Aehr Test Systems (AEHR) 10-Q 13 Jan 25 2025 Q2 Quarterly report Financial data

Cover

Cover - shares	6 Months Ended
	Nov. 29, 2024	Jan. 09, 2025
Cover [Abstract]
Entity Registrant Name	AEHR TEST SYSTEMS
Entity Central Index Key	0001040470
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Nov. 29, 2024
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2025
Entity Common Stock Shares Outstanding		29,711,804
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 of $0.01 per share
Trading Symbol	AEHR
Security Exchange Name	NASDAQ
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
Current assets:
Cash and cash equivalents	$ 32,217	$ 49,159
Accounts receivable	7,333	9,796
Inventories	43,776	37,470
Prepaid expenses and other current assets	5,195	1,423
Total current assets	88,521	97,848
Property and equipment, net	4,306	3,253
Goodwill	10,742	0
Intangible assets, net	11,512	0
Deferred tax assets, net	18,585	20,773
Operating lease right-of-use assets, net	6,038	5,734
Other non-current assets	2,576	304
Total assets	142,280	127,912
Current liabilities:
Accounts payable	4,854	5,332
Accrued expenses	5,392	3,366
Operating lease liabilities, short-term	858	465
Deferred revenue, short-term	613	1,345
Total current liabilities	11,717	10,508
Operating lease liabilities, long-term	5,574	5,732
Deferred revenue, long-term	52	41
Other long-term liabilities	1,756	38
Total liabilities	19,099	16,319
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: 29,709 shares and 28,995 shares at November 29, 2024 and May 31, 2024, respectively	297	289
Additional paid-in-capital	142,593	130,612
Accumulated other comprehensive loss	(191)	(158)
Accumulated deficit	(19,518)	(19,150)
Total shareholders' equity	123,181	111,593
Total liabilities and shareholders equity	$ 142,280	$ 127,912

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Nov. 29, 2024	May 31, 2024
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
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	29,709,000	28,995,000
Common stock, shares outstanding	29,709,000	28,995,000

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Revenue:
Total revenue	$ 13,453	$ 21,431	$ 26,572	$ 42,055
Total revenue	(13,453)	(21,431)	(26,572)	(42,055)
Cost of revenue:
Total cost of revenue	8,053	10,473	14,094	21,116
Gross profit	5,400	10,958	12,478	20,939
Operating expenses:
Research and development	2,276	1,972	4,637	4,429
Selling, general and administrative	4,637	3,518	9,195	6,927
Total operating expenses	6,913	5,490	13,832	11,356
Income (loss) from operations	(1,513)	5,468	(1,354)	9,583
Interest income, net	228	631	909	1,212
Other income, net	40	10	14	4
Income (loss) before income tax expense (benefit)	(1,245)	6,109	(431)	10,799
Income tax expense (benefit)	(217)	20	(63)	36
Net income (loss)	$ (1,028)	$ 6,089	$ (368)	$ 10,763
Net income (loss) per share:
Net income (loss) per share: Basic	$ (0.03)	$ 0.21	$ (0.01)	$ 0.37
Net income (loss) per share: Diluted	$ (0.03)	$ 0.20	$ (0.01)	$ 0.36
Shares used in per share calculations:
Basic	29,659	28,801	29,383	28,725
Diluted	29,659	29,769	29,383	29,700
Services [Member]
Revenue:
Total revenue	$ 1,468	$ 1,594	$ 2,433	$ 2,861
Total revenue	(1,468)	(1,594)	(2,433)	(2,861)
Cost of revenue:
Total cost of revenue	627	766	1,250	1,490
Products [Member]
Revenue:
Total revenue	11,985	19,837	24,139	39,194
Total revenue	(11,985)	(19,837)	(24,139)	(39,194)
Cost of revenue:
Total cost of revenue	$ 7,426	$ 9,707	$ 12,844	$ 19,626

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
Net income (loss)	$ (1,028)	$ 6,089	$ (368)	$ 10,763
Other comprehensive income (loss), net of tax:
Net change in cumulative translation adjustment	(57)	7	(33)	4
Net change in unrealized gain on investments	0	0	0	17
Comprehensive income (loss)	$ (1,085)	$ 6,096	$ (401)	$ 10,784

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (loss)	Accumulated Deficit
Balance, shares at May. 31, 2023		28,539
Balance, amount at May. 31, 2023	$ 75,600	$ 285	$ 127,776	$ (155)	$ (52,306)
Issuance of common stock under employee plans, shares		321
Issuance of common stock under employee plans, amount	1,092	$ 3	1,089	0	0
Issuance cost of common stock offering	(72)	$ 0	(72)	0	0
Shares repurchased for tax withholdings on vesting of restricted stock units, shares		34
Shares repurchased for tax withholdings on vesting of restricted stock units, amount	1,460	$ 0	1,460	0	0
Stock-based compensation	1,210	0	1,210	0	0
Net income (loss)	10,763	0	0	0	10,763
Foreign currency translation adjustment	4	0	0	4	0
Net unrealized gains on investments	17	$ 0	0	17	0
Balance, shares at Nov. 30, 2023		28,826
Balance, amount at Nov. 30, 2023	87,154	$ 288	128,543	(134)	(41,543)
Balance, shares at Aug. 31, 2023		28,763
Balance, amount at Aug. 31, 2023	80,145	$ 288	127,630	(141)	(47,632)
Issuance of common stock under employee plans, shares		74
Issuance of common stock under employee plans, amount	774	$ 0	774	0	0
Issuance cost of common stock offering	(72)	$ 0	(72)	0	0
Shares repurchased for tax withholdings on vesting of restricted stock units, shares		11
Shares repurchased for tax withholdings on vesting of restricted stock units, amount	448	$ 0	448	0	0
Stock-based compensation	659	0	659	0	0
Net income (loss)	6,089	0	0	0	6,089
Foreign currency translation adjustment	7	$ 0	0	7	0
Balance, shares at Nov. 30, 2023		28,826
Balance, amount at Nov. 30, 2023	87,154	$ 288	128,543	(134)	(41,543)
Balance, shares at May. 31, 2024		28,995
Balance, amount at May. 31, 2024	111,593	$ 289	130,612	(158)	(19,150)
Issuance of common stock under employee plans, shares		184
Issuance of common stock under employee plans, amount	831	$ 2	829	0	0
Shares repurchased for tax withholdings on vesting of restricted stock units, shares		22
Shares repurchased for tax withholdings on vesting of restricted stock units, amount	343	$ 0	343	0	0
Stock-based compensation	2,120	0	2,120	0	0
Net income (loss)	(368)	0	0	0	(368)
Foreign currency translation adjustment	(33)	$ 0	0	(33)	0
Issuance of common stock for business acquisition, shares		552
Issuance of common stock for business acquisition, amount	9,381	$ 6	9,375	0	0
Balance, shares at Nov. 29, 2024		29,709
Balance, amount at Nov. 29, 2024	123,181	$ 297	142,593	(191)	(19,518)
Balance, shares at Aug. 30, 2024		29,584
Balance, amount at Aug. 30, 2024	122,483	$ 295	140,812	(134)	(18,490)
Issuance of common stock under employee plans, shares		137
Issuance of common stock under employee plans, amount	775	$ 2	773	0	0
Shares repurchased for tax withholdings on vesting of restricted stock units, shares		12
Shares repurchased for tax withholdings on vesting of restricted stock units, amount	181	$ 0	181	0	0
Stock-based compensation	1,189	0	1,189	0	0
Net income (loss)	(1,028)	0	0	0	(1,028)
Foreign currency translation adjustment	(57)	$ 0	0	(57)	0
Balance, shares at Nov. 29, 2024		29,709
Balance, amount at Nov. 29, 2024	$ 123,181	$ 297	$ 142,593	$ (191)	$ (19,518)

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023
Cash flows from operating activities:
Net income (loss)	$ (368)	$ 10,763
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Stock-based compensation expense	1,945	1,160
Depreciation and amortization	953	283
Deferred income taxes	(90)	0
Amortization of operating lease right-of-use assets	506	337
Accretion of investment discount	0	(130)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable	3,718	12,037
Inventories	(3,638)	(9,996)
Prepaid expenses and other current assets	(2,940)	(2,245)
Accounts payable	(1,880)	(5,099)
Accrued expenses	5	(974)
Deferred revenue	(1,209)	(2,703)
Operating lease liabilities	(478)	(89)
Income taxes payable	(17)	12
Net cash provided by (used in) operating activities	(3,493)	3,356
Cash flows from investing activities:
Purchases of property and equipment	(518)	(440)
Proceeds from maturities of investments	0	18,000
Payments for business acquisition, net of cash and cash equivalent acquired	(10,615)	0
Net cash provided by (used in) investing activities	(11,133)	17,560
Cash flows from financing activities:
Proceeds from issuance of common stock under employee plans	831	1,092
Shares repurchased for tax withholdings on vesting of restricted stock units	(343)	(1,460)
Proceeds from issuance of common stock from public offering, net of issuance costs	0	(72)
Net cash provided by (used in) financing activities	488	(440)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3)	(16)
Net increase (decrease) in cash, cash equivalents and restricted cash	(14,141)	20,460
Cash, cash equivalents and restricted cash, beginning of period (1)	49,309	30,204
Cash, cash equivalents and restricted cash, end of period (1)	$ 35,168	$ 50,664

ORGANIZATION AND SIGNIFICANT AC

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Nov. 29, 2024
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES	1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Aehr Test Systems (the “Company”) was incorporated in California in May 1977 and develops 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 and singulated die/module parallel test and burn-in systems, the Sonoma, Tahoe and Echo packaged parts burn-in products, the WaferPak full wafer contactor, the DiePak carrier, the WaferPak aligner, the DiePak autoloader, and test fixtures. Basis of Presentation The unaudited Condensed Consolidated Financial Statements included in this quarterly report on Form 10-Q include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures normally included in the annual consolidated financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2024 audited Consolidated Financial Statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended May 31, 2024. Beginning on June 1, 2024, the Company changed its fiscal year to the 52- or 53-week period ending on the Friday nearest May 31. The second fiscal quarter in fiscal 2025 ended on November 29, 2024 and the Company’s fiscal year 2025 will end on May 30, 2025. Principles of Consolidation The Company’s Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries and all significant intercompany accounts and transactions have been eliminated upon consolidation. Critical Accounting Policies and use of Estimates The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2024. Except for the accounting policies related to Business Combination and Goodwill and Intangible Assets, as discussed below, there have been no significant changes to these accounting policies during the three and six months ended November 29, 2024. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Critical accounting estimates in these Condensed Consolidated Financial Statements include valuation of inventory at the lower of cost or net realizable value, valuation of intangible assets and impairment of long-lived assets and goodwill. Actual results could differ from those estimates. Business Combination The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. Key estimates and assumptions in valuing certain of the intangible assets and goodwill the Company has acquired include, but are not limited to, expected future cash flows from acquired developed technology, customer relationships, and trade names. Unanticipated events and circumstances could impact the accuracy or validity of such assumptions, estimates or actual results. The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded in the consolidated statements of operations. Goodwill Goodwill represents the excess of the total purchase price over the fair value of net identifiable assets acquired in a business combination. The Company assesses goodwill for impairment annually during each fourth fiscal quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. In the valuation of goodwill, management estimates future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if an impairment test is necessary. Management may choose to proceed directly to the quantitative impairment test, bypassing the initial qualitative assessment. The quantitative test compares the fair value of the reporting unit to its carrying value, including goodwill allocated to that reporting unit. A goodwill impairment loss would be the amount by which a reporting unit’s carrying value exceeds its fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Definite-lived Intangible Assets The Company performs valuations of assets acquired and liabilities assumed on the acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the identifiable net tangible and intangible assets. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern of consumption of economic benefits. Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment recorded during the three and six months ended November 29, 2024 and November 30, 2023. Concentration of Credit Risk Financial instruments which subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and generally requires no collateral. The Company had revenues from individual customers in excess of 10% of total revenues as follows: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, 2024 2023 2024 2023 Customer A 46.5 % 46.9 % 68.4 % 66.9 % Customer B 12.1 % * * * Customer C * 34.6 % * 20.0 % * Amount was less than 10% of total revenues The Company had gross accounts receivable from individual customers in excess of 10% of gross accounts receivable as follows: November 29, May 31, 2024 2024 Customer A * 49.9 % Customer B 13.3 % * Customer C 20.3 % 16.5 % Customer D 12.7 % 12.3 % Customer E 12.7 % * * Amount was less than 10% of total gross accounts receivable Recent Accounting Pronouncements Not Yet Adopted Improvements to Reportable Segment Disclosures: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures. Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.

BUSINESS COMBINATION

BUSINESS COMBINATION	6 Months Ended
	Nov. 29, 2024
BUSINESS COMBINATION
BUSINESS COMBINATION	2. BUSINESS COMBINATION On July 31, 2024, the Company completed its acquisition of Incal Technology, Inc. (“Incal”), a company that specializes in packaged part reliability/burn-in test solutions. The acquisition date fair value of the consideration transferred for Incal was approximately $22.2 million, which consisted of the following: (In thousands) Fair Value Cash $ 10,631 Common stock under transfer restriction 9,381 Escrow payable 2,381 Working capital adjustments (1) (240 ) Total $ 22,153 (1) Included in Prepaid expenses and other current assets As part of the purchase consideration, the Company issued 552,355 shares of its restricted common stock. The restricted stock issued to the shareholders of Incal is subject to a six-month holding period, during which time the shares cannot be transferred or sold without registration under the Securities Act of 1933, as amended, or pursuant to an available exemption. The fair value of the restricted shares was determined based on the closing price of the Company’s common stock on the acquisition date, adjusted for a discount related to the lack of marketability due to the transfer restrictions. The total fair value of the restricted shares issued as part of the consideration was $9.4 million. The escrow payable recorded at the acquisition date represented the present value of total escrow amount. The total escrow amount at the acquisition date included: (1) $2.1 million designated for the sellers' indemnification obligations and expected to be settled after 15 months, and (2) $0.7 million designated for the sellers' payment obligations and expected to be settled after 60 days. The escrow payable will be settled with cash of $2.8 million held in an escrow account for working capital adjustments and potential indemnification obligations in connection with the acquisition of Incal. Of the $2.8 million cash restricted in escrow, $0.7 million is included in Prepaid expenses and other current assets and $2.1 million is included in Other noncurrent assets. During the three months ended November 29, 2024, the Company updated the purchase consideration, which reflects a reduction in the receivable related to the working capital adjustment from $0.8 million to $0.2 million and a reduction in escrow payable related to indemnification from $2.8 million to $2.5 million, based on negotiations with the seller. As a result, the total purchase consideration has been adjusted from $21.9 million to $22.2 million. Accordingly, the goodwill balance has increased from $10.4 million to $10.7 million. The following table summarizes the preliminary fair value of the assets acquired and liabilities assumed at the acquisition date: (In thousands) Fair Value Cash $ 16 Accounts receivable 1,285 Inventory 2,829 Goodwill 10,742 Property and equipment 129 Intangible assets 12,000 Operating lease right-of-use assets 810 Other assets, current and noncurrent 63 Accounts payable, accrued expenses and other liabilities, current and noncurrent (2,240 ) Deferred revenue (489 ) Operating lease liabilities, current and noncurrent (714 ) Deferred tax liabilities, net (2,278 ) Total $ 22,153 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and will not be deductible for income tax purposes. The following table summarizes the fair value of the separately identifiable intangible assets at the time of acquisition: Estimated Useful life (In thousands) Fair Value (in years) Developed technology $ 9,130 12 Trade names 1,050 10 Customer relationships 810 11 Non-compete agreements and others 1,010 1-3 Total intangible assets acquired $ 12,000 Acquisition-related costs were $0.5 million for the six months ended November 29, 2024 and were expensed in the period incurred within selling, general and administrative expense in the Company's Condensed Consolidated Statements of Operations. The Company's Condensed Consolidated Statement of Operations includes $5.0 million in revenue and $0.4 million in net income contributed by Incal from the date of acquisition. Pro forma results of operations for this acquisition have not been presented, as the acquisition was not determined to be significant as of the date of acquisition. The purchase consideration allocation remains preliminary, and as additional information becomes available, the Company may further revise it during the remainder of the measurement period.

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	6 Months Ended
	Nov. 29, 2024
FAIR VALUE OF FINANCIAL INSTRUMENTS
FAIR VALUE OF FINANCIAL INSTRUMENTS	3. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents and money market funds at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings. Level 3 — Unobservable inputs that are supported by little or no market activities. The following table represents the Company’s assets measured at fair value on a recurring basis as of November 29, 2024, and the basis for that measurement: Balance as of (In thousands) November 29, 2024 Level 1 Level 2 Level 3 Money market funds $ 31,123 $ 31,123 $ - $ - Total $ 31,123 $ 31,123 $ - $ - The following table represents the Company’s assets measured at fair value on a recurring basis as of May 31, 2024, and the basis for that measurement: Balance as of (In thousands) May 31, 2024 Level 1 Level 2 Level 3 Money market funds $ 44,280 $ 44,280 $ - $ - Total $ 44,280 $ 44,280 $ - $ - Included in money market funds as of November 29, 2024 and May 31, 2024 is $0.2 million restricted cash representing a security deposit for the Company’s United States manufacturing and office space lease. There were no financial liabilities measured at fair value as of November 29, 2024 and May 31, 2024. There were no transfers between Level 1 and Level 2 fair value measurements during the six months ended November 29, 2024. The carrying amounts of financial instruments, including cash equivalents, accounts receivable, accounts payable and certain other accrued liabilities, approximate fair value due to their short maturities.

BALANCE SHEET INFORMATION

BALANCE SHEET INFORMATION	6 Months Ended
	Nov. 29, 2024
BALANCE SHEET INFORMATION
BALANCE SHEET INFORMATION	4. BALANCE SHEET INFORMATION Inventories Inventories consisted of the following: November 29, May 31, (In thousands) 2024 2024 Raw materials and sub-assemblies $ 25,200 $ 22,410 Work in process 13,953 13,593 Finished goods 4,623 1,467 $ 43,776 $ 37,470 Property and equipment Property and equipment, net consisted of the following: Useful life November 29, May 31, (In thousands) (in years) 2024 2024 Leasehold improvements * $ 2,699 $ 1,588 Machinery and equipment 3 - 5 4,718 4,528 Test equipment 4 - 5 1,965 1,928 Furniture and fixtures 2 - 5 198 175 9,580 8,219 Less: accumulated depreciation (5,274 ) (4,966 ) $ 4,306 $ 3,253 * Lesser of estimated useful life or lease term. Depreciation expense was $0.2 million and $0.4 million for the three and six months ended November 29, 2024, respectively. Depreciation expense was $0.1 million and $0.3 million for the three and six months ended November 30, 2023, respectively. Product warranties The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The standard warranty period is one year for systems and ninety days for parts and service. The following is a summary of changes in the Company's liability for product warranties during the three and six months ended November 29, 2024 and November 30, 2023: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Balance at the beginning of the period $ 219 $ 232 $ 234 $ 267 Accruals for warranties issued during the period 130 162 308 227 Warranties acquired through business combination 144 - 144 - Consumption of reserves (135 ) (173 ) (328 ) (273 ) Balance at the end of the period $ 358 $ 221 $ 358 $ 221 The accrued warranty balance is included in accrued expenses on the accompanying Condensed Consolidated Balance Sheets. Deferred revenue Deferred revenue, short-term consisted of the following: November 29, May 31, (In thousands) 2024 2024 Customer deposits $ 511 $ 1,248 Deferred revenue 102 97 $ 613 $ 1,345

GOODWILL AND PURCHASED INTANGIB

GOODWILL AND PURCHASED INTANGIBLE ASSETS	6 Months Ended
	Nov. 29, 2024
GOODWILL AND PURCHASED INTANGIBLE ASSETS
GOODWILL AND PURCHASED INTANGIBLE ASSETS	5. GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill The Company's goodwill activity during the six months ended November 29, 2024 was as follows: (In thousands) Total Balance as of May 31, 2024 $ - Addition due to business combination 10,742 Balance as of November 29, 2024 $ 10,742 There were no impairments to goodwill during the three and six months ended November 29, 2024. Purchased Intangible Assets The Company’s purchased intangible assets, net, were as follows: November 29, 2024 (In thousands) Accumulated Finite-lived intangible assets: Gross Amortization Net Developed technology $ 9,130 $ (254 ) $ 8,876 Trade names 1,050 (35 ) 1,015 Customer relationships 810 (25 ) 785 Non-compete agreements and others 1,010 (174 ) 836 Total $ 12,000 $ (488 ) $ 11,512 Amortization expense related to purchased intangible assets with finite lives was $0.3 million and $0.5 million for the three and six months ended November 29, 2024, respectively. As of November 29, 2024, the estimated future amortization expense of purchased intangible assets with finite lives is as follows: (In thousands) Amount Remainder of 2025 $ 731 2026 1,229 2027 1,183 2028 980 2029 940 Thereafter 6,449 Total $ 11,512 There were no impairment charges related to purchased intangible assets for the three and six months ended November 29, 2024.

INCOME TAXES

INCOME TAXES	6 Months Ended
	Nov. 29, 2024
INCOME TAXES
INCOME TAXES	6. INCOME TAXES The following table provides details of income taxes: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Income (loss) before income tax expense (benefit) $ (1,245 ) $ 6,109 $ (431 ) $ 10,799 Income tax expense (benefit) (217 ) 20 (63 ) 36 Effective tax rate 17.4 % 0.3 % 14.6 % 0.3 % The Company’s effective tax rate varies from the U.S. federal statutory rate of 21% primarily due to the research and development credits available to apply against federal and California income and the tax expense from stock-based compensation. The determination of income taxes for the three and six months ended November 29, 2024 and November 30, 2023, respectively, was based on the Company’s estimated annual effective tax rate. For the three and six months ended November 29, 2024, the Company recognized a tax benefit due to quarter-to-date and year-to-date losses in the U.S.. Tax expense for the three and six months ended November 30, 2023 was primarily due to profitable foreign subsidiaries. Provision for income taxes for the three and six months ended November 30, 2023 did not included tax expense related to U.S. operations due to a valuation allowance. The Company maintained a full valuation allowance on all the U.S. net deferred tax assets through the first nine months of fiscal 2024. In the fourth quarter of fiscal 2024, the Company concluded that the valuation allowance related to the U.S. federal and state deferred tax assets was no longer required due to existence of sufficient positive evidence to support that it is more likely than not that its deferred tax assets are realizable. A significant income tax benefit of $21.9 million was recognized due to release of a valuation allowance in the fourth quarter of fiscal 2024. The Company accounts for uncertain tax positions consistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Nov. 29, 2024
Commitments and contingencies (Note 7)
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES 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. 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. On December 3, 2024, a shareholder class action lawsuit captioned Lucid Alternative Fund, LP v. Aehr Test Systems, Inc. was filed in the United States District Court for the Northern District of California against the Company. The lawsuit alleges, in part, that the Company and certain of its executives made materially false and misleading statements regarding the Company’s earnings guidance and other financial projections for 2024. The lawsuit seeks unspecified monetary damages and purports to represent purchasers of the Company’s securities between January 9, 2024 and March 24, 2024. Additionally, a shareholder derivative complaint was filed, alleging breaches of fiduciary duties and other misconduct by certain directors and officers of the Company. The Company believes the claims are meritless and intends to vigorously defend its position. Given the procedural posture and the nature of the case, including that the pending proceeding is in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, the Company is unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from this matter. On October 18, 2024, the Company filed a complaint with the China Suzhou Intermediate Court to protect its intellectual property rights in China against Suzhou Semight Instruments Co., Ltd. (“Semight”) and its related entities and/or distributors, alleging infringement of the Company’s two patents related to wafer burn-in systems and wafer reliability test systems. The Company is seeking injunctive relief, claiming that Semight’s actions have infringed upon its intellectual property rights and caused substantial harm to its business. The Company believes its claims are valid and is vigorously pursuing its legal remedies. At this stage, the outcome of the litigation is uncertain, and the Company is unable to predict the likelihood of success or estimate the potential financial impact, if any, on its condensed consolidated financial statements. The Company has also incurred and expects to continue to incur legal expenses related to this matter. On December 19, 2024, Semight filed a petition for acceptance of request for invalidation to the aforementioned Chinese patents with the Department of National Intellectual Properties in Beijing. 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.

SHAREHOLDERS EQUITY

SHAREHOLDERS EQUITY	6 Months Ended
	Nov. 29, 2024
SHAREHOLDERS EQUITY
EQUITY	8. SHAREHOLDERS’ 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 up to $25 million of common stock was subsequently filed on September 17, 2021. The Company sold 1,696,729 shares of common stock at an average selling price of $14.73 per share between September and October 2021. 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 up to $25 million of common stock was subsequently filed on February 8, 2023. The Company sold 208,917 shares of common stock at an average selling price of $34.78 per share in February 2023. The gross proceeds to the Company during the quarter ended February 28, 2023 were $7.3 million, before commissions of $0.2 million and offering expenses of $0.2 million. The 2021 registration statement expired in September 2024. On October 15, 2024, the Board of Directors authorized management to execute a new $100 million shelf registration, and a Registration Statement on Form S-3 was filed with the SEC. Additionally, a Prospectus Supplement for an ATM offering of up to $40 million of common stock was filed. No proceeds were raised from the ATM during the three and six months ended November 29, 2024. The remaining amount of the ATM offering was $40 million as of November 29, 2024.

REVENUE

REVENUE	6 Months Ended
	Nov. 29, 2024
REVENUE
REVENUE	9. REVENUE Revenue recognition The Company recognizes revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below. Performance obligations include sales of systems, contactors, spare parts, 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 is recognized at a point in time, which is generally upon shipment or delivery and evidenced by transfer of title and risk of loss to the customer. Revenue from services is recognized over time as the customer receives the benefit 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. The Company sells its products primarily through a direct sales force. In certain international markets, the Company sells its products through independent distributors. Disaggregation of revenue The following presents information about the Company’s net revenues in different geographic areas, which are based upon ship-to locations, and by product category: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Asia $ 9,825 $ 18,922 $ 22,403 $ 38,153 United States 3,462 676 3,984 1,465 Europe 166 1,833 185 2,437 $ 13,453 $ 21,431 $ 26,572 $ 42,055 Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Systems $ 3,410 $ 10,685 $ 3,470 $ 18,779 Contactors 8,575 9,152 20,669 20,415 Services 1,468 1,594 2,433 2,861 $ 13,453 $ 21,431 $ 26,572 $ 42,055 With the exception of the amount of service contracts and extended warranties, the Company’s product net revenues are recognized at a point in time when control transfers to the customer. The following presents net revenues based on timing of recognition: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Timing of revenue recognition: Products and services transferred at a point in time $ 13,231 $ 20,974 $ 26,148 $ 40,985 Services transferred over time 222 457 424 1,070 $ 13,453 $ 21,431 $ 26,572 $ 42,055 Contract balances Accounts receivable are recognized in the period the Company delivers goods or provides services and when the Company’s right to consideration is unconditional. Contract assets include unbilled receivables which represent revenues that are earned in advance of scheduled billings to customers. These amounts are primarily related to product sales where transfer of control has occurred but the Company has not yet invoiced. As of November 29, 2024 and May 31, 2024, unbilled receivables were $0.2 million and $0.2 million, respectively, and were included in prepaid expenses and other current assets on the accompanying Condensed Consolidated Balance Sheets. Contract liabilities include payments received in advance of performance under a contract and are satisfied as the associated revenue is recognized. Contract liabilities as of November 29, 2024 and May 31, 2024 were $0.7 million and $1.4 million, respectively, and were included in deferred revenue, short-term and deferred revenue, long-term on the accompanying Condensed Consolidated Balance Sheets. During the three and six months ended November 29, 2024, the Company recognized $0.06 million and $1.1 million in revenue, respectively, which were included in contract liabilities as of May 31, 2024. Remaining performance obligations As of November 29, 2024, the remaining performance obligations, exclusive of customer deposits, which were comprised of deferred service contracts and extended warranty contracts not yet delivered, are not material. The foregoing excludes the value of other remaining performance obligations, as they have original durations of one year or less and 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 expenses 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.

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION	6 Months Ended
	Nov. 29, 2024
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION	10. STOCK-BASED COMPENSATION Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs (“PRSUs”), restricted shares, performance restricted shares and employee stock purchase plan (“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. See Note 11 in the Company’s Annual Report on Form 10-K for fiscal 2024 filed on July 30, 2024 for further information regarding the equity incentive plans and the ESPP. The following table summarizes the stock-based compensation expense for the three and six months ended November 29, 2024 and November 30, 2023: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Cost of sales $ 69 $ 101 $ 162 $ 164 Research and development 278 139 486 292 Selling, general and administrative 728 398 1,297 704 $ 1,075 $ 638 $ 1,945 $ 1,160 Stock-based compensation expense totaling $0.5 million and $0.3 million was capitalized as part of inventory as of November 29, 2024 and May 31, 2024, respectively. The Company’s nonvested RSU, PRSU and restricted shares activities during the six months ended November 29, 2024 were as follows: Weighted Average Grant Date Fair Shares Value (in thousands) Per Share Unvested, May 31, 2024 294 $ 20.08 Granted (1) 555 15.23 Vested (32 ) 12.42 Forfeited - - Unvested, August 30, 2024 817 $ 17.09 Granted (1) 10 13.01 Vested (47 ) 15.33 Forfeited - - Unvested, November 29, 2024 780 $ 17.14 (1) Includes 262,000 performance-based awards, of which 80,000 performance-based awards have target achievement goals whereby the grantee can earn up to 200% of the original award (up to 161,000 shares) if the maximum target goals are met. The remaining awards are earned at 100% if the target goals are achieved There were no options granted during the three and six months ended November 29, 2024 and November 30, 2023. During the six months ended November 29, 2024 and November 30, 2023, the Company issued 41,000 and 24,000 shares, respectively, under the ESPP. As of November 29, 2024 and November 30, 2023, ESPP shares of 285,000 and 373,000, respectively, were available for issuance.

NET INCOME PER SHARE

NET INCOME PER SHARE	6 Months Ended
	Nov. 29, 2024
Net income (loss) per share:
NET INCOME PER SHARE	11. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is determined using the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is determined using the weighted average number of common shares and potential common shares (representing the hypothetical number of incremental shares issuable under the assumed exercise of outstanding stock options, and vesting of outstanding RSUs and ESPP shares) during the period using the treasury stock method. The calculation of dilutive shares outstanding excludes securities that would have an antidilutive effect on net income per share. The following table presents the computation of basic and diluted net income (loss) per share: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands, except per share data) 2024 2023 2024 2023 Numerator: Net income (loss) $ (1,028 ) $ 6,089 $ (368 ) $ 10,763 Denominator: Basic weighted average shares outstanding 29,659 28,801 29,383 28,725 Dilutive effect of common equivalent shares outstanding - 968 - 975 Diluted weighted average shares outstanding 29,659 29,769 29,383 29,700 Net income (loss) per share - Basic $ (0.03 ) $ 0.21 $ (0.01 ) $ 0.37 Net income (loss) per share - Diluted $ (0.03 ) $ 0.20 $ (0.01 ) $ 0.36 Antidilutive employee share-based awards, excluded 1,747 9 1,622 4

SEGMENT AND CONCENTRATION INFOR

SEGMENT AND CONCENTRATION INFORMATION	6 Months Ended
	Nov. 29, 2024
SEGMENT AND CONCENTRATION INFORMATION
SEGMENT INFORMATION	12. SEGMENT AND CONCENTRATION INFORMATION Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker, the chief executive officer, reviews discrete financial information presented on a consolidated basis for purposes of regularly making operating decisions and assessing financial performance. Accordingly, the Company considers itself to be in one operating segment. Property and equipment, net by geographic area are as follows: November 29, May 31, (In thousands) 2024 2024 United States $ 4,206 $ 3,128 International 100 125 Total long-lived assets, net $ 4,306 $ 3,253

ORGANIZATION AND SIGNIFICANT _2

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Nov. 29, 2024
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization	Aehr Test Systems (the “Company”) was incorporated in California in May 1977 and develops 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 and singulated die/module parallel test and burn-in systems, the Sonoma, Tahoe and Echo packaged parts burn-in products, the WaferPak full wafer contactor, the DiePak carrier, the WaferPak aligner, the DiePak autoloader, and test fixtures.
Principles of Consolidation	The Company’s Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiaries and all significant intercompany accounts and transactions have been eliminated upon consolidation.
Critical Accounting Policies and use of Estimates	The Company’s significant accounting policies are disclosed in the Company’s Annual Report on Form 10-K for the year ended May 31, 2024. Except for the accounting policies related to Business Combination and Goodwill and Intangible Assets, as discussed below, there have been no significant changes to these accounting policies during the three and six months ended November 29, 2024. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the 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. Critical accounting estimates in these Condensed Consolidated Financial Statements include valuation of inventory at the lower of cost or net realizable value, valuation of intangible assets and impairment of long-lived assets and goodwill. Actual results could differ from those estimates.
Impairment of Long-Lived Assets	The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. There was no impairment recorded during the three and six months ended November 29, 2024 and November 30, 2023.
Concentration of Credit Risk	Financial instruments which subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company performs credit evaluations of its customers’ financial condition and generally requires no collateral. The Company had revenues from individual customers in excess of 10% of total revenues as follows: Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, 2024 2023 2024 2023 Customer A 46.5 % 46.9 % 68.4 % 66.9 % Customer B 12.1 % * * * Customer C * 34.6 % * 20.0 % * Amount was less than 10% of total revenues The Company had gross accounts receivable from individual customers in excess of 10% of gross accounts receivable as follows: November 29, May 31, 2024 2024 Customer A * 49.9 % Customer B 13.3 % * Customer C 20.3 % 16.5 % Customer D 12.7 % 12.3 % Customer E 12.7 % * * Amount was less than 10% of total gross accounts receivable
Recent Accounting Pronouncements Not Yet Adopted	Improvements to Reportable Segment Disclosures: In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires disclosure of incremental segment information on an annual and interim basis. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 on a retrospective basis. The Company is currently evaluating the effect of this pronouncement on its disclosures. Improvements to Income Tax Disclosures: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. This ASU is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendment should be applied on a prospective basis while retrospective application is permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures.
Basis of Presentation	The unaudited Condensed Consolidated Financial Statements included in this quarterly report on Form 10-Q include the accounts of the Company and its wholly-owned subsidiaries and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, the unaudited Condensed Consolidated Financial Statements do not include certain information and footnote disclosures normally included in the annual consolidated financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements for the interim periods presented have been prepared on a basis consistent with the May 31, 2024 audited Consolidated Financial Statements and reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the condensed consolidated financial position and results of operations as of and for such periods indicated. These unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements contained in the Company's Annual Report on Form 10-K for the year ended May 31, 2024. Beginning on June 1, 2024, the Company changed its fiscal year to the 52- or 53-week period ending on the Friday nearest May 31. The second fiscal quarter in fiscal 2025 ended on November 29, 2024 and the Company’s fiscal year 2025 will end on May 30, 2025.
Business Combination	The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. Key estimates and assumptions in valuing certain of the intangible assets and goodwill the Company has acquired include, but are not limited to, expected future cash flows from acquired developed technology, customer relationships, and trade names. Unanticipated events and circumstances could impact the accuracy or validity of such assumptions, estimates or actual results. The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded in the consolidated statements of operations.
Goodwill	Goodwill represents the excess of the total purchase price over the fair value of net identifiable assets acquired in a business combination. The Company assesses goodwill for impairment annually during each fourth fiscal quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. In the valuation of goodwill, management estimates future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if an impairment test is necessary. Management may choose to proceed directly to the quantitative impairment test, bypassing the initial qualitative assessment. The quantitative test compares the fair value of the reporting unit to its carrying value, including goodwill allocated to that reporting unit. A goodwill impairment loss would be the amount by which a reporting unit’s carrying value exceeds its fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
Definite-lived Intangible Assets	The Company performs valuations of assets acquired and liabilities assumed on the acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the identifiable net tangible and intangible assets. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern of consumption of economic benefits.

ORGANIZATION AND SIGNIFICANT _3

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Nov. 29, 2024
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Revenue from major customers	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, 2024 2023 2024 2023 Customer A 46.5 % 46.9 % 68.4 % 66.9 % Customer B 12.1 % * * * Customer C * 34.6 % * 20.0 % November 29, May 31, 2024 2024 Customer A * 49.9 % Customer B 13.3 % * Customer C 20.3 % 16.5 % Customer D 12.7 % 12.3 % Customer E 12.7 % *

BUSINESS COMBINATION (Tables)

BUSINESS COMBINATION (Tables)	6 Months Ended
	Nov. 29, 2024
BUSINESS COMBINATION
Schedule of fair value of the separately identifiable intangible assets	Estimated Useful life (In thousands) Fair Value (in years) Developed technology $ 9,130 12 Trade names 1,050 10 Customer relationships 810 11 Non-compete agreements and others 1,010 1-3 Total intangible assets acquired $ 12,000
Schedule of acquisition date fair value of the consideration	(In thousands) Fair Value Cash $ 10,631 Common stock under transfer restriction 9,381 Escrow payable 2,381 Working capital adjustments (1) (240 ) Total $ 22,153
Fair value of the assets acquired and liabilities	(In thousands) Fair Value Cash $ 16 Accounts receivable 1,285 Inventory 2,829 Goodwill 10,742 Property and equipment 129 Intangible assets 12,000 Operating lease right-of-use assets 810 Other assets, current and noncurrent 63 Accounts payable, accrued expenses and other liabilities, current and noncurrent (2,240 ) Deferred revenue (489 ) Operating lease liabilities, current and noncurrent (714 ) Deferred tax liabilities, net (2,278 ) Total $ 22,153

FAIR VALUE OF FINANCIAL INSTR_2

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Nov. 29, 2024
FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair value of assets and liabilities	Balance as of (In thousands) November 29, 2024 Level 1 Level 2 Level 3 Money market funds $ 31,123 $ 31,123 $ - $ - Total $ 31,123 $ 31,123 $ - $ - Balance as of (In thousands) May 31, 2024 Level 1 Level 2 Level 3 Money market funds $ 44,280 $ 44,280 $ - $ - Total $ 44,280 $ 44,280 $ - $ -

BALANCE SHEET INFORMATION (Tabl

BALANCE SHEET INFORMATION (Tables)	6 Months Ended
	Nov. 29, 2024
BALANCE SHEET INFORMATION
Inventories	November 29, May 31, (In thousands) 2024 2024 Raw materials and sub-assemblies $ 25,200 $ 22,410 Work in process 13,953 13,593 Finished goods 4,623 1,467 $ 43,776 $ 37,470
Property and equipment, net	Useful life November 29, May 31, (In thousands) (in years) 2024 2024 Leasehold improvements * $ 2,699 $ 1,588 Machinery and equipment 3 - 5 4,718 4,528 Test equipment 4 - 5 1,965 1,928 Furniture and fixtures 2 - 5 198 175 9,580 8,219 Less: accumulated depreciation (5,274 ) (4,966 ) $ 4,306 $ 3,253
Warranty reserve	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Balance at the beginning of the period $ 219 $ 232 $ 234 $ 267 Accruals for warranties issued during the period 130 162 308 227 Warranties acquired through business combination 144 - 144 - Consumption of reserves (135 ) (173 ) (328 ) (273 ) Balance at the end of the period $ 358 $ 221 $ 358 $ 221
Customer deposits and deferred revenue, short-term	November 29, May 31, (In thousands) 2024 2024 Customer deposits $ 511 $ 1,248 Deferred revenue 102 97 $ 613 $ 1,345

GOODWILL AND PURCHASED INTANG_2

GOODWILL AND PURCHASED INTANGIBLE ASSETS (Tables)	6 Months Ended
	Nov. 29, 2024
GOODWILL AND PURCHASED INTANGIBLE ASSETS
Schedule of Goodwill	(In thousands) Total Balance as of May 31, 2024 $ - Addition due to business combination 10,742 Balance as of November 29, 2024 $ 10,742
Purchased Intangible Assets	November 29, 2024 (In thousands) Accumulated Finite-lived intangible assets: Gross Amortization Net Developed technology $ 9,130 $ (254 ) $ 8,876 Trade names 1,050 (35 ) 1,015 Customer relationships 810 (25 ) 785 Non-compete agreements and others 1,010 (174 ) 836 Total $ 12,000 $ (488 ) $ 11,512
Schedule of estimated future amortization expense	(In thousands) Amount Remainder of 2025 $ 731 2026 1,229 2027 1,183 2028 980 2029 940 Thereafter 6,449 Total $ 11,512

INCOME TAXES (Tables)

INCOME TAXES (Tables)	6 Months Ended
	Nov. 29, 2024
INCOME TAXES
Domestic and foreign components of loss before income tax (expense) benefit	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Income (loss) before income tax expense (benefit) $ (1,245 ) $ 6,109 $ (431 ) $ 10,799 Income tax expense (benefit) (217 ) 20 (63 ) 36 Effective tax rate 17.4 % 0.3 % 14.6 % 0.3 %

REVENUE (Tables)

REVENUE (Tables)	6 Months Ended
	Nov. 29, 2024
REVENUE
Disaggregation of revenue	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Asia $ 9,825 $ 18,922 $ 22,403 $ 38,153 United States 3,462 676 3,984 1,465 Europe 166 1,833 185 2,437 $ 13,453 $ 21,431 $ 26,572 $ 42,055 Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Systems $ 3,410 $ 10,685 $ 3,470 $ 18,779 Contactors 8,575 9,152 20,669 20,415 Services 1,468 1,594 2,433 2,861 $ 13,453 $ 21,431 $ 26,572 $ 42,055 Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Timing of revenue recognition: Products and services transferred at a point in time $ 13,231 $ 20,974 $ 26,148 $ 40,985 Services transferred over time 222 457 424 1,070 $ 13,453 $ 21,431 $ 26,572 $ 42,055

STOCKBASED COMPENSATION (Tables

STOCKBASED COMPENSATION (Tables)	6 Months Ended
	Nov. 29, 2024
STOCK-BASED COMPENSATION
Compensation costs related to the Company's stock-based compensation	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands) 2024 2023 2024 2023 Cost of sales $ 69 $ 101 $ 162 $ 164 Research and development 278 139 486 292 Selling, general and administrative 728 398 1,297 704 $ 1,075 $ 638 $ 1,945 $ 1,160
Nonvested RSU activity	Weighted Average Grant Date Fair Shares Value (in thousands) Per Share Unvested, May 31, 2024 294 $ 20.08 Granted (1) 555 15.23 Vested (32 ) 12.42 Forfeited - - Unvested, August 30, 2024 817 $ 17.09 Granted (1) 10 13.01 Vested (47 ) 15.33 Forfeited - - Unvested, November 29, 2024 780 $ 17.14

NET INCOME PER SHARE (Tables)

NET INCOME PER SHARE (Tables)	6 Months Ended
	Nov. 29, 2024
Net income (loss) per share:
Earnings per share	Three Months Ended Six Months Ended November 29, November 30, November 29, November 30, (In thousands, except per share data) 2024 2023 2024 2023 Numerator: Net income (loss) $ (1,028 ) $ 6,089 $ (368 ) $ 10,763 Denominator: Basic weighted average shares outstanding 29,659 28,801 29,383 28,725 Dilutive effect of common equivalent shares outstanding - 968 - 975 Diluted weighted average shares outstanding 29,659 29,769 29,383 29,700 Net income (loss) per share - Basic $ (0.03 ) $ 0.21 $ (0.01 ) $ 0.37 Net income (loss) per share - Diluted $ (0.03 ) $ 0.20 $ (0.01 ) $ 0.36 Antidilutive employee share-based awards, excluded 1,747 9 1,622 4

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	6 Months Ended
	Nov. 29, 2024
SEGMENT AND CONCENTRATION INFORMATION
Property and equipment by geographic region	November 29, May 31, (In thousands) 2024 2024 United States $ 4,206 $ 3,128 International 100 125 Total long-lived assets, net $ 4,306 $ 3,253

ORGANIZATION AND SIGNIFICANT _4

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended		6 Months Ended		12 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023	May 31, 2024
Net Sales | Customer A
Concentration risk	46.50%	46.90%	68.40%	66.90%
Net Sales | Customer C
Concentration risk	0%	34.60%	0%	20%
Net Sales | Customer B
Concentration risk	12.10%	0%	0%	0%
Accounts Receivable | Customer A
Concentration risk			0%		49.90%
Accounts Receivable | Customer B
Concentration risk			13.30%		0%
Accounts Receivable | Customer C
Concentration risk			20.30%		16.50%
Accounts Receivable | Customer D
Concentration risk			12.70%		12.30%
Accounts Receivable | Customer E
Concentration risk			12.70%		0%

ORGANIZATION AND SIGNIFICANT _5

ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	6 Months Ended
	Nov. 29, 2024
Revenue [Member]
Concentration risk	10%

BUSINESS COMBINATION (Details)

BUSINESS COMBINATION (Details) $ in Thousands	6 Months Ended
	Nov. 29, 2024 USD ($)
BUSINESS COMBINATION
Cash	$ 10,631
Common stock under transfer restriction	9,381
Escrow payable	2,381
Working capital adjustments	(240)
Total fair value of the consideration	$ 22,153

BUSINESS COMBINATION (Details 1

BUSINESS COMBINATION (Details 1) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
Inventory	$ 43,776	$ 37,470
Goodwill	10,742	0
Property and equipment	4,306	3,253
Operating lease right-of-use assets	6,038	5,734
Other assets, current and noncurrent	2,576	304
Deferred revenue	(102)	(97)
Operating lease liabilities, current and noncurrent	(5,574)	$ (5,732)
Fair Value [Member]
Cash	16
Accounts receivable	1,285
Inventory	2,829
Goodwill	10,742
Property and equipment	129
Intangible assets	12,000
Operating lease right-of-use assets	810
Other assets, current and noncurrent	63
Accounts payable, accrued expenses and other liabilities, current and noncurrent	(2,240)
Deferred revenue	(489)
Operating lease liabilities, current and noncurrent	(714)
Deferred tax liabilities, net	(2,278)
Total	$ 22,153

BUSINESS COMBINATION (Details 2

BUSINESS COMBINATION (Details 2) $ in Thousands	6 Months Ended
	Nov. 29, 2024 USD ($)
Fair Value of intangible assets	$ 12,000
Trade Names [Member]
Fair Value of estimated useful life	10 years
Fair Value of intangible assets	$ 1,050
Developed Technology [Member]
Fair Value of estimated useful life	12 years
Fair Value of intangible assets	$ 9,130
Customer Relationships [Member]
Fair Value of estimated useful life	11 years
Fair Value of intangible assets	$ 810
Non Compete Agreements And Others [Member]
Fair Value of intangible assets	$ 1,010
Non Compete Agreements And Others [Member] | Bottom [Member]
Fair Value of estimated useful life	1 year
Non Compete Agreements And Others [Member] | Top [Member]
Fair Value of estimated useful life	3 years

BUSINESS COMBINATION (Details N

BUSINESS COMBINATION (Details Narrative) $ in Millions	3 Months Ended	6 Months Ended
	Nov. 29, 2024 USD ($)	Nov. 29, 2024 USD ($) shares
Restricted common stock shares issued | shares		552,355
Total fair value of the restricted shares issued		$ 9.4
Escrow payable		$ 2.8
Description of designated indemnification obligations		$2.1 million designated for the sellers' indemnification obligations and expected to be settled after 15 months, and (2) $0.7 million designated for the sellers' payment obligations and expected to be settled after 60 days
Cash restricted	$ 2.8	$ 2.8
Prepaid expenses and other current assets	0.7	0.7
Other noncurrent assets	$ 2.1	2.1
Total fair value of the consideration transferred		22.2
General and administrative expense		0.5
Updated purchase consideration description	which reflects a reduction in the receivable related to the working capital adjustment from $0.8 million to $0.2 million and a reduction in escrow payable related to indemnification from $2.8 million to $2.5 million, based on negotiations with the seller. As a result, the total purchase consideration has been adjusted from $21.9 million to $22.2 million. Accordingly, the goodwill balance has increased from $10.4 million to $10.7 million
Incal Technology Inc [Member]
Revenues		5
Net income		$ 0.4

FAIR VALUE OF FINANCIAL INSTR_3

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
Assets [Member]
Investment securities	$ 31,123	$ 44,280
Level 1 [Member] | Assets [Member]
Investment securities	31,123	44,280
Level 2 [Member] | Assets [Member]
Investment securities	0	0
Level 3 [Member] | Assets [Member]
Investment securities	0	0
Money Market Funds
Investment securities	31,123	44,280
Money Market Funds | Level 1 [Member]
Investment securities	31,123	44,280
Money Market Funds | Level 2 [Member]
Investment securities	0	0
Money Market Funds | Level 3 [Member]
Investment securities	$ 0	$ 0

FAIR VALUE OF FINANCIAL INSTR_4

FAIR VALUE OF FINANCIAL INSTRUMENTS (Details Narrative) - USD ($)	Nov. 29, 2024	May 31, 2024
FAIR VALUE OF FINANCIAL INSTRUMENTS
Restricted cash	$ 200,000	$ 200,000

BALANCE SHEET INFORMATION (Deta

BALANCE SHEET INFORMATION (Details) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
BALANCE SHEET INFORMATION
Raw materials and sub-assemblies	$ 25,200	$ 22,410
Work in process	13,953	13,593
Finished goods	4,623	1,467
Inventories	$ 43,776	$ 37,470

BALANCE SHEET INFORMATION (De_2

BALANCE SHEET INFORMATION (Details 1) - USD ($) $ in Thousands	6 Months Ended
	Nov. 29, 2024	May 31, 2024
Leasehold improvements	$ 2,699	$ 1,588
Machinery and equipment	4,718	4,528
Test equipment	1,965	1,928
Furniture and fixtures	198	175
Property and equipment, gross	9,580	8,219
Less: Accumulated depreciation and amortization	(5,274)	(4,966)
Property and equipment, net	$ 4,306	$ 3,253
Test Equipment [Member] | Top [Member]
Property and equipment useful life	5 years
Test Equipment [Member] | Bottom [Member]
Property and equipment useful life	4 years
Machinery And Equipment [Member] | Top [Member]
Property and equipment useful life	5 years
Machinery And Equipment [Member] | Bottom [Member]
Property and equipment useful life	3 years
Furniture And Fixtures [Member] | Top [Member]
Property and equipment useful life	5 years
Furniture And Fixtures [Member] | Bottom [Member]
Property and equipment useful life	2 years

BALANCE SHEET INFORMATION (De_3

BALANCE SHEET INFORMATION (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
BALANCE SHEET INFORMATION
Balance at the Beginning of the period	$ 219	$ 232	$ 234	$ 267
Accruals for warranties issued during the period	130	162	308	227
Warranties acquired through business combination	144	0	144	0
Consumption of reserves	(135)	(173)	(328)	(273)
Balance at the End of the period	$ 358	$ 221	$ 358	$ 221

BALANCE SHEET INFORMATION (De_4

BALANCE SHEET INFORMATION (Details 3) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
BALANCE SHEET INFORMATION
Customer deposits	$ 511	$ 1,248
Deferred revenue	102	97
Customer deposits and deferred revenue	$ 613	$ 1,345

BALANCE SHEET INFORMATION (De_5

BALANCE SHEET INFORMATION (Details Narrative) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
BALANCE SHEET INFORMATION
Depreciation expense	$ 0.2	$ 0.1	$ 0.4	$ 0.3

GOODWILL AND PURCHASED INTANG_3

GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details) $ in Thousands	6 Months Ended
	Nov. 29, 2024 USD ($)
GOODWILL AND PURCHASED INTANGIBLE ASSETS
Balance as of May 31, 2024	$ 0
Addition due to business combination	10,742
Balance as of November 29, 2024	$ 10,742

GOODWILL AND PURCHASED INTANG_4

GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details 1) $ in Thousands	Nov. 29, 2024 USD ($)
Intangible assets gross	$ 12,000
Intangible assets accumulated amortization	(488)
Intangible assets net	11,512
Trade Names [Member]
Intangible assets gross	1,050
Intangible assets accumulated amortization	(35)
Intangible assets net	1,015
Developed Technology [Member]
Intangible assets gross	9,130
Intangible assets accumulated amortization	(254)
Intangible assets net	8,876
Customer Relationships [Member]
Intangible assets gross	810
Intangible assets accumulated amortization	(25)
Intangible assets net	785
Non Compete Agreements And Others [Member]
Intangible assets gross	1,010
Intangible assets accumulated amortization	(174)
Intangible assets net	$ 836

GOODWILL AND PURCHASED INTANG_5

GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details 2) $ in Thousands	Nov. 29, 2024 USD ($)
GOODWILL AND PURCHASED INTANGIBLE ASSETS
Remainder of 2025	$ 731
2026	1,229
2027	1,183
2028	980
2029	940
Thereafter	6,449
Total	$ 11,512

GOODWILL AND PURCHASED INTANG_6

GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Nov. 29, 2024	Nov. 29, 2024
GOODWILL AND PURCHASED INTANGIBLE ASSETS
Amortization expense intangible assets	$ 0.3	$ 0.5

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
INCOME TAXES
Income (loss) before income tax (expense) benefit	$ (1,245)	$ 6,109	$ (431)	$ 10,799
Income tax expense (benefit)	$ (217)	$ 20	$ (63)	$ 36
Effective tax rate	17.40%	0.30%	14.60%	0.30%

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) $ in Millions	6 Months Ended
	Nov. 29, 2024 USD ($)
INCOME TAXES
U.S. federal statutory tax rate	21%
Deferred tax assets	$ 21.9

SHAREHOLDERS EQUITY (Details Na

SHAREHOLDERS EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Millions		1 Months Ended
	Feb. 08, 2023	Feb. 28, 2023	Sep. 17, 2021	Nov. 29, 2024	Oct. 29, 2024	Oct. 15, 2024
SHAREHOLDERS EQUITY
Sale of common stock price per share		$ 34.78	$ 14.73
Sale of common stock shares		208,917	1,696,729
Gross proceeds	$ 25	$ 7.3	$ 25
Commission fees		0.2	0.7
Offering expenses		0.2	$ 0.3
Shelf registration amount						$ 100
Prospectus Supplement					$ 40
Remaining amount of the ATM offering				$ 40
ATM [Member]
SHAREHOLDERS EQUITY
Gross proceeds		$ 25

REVENUE (Details)

REVENUE (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Net sales	$ 13,453	$ 21,431	$ 26,572	$ 42,055
Europe
Net sales	166	1,833	185	2,437
Asia
Net sales	9,825	18,922	22,403	38,153
United States
Net sales	$ 3,462	$ 676	$ 3,984	$ 1,465

REVENUE (Details 1)

REVENUE (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Net sales	$ 13,453	$ 21,431	$ 26,572	$ 42,055
Services [Member]
Net sales	1,468	1,594	2,433	2,861
Systems [Member]
Net sales	3,410	10,685	3,470	18,779
Contactors [Member]
Net sales	$ 8,575	$ 9,152	$ 20,669	$ 20,415

REVENUE (Details 2)

REVENUE (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Net sales	$ 13,453	$ 21,431	$ 26,572	$ 42,055
Products And Services Transferred At A Point In Time [Member]
Net sales	13,231	20,974	26,148	40,985
Services Transferred over Time [Member]
Net sales	$ 222	$ 457	$ 424	$ 1,070

REVENUE (Details Narrative)

REVENUE (Details Narrative) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Nov. 29, 2024	Nov. 29, 2024	May 31, 2024
REVENUE
Contract liabilities	$ 700	$ 700	$ 1,400
Contract assets	200	200	$ 200
Recognition of contract liabilities	$ 60	$ 1,100

STOCKBASED COMPENSATION (Detail

STOCKBASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Total stock-based compensation	$ 1,075	$ 638	$ 1,945	$ 1,160
Cost of Sales
Total stock-based compensation	69	101	162	164
Research and Development
Total stock-based compensation	278	139	486	292
Selling, General and Administrative
Total stock-based compensation	$ 728	$ 398	$ 1,297	$ 704

STOCKBASED COMPENSATION (Deta_2

STOCKBASED COMPENSATION (Details 1) - Nonvested RSU Activty - $ / shares	3 Months Ended
	Nov. 29, 2024	Aug. 30, 2024
Unvested beginning	817,000	294,000
Shares, Granted	10,000	555,000
Shares, Vested	(47,000)	(32,000)
Shares, Forfeited	0	0
Unvested, Ending	780,000	817,000
Weighted Average Grant Date Fair Value Per Share, beginning	$ 17.09	$ 20.08
Granted	13.01	15.23
Vested	15.33	12.42
Forfeited	0	0
Weighted Average Grant Date Fair Value Per Share, Ending	$ 17.14	$ 17.09

STOCKBASED COMPENSATION (Deta_3

STOCKBASED COMPENSATION (Details Narrative) - USD ($) $ in Millions	6 Months Ended
	Nov. 29, 2024	Nov. 30, 2023	May 31, 2024
Awards shares issued	80,000
Stock-based compensation expense capitalized	$ 0.5		$ 0.3
Employee stock purchase plan shares available for issuance	262,000
Employee stock purchase plan shares issued	161,000
Employee Stock Purchase Plan
Employee stock purchase plan shares issued	41,000	24,000
Share available for issuance	285,000	373,000

NET INCOME (LOSS) PER SHARE (De

NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended			6 Months Ended
	Nov. 29, 2024	Nov. 29, 2024	Nov. 30, 2023	Nov. 29, 2024	Nov. 30, 2023
Net income (loss) per share:
Net income (loss)	$ (1,028)	$ (1,028)	$ 6,089	$ (368)	$ 10,763
Denominator: Weighted average shares outstanding		29,659	28,801	29,383	28,725
Dilutive effect of common equivalent shares outstanding			968		975
Denominator: Diluted weighted average shares outstanding	29,659	29,659	29,769	29,383	29,700
Net income (loss) per share - Basic	$ (0.03)	$ (0.03)	$ 0.21	$ (0.01)	$ 0.37
Net income (loss) per share - Diluted	$ (0.03)	$ (0.03)	$ 0.20	$ (0.01)	$ 0.36
Antidilutive employee share-based award shares, excluded		1,747	9	1,622	4

SEGMENT AND CONCENTRATION INF_2

SEGMENT AND CONCENTRATION INFORMATION (Details) - USD ($) $ in Thousands	Nov. 29, 2024	May 31, 2024
SEGMENT AND CONCENTRATION INFORMATION
Property and equipment, net	$ 4,306	$ 3,253
International
SEGMENT AND CONCENTRATION INFORMATION
Property and equipment, net	100	125
United States
SEGMENT AND CONCENTRATION INFORMATION
Property and equipment, net	$ 4,206	$ 3,128