Asia 55,609 45,700 11,074 Europe 63 19 140 $ 64,961 $ 50,829 $ 16,600 With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at point in time when control transfers to customers. The following presents revenue based on timing of recognition (in thousands): Year Ended May 31, 2023 2022 2021 Timing of revenue recognition (in thousands): Products and services transferred at a point in time $ 63,531 $ 49,441 $ 15,009 Services transferred over time 1,430 1,388 1,591 $ 64,961 $ 50,829 $ 16,600 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 consolidated balance sheets at the end of each reporting period as a component of deferred revenue. Contract liabilities as of May 31, 2023 and 2022 were $2,853,000 and $2,484,000, respectively. During the fiscal years ended May 31, 2023 and 2022, the Company recognized $2,179,000 and $189,000 of revenues that were included in contract liabilities as of May 31, 2022 and 2021, respectively. Remaining performance obligations On May 31, 2023, the Company had $163,000 of remaining performance obligations, exclusive of customer deposits, which were comprised of deferred service contracts and extended warranty contracts not yet delivered. The Company expects to recognize approximately 81% of its remaining performance obligations as revenue in fiscal 2024, and an additional 19% in fiscal 2025 and 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.

EARNINGS PER SHARE (EPS)

EARNINGS PER SHARE (EPS)	12 Months Ended
	May 31, 2023
EARNINGS PER SHARE (EPS)
EARNINGS PER SHARE (''EPS'')	3. EARNINGS PER SHARE (“EPS”): Basic EPS is determined using the weighted average number of common shares outstanding during the period. Diluted EPS is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, restricted shares, restricted shares units, or RSUs, and ESPP shares) outstanding during the period using the treasury stock method. The following table presents the computation of basic and diluted earnings (net loss) per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data): Year Ended May 31, 2023 2022 2021 Numerator: Net income (net loss) $ 14,557 $ 9,450 $ (2,027 ) Denominator for basic earnings (net loss) per share: Weighted average shares outstanding 27,785 26,014 23,457 Shares used in basic earnings (net loss) per share calculation 27,785 26,014 23,457 Effect of dilutive securities 1,430 1,760 - Denominator for diluted earnings (net loss) per share 29,215 27,774 23,457 Basic earnings (net loss) per share $ 0.52 $ 0.36 $ (0.09 ) Diluted earnings (net loss) per share $ 0.50 $ 0.34 $ (0.09 ) For the purpose of computing diluted earnings per share, weighted average potential common shares do 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. Stock options to purchase 5,000 and 64,000 shares of common stock were outstanding as of May 31, 2023 and 2022, respectively, but were not included in the computation of diluted earnings per share, because the inclusion of such shares would be anti-dilutive. Stock options to purchase 2,766,000 shares of common stock were outstanding on May 31, 2021 but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. ESPP rights to purchase 239,000 ESPP shares and RSUs for 132,000 shares were outstanding on May 31, 2021 but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.

CASH, CASH EQUIVALENTS AND INVE

CASH, CASH EQUIVALENTS AND INVESTMENTS	12 Months Ended
	May 31, 2023
CASH, CASH EQUIVALENTS AND INVESTMENTS
CASH, CASH EQUIVALENTS AND INVESTMENTS	4. CASH, CASH EQUIVALENTS AND INVESTMENTS The following table summarizes the Company’s cash, cash equivalents and investments by security type as of May 31, 2023 (in thousands): Cost Gross Unrealized Loss Estimated Fair Value Cash $ 3,182 $ - $ 3,182 Cash equivalents: Money market funds 26,872 - 26,872 Total cash and cash equivalents $ 30,054 $ - $ 30,054 Short-term investments: U.S. treasury securities $ 17,870 $ (17 ) $ 17,853 Long-term investments: Money market funds $ 150 $ - $ 150 Total cash, cash equivalents and investments $ 48,074 $ (17 ) $ 48,057 The following table summarizes the Company’s cash, cash equivalents and investments by security type as of May 31, 2022 (in thousands): Cost Gross Unrealized Loss Estimated Fair Value Cash $ 2,955 $ - $ 2,955 Cash equivalents: Money market funds 28,529 - 28,529 Total cash and cash equivalents $ 31,484 $ - $ 31,484 Long-term investments: Money market funds $ 80 $ - $ 80 Total cash, cash equivalents and investments $ 31,564 $ - $ 31,564 Long-term investments are included in other assets on the accompanying consolidated balance sheets. Unrealized gains and losses on investments classified as available-for-sale are included within accumulated other comprehensive loss, net of any related tax effect. Upon realization, those amounts are reclassified from accumulated other comprehensive loss to results of operations. The unrealized loss of $17,000 as of May 31, 2023 is not considered other-than-temporary, and has been in an unrealized loss position for less than a year.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	12 Months Ended
	May 31, 2023
FAIR VALUE OF FINANCIAL INSTRUMENTS
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 May 31, 2023 (in thousands): Balance as of May 31, 2023 Level 1 Level 2 Level 3 Money market funds $ 27,022 $ 27,022 $ - $ - U.S. treasury securities 17,853 17,853 Total $ 44,875 $ 44,875 $ - $ - The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2022 (in thousands): Balance as of May 31, 2022 Level 1 Level 2 Level 3 Money market funds $ 28,609 $ 28,609 $ - $ - Total $ 28,609 $ 28,609 $ - $ - Included in money market funds as of May 31, 2023 and 2022 was $150,000 and $80,000 of restricted cash, respectively, 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 May 31, 2023 and 2022. There were no transfers between Level 1 and Level 2 fair value measurements during the fiscal years ended May 31, 2023 and 2022. The carrying amounts of financial instruments including cash equivalents, accounts receivables, accounts payable and certain other accrued liabilities, approximate fair value due to their short maturities.

TRADE AND OTHER ACCOUNTS RECEIV

TRADE AND OTHER ACCOUNTS RECEIVABLE, NET	12 Months Ended
	May 31, 2023
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET:	6. TRADE AND OTHER ACCOUNTS RECEIVABLE, NET: Accounts receivable comprise (in thousands): May 31, 2023 2022 Accounts receivable $ 16,594 $ 12,859 Less: Allowance for doubtful accounts - - $ 16,594 $ 12,859 Accounts receivable represents customer trade receivables. As of May 31, 2023 and 2022, there were no allowances for doubtful accounts.

BALANCE SHEET DETAIL

BALANCE SHEET DETAIL	12 Months Ended
	May 31, 2023
BALANCE SHEET DETAIL
BALANCE SHEET DETAIL	7. BALANCE SHEET DETAIL: INVENTORIES: May 31, (In Thousands) 2023 2022 Raw materials and sub-assemblies $ 15,953 $ 9,507 Work in process 5,764 5,461 Finished goods 2,191 83 $ 23,908 $ 15,051 PROPERTY AND EQUIPMENT, NET: May 31, (In Thousands) 2023 2022 Leasehold improvements $ 1,310 $ 1,230 Furniture and fixtures 706 697 Machinery and equipment 5,445 4,013 Test equipment 2,998 2,523 10,459 8,463 Less: Accumulated depreciation and amortization (7,700 ) (7,260 ) $ 2,759 $ 1,203 Depreciation expense was $450,000, $307,000 and $310,000 for fiscal 2023, 2022, and 2021, respectively. ACCRUED EXPENSES: May 31, (In Thousands) 2023 2022 Commissions and bonuses $ 1,728 $ 1,505 Payroll related 1,491 1,401 Warranty 267 410 Professional services 520 204 Investor relations 79 44 Taxes payable 22 13 Other 36 33 $ 4,143 $ 3,610 CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM: May 31, (In Thousands) 2023 2022 Customer deposits $ 2,690 $ 2,263 Deferred revenue 132 152 $ 2,822 $ 2,415

ACCUMULATED OTHER COMPREHENSIVE

ACCUMULATED OTHER COMPREHENSIVE LOSS	12 Months Ended
	May 31, 2023
ACCUMULATED OTHER COMPREHENSIVE LOSS
ACCUMULATED OTHER COMPREHENSIVE LOSS	8. ACCUMULATED OTHER COMPREHENSIVE LOSS: Changes in the components of accumulated other comprehensive loss, net of tax, were as follows (in thousands): Cumulative Translation Adjustments Unrealized Loss on Investments, Net Total Balance as of May 31, 2021 $ (28 ) $ - $ (28 ) Other comprehensive loss before reclassifications (77 ) - (77 ) Balance as of May 31, 2022 (105 ) - (105 ) Other comprehensive loss before reclassifications (33 ) (17 ) (50 ) Balance as of May 31, 2023 $ (138 ) $ (17 ) $ (155 )

INCOME TAXES

INCOME TAXES	12 Months Ended
	May 31, 2023
INCOME TAXES
INCOME TAXES	9. INCOME TAXES: Domestic and foreign components of income (loss) before income tax (expense) benefit are as follows (in thousands): Year Ended May 31, 2023 2022 2021 Domestic $ 14,541 $ 9,416 $ (13,064 ) Foreign 76 125 10,860 $ 14,617 $ 9,541 $ (2,204 ) The income tax (expense) benefit consists of the following (in thousands): Year Ended May 31, 2023 2022 2021 Federal income taxes: Current $ (28 ) $ (59 ) $ 163 Deferred - - - State income taxes: Current - (5 ) 13 Deferred - - - Foreign income taxes: Current (32 ) (27 ) 1 Deferred - - - $ (60 ) $ (91 ) $ 177 The Company’s effective tax rate differs from the U.S. federal statutory tax rate, as follows: Year Ended May 31, 2023 2022 2021 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % State taxes, net of federal tax effect - 0.1 0.6 Foreign rate differential 0.7 0.3 9.8 Stock-based compensation (9.1 ) (11.0 ) (4.7 ) Research and development credit (2.3 ) (1.3 ) 4.0 Change in valuation allowance (9.3 ) (4.7 ) (32.1 ) Controlled Foreign Corporation Liquidation. . - - 9.8 PPP Loan - (3.7 ) - Other (0.6 ) 0.4 (0.4 ) Effective tax rate 0.4 % 1.1 % 8.0 % The components of the net deferred tax assets and liabilities are as follows (in thousands): Year Ended May 31, 2023 2022 Deferred tax assets: Net operating losses $ 11,964 $ 14,912 Lease liability 1,335 218 Credit carryforwards 6,235 5,535 Inventory reserves 938 934 Reserves and accruals 1,200 1,360 Capitalized research and development 1,187 - Other 297 220 Less: valuation allowance (21,859 ) (22,980 ) 1,297 199 Deferred tax liabilities: Operating lease right-of-use assets (1,297 ) (199 ) Net deferred tax assets (liabilities) $ - $ - The valuation allowance decreased by $1,121,000 during fiscal 2023, decreased by $278,000 during fiscal 2022, and increased by $2,438,000 during fiscal 2021. As of May 31, 2023 and 2022, the Company provided a full valuation allowance against the deferred tax assets as it did not have enough objective evidence as required by GAAP to reverse its full valuation allowance. The Company will continue to evaluate the need for a valuation allowance against its deferred tax assets on a quarterly basis. At May 31, 2023 and 2022, the Company has federal net operating loss carryforwards of approximately $46,967,000 and $61,068,000 respectively, to reduce future taxable income. A portion of the federal net operating losses will begin to expire in 2024. Federal net operating losses of $14,425,000 will carryforward indefinitely and would be subject to an 80% taxable income limitation in the year utilized. At May 31, 2023 and 2022, the Company has state net operating loss carryforwards of $30,203,000 and $30,043,000, respectively, to reduce future taxable income. The state net operating loss carryforwards will begin to expire in 2028. At May 31, 2023 and 2022, the Company has federal research and development credit carryforwards of approximately $2,923,000 and $2,362,000, respectively, to offset future tax liability. The federal credit carryforwards began to expire in 2022. At May 31, 2023 and 2022, the Company has state research and development credit carryforwards of approximately $6,623,000 and $6,152,000 respectively, to offset future tax liability. The state credit carryforwards are not subject to expiration. The Company also has alternative minimum tax credit carryforwards of $34,000 for state purposes. The credits may be used to offset regular tax and do not expire. Internal Revenue Code of 1986, as amended (“IRC”) Section 382 (“§382”) limits the use of NOL and tax credit carryforwards in certain situations where changes occur in the stock ownership of a company. In general, if we experience a greater than 50% aggregate change in ownership over a three-year period, we are subject to an annual limitation under IRC §382 on the utilization of the Company’s pre-change NOL carryforwards. California and other states have similar laws. The annual limitation generally is determined by multiplying the value of the Company’s stock at the time of such ownership change (subject to certain adjustments) by the applicable long-term exempt rate. Such limitations may result in expiration of a portion of the NOL carryforwards before utilization. The Company has made no provision for U.S. income taxes on undistributed earnings of certain foreign subsidiaries because it is the Company’s intention to permanently reinvest such earnings in its foreign subsidiaries. If such earnings were distributed, the Company would be subject to additional U.S. income tax expense. The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available. The aggregate changes in the balance of gross unrecognized tax benefits are as follows (in thousands): Beginning balance as of May 31, 2020 $ 1,852 Increases related to prior year tax positions 11 Increases related to current year tax positions 65 Balance at May 31, 2021 1,928 Increases related to prior year tax positions 12 Increases related to current year tax positions 78 Balance at May 31, 2022 2,018 Increases related to prior year tax positions 90 Increases related to current year tax positions 168 Balance at May 31, 2023 $ 2,276 As of May 31, 2023 and 2022, the Company has not recorded interest and penalties associated with its unrecognized tax benefits. The Company’s unrecognized gross tax benefits would not reduce the annual effective tax rate if recognized because it has recorded a full valuation allowance on its deferred tax assets. The Company does not foresee any material changes to the gross unrecognized tax benefit within the next twelve months. The Company’s policy is to recognize interest and penalties in income tax expense. The Company’s federal and state income tax returns are subject to possible examination by the taxing authorities until the expiration of the related statutes of limitations on those tax returns. In general, the federal income tax returns have a three-year statute of limitations, and the state income tax returns have a four-year statute of limitations. The Company’s foreign income tax returns are also subject to examination by the foreign tax authorities with the longest statute of limitations period of four-year.

LEASES

LEASES	12 Months Ended
	May 31, 2023
LEASES
LEASES	10. LEASES The Company leases its manufacturing and office space under operating leases. The principal administrative and production facility is located in Fremont, California, in a 51,289 square foot building. The Company entered into a non-cancelable operating lease agreement for its United States manufacturing and office facility, which was renewed in December 2022 and expires in September 2030. The Company leases a 492 square foot sales and support office in Utting, Germany. The lease, which began on February 1, 1992 and expires on January 31, 2025, contains an automatic twelve months renewal, at rates to be determined, if no notice is given prior to six months from expiration. The Company leases a facility in the Philippines located in a 2,713 square foot building in Clark Freeport Zone, Pampanga. The lease, which began on January 1, 2021 and expires on December 31, 2025, contains an option to renew for another three years at rates stipulated in the contract, notice for renewal is given six months from expiration. Under the lease agreements, the Company is responsible for payments of utilities, taxes and insurance. 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 consolidated balance sheets, 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 sheets. The Company’s operating leases have remaining lease terms of one year to seven 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. In December 2022, the Company amended its lease agreement to extend the lease term of an existing office facility located in the United States, which is considered a lease modification not accounted for as a separate contract. The total commitments, net of tenant incentives expected to be received, under the modified lease are $8.6 million. The modified lease expires in fiscal 2031 and contains an option to further extend the lease. The lease modification resulted in an increase in the Company’s operating lease right-of-use assets and operating lease liabilities of $5.9 million each. The weighted average remaining lease term for the Company’s operating leases was 7.3 years at May 31, 2023 and the weighted average discount rate was 7.5%. The Company’s operating lease cost was $923,000, $766,000 and $761,000 for the years ended May 31, 2023, 2022 and 2021, respectively. The following table presents supplemental cash flow information related to the Company’s operating leases (in thousands): Year Ended May 31, 2023 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 835 $ 813 $ 779 The following table presents the maturities of the Company’s operating lease liabilities as of May 31, 2023 (in thousands): Fiscal year Operating Leases 2024 $ 608 2025 1,143 2026 1,174 2027 1,195 2028 1,234 Thereafter 3,075 Total future minimum operating lease payments 8,429 Less: imputed interest (2,129 ) Present value of operating lease liabilities $ 6,300

BORROWING AND FINANCING ARRANGE

BORROWING AND FINANCING ARRANGEMENTS	12 Months Ended
	May 31, 2023
BORROWING AND FINANCING ARRANGEMENTS
BORROWING AND FINANCING ARRANGEMENTS	11. 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 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 SVB. The Amendment, among other things, extended the Revolving Line Maturity Date to July 14, 2021; provided, however, that if the Company achieved specified operating metrics on a consolidated basis on or prior to May 31, 2021 the Amended Revolving Line Maturity Date would be extended to January 13, 2022. On January 11, 2022, the Company entered into the Second Amendment to the Loan and Security Agreement (the “Second Amendment”) with SVB. The Second Amendment, among other things, (A) increased the available amount of the line up to the lesser of (i) $10 million or (ii) the available amount under the borrowing base, under a revolving line of credit, (B) allowed for borrowing up to $3 million of the available balance based upon eligible customer purchase orders, (C) reduced the interest rate for account advances under the line to the greater of (a) prime rate plus an additional percentage up to 1.0%, which additional percentage depends on the Company’s adjusted quick ratio, and (b) 3.25%, reduces the interest rate for purchase order advances under the line to the greater of (a) prime rate plus an additional percentage up to 1.5%, which additional percentage depends on the Company’s adjusted quick ratio, and (b) 3.75%, and (D) extended the maturity date to January 13, 2023. On January 10, 2023, the Company entered into the Third Amendment to the Loan and Security Agreement (the “Third Amendment”) with SVB. The Third Amendment, among other things, extends the Revolving Line Maturity Date to January 13, 2024, provided, however, that (i) if the Company submits a fiscal year 2024 plan of record that is generally acceptable to SVB, and (ii) the minimum net liquidity at the end of November 30, 2023 is at least $20.0 million, the Amended Revolving Line Maturity Date would be extended to January 13, 2025. As of May 31, 2023 the Company had not drawn 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 as of May 31, 2023 was $8,004,000. There are no financial covenants in the agreement.

LONGTERM DEBT

LONGTERM DEBT	12 Months Ended
	May 31, 2023
LONGTERM DEBT
LONG-TERM DEBT	12. LONG-TERM DEBT: On April 23, 2020, the Company obtained a Payroll Protection Program loan (“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, payable monthly commencing on November 23, 2020. The PPP Loan proceeds were used for payroll, health care benefits, rent and utilities. Under the terms of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), PPP Loan recipients can apply for and be granted forgiveness for all or a portion of loans granted under the PPP Loan. On June 12, 2021, the Company received confirmation from the SVB that on June 4, 2021, the Small Business Administration approved the Company’s PPP Loan forgiveness application for the entire PPP Loan balance of $1,679,000 and interest totaling $19,000, and the Company recognized a gain on loan forgiveness of $1,698,000.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	12 Months Ended
	May 31, 2023
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	13. STOCK-BASED COMPENSATION: Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs, or PRSUs, restricted shares, performance restricted shares and employee stock purchase plan, or 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, PRSUs, restricted shares and performance restricted shares, stock-based compensation expense is based on the fair value of the Company’s common stock at the grant date, and is recognized as expense over the employee’s requisite service period. All of the Company’s stock-based compensation is accounted for as equity instruments. The following table summarizes the stock-based compensation expense for the fiscal years ended May 31, 2023, 2022 and 2021 (in thousands, except per share data): Year Ended May 31, 2023 2022 2021 Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights, included in: Cost of sales $ 331 $ 234 $ 70 Selling, general and administrative 1,711 1,721 816 Research and development 706 968 215 Net effect on net income (loss) $ 2,748 $ 2,923 $ 1,101 Effect on earnings (net loss) per share: Basic $ 0.10 $ 0.11 $ 0.05 Diluted $ 0.09 $ 0.11 $ 0.05 As of the years ended May 31, 2023, 2022 and 2021, stock-based compensation totaling $120,000, $83,000 and $0, respectively, was capitalized as part of inventory. During fiscal 2023, 2022 and 2021, the Company recorded stock-based compensation related to stock options, RSUs, PRSUs, performance restricted shares and restricted shares of $1,988,000, $2,071,000 and $993,000, respectively. For PRSUs and performance restricted shares, the Company evaluates compensation expense quarterly and recognizes expense for performance-based awards only if it determines it is probable that performance criteria for the awards will be met. As of May 31, 2023, the total compensation expense related to unvested stock-based awards under the Company’s 2016 Equity Incentive Plan, but not yet recognized, was $3,102,000 which is net of estimated forfeitures of $8,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 2.3 years. During fiscal 2023, 2022 and 2021, the Company recorded stock-based compensation related to its ESPP of $760,000, $935,000 and $108,000, respectively. As of May 31, 2023, the total compensation expense related to purchase rights under the ESPP but not yet recognized was $715,000. This expense will be amortized on a straight-line basis over a weighted average period of approximately 1.1 years. Valuation Assumptions Valuation and Amortization Method. The Company estimates the fair value of stock options granted using the Black-Scholes option valuation method 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 five to six 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 method 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 in fiscal 2023, 2022 and 2021 were estimated using the following weighted average assumptions in the Black-Scholes option valuation method: Year Ended May 31, 2023 2022 2021 Expected term (in years) 5 - 6 5 - 6 6 Volatility 86 % 88 % 72 % Risk-free interest rates 3.12 % 1.50 % 0.44 % Weighted average grant date fair value $ 6.29 $ 4.01 $ 1.12 The fair value of our ESPP purchase rights for the fiscal 2023, 2022 and 2021 was estimated using the following weighted average assumptions: Year Ended May 31, 2023 2022 2021 Expected term (in years) 0.5 – 2.0 0.5 – 2.0 0.5 – 2.0 Volatility 91% – 203 % 101% – 272 % 74% – 88 % Risk-free interest rates 3.97%–4.94 % 0.05%–2.44 % 0.04%–0.17 % Weighted average grant date fair value $ 13.60 $ 9.68 $ 1.03 EQUITY INCENTIVE PLAN: In October 2006, the Company’s 2006 Equity Incentive Plan was approved by the shareholders, which provides for granting of incentive stock options, non-statutory stock options, restricted shares, RSUs, stock appreciation rights, PRSUs, performance restricted shares and other stock or cash awards as the Company’s Board of Directors may determine. In October 2016, the Company’s 2016 Equity Incentive Plan was approved by the Company’s shareholders. The 2016 Equity Incentive Plan replaced our 2006 Equity Incentive Plan, which was scheduled to expire in October 2016, and will continue in effect until 2026. The exercise price of each stock option equals the market value of the Company's common stock on the date of grant. Options typically vest over four years, subject to the grantee’s continued service with the Company through the scheduled vesting date, and expire in seven years from the grant date. A total of 4,848,000 shares of common stock have been reserved for issuance under the Company’s 2016 Equity Incentive Plan, which includes 2,248,000 shares that remained available for issuance under the 2006 Equity Incentive Plan. Full value awards, which are equity awards other than options, stock appreciation rights or other awards that are based solely on an increase in value of the shares following the grant date, when granted or forfeited will be counted as two times the number of shares added or deducted to the remaining available shares for issuance under 2016 Equity Incentive Plan. See the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on November 16, 2021 for further information regarding the 2016 Equity Incentive Plan. The following tables summarize the Company’s stock option and RSU transactions during fiscal 2023, 2022 and 2021 (in thousands): Available Shares Balance, May 31, 2020 1,416 Options granted (297 ) RSUs granted (680 ) RSUs cancelled 2 Shares withheld for taxes and not issued 18 Options terminated 455 Options expired (341 ) Balance, May 31, 2021 573 Additional shares reserved 1,414 Options granted (303 ) RSUs granted (1,044 ) RSUs cancelled 20 Shares withheld for taxes and not issued (30 ) Options terminated 105 Balance, May 31, 2022 735 Options granted (110 ) RSUs granted (674 ) RSUs cancelled 60 Options terminated 16 Balance, May 31, 2023 27 The following table summarized the stock option transactions during fiscal 2023, 2022 and 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 297 $ 1.78 Options terminated (455 ) $ 2.31 Options exercised (229 ) $ 1.54 Balances, May 31, 2021 2,766 $ 2.16 $ 807 Options granted 303 $ 5.37 Options terminated (105 ) $ 1.59 Options exercised (1,367 ) $ 2.28 Balances, May 31, 2022 1,597 $ 2.70 $ 9,290 Options granted 110 $ 9.06 Options terminated (16 ) $ 5.42 Options exercised (730 ) $ 2.32 Balances, May 31, 2023 961 $ 3.67 $ 28,211 Options fully vested and expected to vest at May 31, 2023 947 $ 3.66 $ 27,796 The options outstanding and exercisable at May 31, 2023 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at May 31, 2023 at May 31, 2023 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 $ 1.34 41 4.39 $ 1.34 41 4.39 $ 1.34 $1.64-$1.86 365 3.53 $ 1.72 291 3.45 $ 1.70 $2.03-$2.40 185 2.61 $ 2.14 175 2.48 $ 2.14 $ 2.93 139 5.12 $ 2.93 35 5.12 $ 2.93 $3.46-$3.93 37 1.11 $ 3.93 37 1.11 $ 3.93 $8.00-34.00 194 5.97 $ 9.77 41 5.90 $ 10.18 $1.34-34.00 961 4.02 $ 3.67 620 3.35 $ 2.56 $ 18,895 The total intrinsic values of options exercised were $17,088,000, $12,542,000 and $152,000 during fiscal 2023, 2022 and 2021, respectively. The weighted average contractual life of the options exercisable and expected to be exercisable at May 31, 2023 was 4.01 years. Options to purchase 620,000, 1,042,000 and 2,045,000 shares were exercisable at May 31, 2023, 2022 and 2021, respectively. These exercisable options had weighted average exercise prices of $2.56, $2.22 and $2.26 as of May 31, 2023, 2022 and 2021, respectively. The following table summarizes RSUs, PRSUs, restricted shares and performance restricted shares granted to employees and members of the Company’s Board of Directors during fiscal 2023, 2022 and 2021: Year Ended May 31, 2023 2022 2021 Employees: Annual RSUs granted 152,000 120,000 161,000 Weighted-average grant-date fair value of annual RSUs $ 8.03 $ 3.17 $ 1.86 Annual restricted shares granted 8,000 - - Weighted-average grant-date fair value of annual restricted shares $ 8.00 - - RSUs granted in lieu of cash payment for salary reductions and bonus - 89,000 18,000 Weighted-average grant-date value of RSU in lieu of cash payment - $ 2.50 $ 2.21 Maximum PRSUs to be vested if all revenue goals are achieved 80,000 270,000 - Maximum Performance restricted shares to be vested if all revenue goals are achieved 24,000 - - Weighted-average grant-date fair value of PRSUs and performance restricted shares $ 8.00 $ 3.41 - Members of Board of Directors: RSUs granted 44,000 43,000 161,000 Weighted-average grant-date fair value of RSUs $ 11.35 $ 8.02 $ 1.81 Maximum PRSUs granted to be vested if all revenue goals are achieved 25,000 - - Weighted-average grant-date fair value of PRSUs $ 8.00 - - PRSUs were granted to key officers and members of Board of Directors based upon revenue target thresholds for fiscal 2023 and 2022. The following table summarizes the RSUs and PRSUs vested and unvested during fiscal 2023, 2022 and 2021: Year Ended May 31, 2023 2022 2021 Net RSUs and PRSUs vested 240,000 96,000 207,000 Shares withheld to settle payroll taxes 178,000 62,000 9,000 Weighted average grant-date fair value of vested RSUs and PRSUs $ 4.47 $ 3.12 $ 1.90 RSUs and PRSUs cancelled 30,000 10,000 1,000 Weighted average grant-date fair value of cancelled RSUs and PRSUs $ 8.56 $ 2.93 $ 3.46 RSUs and PRSUs unvested 345,000 185,000 132,000 Weighted average grant-date fair value of unvested RSUs and PRSUs $ 6.40 $ 3.00 $ 1.88 Intrinsic value of unvested RSUs and PRSUs (in thousands) $ 11,392 $ 1,554 $ 297 EMPLOYEE STOCK PURCHASE PLAN: In October 2006, the Company’s shareholders approved the 2006 Employee Stock Purchase Plan. In October 2016, the Company’s shareholders approved the Company’s Amended and Restated 2006 Employee Stock Purchase Plan (the “Purchase Plan”), which amended and restated the 2006 Employee Stock Purchase Plan. The Purchase Plan extended the term of the 2006 Employee Stock Purchase Plan indefinitely. See the Company’s Registration Statements on Form S-8 filed with the Securities and Exchange Commission on November 18, 2020 and November 16, 2022 for further information regarding the Purchase Plan. The Purchase Plan has consecutive, overlapping, twenty-four month offering periods. Each twenty-four-month offering period includes four six-month purchase periods. The offering periods generally begin on the first trading day on or after April 1 and October 1 each year. All employees who work a minimum of 20 hours per week and are customarily employed by the Company (or an affiliate thereof) for at least five months per calendar year are eligible to participate. Under the Purchase Plan, shares are purchased through employee payroll deductions at exercise prices equal to 85% of the lesser of the fair market value of the Company’s common stock at either the first day of an offering period or the last day of the purchase period. If a participant’s rights to purchase stock under all employee stock purchase plans of the Company accrue at a rate which exceeds $25,000 worth of stock for a calendar year, such participant may not be granted an option to purchase stock under the Purchase Plan. The maximum number of shares a participant may purchase during a single purchase period is 3,000 shares. In October 2022, the Company’s shareholders approved an amendment to the Purchase Plan to increase the number of shares authorized for issuance thereunder by an additional 350,000 shares of the Company’s common stock. After such amendment, a total of 2,550,000 shares of the Company’s common stock have been authorized for issuance under the Purchase Plan. During the fiscal years ended May 31, 2023, 2022 and 2021, ESPP purchase rights of 77,000, 101,000, and 279,000 shares, respectively, were granted. For the fiscal years ended May 31, 2023, 2022 and 2021, approximately 211,000, 178,000 and 147,000 shares of common stock, respectively, were issued under the Purchase Plan. As of May 31, 2023, a total of 2,152,000 shares have been issued under the Purchase Plan, and 398,000 ESPP shares remain available for issuance.

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS	12 Months Ended
	May 31, 2023
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS	14. EMPLOYEE BENEFIT PLANS: EMPLOYEE STOCK OWNERSHIP PLAN: The Company has a non-contributory, trusteed employee stock ownership plan for full-time employees who have completed three consecutive months of service and for part-time employees who have completed one year of service and have attained an age of 21. The Company can contribute either shares of the Company’s stock or cash to the plan. The contribution is determined annually by the Company and cannot exceed 15% of the annual aggregate salaries of those employees eligible for participation in the plan. On May 31, 2007, the Company converted the Aehr Test Systems Employee Stock Bonus Plan into the Aehr Test Systems Employee Stock Ownership Plan (the “Plan”). The stock bonus plan was converted to an employee stock ownership plan (“ESOP”) to enable the Plan to better comply with changes in the law regarding Company stock. Individuals’ account balances vest at a rate of 20% per year commencing upon completion of two years of service. Non-vested balances, which are forfeited following termination of employment, are allocated to the remaining employees in the Plan. Under the Plan provisions, each employee who reaches age fifty-five (55) and has been a participant in the Plan for ten years will be offered an election each year to direct the transfer of up to 25% of his/her ESOP account to the employee self-directed account in the Savings and Retirement Plan. For anyone who met the above prerequisites, the first election to diversify holdings was offered after May 31, 2008. In the sixth year, employees will be able to diversify up to 50% of their ESOP accounts. Contributions of $300,000 were authorized for the plan during fiscal 2023, $250,000 for 2022 and $60,000 for 2021. The contribution amounts are recorded as compensation expense in the period authorized and included in accrued expenses in the period authorized. Contributions of 29,832 shares were made to the ESOP during fiscal 2023 for fiscal 2022. Contributions of 26,666 shares were made to the ESOP during fiscal 2022 for fiscal 2021. Contributions of 36,000 shares were made to the ESOP during fiscal 2021 for fiscal 2020. The contribution for fiscal 2023 will be made in fiscal 2024. Shares held in the ESOP are included in the EPS calculation. 401(K) PLAN: The Company maintains a defined contribution savings plan (the “401(k) Plan”) to provide retirement income to all qualified employees of the Company. The 401(k) Plan is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The 401(k) Plan is funded by voluntary pre-tax contributions from employees. Contributions are invested, as directed by the participant, in investment funds available under the 401(k) Plan. The Company is not required to make, and did not make, any contributions to the 401(k) Plan during fiscal 2023, 2022 and 2021.

OTHER INCOME (EXPENSE) NET

OTHER INCOME (EXPENSE) NET	12 Months Ended
	May 31, 2023
OTHER INCOME (EXPENSE) NET
OTHER INCOME (EXPENSE), NET	15. OTHER (EXPENSE) INCOME, NET: Other (expense) income, net comprises the following (in thousands): Year Ended May 31, 2023 2022 2021 Foreign exchange (loss) gain $ (3 ) $ 32 $ (111 ) Other expense, net - (2 ) (51 ) $ (3 ) $ 30 $ (162 )

PRODUCT WARRANTIES

PRODUCT WARRANTIES	12 Months Ended
	May 31, 2023
PRODUCT WARRANTIES
PRODUCT WARRANTIES	16. 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. Following is a summary of changes in the Company’s liability for product warranties during the fiscal years ended May 31, 2023 and 2022 (in thousands): May 31, 2023 2022 Balance at the beginning of the year $ 410 $ 494 Accruals for warranties issued during the year 420 465 Adjustment to previously existing warranty 61 98 Consumption of reserves (624 ) (647 ) Balance at the end of the year $ 267 $ 410 The accrued warranty balance is included in accrued expenses on the consolidated balance sheets.

SEGMENT INFORMATION

SEGMENT INFORMATION	12 Months Ended
	May 31, 2023
SEGMENT INFORMATION
SEGMENT INFORMATION	17. 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 2, “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): May 31, 2023 2022 United States $ 2,713 $ 1,156 Asia 44 47 Europe 2 - $ 2,759 $ 1,203 As of May 31, 2023, operating lease right-of-use assets of $6,007,000, $70,000 and $45,000 were allocated in the United States, Asia and Europe, respectively. As of May 31, 2022, the operating lease right-of-use assets of $822,000 and $95,000 were allocated in the United States and Asia, respectively. There were no revenues through distributors for the fiscal years ended May 31, 2023, 2022 and 2021.

DISSOLUTION OF AEHR TEST SYSTEM

DISSOLUTION OF AEHR TEST SYSTEMS JAPAN	12 Months Ended
	May 31, 2023
DISSOLUTION OF AEHR TEST SYSTEMS JAPAN
DISSOLUTION OF AEHR TEST SYSTEMS JAPAN	18. 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.

EQUITY

EQUITY	12 Months Ended
	May 31, 2023
EQUITY
EQUITY	19. EQUITY: On August 25, 2021, the Board of Directors authorized management to take actions necessary for the execution of a $75 million shelf registration. A Registration Statement on Form S-3 was filed with the SEC on September 3, 2021. A Prospectus Supplement for an "At the Market" ("ATM") sale of $25 million of common stock was subsequently filed on September 17, 2021. On October 8, 2021, the Company executed the ATM offering by selling 1,696,729 shares of common stock at an average selling price of $14.73 per share. The gross proceeds to the Company were $25.0 million, before commission fees of $0.7 million and offering expenses of $0.3 million. Another Prospectus Supplement for an ATM sale of $25 million of common stock was subsequently filed on February 8, 2023. The Company partially executed the ATM offering by selling 208,917 shares of common stock at an average selling price of $34.78 per share. The gross proceeds to the Company were $7.3 million, before commissions of $0.2 million and offering expenses of $0.2 million.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	May 31, 2023
Commitments and contingencies (Note 20)
COMMITMENTS AND CONTINGENCIES	20. COMMITMENTS AND CONTINGENCIES: COMMITMENTS As of May 31, 2023 and 2022, the Company had restricted money market funds of $150,000 and $80,000, respectively, held by a financial institution, representing a security deposit for its United States manufacturing and office space lease. This amount is included in other assets on the consolidated balance sheets. PURCHASE OBLIGATIONS The Company has purchase obligations to certain suppliers. In some cases, the products the Company purchases are unique and have provisions against cancellation of the order. At May 31, 2023, the Company had $26,318,000 of purchase obligations which are due within the following 12 months. This amount does not include contractual obligations recorded on the consolidated balance sheets as liabilities. CONTINGENCIES The Company may, from time to time, be involved in legal proceedings arising in the ordinary course of business. While there can be no assurances as to the ultimate outcome of any litigation involving the Company, management does not believe any pending legal proceedings will result in judgment or settlement that will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. In the normal course of business to facilitate sales of its products, the Company indemnifies other parties, including customers, with respect to certain matters, for example, including against losses arising from a breach of representations or covenants, or from intellectual property infringement or other claims. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws contain similar indemnification obligations to the Company’s agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, payments made by the Company under these agreements have not had a material impact on the Company’s operating results, financial position or cash flow.

ORGANIZATION AND SUMMARY OF S_2

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	May 31, 2023
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS:	Aehr Test Systems (the “Company”) was incorporated in California in May 1977 and primarily designs, engineers and manufactures test and burn-in equipment used in the semiconductor industry. The Company’s principal products are the FOX-XP, FOX-NP, and FOX-CP wafer contact parallel test and burn-in systems, the WaferPak full wafer contactor, the DiePak carrier, the WaferPak aligner, the DiePak autoloader, and test fixtures.
CONSOLIDATION:	The consolidated financial statements include the accounts of the Company and both its wholly-owned and majority-owned foreign subsidiaries. Intercompany accounts and transactions have been eliminated.
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS:	Assets and liabilities of the Company’s foreign subsidiaries and a branch office are translated into U.S. Dollars from their functional currencies of Euros, Philippines Peso and New Taiwan Dollars using the exchange rate in effect at the balance sheet date. Additionally, their net sales and expenses are translated using exchange rates approximating average rates prevailing during the fiscal year. Translation adjustments that arise from translating their financial statements from their local currencies to U.S. Dollars are accumulated and reflected as a separate component of shareholders’ equity. Transaction gains and losses that arise from exchange rate changes denominated in currencies other than the local currency are included in the Consolidated Statements of Operations as incurred. See Note 15, “Other (Expense) Income, Net” for the detail of foreign exchange transaction gains and losses for all periods presented.
USE OF ESTIMATES:	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, 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. Actual results could differ from those estimates. Significant estimates in the Company’s consolidated financial statements include allowance for doubtful accounts, valuation of inventory at the lower of cost or net realizable value, and warranty reserves.
RECLASSIFICATIONS:	Certain reclassifications have been made to the previous year consolidated financial statements to conform to the current period presentation. The reclassifications had no impact on net income (loss), total assets, total liabilities, or shareholders’ equity.
CASH EQUIVALENTS:	Cash equivalents consist of money market instruments purchased with an original maturity of three months or less. These investments are reported at fair value.
ACCOUNTS RECEIVABLE AND ALLOWANCE 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. Accounts receivable are recorded at the invoiced amount and are not interest bearing. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company also reviews its trade receivables by aging category to identify specific customers with known disputes or collection issues. The Company exercises judgment when determining the adequacy of these reserves as the Company evaluates historical bad debt trends, general economic conditions in the United States and internationally, and changes in customer financial conditions. Uncollectible receivables are recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received. During the fiscal year ended May 31, 2023, the Company recorded bad debt expense of $24,000. No significant adjustments to the allowance for doubtful accounts were recorded during the fiscal years ended May 31, 2022 or 2021.
CONCENTRATION OF CREDIT RISK:	The Company sells its products primarily to semiconductor manufacturers in North America, Asia, and Europe. As of May 31, 2023, approximately 17% and 83% of gross accounts receivable were from customers located in North America and Asia, respectively. As of May 31, 2022, approximately 20% and 80% of gross accounts receivable were from customers located in North America and Asia, respectively. Two customers accounted for 82% and 17% of gross accounts receivable as of May 31, 2023. Three customers accounted for 68%, 18% and 11% of gross accounts receivable as of May 31, 2022. Two customers accounted for 79% and 10% of net sales in fiscal 2023, respectively. One customer accounted for 82% of net sales in fiscal 2022. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company uses letter of credit terms for some of its international customers. The Company’s cash and cash equivalents are generally deposited with major financial institutions in the United States, Philippines, Germany and Taiwan. The Company invests its excess cash in money market funds and U.S. Treasury securities. The money market funds bear the risk associated with each fund. The money market funds have variable interest rates. The Company’s cash and investment balances held at banks and brokerage firms may at time exceed federally insured levels. The Company has not experienced any material losses on its money market funds or short-term cash deposits.
CONCENTRATION OF SUPPLY RISK:	The Company relies on subcontractors to manufacture many of the components and subassemblies used in its products. Quality or performance failures of the Company’s products or changes in its manufacturers’ financial or business condition could disrupt the Company’s ability to supply quality products to its customers and thereby have a material and adverse effect on its business and operating results. Some of the components and technologies used in the Company’s products are purchased and licensed from a single source or a limited number of sources. The loss of any of these suppliers may cause the Company to incur additional transition costs, result in delays in the manufacturing and delivery of its products, or cause it to carry excess or obsolete inventory and could cause it to redesign its products.
INVENTORIES:	Inventories include material, labor and overhead, and are stated at the lower of cost (first-in, first-out method) or net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less costs of completion, disposal and transportation. Provisions for excess, obsolete and unusable inventories are made after management’s evaluation of future demand and market conditions. The Company adjusts inventory balances to approximate the lower of its manufacturing costs or net realizable value. If actual future demand or market conditions become less favorable than those projected by management, additional inventory write-downs may be required, and would be reflected in cost of sales in the period the revision is made. During fiscal 2023, 2022 and 2021 the Company recognized a provision for inventory reserves of $569,000, $1,031,000, and $176,000, respectively.
PROPERTY AND EQUIPMENT:	Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the related lease. Furniture and fixtures, machinery and equipment, and test equipment are depreciated on a straight-line basis over their estimated useful lives. The ranges of estimated useful lives are generally as follows: Furniture and fixtures 2 to 6 years Machinery and equipment 3 to 6 years Test equipment 4 to 6 years
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. We sell our products primarily through a direct sales force. In certain international markets, we sell our products through independent distributors. Transfer of control is evidenced upon passage of title and risk of loss to the customer unless we are required to provide additional services.
PRODUCT DEVELOPMENT COSTS AND CAPITALIZED SOFTWARE:	Costs incurred in the research and development of new products or systems are charged to operations as incurred. Costs incurred in the development of software programs for the Company’s products are charged to operations as incurred until technological feasibility of the software has been established. Generally, technological feasibility is established when the software module performs its primary functions described in its original specifications, contains features required for it to be usable in a production environment, is completely documented and the related hardware portion of the product is complete. After technological feasibility is established, any additional costs are capitalized. Capitalization of software costs ceases when the software is substantially complete and is ready for its intended use. Capitalized costs are amortized over the estimated life of the related software product using the greater of the units of sales or straight-line methods over ten years. No system software development costs were capitalized or amortized in fiscal 2023, 2022 and 2021.
IMPAIRMENT OF LONG-LIVED ASSETS:	In the event that facts and circumstances indicate that the carrying value of assets may be impaired, an evaluation of recoverability would be performed. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying value to determine if a write-down is required.
ADVERTISING COSTS:	The Company expenses all advertising costs as incurred and the amounts were not material for all periods presented.
SHIPPING AND HANDLING OF PRODUCTS:	Amounts billed to customers for shipping and handling of products are included in net sales. Costs incurred related to shipping and handling of products are included in cost of sales.
INCOME TAXES:	Income taxes are accounted for under the asset-and-liability method as required by Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period corresponding to the enactment date. Under ASC 740, a valuation allowance is required when it is more likely than not all or some portion of the deferred tax assets will not be realized through generating sufficient future taxable income. As of May 31, 2023 the Company maintained a full valuation allowance against its deferred tax assets. We will continue to assess whether sufficient future taxable income will be generated to permit the use of deferred tax assets, and will reverse all or a portion of the allowance when there is sufficient evidence to support the reversal. Based upon our prior two fiscal years of profitability, the outlook for the next fiscal year, and absent any additional objective negative evidence, the Company anticipates adjusting the current valuation allowance position in fiscal 2024. FASB ASC Subtopic 740-10, Accounting for Uncertainty of Income Taxes, (“ASC 740-10”) defines the criterion an individual tax position must meet for any part of the benefit of the tax position to be recognized in financial statements prepared in conformity with GAAP. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not such tax position will be sustained on examination by the taxing authorities, based solely on the technical merits of the respective tax position. The tax benefits recognized in the financial statements from such a tax position should be measured based on the largest benefit having a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. In accordance with the disclosure requirements of ASC 740-10, the Company’s policy on income statement classification of interest and penalties related to income tax obligations is to include such items as part of income taxes.
COMPREHENSIVE INCOME (LOSS):	Comprehensive income (loss) generally represents all changes in shareholders’ equity except those resulting from investments or contributions by shareholders. Unrealized gains and losses from available-for-sale securities and on foreign currency translation adjustments are included in the Company’s components of comprehensive income (loss), which are excluded from net income (loss). In fiscal 2021, the Company recognized a gain of $2,401,000 related to the completed liquidation of ATS-Japan, a majority owned subsidiary, which is deducted from net income (loss) when calculating comprehensive income (loss). Refer to Note 18, “Dissolution of Aehr Test Systems Japan,” for a further discussion of the transaction. Comprehensive income (loss) is included in the statements of comprehensive income (loss).
RECENT ACCOUNTING PRONOUNCEMENTS:	Accounting Standards Not Yet Adopted In June 2016, the FASB issued Accounting Standard Update (“ASU”) 2016-13, Financial Instruments – Credit Losses (Topic 326), 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. The Company does not expect a material impact of this accounting standard on its consolidated financial statements.

ORGANIZATION AND SUMMARY OF S_3

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	May 31, 2023
ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Useful life for property and equipment	Furniture and fixtures 2 to 6 years Machinery and equipment 3 to 6 years Test equipment 4 to 6 years

REVENUE (Tables)

REVENUE (Tables)	12 Months Ended
	May 31, 2023
REVENUE
Disaggregation of revenue	The Company’s revenues by product category are as follows (in thousands): Year Ended May 31, 2023 2022 2021 Type of good / service: Systems $ 38,844 $ 25,224 $ 7,250 Contactors 21,873 22,647 5,837 Services 4,244 2,958 3,513 $ 64,961 $ 50,829 $ 16,600 Product lines: Wafer-level $ 63,531 $ 48,926 $ 15,004 Test During Burn-In 1,430 1,903 1,596 $ 64,961 $ 50,829 $ 16,600 The following presents information about the Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands): Year Ended May 31, 2023 2022 2021 Geographic region: United States $ 9,289 $ 5,110 $ 5,386 Asia 55,609 45,700 11,074 Europe 63 19 140 $ 64,961 $ 50,829 $ 16,600 With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at point in time when control transfers to customers. The following presents revenue based on timing of recognition (in thousands): Year Ended May 31, 2023 2022 2021 Timing of revenue recognition (in thousands): Products and services transferred at a point in time $ 63,531 $ 49,441 $ 15,009 Services transferred over time 1,430 1,388 1,591 $ 64,961 $ 50,829 $ 16,600

EARNINGS PER SHARE (EPS) (Table

EARNINGS PER SHARE (EPS) (Tables)	12 Months Ended
	May 31, 2023
EARNINGS PER SHARE (EPS)
Earnings per share	The following table presents the computation of basic and diluted earnings (net loss) per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data): Year Ended May 31, 2023 2022 2021 Numerator: Net income (net loss) $ 14,557 $ 9,450 $ (2,027 ) Denominator for basic earnings (net loss) per share: Weighted average shares outstanding 27,785 26,014 23,457 Shares used in basic earnings (net loss) per share calculation 27,785 26,014 23,457 Effect of dilutive securities 1,430 1,760 - Denominator for diluted earnings (net loss) per share 29,215 27,774 23,457 Basic earnings (net loss) per share $ 0.52 $ 0.36 $ (0.09 ) Diluted earnings (net loss) per share $ 0.50 $ 0.34 $ (0.09 )

CASH, CASH EQUIVALENTS AND IN_2

CASH, CASH EQUIVALENTS AND INVESTMENTS (Tables)	12 Months Ended
	May 31, 2023
CASH, CASH EQUIVALENTS AND INVESTMENTS
Cash, cash equivalents and investments by security type	The following table summarizes the Company’s cash, cash equivalents and investments by security type as of May 31, 2023 (in thousands): Cost Gross Unrealized Loss Estimated Fair Value Cash $ 3,182 $ - $ 3,182 Cash equivalents: Money market funds 26,872 - 26,872 Total cash and cash equivalents $ 30,054 $ - $ 30,054 Short-term investments: U.S. treasury securities $ 17,870 $ (17 ) $ 17,853 Long-term investments: Money market funds $ 150 $ - $ 150 Total cash, cash equivalents and investments $ 48,074 $ (17 ) $ 48,057 The following table summarizes the Company’s cash, cash equivalents and investments by security type as of May 31, 2022 (in thousands): Cost Gross Unrealized Loss Estimated Fair Value Cash $ 2,955 $ - $ 2,955 Cash equivalents: Money market funds 28,529 - 28,529 Total cash and cash equivalents $ 31,484 $ - $ 31,484 Long-term investments: Money market funds $ 80 $ - $ 80 Total cash, cash equivalents and investments $ 31,564 $ - $ 31,564

FAIR VALUE OF FINANCIAL INSTR_2

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	12 Months Ended
	May 31, 2023
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value by hierarchy	The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2023 (in thousands): Balance as of May 31, 2023 Level 1 Level 2 Level 3 Money market funds $ 27,022 $ 27,022 $ - $ - U.S. treasury securities 17,853 17,853 Total $ 44,875 $ 44,875 $ - $ - The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2022 (in thousands): Balance as of May 31, 2022 Level 1 Level 2 Level 3 Money market funds $ 28,609 $ 28,609 $ - $ - Total $ 28,609 $ 28,609 $ - $ -

TRADE AND OTHER ACCOUNTS RECE_2

TRADE AND OTHER ACCOUNTS RECEIVABLE, NET (Tables)	12 Months Ended
	May 31, 2023
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET
Accounts receivable	Accounts receivable comprise (in thousands): May 31, 2023 2022 Accounts receivable $ 16,594 $ 12,859 Less: Allowance for doubtful accounts - - $ 16,594 $ 12,859

BALANCE SHEET DETAIL (Tables)

BALANCE SHEET DETAIL (Tables)	12 Months Ended
	May 31, 2023
BALANCE SHEET DETAIL
Inventories	INVENTORIES: May 31, (In Thousands) 2023 2022 Raw materials and sub-assemblies $ 15,953 $ 9,507 Work in process 5,764 5,461 Finished goods 2,191 83 $ 23,908 $ 15,051
Property and equipment, net	PROPERTY AND EQUIPMENT, NET: May 31, (In Thousands) 2023 2022 Leasehold improvements $ 1,310 $ 1,230 Furniture and fixtures 706 697 Machinery and equipment 5,445 4,013 Test equipment 2,998 2,523 10,459 8,463 Less: Accumulated depreciation and amortization (7,700 ) (7,260 ) $ 2,759 $ 1,203
Accrued expenses	ACCRUED EXPENSES: May 31, (In Thousands) 2023 2022 Commissions and bonuses $ 1,728 $ 1,505 Payroll related 1,491 1,401 Warranty 267 410 Professional services 520 204 Investor relations 79 44 Taxes payable 22 13 Other 36 33 $ 4,143 $ 3,610
Customer deposits and deferred revenue, short-term	CUSTOMER DEPOSITS AND DEFERRED REVENUE, SHORT-TERM: May 31, (In Thousands) 2023 2022 Customer deposits $ 2,690 $ 2,263 Deferred revenue 132 152 $ 2,822 $ 2,415

ACCUMULATED OTHER COMPREHENSI_2

ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)	12 Months Ended
	May 31, 2023
ACCUMULATED OTHER COMPREHENSIVE LOSS
Schedule of Changes in the components of accumulated other comprehensive loss, net of tax	Changes in the components of accumulated other comprehensive loss, net of tax, were as follows (in thousands): Cumulative Translation Adjustments Unrealized Loss on Investments, Net Total Balance as of May 31, 2021 $ (28 ) $ - $ (28 ) Other comprehensive loss before reclassifications (77 ) - (77 ) Balance as of May 31, 2022 (105 ) - (105 ) Other comprehensive loss before reclassifications (33 ) (17 ) (50 ) Balance as of May 31, 2023 $ (138 ) $ (17 ) $ (155 )

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	May 31, 2023
INCOME TAXES
Domestic and foreign components of loss before income tax (expense) benefit	Domestic and foreign components of income (loss) before income tax (expense) benefit are as follows (in thousands): Year Ended May 31, 2023 2022 2021 Domestic $ 14,541 $ 9,416 $ (13,064 ) Foreign 76 125 10,860 $ 14,617 $ 9,541 $ (2,204 )
Income tax (expense) benefit	The income tax (expense) benefit consists of the following (in thousands): Year Ended May 31, 2023 2022 2021 Federal income taxes: Current $ (28 ) $ (59 ) $ 163 Deferred - - - State income taxes: Current - (5 ) 13 Deferred - - - Foreign income taxes: Current (32 ) (27 ) 1 Deferred - - - $ (60 ) $ (91 ) $ 177
Income tax reconciliation	The Company’s effective tax rate differs from the U.S. federal statutory tax rate, as follows: Year Ended May 31, 2023 2022 2021 U.S. federal statutory tax rate 21.0 % 21.0 % 21.0 % State taxes, net of federal tax effect - 0.1 0.6 Foreign rate differential 0.7 0.3 9.8 Stock-based compensation (9.1 ) (11.0 ) (4.7 ) Research and development credit (2.3 ) (1.3 ) 4.0 Change in valuation allowance (9.3 ) (4.7 ) (32.1 ) Controlled Foreign Corporation Liquidation. . - - 9.8 PPP Loan - (3.7 ) - Other (0.6 ) 0.4 (0.4 ) Effective tax rate 0.4 % 1.1 % 8.0 %
Net deferred tax assets and liabilities	The components of the net deferred tax assets and liabilities are as follows (in thousands): Year Ended May 31, 2023 2022 Deferred tax assets: Net operating losses $ 11,964 $ 14,912 Lease liability 1,335 218 Credit carryforwards 6,235 5,535 Inventory reserves 938 934 Reserves and accruals 1,200 1,360 Capitalized research and development 1,187 - Other 297 220 Less: valuation allowance (21,859 ) (22,980 ) 1,297 199 Deferred tax liabilities: Operating lease right-of-use assets (1,297 ) (199 ) Net deferred tax assets (liabilities) $ - $ -
Unrecognized tax benefits	The aggregate changes in the balance of gross unrecognized tax benefits are as follows (in thousands): Beginning balance as of May 31, 2020 $ 1,852 Increases related to prior year tax positions 11 Increases related to current year tax positions 65 Balance at May 31, 2021 1,928 Increases related to prior year tax positions 12 Increases related to current year tax positions 78 Balance at May 31, 2022 2,018 Increases related to prior year tax positions 90 Increases related to current year tax positions 168 Balance at May 31, 2023 $ 2,276

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	May 31, 2023
LEASES
Supplemental cash flow information related to leases	The following table presents supplemental cash flow information related to the Company’s operating leases (in thousands): Year Ended May 31, 2023 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities: Operating cash flows from operating leases $ 835 $ 813 $ 779
Maturity of operating lease liabilities	The following table presents the maturities of the Company’s operating lease liabilities as of May 31, 2023 (in thousands): Fiscal year Operating Leases 2024 $ 608 2025 1,143 2026 1,174 2027 1,195 2028 1,234 Thereafter 3,075 Total future minimum operating lease payments 8,429 Less: imputed interest (2,129 ) Present value of operating lease liabilities $ 6,300

STOCK-BASED COMPENSATION (Table

STOCK-BASED COMPENSATION (Tables)	12 Months Ended
	May 31, 2023
STOCK-BASED COMPENSATION
Compensation costs related to the Company's stock-based compensation	Year Ended May 31, 2023 2022 2021 Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights, included in: Cost of sales $ 331 $ 234 $ 70 Selling, general and administrative 1,711 1,721 816 Research and development 706 968 215 Net effect on net income (loss) $ 2,748 $ 2,923 $ 1,101 Effect on earnings (net loss) per share: Basic $ 0.10 $ 0.11 $ 0.05 Diluted $ 0.09 $ 0.11 $ 0.05
Fair value assumptions for Option Valuation Model	Fair Value. The fair values of the Company’s stock options granted to employees in fiscal 2023, 2022 and 2021 were estimated using the following weighted average assumptions in the Black-Scholes option valuation method: Year Ended May 31, 2023 2022 2021 Expected term (in years) 5 - 6 5 - 6 6 Volatility 86 % 88 % 72 % Risk-free interest rates 3.12 % 1.50 % 0.44 % Weighted average grant date fair value $ 6.29 $ 4.01 $ 1.12
Fair value assumption of the ESPP Purchase Rights	The fair value of our ESPP purchase rights for the fiscal 2023, 2022 and 2021 was estimated using the following weighted average assumptions: Year Ended May 31, 2023 2022 2021 Expected term (in years) 0.5 – 2.0 0.5 – 2.0 0.5 – 2.0 Volatility 91% – 203 % 101% – 272 % 74% – 88 % Risk-free interest rates 3.97%–4.94 % 0.05%–2.44 % 0.04%–0.17 % Weighted average grant date fair value $ 13.60 $ 9.68 $ 1.03
Stock option and RSU transactions	The following tables summarize the Company’s stock option and RSU transactions during fiscal 2023, 2022 and 2021 (in thousands): Available Shares Balance, May 31, 2020 1,416 Options granted (297 ) RSUs granted (680 ) RSUs cancelled 2 Shares withheld for taxes and not issued 18 Options terminated 455 Options expired (341 ) Balance, May 31, 2021 573 Additional shares reserved 1,414 Options granted (303 ) RSUs granted (1,044 ) RSUs cancelled 20 Shares withheld for taxes and not issued (30 ) Options terminated 105 Balance, May 31, 2022 735 Options granted (110 ) RSUs granted (674 ) RSUs cancelled 60 Options terminated 16 Balance, May 31, 2023 27
Stock option transactions	The following table summarized the stock option transactions during fiscal 2023, 2022 and 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 297 $ 1.78 Options terminated (455 ) $ 2.31 Options exercised (229 ) $ 1.54 Balances, May 31, 2021 2,766 $ 2.16 $ 807 Options granted 303 $ 5.37 Options terminated (105 ) $ 1.59 Options exercised (1,367 ) $ 2.28 Balances, May 31, 2022 1,597 $ 2.70 $ 9,290 Options granted 110 $ 9.06 Options terminated (16 ) $ 5.42 Options exercised (730 ) $ 2.32 Balances, May 31, 2023 961 $ 3.67 $ 28,211 Options fully vested and expected to vest at May 31, 2023 947 $ 3.66 $ 27,796
Options outstanding	The options outstanding and exercisable at May 31, 2023 were in the following exercise price ranges (in thousands, except per share data): Options Outstanding Options Exercisable at May 31, 2023 at May 31, 2023 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 $ 1.34 41 4.39 $ 1.34 41 4.39 $ 1.34 $1.64-$1.86 365 3.53 $ 1.72 291 3.45 $ 1.70 $2.03-$2.40 185 2.61 $ 2.14 175 2.48 $ 2.14 $ 2.93 139 5.12 $ 2.93 35 5.12 $ 2.93 $3.46-$3.93 37 1.11 $ 3.93 37 1.11 $ 3.93 $8.00-34.00 194 5.97 $ 9.77 41 5.90 $ 10.18 $1.34-34.00 961 4.02 $ 3.67 620 3.35 $ 2.56 $ 18,895
RSUs, PRSUs, restricted shares and performance restricted shares granted	The following table summarizes RSUs, PRSUs, restricted shares and performance restricted shares granted to employees and members of the Company’s Board of Directors during fiscal 2023, 2022 and 2021: Year Ended May 31, 2023 2022 2021 Employees: Annual RSUs granted 152,000 120,000 161,000 Weighted-average grant-date fair value of annual RSUs $ 8.03 $ 3.17 $ 1.86 Annual restricted shares granted 8,000 - - Weighted-average grant-date fair value of annual restricted shares $ 8.00 - - RSUs granted in lieu of cash payment for salary reductions and bonus - 89,000 18,000 Weighted-average grant-date value of RSU in lieu of cash payment - $ 2.50 $ 2.21 Maximum PRSUs to be vested if all revenue goals are achieved 80,000 270,000 - Maximum Performance restricted shares to be vested if all revenue goals are achieved 24,000 - - Weighted-average grant-date fair value of PRSUs and performance restricted shares $ 8.00 $ 3.41 - Members of Board of Directors: RSUs granted 44,000 43,000 161,000 Weighted-average grant-date fair value of RSUs $ 11.35 $ 8.02 $ 1.81 Maximum PRSUs granted to be vested if all revenue goals are achieved 25,000 - - Weighted-average grant-date fair value of PRSUs $ 8.00 - -
RSUs and PRSUs vested and unvested	The following table summarizes the RSUs and PRSUs vested and unvested during fiscal 2023, 2022 and 2021: Year Ended May 31, 2023 2022 2021 Net RSUs and PRSUs vested 240,000 96,000 207,000 Shares withheld to settle payroll taxes 178,000 62,000 9,000 Weighted average grant-date fair value of vested RSUs and PRSUs $ 4.47 $ 3.12 $ 1.90 RSUs and PRSUs cancelled 30,000 10,000 1,000 Weighted average grant-date fair value of cancelled RSUs and PRSUs $ 8.56 $ 2.93 $ 3.46 RSUs and PRSUs unvested 345,000 185,000 132,000 Weighted average grant-date fair value of unvested RSUs and PRSUs $ 6.40 $ 3.00 $ 1.88 Intrinsic value of unvested RSUs and PRSUs (in thousands) $ 11,392 $ 1,554 $ 297

OTHER INCOME (EXPENSE) NET (Tab

OTHER INCOME (EXPENSE) NET (Tables)	12 Months Ended
	May 31, 2023
OTHER INCOME (EXPENSE) NET
Other income (expense), net	Other (expense) income, net comprises the following (in thousands): Year Ended May 31, 2023 2022 2021 Foreign exchange (loss) gain $ (3 ) $ 32 $ (111 ) Other expense, net - (2 ) (51 ) $ (3 ) $ 30 $ (162 )

PRODUCT WARRANTIES (Tables)

PRODUCT WARRANTIES (Tables)	12 Months Ended
	May 31, 2023
PRODUCT WARRANTIES
Liability for product warranties	Following is a summary of changes in the Company’s liability for product warranties during the fiscal years ended May 31, 2023 and 2022 (in thousands): May 31, 2023 2022 Balance at the beginning of the year $ 410 $ 494 Accruals for warranties issued during the year 420 465 Adjustment to previously existing warranty 61 98 Consumption of reserves (624 ) (647 ) Balance at the end of the year $ 267 $ 410

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	12 Months Ended
	May 31, 2023
SEGMENT INFORMATION
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): May 31, 2023 2022 United States $ 2,713 $ 1,156 Asia 44 47 Europe 2 - $ 2,759 $ 1,203

ORGANIZATION AND SUMMARY OF S_4

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	May 31, 2023
Maximum | Furniture and Fixtures
Useful life	6 years
Maximum | Machinery and Equipment
Useful life	6 years
Maximum | Test Equipment
Useful life	6 years
Minimum | Furniture and Fixtures
Useful life	2 years
Minimum | Machinery and Equipment
Useful life	3 years
Minimum | Test Equipment
Useful life	4 years

ORGANIZATION AND SUMMARY OF S_5

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Allowance for doubtful accounts	$ 24,000	$ 0	$ 0
Provision for inventory reserves	$ 569,000	$ 1,031,000	176,000
Gain related to completed liquidation of ATS-Japan			$ 2,401,000
Accounts Receivable | North America
Concentration risk	17%	20%
Accounts Receivable | Asia
Concentration risk	83%	80%
Accounts Receivable | Customer One
Concentration risk	82%	68%
Accounts Receivable | Customer Two
Concentration risk	17%	18%
Accounts Receivable | Customer Three
Concentration risk		11%
Net Sales | Customer One
Concentration risk	79%	82%
Net Sales | Customer Two
Concentration risk	10%

REVENUE (Details)

REVENUE (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Net sales	$ 64,961	$ 50,829	$ 16,600
Systems [Member]
Net sales	38,844	25,224	7,250
Test During Burn-In. [Member]
Net sales	1,430	1,903	1,596
Wafer-level [Member]
Net sales	63,531	48,926	15,004
Services [Member]
Net sales	4,244	2,958	3,513
Contactors [Member]
Net sales	21,873	22,647	5,837
Total Product line [Member]
Net sales	$ 64,961	$ 50,829	$ 16,600

REVENUE (Details 1)

REVENUE (Details 1) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Net sales	$ 64,961	$ 50,829	$ 16,600
Asia
Net sales	55,609	45,700	11,074
Europe
Net sales	63	19	140
United States
Net sales	$ 9,289	$ 5,110	$ 5,386

REVENUE (Details 2)

REVENUE (Details 2) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Net sales	$ 64,961	$ 50,829	$ 16,600
Products And Services Transferred At A Point In Time [Member]
Net sales	63,531	49,441	15,009
Services Transferred over Time [Member]
Net sales	$ 1,430	$ 1,388	$ 1,591

REVENUE (Details Narrative)

REVENUE (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2025	May 31, 2024
Contract liabilities	$ 2,853,000	$ 2,484,000
Recognition of contract liabilities	2,179,000	$ 189,000
Remaining performance obligations	$ 163,000
Scenario Forecast [Member]
Remaining performance obligation revenue recognition			19%	81%

EARNINGS PER SHARE (EPS) (Detai

EARNINGS PER SHARE (EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
EARNINGS PER SHARE (EPS)
Net Income (Loss)	$ 14,557	$ 9,450	$ (2,027)
Weighted average shares outstanding	27,785	26,014	23,457
Shares used in basic net income (loss) per share calculation	27,785	26,014	23,457
Effect of dilutive securities	1,430	1,760
Denominator for diluted net income (loss) per share	29,215	27,774	23,457
Basic net income (loss) per share	$ 0.52	$ 0.36	$ (0.09)
Diluted net income (loss) per share	$ 0.50	$ 0.34	$ (0.09)

EARNINGS PER SHARE (EPS) (Det_2

EARNINGS PER SHARE (EPS) (Details Narrative) - shares	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Employee Stock Purchase Plan
Options not included in the computation of diluted net loss per share (in thousands)			239,000
Stock Option
Options not included in the computation of diluted net loss per share (in thousands)	5,000	64,000	2,766,000
Restricted Stock Units
Options not included in the computation of diluted net loss per share (in thousands)			132,000

CASH CASH EQUIVALENTS AND INVES

CASH CASH EQUIVALENTS AND INVESTMENTS (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Total cash and cash equivalents	$ 30,054	$ 31,484
Cost [Member]
Cash	3,182	2,955
Total cash and cash equivalents	30,054	31,484
Total cash, cash equivalents and investments	48,074	31,564
Total cash, cash equivalents and investments	(48,074)	(31,564)
Cost [Member] | Money Market Funds
Cash equivalents	26,872	28,529
Long-term investments	150	80
Cost [Member] | U S Treasury Securities [Member]
Short-term Investments	17,870
Short-term Investments	(17,870)
Gross Unrealized Loss
Cash	0	0
Total cash and cash equivalents	0	0
Total cash, cash equivalents and investments	17	0
Total cash, cash equivalents and investments	(17)	0
Gross Unrealized Loss | Money Market Funds
Cash equivalents	0	0
Long-term investments	0	0
Gross Unrealized Loss | U S Treasury Securities [Member]
Short-term Investments	17
Short-term Investments	(17)
Estimated Fair Value [Member]
Cash	3,182	2,955
Total cash and cash equivalents	30,054	31,484
Total cash, cash equivalents and investments	48,057	31,564
Total cash, cash equivalents and investments	(48,057)	(31,564)
Estimated Fair Value [Member] | Money Market Funds
Cash equivalents	26,872	28,529
Long-term investments	150	$ 80
Estimated Fair Value [Member] | U S Treasury Securities [Member]
Short-term Investments	17,853
Short-term Investments	$ (17,853)

CASH CASH EQUIVALENTS AND INV_2

CASH CASH EQUIVALENTS AND INVESTMENTS (Details Narrative)	12 Months Ended
	May 31, 2023 USD ($)
Net unrealized loss on investments	$ (17,000)
Gross Unrealized Loss
Net unrealized loss on investments	$ 17,000

FAIR VALUE OF FINANCIAL INSTR_3

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($)	May 31, 2023	May 31, 2022
Assets [Member]
Investment securities	$ 44,875,000	$ 28,609,000
U.S. treasury securities
Investment securities	17,853,000
Level 1 [Member] | Assets [Member]
Investment securities	44,875,000	28,609,000
Level 2 [Member] | Assets [Member]
Investment securities	0	0
Level 3 [Member] | Assets [Member]
Investment securities	0	0
Money Market Funds
Investment securities	27,022,000	28,609,000
Money Market Funds | Level 1 [Member]
Investment securities	27,022,000	28,609,000
Money Market Funds | Level 2 [Member]
Investment securities	0	0
Money Market Funds | Level 3 [Member]
Investment securities	0	$ 0
US Treasury Securities | Level 1 [Member]
Investment securities	17,853,000
US Treasury Securities | Level 2 [Member]
Investment securities	0
US Treasury Securities | Level 3 [Member]
Investment securities	$ 0

FAIR VALUE OF FINANCIAL INSTR_4

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($)	May 31, 2023	May 31, 2022
FAIR VALUE OF FINANCIAL INSTRUMENTS
Transfer between Level 1 and Level 2 fair value measurements	$ 0	$ 0
Restricted cash	150,000	80,000
Financial liabilities at fair value	$ 0	$ 0

TRADE AND OTHER ACCOUNTS RECE_3

TRADE AND OTHER ACCOUNTS RECEIVABLE, NET (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
TRADE AND OTHER ACCOUNTS RECEIVABLE, NET
Accounts receivable	$ 16,594	$ 12,859
Less: Allowance for doubtful accounts	0	0
Accounts Receivable, net	$ 16,594	$ 12,859

BALANCE SHEET DETAIL (Details)

BALANCE SHEET DETAIL (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
BALANCE SHEET DETAIL
Raw materials and sub-assemblies	$ 15,953	$ 9,507
Work in process	5,764	5,461
Finished goods	2,191	83
Inventories	$ 23,908	$ 15,051

BALANCE SHEET DETAIL (Details 1

BALANCE SHEET DETAIL (Details 1) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
BALANCE SHEET DETAIL
Leasehold improvements	$ 1,310	$ 1,230
Furniture and fixtures	706	697
Machinery and equipment	5,445	4,013
Test equipment	2,998	2,523
Property and equipment, gross	10,459	8,463
Less: Accumulated depreciation and amortization	(7,700)	(7,260)
Property and equipment, net	$ 2,759	$ 1,203

BALANCE SHEET DETAIL (Details 2

BALANCE SHEET DETAIL (Details 2) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022	May 31, 2021
BALANCE SHEET DETAIL
Commissions and bonuses	$ 1,728	$ 1,505
Payroll related	1,491	1,401
Warranty	267	410	$ 494
Professional services	520	204
Investor relations	79	44
Taxes payable	22	13
Other	36	33
Accrued expenses	$ 4,143	$ 3,610

BALANCE SHEET DETAIL (Details 3

BALANCE SHEET DETAIL (Details 3) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
BALANCE SHEET DETAIL
Customer deposits	$ 2,690	$ 2,263
Deferred revenue	132	152
Customer deposits and deferred revenue	$ 2,822	$ 2,415

BALANCE SHEET DETAIL (Details N

BALANCE SHEET DETAIL (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
BALANCE SHEET DETAIL
Depreciation expense	$ 450,000	$ 307,000	$ 310,000

ACCUMULATED OTHER COMPREHENSI_3

ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
Balance at the beginning of the year	$ (105)	$ (28)
Other comprehensive loss before reclassifications	(50)	(77)
Balance at the ending of the year	(155)	(105)
Unrealized Loss on Investments Net [Member]
Balance at the beginning of the year	0	0
Other comprehensive loss before reclassifications	(17)	0
Balance at the ending of the year	(17)	0
Cumulative Translation Adjustments [Member]
Balance at the beginning of the year	(105)	(28)
Other comprehensive loss before reclassifications	(33)	(77)
Balance at the ending of the year	$ (138)	$ (105)

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
INCOME TAXES
Domestic	$ 14,541	$ 9,416	$ (13,064)
Foreign	76	125	10,860
Income (loss) before income tax (expense) benefit	$ 14,617	$ 9,541	$ (2,204)

INCOME TAXES (Details 1)

INCOME TAXES (Details 1) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Federal income taxes:
Current	$ (28)	$ (59)	$ 163
Deferred	0	0	0
State income taxes:
Current	0	(5)	13
Deferred	0	0	0
Foreign income taxes:
Current	(32)	(27)	1
Deferred	0	0	0
Income tax (expense) benefit	$ (60)	$ (91)	$ 177

INCOME TAXES (Details 2)

INCOME TAXES (Details 2)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
INCOME TAXES
U.S. federal statutory tax rate	21%	21%	21%
State taxes, net of federal tax effect	0%	0.10%	0.60%
Foreign rate differential	0.70%	0.30%	9.80%
Stock-based compensation	(9.10%)	(11.00%)	(4.70%)
Research and development credit	(2.30%)	(1.30%)	4%
Change in valuation allowance	(9.30%)	(4.70%)	(32.10%)
Controlled Foreign Corporation Liquidation	0%	0%	9.80%
PPP Loan	0%	(3.70%)	0%
Other	(0.60%)	0.40%	(0.40%)
Effective tax rate	0.40%	1.10%	8%

INCOME TAXES (Details 3)

INCOME TAXES (Details 3) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Deferred tax assets:
Net operating losses	$ 11,964	$ 14,912
Lease liability	1,335	218
Credit carryforwards	6,235	5,535
Inventory reserves	938	934
Reserves and accruals	1,200	1,360
Capitalized research and development	1,187	0
Other	297	220
Less: Valuation allowance	(21,859)	(22,980)
Deferred tax assets	1,297	199
Deferred tax liabilities:
Operating lease right-of-use assets	1,297	199
Net deferred tax assets (liabilities)	$ 0	$ 0

INCOME TAXES (Details 4)

INCOME TAXES (Details 4) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
INCOME TAXES
Unrecognized tax benefit, beginning	$ 2,018	$ 1,928	$ 1,852
Increases related to prior year tax positions	90	12	11
Increases related to current year tax positions	168	78	65
Unrecognized tax benefit, ending	$ 2,276	$ 2,018	$ 1,928

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Valuation allowance	$ (1,121,000)	$ (278,000)	$ 2,438,000
Federal
Net operating loss carryforward	(46,967,000)	(61,068,000)
Research and development tax credit carryforwards	2,923,000	2,362,000
Alternative minimum tax credit carryforwards	14,425,000
State
Net operating loss carryforward	(30,203,000)	(30,043,000)
Research and development tax credit carryforwards	6,623,000	$ 6,152,000
Alternative minimum tax credit carryforwards	$ 34,000

LEASES (Details)

LEASES (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Cash paid for amounts included in measurement of operating lease liabilities:
Operating cash flows for operating leases	$ 835	$ 813	$ 779

LEASES (Details 1)

LEASES (Details 1) $ in Thousands	May 31, 2023 USD ($)
LEASES
2024	$ 608
2025	1,143
2026	1,174
2027	1,195
2028	1,234
Thereafter	3,075
Total future minimum operating lease payments	8,429
Less: imputed interest	(2,129)
Present value of operating lease liabilities	$ 6,300

LEASES (Details Narrative)

LEASES (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Operating lease, weighted-average discount rate	7.50%
Operating lease, weighted-average remaining lease term	7 years 3 months 18 days
Operating lease, cost	$ 923,000	$ 766,000	$ 761,000
Increase in operating lease liabilities	$ 5,900,000
Maximum [Member]
Operating lease term	1 year
Minimum [Member]
Operating lease term	7 years

BORROWING AND FINANCING ARRAN_2

BORROWING AND FINANCING ARRANGEMENTS (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	Nov. 30, 2023
Original Loan and Security Agreement
Line of Credit, maximum borrowing	$ 4,000,000
Balance available to borrow under the line of credit	$ 8,004,000
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%
Second Amendment To Loan And Security Agreement
Line of Credit, maximum borrowing	$ 10,000,000
Variable interest rate	the greater of (a) prime rate plus an additional percentage up to 1.0%, which additional percentage depends on the Company’s adjusted quick ratio, and (b) 3.25%,
Revolving line maturity date	Jan. 13, 2023
First Amendment to Loan and Security Agreement
Revolving line maturity date	Jan. 13, 2022
Third Amendment to Loan and Security Agreement
Revolving line maturity date	Jan. 13, 2025
Third Amendment to Loan and Security Agreement | Subsequent Event
Minimum liquidity net		$ 20,000,000

LONGTERM DEBT (Details Narrativ

LONGTERM DEBT (Details Narrative) - Silicon Valley Bank - USD ($)	Jun. 12, 2021	Apr. 23, 2020
PPP loan		$ 1,679,000
Interest rate		1%
PPP Loan balance	$ 1,679,000
Total interest	19,000
Recognized a gain on loan forgiveness	$ 1,698,000

STOCK-BASED COMPENSATION (Detai

STOCK-BASED COMPENSATION (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Net stock-based compensation	$ 2,748	$ 2,923	$ 1,101
Effect on net loss per share, basic	$ 0.10	$ 0.11	$ 0.05
Effect on net loss per share, diluted	$ 0.09	$ 0.11	$ 0.05
Cost of Sales
Total stock-based compensation	$ 331	$ 234	$ 70
Selling, General and Administrative
Total stock-based compensation	1,711	1,721	816
Research and Development
Total stock-based compensation	$ 706	$ 968	$ 215

STOCK-BASED COMPENSATION (Det_2

STOCK-BASED COMPENSATION (Details 1) - Stock Option - $ / shares	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Expected term (in years)			6 years
Volatility	86%	88%	72%
Risk-free interest rates	3.12%	1.50%	0.44%
Weighted-average grant date fair value	$ 6.29	$ 4.01	$ 1.12
Minimum [Member]
Expected term (in years)	5 years	5 years
Maximum [Member]
Expected term (in years)	6 years	6 years

STOCK-BASED COMPENSATION (Det_3

STOCK-BASED COMPENSATION (Details 2) - Employee Stock Purchase Plan - $ / shares	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Weighted-average grant date fair value	$ 13.60	$ 9.68	$ 1.03
Minimum [Member]
Expected term (in years)	6 months	6 months	6 months
Volatility	91%	101%	74%
Risk-free interest rates	3.97%	0.05%	0.04%
Maximum [Member]
Expected term (in years)	2 years	2 years	2 years
Volatility	203%	272%	88%
Risk-free interest rates	4.94%	2.44%	0.17%

STOCK-BASED COMPENSATION (Det_4

STOCK-BASED COMPENSATION (Details 3) - shares	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Shares withheld for tax and not issued (in thousands)	178,000	62,000	9,000
Stock Option and RSU Transactions
Available shares, beginning (in thousands)	735,000	573,000	1,416,000
Additional shares reserved (in thousands)		1,414,000
Options granted (in thousands)	(110,000)	(303,000)	(297,000)
Annual RSUs granted	(674,000)	(1,044,000)	(680,000)
RSUs cancelled (in thousands)	60,000	20,000	2,000
Shares withheld for tax and not issued (in thousands)		(30,000)	18,000
Options terminated (in thousands)	16,000	105,000	455,000
Options expired (in thousands)			(341,000)
Available shares, ending (in thousands)	27,000	735,000	573,000

STOCK-BASED COMPENSATION (Det_5

STOCK-BASED COMPENSATION (Details 4) - Outstanding Options Stock Option Transactions - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Options outstanding, beginning (in thousands)	1,597	2,766	3,153
Options granted (in thousands)	110	303	297
Options terminated (in thousands)	(16)	(105)	(455)
Options exercised (in thousands)	(730)	(1,367)	(229)
Options outstanding, ending (in thousands)	961	1,597	2,766
Options fully vested and expected to vest (in thousands)	947
Weighted average exercise price outstanding, beginning	$ 2.70	$ 2.16	$ 2.17
Weighted average exercise price granted	9.06	5.37	1.78
Weighted average exercise price terminated	5.42	1.59	2.31
Weighted average exercise price exercised	2.32	2.28	1.54
Weighted average exercise price outstanding, ending	3.67	$ 2.70	$ 2.16
Weighted average exercise price fully vested and expected to vest	$ 3.66
Aggregate intrinsic value, beginning	$ 9,290	$ 807	$ 102
Aggregate intrinsic value, ending	28,211	$ 9,290	$ 807
Aggregate intrinsic value for options fully vested and expected to vest	$ 27,796

STOCK-BASED COMPENSATION (Det_6

STOCK-BASED COMPENSATION (Details 5) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2023 USD ($) $ / shares shares
$1.34
Options outstanding, ending (in thousands) | shares | shares	41
Weighted average remaining contractual life (Years) options outstanding	4 years 4 months 20 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 1.34
Option exercisable shares (in thousands) | shares	41
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 1.34
Weighted average remaining contractual life (Years) options exercisable	4 years 4 months 20 days
$1.64-$1.86
Options outstanding, ending (in thousands) | shares | shares	365
Weighted average remaining contractual life (Years) options outstanding	3 years 6 months 10 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 1.72
Option exercisable shares (in thousands) | shares	291
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 1.70
Weighted average remaining contractual life (Years) options exercisable	3 years 5 months 12 days
$2.03-$2.40
Options outstanding, ending (in thousands) | shares | shares	185
Weighted average remaining contractual life (Years) options outstanding	2 years 7 months 9 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 2.14
Option exercisable shares (in thousands) | shares	175
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 2.14
Weighted average remaining contractual life (Years) options exercisable	2 years 5 months 23 days
$2.93
Options outstanding, ending (in thousands) | shares | shares	139
Weighted average remaining contractual life (Years) options outstanding	5 years 1 month 13 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 2.93
Option exercisable shares (in thousands) | shares	35
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 2.93
Weighted average remaining contractual life (Years) options exercisable	5 years 1 month 13 days
$3.46-$3.93
Options outstanding, ending (in thousands) | shares | shares	37
Weighted average remaining contractual life (Years) options outstanding	1 year 1 month 9 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 3.93
Option exercisable shares (in thousands) | shares	37
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 3.93
Weighted average remaining contractual life (Years) options exercisable	1 year 1 month 9 days
$8.00-34.00
Options outstanding, ending (in thousands) | shares | shares	194
Weighted average remaining contractual life (Years) options outstanding	5 years 11 months 19 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 9.77
Option exercisable shares (in thousands) | shares	41
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 10.18
Weighted average remaining contractual options exercisable	5 years 10 months 24 days
$1.34-$34.00
Options outstanding, ending (in thousands) | shares | shares	961
Weighted average remaining contractual life (Years) options outstanding	4 years 7 days
Weighted average exercise price for options outstanding | $ / shares | $ / shares	$ 3.67
Option exercisable shares (in thousands) | shares	620
Weighted average exercise price for options exercisable | $ / shares | $ / shares	$ 2.56
Weighted average remaining contractual life (Years) options exercisable	3 years 4 months 6 days
Aggregate intrinsic value for options exercisable | | $	$ 18,895

STOCKBASED COMPENSATION (Detail

STOCKBASED COMPENSATION (Details 6) - $ / shares	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Employees Member
Annual RSUs granted	152,000	120,000	161,000
Weighted average market value on the date of the grant of annual RSUs	$ 8.03	$ 3.17	$ 1.86
Annual restricted shares granted	8,000	0
Weighted average market value on the date of the grant of annual restricted shares	$ 8	$ 0	$ 0
RSUs granted in lieu of cash payment for salary reductions		89,000	18,000
Weighted average market value on the date of the grant of RSU in lieu of cash payment	$ 0	$ 2.50	$ 2.21
PRSUs granted based on revenue target thresholds maximum	80,000	270,000
Performance restricted shares granted based on revenue target thresholds maximum	24,000
Weighted average market value on the date of the grant of PRSUs, performance restricted shares	$ 8	$ 3.41	$ 0
Board Of Directors
Annual RSUs granted	44,000	43,000	161,000
Weighted average market value on the date of the grant of annual RSUs	$ 11.35	$ 8.02	$ 1.81
PRSUs granted based on revenue target thresholds maximum	25,000
Weighted average market value on the date of the grant of PRSUs	$ 8	$ 0	$ 0

STOCKBASED COMPENSATION (Deta_2

STOCKBASED COMPENSATION (Details 7) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
STOCKBASED COMPENSATION (Details 6)
Net RSUs and PRSUs vested	240,000	96,000	207,000
Shares withheld to settle payroll taxes	178,000	62,000	9,000
Weighted average grant-date fair value of vested RSUs and PRSUs	$ 4.47	$ 3.12	$ 1.90
RSUs and PRSUs cancelled	30,000	10,000	1,000
Weighted average grant-date fair value of cancelled RSUs	$ 8.56	$ 2.93	$ 3.46
RSUs and PRSUs unvested	345,000	185,000	132,000
Weighted average grant-date fair value of unvested RSUs and PRSUs	$ 6.40	$ 3	$ 1.88
Intrinsic value of unvested RSUs and PRSUs (in thousands)	$ 11,392	$ 1,554	$ 297

STOCK-BASED COMPENSATION (Det_7

STOCK-BASED COMPENSATION (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
Total intrinsic values of options exercised	$ 17,088,000	$ 12,542,000	$ 152,000
Stock based compensation expenses	$ 120,000	$ 83,000	$ 0
Option exercisable shares (in thousands)	620,000	1,042,000	2,045,000
Weighted average exercise price for options exercisable	$ 2.56	$ 2.22	$ 2.26
Stock Option, RSUs and PRSUs
Stock-based compensation expense related to stock options and RSUs	$ 1,988,000	$ 2,071,000	$ 993,000
RSUs cancelled (in thousands)	0
2016 Equity Incentive Plan
Unrecognized stock-based compensation	$ 3,102,000
Common stock reserved for issuance	4,848,000
Remained available for issuance	2,248,000
Estimated forfeitures of unvested stock based awards, amount	$ 8,000
Weighted average period for recognition of costs	2 years 3 months 18 days
Employee Stock Purchase Plan
Common stock reserved for issuance	2,550,000
Purchase rights under the ESPP	$ 715,000
Weighted average period for recognition of costs	1 year 1 month 6 days
Stock-based compensation related to the ESPP	$ 760,000	935,000	108,000
Maximum calendar year contribution per employee	$ 25,000	$ 25,000	$ 25,000
Maximum number of shares a participant may purchase (in thousands)	3,000	3,000	3,000
ESPP purchase right granted (in thousands)	77,000	101,000	279,000
ESPP shares issued (in thousands)	211,000	178,000	147,000
Total shares issued under ESPP plan (in thousands)	2,152,000
ESPP Shares available for issuance (in thousands)	398,000
Number of authorized shares increased	350,000

EMPLOYEE BENEFIT PLANS (Details

EMPLOYEE BENEFIT PLANS (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
EMPLOYEE BENEFIT PLANS
Contributions to ESOP	$ 300,000	$ 250,000	$ 60,000
Shares contributed to the ESOP during fiscal year (in thousands)	29,832	26,666	36,000
Defined contribution plan, description	The stock bonus plan was converted to an employee stock ownership plan (“ESOP”) to enable the Plan to better comply with changes in the law regarding Company stock. Individuals’ account balances vest at a rate of 20% per year commencing upon completion of two years of service

OTHER INCOME (EXPENSE) NET (Det

OTHER INCOME (EXPENSE) NET (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
OTHER INCOME (EXPENSE) NET
Foreign exchange gain (loss)	$ (3)	$ 32	$ (111)
Other income (expense), net		(2)	(51)
Other income (expense), net	$ (3)	$ 30	$ (162)

PRODUCT WARRANTIES (Details)

PRODUCT WARRANTIES (Details) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2023	May 31, 2022
PRODUCT WARRANTIES
Balance at the beginning of the period	$ 410	$ 494
Accruals for warranties issued during the period	420	465
Adjustments to previously existing warranty accruals	61	98
Consumption of reserves	(624)	(647)
Balance at the End of the period	$ 267	$ 410

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Property and equipment, net	$ 2,759	$ 1,203
Asia
Property and equipment, net	44	47
Europe
Property and equipment, net	2	0
United States
Property and equipment, net	$ 2,713	$ 1,156

SEGMENT INFORMATION (Details Na

SEGMENT INFORMATION (Details Narrative) - USD ($) $ in Thousands	May 31, 2023	May 31, 2022
Operating lease right-of-use assets	$ 6,123	$ 917
Asia
Operating lease right-of-use assets	70	95
Europe
Operating lease right-of-use assets	45
United States
Operating lease right-of-use assets	$ 6,007	$ 822

DISSOLUTION OF AEHR TEST SYST_2

DISSOLUTION OF AEHR TEST SYSTEMS JAPAN (Details Narrative) - USD ($)	12 Months Ended
	May 31, 2023	May 31, 2022	May 31, 2021
DISSOLUTION OF AEHR TEST SYSTEMS JAPAN
Deconsolidation net gain		$ 0	$ 2,401,000
Net gain due to cumulative translation adjustment reclassiefied to earnings	$ 0	0	2,186,000
Income tax benefits	$ 0	$ 0	$ 215,000

EQUITY (Details Narrative)

EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions	Feb. 08, 2023	Oct. 08, 2021	Aug. 25, 2021
EQUITY
Sale of common stock price per share	$ 34.78	$ 14.73
Sale of common stock shares	208,917	1,696,729
Gross proceeds	$ 7.3	$ 25
Commission fees	0.2	0.7
Offering expenses	$ 0.2	$ 0.3
Shelf registration amount			$ 75

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	May 31, 2023	May 31, 2022
Commitments and contingencies (Note 20)
Restricted cash	$ 150,000	$ 80,000
Purchase obligation	$ 26,318,000