aehr_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to __________

Commission file number: 000-22893

AEHR TEST SYSTEMS

(Exact name of Registrant as specified in its charter)

California		94-2424084
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

400 Kato Terrace Fremont, CA		94539
(Address of principal executive offices)		(Zip Code)

(510) 623-9400

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes☒ No☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No☐

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock Par value of $0.01 per share	AEHR	The NASDAQ Capital Market

Number of shares of the registrant’s common stock, $0.01 par value, outstanding as of December 31, 2022 was 27,759,445.

AEHR TEST SYSTEMS

FORM 10-Q

FOR THE QUARTER ENDED NOVEMBER 30, 2022

INDEX

PART I. FINANCIAL INFORMATION		3

ITEM 1. Financial Statements (Unaudited)		3

Condensed Consolidated Balance Sheets at November 30, 2022 and May 31, 2022		3

Condensed Consolidated Statements of Operations for the Three and Six Months Ended November 30, 2022 and 2021		4

Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended November 30, 2022 and 2021		5

Condensed Consolidated Statements of Shareholders’ Equity for the Three and Six Months Ended November 30, 2022 and 2021		6

Condensed Consolidated Statements of Cash Flows for the Six Months Ended November 30, 2022 and 2021		8

Notes to Condensed Consolidated Financial Statements		9

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		24

ITEM 3. Quantitative and Qualitative Disclosures About Market Risks		29

ITEM 4. Controls and Procedures		29

PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings		31

ITEM 1A. Risk Factors		31

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds		31

ITEM 3. Defaults Upon Senior Securities		31

ITEM 4. Mine Safety Disclosures		31

ITEM 5. Other Information		31

ITEM 6. Exhibits		32

SIGNATURES		33

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (Unaudited)

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

(unaudited)

	November 30,			May 31,
	2022			2022
					(1)
ASSETS
Current assets:
Cash and cash equivalents	$	18,874		$	31,484
Short-term investments		17,710			-
Trade and other accounts receivable, net		10,156			12,859
Inventories		17,972			15,051
Prepaid expenses and other current assets		823			613

Total current assets		65,535			60,007

Property and equipment, net		1,263			1,203
Operating lease right-of-use assets		561			917
Other assets		184			201

Total assets	$	67,543		$	62,328

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,949		$	4,195
Accrued expenses		2,566			3,610
Operating lease liabilities, short-term		551			794
Customer deposits and deferred revenue, short-term		3,680			2,415

Total current liabilities		10,746			11,014

Operating lease liabilities, long-term		65			212
Deferred revenue, long-term		25			69
Other liabilities		40			44
Total liabilities		10,876			11,339

Shareholders’ equity:

Common stock, $0.01 par value: Authorized: 75,000 shares; Issued and outstanding: 27,732 shares and 27,120 shares at November 30, 2022 and May 31, 2022, respectively		277			271
Additional paid-in capital		119,094			117,686
Accumulated other comprehensive loss		(155	)		(105	)
Accumulated deficit		(62,549	)		(66,863	)

Total shareholders’ equity		56,667			50,989

Total liabilities and shareholders’ equity	$	67,543		$	62,328

(1)	The condensed consolidated balance sheet at May 31, 2022 has been derived from the audited consolidated financial statements at that date.

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

Table of Contents

AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2022			2021			2022			2021

Net sales	$	14,815		$	9,611		$	25,486		$	15,257
Cost of sales		6,904			5,092			13,094			8,457
Gross profit		7,911			4,519			12,392			6,800

Operating expenses:
Selling, general and administrative		2,875			2,489			5,400			4,442
Research and development		1,551			1,313			3,049			2,634
Total operating expenses		4,426			3,802			8,449			7,076

Income (loss) from operations		3,485			717			3,943			(276	)

Interest income (expense), net		263			(1	)		384			(10	)
Gain from forgiveness of PPP loan		-			-			-			1,698
Other (expense) income, net		(5	)		35			19			58

Income before income tax expense		3,743			751			4,346			1,470

Income tax expense		(18	)		(34	)		(32	)		(57	)
Net income	$	3,725		$	717		$	4,314		$	1,413

Net income per share
Basic	$	0.14		$	0.03		$	0.16		$	0.06
Diluted	$	0.13		$	0.03		$	0.15		$	0.05

Shares used in per share calculations:
Basic		27,579			26,205			27,410			25,102
Diluted		29,080			28,342			28,934			26,849

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

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AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands, unaudited)

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2022			2021			2022			2021

Net income	$	3,725		$	717		$	4,314		$	1,413

Other comprehensive (loss) income, net of tax:
Net change in unrealized loss on investments		(6	)		-			(6	)		-
Net change in cumulative translation adjustments		1			(44	)		(44	)		(80	)

Comprehensive income	$	3,720		$	673		$	4,264		$	1,333

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

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AEHR TEST SYSTEMS

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(in thousands)

(unaudited)

					Additional		Accumulated Other						Total
	Common Stock				Paid-in		Comprehensive			Accumulated			Shareholders’
Three Months Ended November 30, 2022	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balances, August 31, 2022		27,395	$	274	$	117,668	$	(150	)	$	(66,274	)	$	51,518

SEC Form 10-Q filed by Aehr Test Systems