1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
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BUSINESS:
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Aehr Test Systems (the “Company”)\rwas incorporated in California in May 1977 and primarily designs, engineers and manufactures test and burn-in equipment used in\rthe semiconductor industry. The Company’s principal products are the Advanced Burn-In and Test System, or ABTS, the FOX full\rwafer contact parallel test and burn-in systems, the MAX burn-in system, WaferPak full wafer contactor, the DiePak carrier and\rtest fixtures.
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LIQUIDITY:
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Since inception, the Company has incurred\rsubstantial cumulative losses and negative cash flows from operations. In response, the Company took steps to minimize expense\rlevels, entered into credit arrangements, and raised capital through public and private equity offerings, to increase the likelihood\rthat it will have sufficient cash to support operations.
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In April 2017, the Company completed a public\roffering of its common stock raising net proceeds to the Company of $15.8 million. At May 31, 2017 the Company had $17.8 million\rin cash and cash equivalents. The Company anticipates that the existing cash balance together with income from operations, collections\rof existing accounts receivable, revenue from our existing backlog of products, the sale of inventory on hand, and deposits and\rdown payments against significant orders will be adequate to meet its working capital and capital equipment requirements.
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CONSOLIDATION:
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The consolidated financial statements include\rthe accounts of the Company and both its wholly-owned and majority-owned foreign subsidiaries. Intercompany accounts and transactions\rhave been eliminated.
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FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS:
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Assets and liabilities of the Company’s\rforeign subsidiaries and a branch office are translated into U.S. Dollars from their functional currencies of Japanese Yen, Euros\rand New Taiwan Dollars using the exchange rate in effect at the balance sheet date. Additionally, their net sales and expenses\rare translated using exchange rates approximating average rates prevailing during the fiscal year. Translation adjustments that\rarise from translating their financial statements from their local currencies to U.S. Dollars are accumulated and reflected as\ra separate component of shareholders’ equity (deficit).
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Transaction gains and losses that arise from\rexchange rate changes denominated in currencies other than the local currency are included in the Consolidated Statements of Operations\ras incurred. See Note 13 for the detail of foreign exchange transaction gains and losses for all periods presented.
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USE OF ESTIMATES:
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The preparation of financial statements in\rconformity with accounting principles generally accepted in the United States of America requires management to make estimates\rand assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at\rthe date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results\rcould differ from those estimates. Significant estimates in the Company’s consolidated financial statements include allowance\rfor doubtful accounts, valuation of inventory at the lower of cost or market, and warranty reserves.
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CASH EQUIVALENTS AND INVESTMENTS:
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Cash equivalents consist of money market\rinstruments purchased with an original maturity of three months or less. These investments are reported at fair value.
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FAIR VALUE OF FINANCIAL INSTRUMENTS AND MEASUREMENT:
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The Company’s financial instruments\rare measured at fair value consistent with authoritative guidance. This authoritative guidance defines fair value, establishes\ra framework for using fair value to measure assets and liabilities, and disclosures required related to fair value measurements.
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The guidance establishes a fair value hierarchy\rbased on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable\rinputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent\rsources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair\rvalue hierarchy consists of the following three levels:
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Level 1 - instrument valuations are obtained from real-time quotes\rfor transactions in active exchange markets involving identical assets.
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Level 2 - instrument valuations are obtained from readily-available\rpricing sources for comparable instruments.
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Level 3 - instrument valuations are obtained without observable market\rvalues and require a high level of judgment to determine the fair value.
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The following table summarizes the Company’s\rfinancial assets measured at fair value on a recurring basis as of May 31, 2017 (in thousands):
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| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2017 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 15,516 | \r | $ | 15,516 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 15,566 | \r | $ | 15,516 | \r | $ | 50 | \r | $ | — | ||||
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The following\rtable summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands):
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| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2016 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 1 | \r | $ | 1 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 51 | \r | $ | 1 | \r | $ | 50 | \r | $ | — | ||||
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There were no financial liabilities measured\rat fair value as of May 31, 2017 and 2016.
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There were no transfers between Level 1 and\rLevel 2 fair value measurements during the fiscal year ended May 31, 2017 and 2016.
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The carrying amounts of financial instruments\rincluding cash, cash equivalents, receivables, accounts payable and certain other accrued liabilities, approximate fair value due\rto their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the carrying\rvalue of the debt approximates the fair value.
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The Company has at times invested in debt\rand equity of private companies, and may do so again in the future, as part of its business strategy.
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ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
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Accounts receivable are derived from the\rsale of products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers\rand burn-in and test service companies. Accounts receivable are recorded at the invoiced amount and are not interest bearing. The\rCompany maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company also\rreviews its trade receivables by aging category to identify specific customers with known disputes or collection issues. The Company\rexercises judgment when determining the adequacy of these reserves as the Company evaluates historical bad debt trends, general\reconomic conditions in the United States and internationally, and changes in customer financial conditions. Uncollectible receivables\rare recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received.\rNo significant adjustments to the allowance for doubtful accounts were recorded during the years ended May 31, 2017, 2016 or 2015.
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CONCENTRATION OF CREDIT RISK:
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The Company sells its products\rprimarily to semiconductor manufacturers in North America, Asia, and Europe. As of May 31, 2017, approximately 55%, 0% and\r45% of gross accounts receivable were from customers located in Asia, Europe and North America, respectively. As of May 31,\r2016, approximately 7%, 68% and 25% of gross accounts receivable were from customers located in Asia, Europe and North\rAmerica, respectively. Three customers accounted for 47%, 40% and 11% of gross accounts receivable as of May 31, 2017. One\rcustomer accounted for 67% of gross accounts receivable as of May 31, 2016. Four customers accounted for 45%, 19%, 17% and\r10% of net sales in fiscal 2017. Two customers accounted for 47% and 32% of net sales in fiscal 2016. The Company performs\rongoing credit evaluations of its customers and generally does not require collateral. The Company uses letter of credit\rterms for some of its international customers.
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The Company’s cash and cash equivalents\rare generally deposited with major financial institutions in the United States, Japan, Germany and Taiwan. The Company invests\rits excess cash in money market funds. The money market funds bear the risk associated with each fund. The money market funds have\rvariable interest rates. The Company has not experienced any material losses on its money market funds or short-term cash deposits.
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CONCENTRATION OF SUPPLY RISK:
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The Company relies on subcontractors to manufacture\rmany of the components and subassemblies used in its products. Quality or performance failures of the Company’s products\ror changes in its manufacturers’ financial or business condition could disrupt the Company’s ability to supply quality\rproducts to its customers and thereby have a material and adverse effect on its business and operating results. Some of the components\rand technologies used in the Company’s products are purchased and licensed from a single source or a limited number of sources.\rThe loss of any of these suppliers may cause the Company to incur additional transition costs, result in delays in the manufacturing\rand delivery of its products, or cause it to carry excess or obsolete inventory and could cause it to redesign its products.
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INVENTORIES:
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Inventories include material, labor and overhead,\rand are stated at the lower of cost (first-in, first-out method) or market. Provisions for excess, obsolete and unusable inventories\rare made after management’s evaluation of future demand and market conditions. The Company adjusts inventory balances to\rapproximate the lower of its manufacturing costs or market value. If actual future demand or market conditions become less favorable\rthan those projected by management, additional inventory write-downs may be required, and would be reflected in cost of product\rrevenue in the period the revision is made.
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PROPERTY AND EQUIPMENT:
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Property and equipment are stated at cost\rless accumulated depreciation and amortization. Major improvements are capitalized, while repairs and maintenance are expensed\ras incurred. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the related lease.\rFurniture and fixtures, machinery and equipment, and test equipment are depreciated on a straight-line basis over their estimated\ruseful lives. The ranges of estimated useful lives are generally as follows:
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| Furniture and fixtures | \r2 to 6 years |
| Machinery and equipment | \r3 to 6 years |
| Test equipment | \r4 to 6 years |
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REVENUE RECOGNITION:
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The Company recognizes revenue upon the shipment\rof products or the performance of services when: (1) persuasive evidence of the arrangement exists; (2) goods or services have\rbeen delivered; (3) the price is fixed or determinable; and (4) collectibility is reasonably assured. When a sales agreement involves\rmultiple deliverables, such as extended support provisions, training to be supplied after delivery of the systems, and test programs\rspecific to customers’ routine applications, the multiple deliverables are evaluated to determine the unit of accounting.\rJudgment is required to properly identify the accounting units of multiple element transactions and the manner in which revenue\ris allocated among the accounting units. Judgments made, or changes to judgments made, may significantly affect the timing or amount\rof revenue recognition.
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Revenue related to the multiple elements\ris allocated to each unit of accounting using the relative selling price hierarchy. Consistent with accounting guidance, the selling\rprice is based upon vendor specific objective evidence (VSOE). If VSOE is not available, third party evidence (TPE) is used to\restablish the selling price. In the absence of VSOE or TPE, estimated selling price is used.
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During the first quarter of fiscal 2013,\rthe Company entered into an agreement with a customer to develop a next generation system, and the Company shipped the first system\rin July 2016. The project identifies multiple milestones with values assigned to each. The consideration earned upon achieving\rthe milestone is required to meet the following conditions prior to recognition: (i) the value is commensurate with the vendor’s\rperformance to meet the milestone, (ii) it relates solely to past performance, (iii) and it is reasonable relative to all of the\rdeliverables and payment terms within the arrangement. Revenue is recognized for the milestone upon acceptance by the customer.
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Sales tax collected from customers is not\rincluded in net sales but rather recorded as a liability due to the respective taxing authorities. Provisions for the estimated\rfuture cost of warranty and installation are recorded at the time the products are shipped.
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Royalty-based revenue related to licensing\rincome from performance test boards and burn-in boards is recognized upon the earlier of the receipt by the Company of the licensee’s\rreport related to its usage of the licensed intellectual property or upon payment by the licensee.
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The Company’s terms of sales\rwith distributors are generally FOB shipping point with payment due within 60 days. All products go through in-house testing\rand verification of specifications before shipment. Apart from warranty reserves, credits issued have not been material as\ra percentage of net sales. The Company’s distributors do not generally carry inventories of the Company’s\rproducts. Instead, the distributors place orders with the Company at or about the time they receive orders from their\rcustomers. The Company’s shipment terms to our distributors do not provide for credits or rights of return. Because\rthe Company’s distributors do not generally carry inventories of our products, they do not have rights to price\rprotection or to return products. At the time we ship products to the distributors, the price is fixed. Subsequent to the\rissuance of the invoice, there are no discounts or special terms. The Company does not give the buyer the right to return the\rproduct or to receive future price concessions. The Company’s arrangements do not include vendor consideration.
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PRODUCT DEVELOPMENT COSTS AND CAPITALIZED SOFTWARE:
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Costs incurred in the research and development\rof new products or systems are charged to operations as incurred. Costs incurred in the development of software programs for the\rCompany’s products are charged to operations as incurred until technological feasibility of the software has been established.\rGenerally, technological feasibility is established when the software module performs its primary functions described in its original\rspecifications, contains features required for it to be usable in a production environment, is completely documented and the related\rhardware portion of the product is complete. After technological feasibility is established, any additional costs are capitalized.\rCapitalization of software costs ceases when the software is substantially complete and is ready for its intended use. Capitalized\rcosts are amortized over the estimated life of the related software product using the greater of the units of sales or straight-line\rmethods over ten years. No system software development costs were capitalized or amortized in fiscal 2017, 2016 and 2015.
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IMPAIRMENT OF LONG-LIVED ASSETS:
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In the event that facts and circumstances\rindicate that the carrying value of assets may be impaired, an evaluation of recoverability would be performed. If an evaluation\ris required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying\rvalue to determine if a write-down is required.
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ADVERTISING COSTS:
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The Company expenses all advertising costs\ras incurred and the amounts were not material for all periods presented.
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SHIPPING AND HANDLING OF PRODUCTS:
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Amounts billed to customers for shipping\rand handling of products are included in net sales. Costs incurred related to shipping and handling of products are included in\rcost of sales.
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INCOME TAXES:
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Income taxes have been provided using the\rliability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and\rtax bases of assets and liabilities and net operating loss and tax credit carryforwards measured using the enacted tax rates and\rlaws that will be in effect when the differences are expected to reverse or the carryforwards are utilized. Valuation allowances\rare established when it is determined that it is more likely than not that such assets will not be realized.
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A full valuation allowance was established\ragainst all deferred tax assets, as management determined that it is more likely than not that deferred tax assets will not be\rrealized, as of May 31, 2017 and 2016.
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The Company accounts for uncertain tax positions\rconsistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and\rmeasurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in\ra tax return. The Company does not expect any material change in its unrecognized tax benefits over the next twelve months. The\rCompany recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes.
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Although the Company files U.S. federal,\rvarious state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, Germany\rand Japan. Tax years 1997 – 2016 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers\rfrom those years.
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STOCK-BASED COMPENSATION:
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Stock-based compensation expense consists\rof expenses for stock options, restricted stock units, or RSUs, and employee stock purchase plan, or ESPP, purchase rights. Stock-based\rcompensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the\raward using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service\rperiod. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and\rare fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly\rtraded options. For RSUs, stock-based compensation expense is based on the fair value of the Company’s common stock at the\rgrant date. All of the Company’s stock-based compensation is accounted for as equity instruments.
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The following table summarizes the stock-based\rcompensation expense for the years ended May 31, 2017, 2016 and 2015 (in thousands, except per share data):
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| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights,\r included in: | \r | \r | \r | |||||||||
| Cost of sales | \r | $ | 91 | \r | $ | 87 | \r | $ | 70 | |||
| Selling, general and administrative | \r | 714 | \r | 723 | \r | 726 | ||||||
| Research and development | \r | 194 | \r | 206 | \r | 201 | ||||||
| Net effect on net loss | \r | $ | 999 | \r | $ | 1,016 | \r | $ | 997 | |||
| Effect on net loss per share: | \r | \r | \r | |||||||||
| Basic | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 | |||
| Diluted | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 |
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During fiscal 2017, 2016 and fiscal 2015,\rthe Company recorded stock-based compensation related to stock options and restricted stock units of $884,000, $894,000 and $857,000,\rrespectively.
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As of May 31, 2017, the total compensation\rcost related to unvested stock-based awards under the Company’s 2006 Equity Incentive Plan and 2016 Equity Incentive Plan,\rbut not yet recognized, was $886,000 which is net of estimated forfeitures of $2,000. This cost will be amortized on a straight-line\rbasis over a weighted average period of approximately 2.3 years.
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During fiscal 2017, 2016 and fiscal 2015,\rthe Company recorded stock-based compensation related to its ESPP of $115,000, $122,000 and $140,000, respectively.
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As of May 31, 2017, 2016 and 2015, stock-based\rcompensation costs of zero, zero and $20,000, respectively, were capitalized as part of inventory.
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As of May 31, 2017, the total compensation\rcost related to purchase rights under the ESPP but not yet recognized was $33,000. This cost will be amortized on a straight-line\rbasis over a weighted average period of approximately 0.7 years.
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Valuation Assumptions
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Valuation and Amortization Method. The Company\restimates the fair value of stock options granted using the Black-Scholes option valuation method and a single option award approach.\rThe fair value under the single option approach is amortized on a straight-line basis over the requisite service periods of the\rawards, which is generally the vesting period.
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Expected Term. The Company’s expected\rterm represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based\ron historical experience, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations\rof future employee behavior as evidenced by changes to the terms of its stock-based awards.
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Volatility. Volatility is a measure of the\ramounts by which a financial variable such as stock price has fluctuated (historical volatility) or is expected to fluctuate (expected\rvolatility) during a period. The Company uses the historical volatility for the past five years, which matches the expected term\rof most of the option grants, to estimate expected volatility. Volatility for each of the ESPP’s four time periods of six\rmonths, twelve months, eighteen months, and twenty-four months is calculated separately and included in the overall stock-based\rcompensation expense recorded.
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Risk-Free Interest Rate. The Company bases\rthe risk-free interest rate used in the Black-Scholes option valuation method on the implied yield in effect at the time of option\rgrant on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock awards including the\rESPP.
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Fair Value. The fair values of the Company’s\rstock options granted to employees in fiscal 2017, 2016 and 2015 were estimated using the following weighted average assumptions\rin the Black-Scholes option valuation method:
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| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Option plan shares | \r | \r | \r | |||||||||
| Expected term (in years) | \r | 4 | \r | 4 | \r | 4 | ||||||
| Volatility | \r | 0.81 | \r | 0.86 | \r | 0.90 | ||||||
| Risk-free interest rates | \r | 1.02% | \r | 1.21% | \r | 1.20% | ||||||
| Weighted-average grant date fair value | \r | $ | 1.09 | \r | $ | 1.31 | \r | $ | 1.52 |
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The fair value of our ESPP purchase rights\rfor the fiscal 2017, 2016 and 2015 was estimated using the following weighted-average assumptions:
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| \r | Year End May 31, | |||||||||||||||
| \r | 2017 | \r | \r | 2016 | \r | \r | 2015 | |||||||||
| Employee stock purchase plan shares | \r | \r | \r | \r | \r | |||||||||||
| Expected term (in years) | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | ||||||||
| Volatility | \r | 0.79 – 1.08 | \r | \r | 0.64 – 0.74 | \r | \r | 0.55 – 0.83 | ||||||||
| Risk-free interest rates | \r | 0.48%–0.80% | \r | \r | 0.40%–0.76% | \r | \r | 0.04%–0.55% | ||||||||
| Weighted-average grant date fair value | \r | $ | 1.65 | \r | \r | $ | 0.80 | \r | \r | $ | 1.43 |
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EARNINGS PER SHARE (“EPS”):
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Basic EPS is determined using the weighted\raverage number of common shares outstanding during the period. Diluted EPS is determined using the weighted average number of common\rshares and potential common shares (representing the dilutive effect of stock options, and employee stock purchase plan shares)\routstanding during the period using the treasury stock method.
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The following table presents the computation\rof basic and diluted net loss per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):
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| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Numerator: Net loss | \r | $ | (5,653 | ) | \r | $ | (6,785 | ) | \r | $ | (6,647 | ) |
| \r | \r | \r | ||||||||||
| Denominator for basic net loss per share: | \r | \r | \r | |||||||||
| Weighted-average shares outstanding | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Shares used in basic net loss per share calculation | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Effect of dilutive securities | \r | — | \r | — | \r | — | ||||||
| \r | \r | \r | ||||||||||
| Denominator for diluted net loss per share | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Basic net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
| \r | \r | \r | ||||||||||
| Diluted net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
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For the purpose of computing diluted earnings\rper share, the weighted average number of potential common shares does not include stock options with an exercise price greater\rthan the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive. In the fiscal\ryear’s ended May 31, 2017 and 2016, potential common shares have not been included in the calculation of diluted net loss\rper share as the effect would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted\rnet loss per share for these periods are the same. Stock options to purchase 3,074,000, 3,201,000, and 3,686,000 shares of common\rstock were outstanding on May 31, 2017, 2016 and 2015, respectively, but were not included in the computation of diluted net loss\rper share, because the inclusion of such shares would be anti-dilutive. RSUs for 32,000 and 35,000 shares were outstanding at May\r31, 2017 and 2016, respectively, but not included in the computation of diluted net loss per share, because the inclusion of such\rshares would be anti-dilutive. ESPP rights to purchase 169,000, 304,000 and 175,000 ESPP shares were outstanding on May 31, 2017,\r2016 and 2015, respectively, but were not included in the computation of diluted net loss per share, because the inclusion of such\rshares would be anti-dilutive. The 2,657,000 shares convertible under the Convertible Notes outstanding at May 31, 2017 and 2016\rwere not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.
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COMPREHENSIVE LOSS:
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Comprehensive loss generally represents all\rchanges in shareholders’ equity (deficit) except those resulting from investments or contributions by shareholders. Unrealized\rgains and losses on foreign currency translation adjustments are included in the Company’s components of comprehensive loss,\rwhich are excluded from net loss. Comprehensive loss is included in the statements of comprehensive loss.
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RECLASSIFICATION
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Certain reclassifications have been made\rto the consolidated financial statements to conform to the current period presentation. These reclassifications did not result\rin any change in previously reported net loss, total assets or shareholders’ equity (deficit).
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RECENT ACCOUNTING PRONOUNCEMENTS:
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In May 2014, as part of its ongoing efforts\rto assist in the convergence of GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting\rStandards Board (“FASB”) issued an accounting standard update related to revenue from contracts with customers. This\rstandard sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety\rand is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in\rGAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the\rtransfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services.\rThe standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed\rcompletely in the prior accounting guidance. The standard provides alternative methods of initial adoption and will become effective\rfor the Company beginning in the first quarter of fiscal 2019. The FASB has issued several updates to the standard which i) defer\rthe original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017. ii)\rclarify the application of the principal versus agent guidance. and iii) clarify the guidance on inconsequential and perfunctory\rpromises and licensing. In May 2016, the FASB issued an update to address certain narrow aspects of the guidance including collectibility\rcriterion, collection of sales taxes from customers, noncash consideration, contract modifications and completed contracts. This\rissuance does not change the core principle of the guidance in the initial topic issued in May 2014. In December 2016, the FASB\rissued updated guidance regarding revenue from contracts with customers. Some topics that could impact the Company include corrections\rand improvements around the following: contract costs impairment testing, disclosure of remaining performance obligations and prior\rperiod obligations, contract modifications, and contract asset versus receivable. The Company is currently evaluating the impact\rof adopting this new guidance on its consolidated financial statements.
\r\r\r\r
In August 2014, the FASB issued authoritative\rguidance related to going concern. This guidance requires management to evaluate the conditions or events that raise substantial\rdoubt about the entity’s ability to continue as a going concern and whether or not it is probable that the entity will be\runable to meet its obligations as they become due within one year after the date the financial statements are issued. This guidance\rbecame effective for the Company for the annual period ending May 31, 2017. The adoption of this guidance did not have a significant\rimpact on the Company’s consolidated financial statements.
\r\r\r\r
In July 2015, the FASB issued an accounting\rstandard update that requires management to measure inventory at the lower of cost or net realizable value. Net realizable value\ris the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal,\rand transportation. This new standard will be effective for us in fiscal year 2018. The adoption of this guidance is not expected\rto have a significant impact on the Company’s consolidated financial statements.
\r\r\r\r
In November 2015, the FASB issued an accounting\rstandard update related to deferred tax assets and liabilities. This standard simplifies the presentation of deferred income taxes\rto be classified as noncurrent in the consolidated balance sheet. This new standard will be effective for us in fiscal year 2018.\rThe adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.
\r\r\r\r
In January 2016, the FASB issued an accounting\rstandard update related to recognition and measurement of financial assets and financial liabilities. This standard changes accounting\rfor equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for\rfinancial instruments. In addition, it clarifies guidance related to the valuation allowance assessment when recognizing deferred\rtax assets resulting from unrealized losses on available-for-sale debt securities. This standard is effective for us in fiscal\ryear 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated\rfinancial statements.
\r\r\r\r
In February 2016, the FASB issued authoritative\rguidance related to leases. This guidance requires management to present all leases greater than one year on the balance sheet\ras a liability to make payments and an asset as the right to use the underlying asset for the lease term. This new standard will\rbe effective for us in fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact of adopting\rthis new guidance on its consolidated financial statements.
\r\r\r\r
In March 2016, the FASB released an accounting\rstandard update that simplifies several aspects of the accounting for share-based payment transactions, including the income tax\rconsequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash\rflows. The accounting standard will be effective for the Company beginning the first quarter of fiscal 2018, and early adoption\ris permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial\rstatements.
\r\r\r\r
In June 2016, the FASB issued an accounting\rstandard update that requires measurement and recognition of expected credit losses for financial assets held based on historical\rexperience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount.\rThe accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2021 on a modified retrospective\rbasis, and early adoption in fiscal 2020 is permitted. The Company is currently evaluating the impact of this accounting standard\rupdate on its consolidated financial statements.
\r\r\r\r
In August 2016, the FASB issued authoritative\rguidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The accounting\rstandard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early\radoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated statements\rof cash flows.
\r\r\r\r
In October 2016, the FASB issued an accounting\rstandard update that requires recognition of the income tax consequences of intra-entity transfers of assets (other than inventory)\rat the transaction date. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal\r2019 on a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this\raccounting standard update on its consolidated financial statements.
\r\r\r\r
In November 2016, the FASB issued authoritative\rguidance related to statements of cash flows. This guidance clarifies that amounts generally described as restricted cash and restricted\rcash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total\ramounts shown on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the\rfirst quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the\rimpact of this accounting standard update on its consolidated financial statements.
\r\r\r\r
In December 2016, the FASB issued authoritative\rguidance related to technical corrections and improvements. This guidance provides minor updates on a variety of codification topics\rand are not expected to have a significant effect on current accounting practice. Most of these corrections do not have a transition\rdate as they are minor in nature.
\r\r"}]},{"name":"rpt:f-765","factDimensions":{"xbrl:concept":"us-gaap:LoansNotesTradeAndOtherReceivablesDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
2. ACCOUNTS RECEIVABLE:
\r\r\r\r
Accounts receivable comprise (in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Accounts receivable | \r | $ | 4,071 | \r | $ | 530 | ||
| Less: Allowance for doubtful accounts | \r | (61 | ) | \r | (8 | ) | ||
| \r | $ | 4,010 | \r | $ | 522 |
\r\r
| \r | \r | Additions | \r | \r | ||||||||||||
| \r | Balance at | \r | charged to | \r | \r | Balance | ||||||||||
| \r | beginning | \r | costs and | \r | \r | at end | ||||||||||
| \r | of year | \r | expenses | \r | Deductions* | \r | of year | |||||||||
| \r | \r | \r | \r | |||||||||||||
| Allowance for doubtful accounts receivable: | \r | \r | \r | \r | ||||||||||||
| May 31, 2017 | \r | $ | 8 | \r | $ | 53 | \r | $ | — | \r | $ | 61 | ||||
| \r | \r | \r | \r | |||||||||||||
| May 31, 2016 | \r | $ | 21 | \r | $ | — | \r | $ | (13 | ) | \r | $ | 8 |
\r\r
* Deductions include write-offs of uncollectible\raccounts and collections of amounts previously reserved.
\r\r"}]},{"name":"rpt:f-766","factDimensions":{"xbrl:concept":"us-gaap:InventoryDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
3. INVENTORIES:
\r\r\r\r
Inventories comprise\r(in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Raw materials and sub-assemblies | \r | $ | 4,268 | \r | $ | 2,839 | ||
| Work in process | \r | 2,059 | \r | 4,151 | ||||
| Finished goods | \r | 277 | \r | 43 | ||||
| \r | $ | 6,604 | \r | $ | 7,033 |
"}]},{"name":"rpt:f-767","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
4. PROPERTY AND EQUIPMENT, NET:
\r\r\r\r
Property and equipment, net comprise (in\rthousands):
\r\r| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Leasehold improvements | \r | $ | 1,145 | \r | $ | 1,072 | ||
| Furniture and fixtures | \r | 974 | \r | 974 | ||||
| Machinery and equipment | \r | 3,035 | \r | 2,330 | ||||
| Test equipment | \r | 2,268 | \r | 2,581 | ||||
| \r | \r | |||||||
| \r | 7,422 | \r | 6,957 | |||||
| Less: Accumulated depreciation and amortization | \r | (6,003 | ) | \r | (5,753 | ) | ||
| \r | $ | 1,419 | \r | $ | 1,204 |
\r\r
Depreciation expense was $271,000,\r$203,000 and $135,000 for fiscal 2017, 2016, and 2015, respectively.
\r\r"}]},{"name":"rpt:f-768","factDimensions":{"xbrl:concept":"us-gaap:ProductWarrantyDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
5. PRODUCT WARRANTIES:
\r\r\r\r
The Company provides for the estimated cost\rof product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product\rquality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s\rwarranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product\rfailure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates,\rrevisions to the estimated warranty liability would be required.
\r\r\r\r
The standard warranty period is one year\rfor systems and ninety days for parts and service.
\r\r\r\r
Following is a summary of changes in the\rCompany’s liability for product warranties during the fiscal years ended May 31, 2017 and 2016 (in thousands):
\r\r| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| \r | \r | |||||||
| Balance at the beginning of the year | \r | $ | 155 | \r | $ | 137 | ||
| Accruals for warranties issued during the year | \r | 123 | \r | 334 | ||||
| Accruals and adjustments (change in estimates) related to pre-existing warranties during the year | \r | (54 | ) | \r | — | |||
| Settlement made during the year (in cash or in kind) | \r | (111 | ) | \r | (316 | ) | ||
| \r | \r | |||||||
| Balance at the end of the year | \r | $ | 113 | \r | $ | 155 |
\r\r
The accrued warranty balance is included\rin accrued expenses on the consolidated balance sheets.
\r\r\r\r\r\r"}]},{"name":"rpt:f-769","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfAccruedLiabilitiesTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
6. ACCRUED EXPENSES:
\r\r\r\r
Accrued expenses comprise (in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Payroll related | \r | $ | 934 | \r | $ | 706 | ||
| Professional services | \r | 161 | \r | 166 | ||||
| Accrued interest | \r | 139 | \r | 110 | ||||
| Commissions and bonuses | \r | 125 | \r | 227 | ||||
| Warranty | \r | 113 | \r | 155 | ||||
| Taxes payable | \r | 69 | \r | 63 | ||||
| Investor relations | \r | 25 | \r | 88 | ||||
| Other | \r | 43 | \r | 38 | ||||
| \r | $ | 1,609 | \r | $ | 1,553 |
"}]},{"name":"rpt:f-770","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
7. INCOME TAXES:
\r\r\r\r
Domestic and foreign components of loss before\rincome tax (expense) benefit are as follows (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||||
| Domestic | \r | $ | (5,663 | ) | \r | $ | (6,794 | ) | \r | $ | (6,871 | ) | ||
| Foreign | \r | 35 | \r | 19 | \r | 258 | ||||||||
| \r | $ | (5,628 | ) | \r | $ | (6,775 | ) | \r | $ | (6,613 | ) |
\r\r
\r\r
The income tax (expense) benefit consists\rof the following (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Federal income taxes: | \r | \r | \r | |||||||||
| Current | \r | $ | — | \r | $ | — | \r | $ | — | |||
| Deferred | \r | — | \r | — | \r | — | ||||||
| State income taxes: | \r | \r | \r | |||||||||
| Current | \r | (8 | ) | \r | 3 | \r | (19 | ) | ||||
| Deferred | \r | — | \r | — | \r | — | ||||||
| Foreign income taxes: | \r | \r | \r | |||||||||
| Current | \r | (17 | ) | \r | (13 | ) | \r | (15 | ) | |||
| Deferred | \r | — | \r | — | \r | — | ||||||
| \r | $ | (25 | ) | \r | $ | (10 | ) | \r | $ | (34 | ) |
\r\r
The Company’s\reffective tax rate differs from the U.S. federal statutory tax rate, as follows:
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| U.S. federal statutory tax rate | \r | 34.0 | % | \r | 34.0 | % | \r | 34.0 | % | |||
| State taxes, net of federal tax effect | \r | (0.1 | ) | \r | — | \r | (0.2 | ) | ||||
| Foreign rate differential | \r | 0.1 | \r | 0.2 | \r | 1.4 | ||||||
| Stock-based compensation | \r | (2.8 | ) | \r | (3.8 | ) | \r | (2.2 | ) | |||
| Research and development credit | \r | 3.1 | \r | 2.1 | \r | 1.1 | ||||||
| Change in valuation allowance | \r | (33.8 | ) | \r | (32.5 | ) | \r | (34.4 | ) | |||
| Other | \r | (0.9 | ) | \r | (0.2 | ) | \r | (0.2 | ) | |||
| Effective tax rate | \r | (0.4 | )% | \r | (0.2 | )% | \r | (0.5 | )% |
\r\r
The components\rof the net deferred tax assets are as follows (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| \r | \r | |||||||
| Net operating losses | \r | $ | 18,719 | \r | $ | 16,643 | ||
| Credit carryforwards | \r | 4,715 | \r | 4,430 | ||||
| Inventory reserves | \r | 870 | \r | 1,064 | ||||
| Reserves and accruals | \r | 1,566 | \r | 1,606 | ||||
| Other | \r | 393 | \r | 885 | ||||
| \r | \r | |||||||
| \r | 26,263 | \r | 24,628 | |||||
| \r | \r | |||||||
| Less: Valuation allowance | \r | (26,263 | ) | \r | (24,628 | ) | ||
| Net deferred tax assets | \r | $ | — | \r | $ | — |
\r\r
The valuation allowance increased by $1,635,000\rduring fiscal 2017, increased by $421,000 during fiscal 2016, and increased by $2,223,000 during fiscal 2015. As of May 31, 2017\rand 2016, the Company concluded that it is more likely than not that the deferred tax assets will not be realized and therefore\rprovided a full valuation allowance against the deferred tax assets. The Company will continue to evaluate the need for a valuation\rallowance against its deferred tax assets on a quarterly basis.
\r\r\r\r
At May 31, 2017, the Company had federal\rand state net operating loss carryforwards of $51,851,000 and $30,351,000, respectively. The federal and state net operating loss\rcarryforwards will begin to expire in 2024. At May 31, 2017, the Company also had federal and state research and development tax\rcredit carryforwards of $1,982,000 and $5,164,000, respectively. The federal credit carryforward will begin to expire in 2019,\rand the California credit will carryforward indefinitely. These carryforwards may be subject to certain limitations on annual utilization\rin case of a change in ownership, as defined by tax law. The Company also has alternative minimum tax credit carryforwards of $91,000\rfor federal tax purposes and $34,000 for state purposes. The credits may be used to offset regular tax and do not expire.
\r\r\r\r
The Company has made no provision for U.S.\rincome taxes on undistributed earnings of certain foreign subsidiaries because it is the Company’s intention to permanently\rreinvest such earnings in its foreign subsidiaries. If such earnings were distributed, the Company would be subject to additional\rU.S. income tax expense. Determination of the amount of unrecognized deferred income tax liability related to these earnings is\rnot practicable.
\r\r\r\r
Foreign net operating loss carryforwards\rof $892,000 are available to reduce future foreign taxable income. The foreign net operating losses will begin to expire in 2018.
\r\r\r\r
The Company maintains liabilities for uncertain\rtax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based\ron the best information available. The aggregate changes in the balance of gross unrecognized tax benefits are as follows (in thousands):
\r\r\r\r
| Beginning balance as of May 31, 2014 | \r | $ | 973 | |
| Decreases related to prior year tax positions | \r | — | ||
| Decreases related to lapse of statute of limitations | \r | (54 | ) | |
| \r | ||||
| Balance at May 31, 2015 | \r | $ | 919 | |
| \r | ||||
| Decreases related to prior year tax positions | \r | (124 | ) | |
| Decreases related to lapse of statute of limitations | \r | (6 | ) | |
| \r | ||||
| Balance at May 31, 2016 | \r | $ | 789 | |
| \r | ||||
| Decreases related to prior year tax positions | \r | — | ||
| Decreases related to lapse of statute of limitations | \r | — | ||
| \r | ||||
| Balance at May 31, 2017 | \r | $ | 789 |
\r\r
The ending balance of $789,000 of unrecognized\rtax benefits as of May 31, 2017, if recognized, would not impact the effective tax rate.
\r\r\r\r
Although the Company files U.S. federal,\rvarious state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, Germany\rand Japan. Tax years 1997 – 2016 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers\rfrom those years.
\r\r"}]},{"name":"rpt:f-771","factDimensions":{"xbrl:concept":"AEHR:CustomerDepositsAndDeferredRevenueDisclosure","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
8. CUSTOMER DEPOSITS AND DEFERRED REVENUE:
\r\r\r\r
Customer deposits and deferred revenue (in\rthousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Customer deposits | \r | $ | 3,264 | \r | $ | 540 | ||
| Deferred revenue | \r | 203 | \r | 1,174 | ||||
| \r | $ | 3,467 | \r | $ | 1,714 |
"}]},{"name":"rpt:f-772","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityNoteDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
10. EQUITY:
\r\r\r\r
On August 8, 2016 the Company issued\r200,000 shares of its common stock to Semics Inc., a semiconductor test equipment provider that produces fully automatic wafer\rprobe systems, in consideration for cancellation of an outstanding invoice of $323,000 for capital equipment.
\r\r\r\r
On September 28, 2016, the Company sold 2,722,000\rshares of its common stock in a private placement transaction to certain institutional and accredited investors. The purchase price\rper share of the common stock sold in the private placement was $2.15, resulting in gross proceeds to the Company of $5,851,000,\rbefore offering expenses. The net proceeds after offering expenses were $5,299,000.
\r\r\r\r
On April 19 2017, the Company completed a\rpublic offering of 4,423,000 shares of its common stock at a price to the public of $3.90 per share, including the underwriter’s\rexercise of its option to purchase 577,000 additional shares to cover over-allotments. The gross proceeds to the Company were $17,250,000,\rbefore underwriting discounts and offering expenses. The net proceeds after underwriting discounts and offering expenses were $15,832,000.
\r\r"}]},{"name":"rpt:f-773","factDimensions":{"xbrl:concept":"us-gaap:StockholdersEquityPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
11. CAPITAL STOCK:
\r\r\r\r
EQUITY INCENTIVE PLAN:
\r\r\r\r
In October 2006, the Company’s 2006\rEquity Incentive Plan was approved by the shareholders, which provides for granting of incentive stock options, nonstatutory stock\roptions, restricted stock, restricted stock units, stock appreciation rights, performance units, performance shares and other stock\ror cash awards as the Company’s Board of Directors may determine.
\r\r\r\r
In October 2016, the Company’s 2016\rEquity Incentive Plan was approved by the Company’s shareholders. The 2016 Equity Incentive Plan replaced our 2006 Equity\rIncentive Plan, which was scheduled to expire in October 2016, and will continue in effect until 2026. A total of 2,238,000 shares\rof common stock have been reserved for issuance under the Company’s 2016 Equity Incentive Plan, which includes 1,438,000\rshares that remained available for issuance under the 2006 Equity Incentive Plan. See the Company’s Registration Statement\ron Form S-8 filed with the Securities and Exchange Commission on November 14, 2016 for further information regarding the 2016 Equity\rIncentive Plan.
\r\r\r\r
As of May 31, 2017, out of the 5,275,000\rshares authorized for grant under the 2006 Equity Incentive Plan and 2016 Equity Incentive Plan, 3,105,000 stock options and RSUs\rwere outstanding.
\r\r\r\r
The following tables summarize the Company’s\rstock option and RSU transactions during fiscal 2017, 2016 and 2015 (in thousands):
\r\r\r\r
| \r | \r | Available | ||
| \r | \r | Shares | ||
| Balances, May 31, 2014 | \r | 1,145 | ||
| \r | ||||
| Additional shares reserved | \r | 860 | ||
| Options granted | \r | (1,253 | ) | |
| Options terminated | \r | 93 | ||
| \r | ||||
| Balances, May 31, 2015 | \r | 845 | ||
| \r | ||||
| Additional shares reserved | \r | 800 | ||
| Options granted | \r | (92 | ) | |
| RSUs granted | \r | (35 | ) | |
| Options terminated | \r | 329 | ||
| \r | ||||
| Balances, May 31, 2016 | \r | 1,847 | ||
| \r | ||||
| Additional shares reserved | \r | 2,238 | ||
| Options granted | \r | (368 | ) | |
| RSUs granted | \r | (157 | ) | |
| Options terminated | \r | 55 | ||
| Plan shares expired | \r | (1,446 | ) | |
| \r | ||||
| Balances, May 31, 2017 | \r | 2,169 |
\r\r
The following table summarized the stock\roption transactions during fiscal 2017, 2016 and 2015 (in thousands, except per share data):
\r\r\r\r
| \r | \r | \r | Outstanding Options | \r|||||||||
| \r | \r | \r | \r | \r | \r | Weighted | \r\r | \r | \r | |||
| \r | \r | \r | Number | \r\r | \r | Average | \r\r | \r | Aggregate | \r|||
| \r | \r | \r | of | \r\r | \r | Exercise | \r\r | \r | Intrinsic | \r|||
| \r | \r | \r | Shares | \r\r | \r | Price | \r\r | \r | Value | \r|||
| Balances, May 31, 2014 | \r\r | \r | 3,002 | \r\r | \r | $ | \r1.31 | \r\r | \r | $ | \r2,913 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 1,253 | \r\r | \r | $ | \r2.38 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (93 | \r) | \r\r | $ | \r2.30 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (476 | \r) | \r\r | $ | \r1.33 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2015 | \r\r | \r | 3,686 | \r\r | \r | $ | \r1.66 | \r\r | \r | $ | \r2,946 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 92 | \r\r | \r | $ | \r2.12 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (329 | \r) | \r\r | $ | \r1.93 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (248 | \r) | \r\r | $ | \r1.34 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2016 | \r\r | \r | 3,201 | \r\r | \r | $ | \r1.66 | \r\r | \r | $ | \r189 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 368 | \r\r | \r | $ | \r1.83 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (55 | \r) | \r\r | $ | \r1.42 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (440 | \r) | \r\r | $ | \r1.35 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2017 | \r\r | \r | 3,074 | \r\r | \r | $ | \r1.73 | \r\r | \r | $ | \r8,763 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options exercisable and expected to be exercisable at May 31, 2017 | \r\r | \r | 3,030 | \r\r | \r | $ | \r1.72 | \r\r | \r | $ | \r8,654 | \r
\r\r
The options outstanding and exercisable at\rMay 31, 2017 were in the following exercise price ranges (in thousands, except per share data):
\r\r\r\r
| \r | \r | Options Outstanding | \r | \r | Options Exercisable | |||||||||||||||||||||||||||||
| \r | \r | at May 31, 2017 | \r | \r | at May 31, 2017 | |||||||||||||||||||||||||||||
Range of Exercise Prices | \r | \r | Number Outstanding Shares | \r | Weighted Average Remaining Contractual Life (Years) | \r | Weighted Average Exercise Price | \r | \r | Number Exercisable Shares | \r | Weighted Average Remaining Contractual Life (Years) | \r | Weighted Average Exercise Price | \r | Aggregate Intrinsic Value | ||||||||||||||||||
| $ | \r | 0.59-$0.97 | \r | 514 | \r | 1.77 | \r | $ | 0.66 | \r | 514 | \r | 1.77 | \r | $ | 0.66 | \r | |||||||||||||||||
| $ | \r | 1.09-$1.40 | \r | 784 | \r | 2.41 | \r | $ | 1.28 | \r | 773 | \r | 2.40 | \r | $ | 1.28 | \r | |||||||||||||||||
| $ | \r | 1.68-$2.06 | \r | 542 | \r | 5.12 | \r | $ | 1.77 | \r | 287 | \r | 4.26 | \r | $ | 1.85 | \r | |||||||||||||||||
| $ | \r | 2.10-$2.81 | \r | 1,234 | \r | 4.53 | \r | $ | 2.44 | \r | 848 | \r | 4.46 | \r | $ | 2.46 | \r | |||||||||||||||||
| \r | \r | \r | \r | \r | \r | \r | \r | |||||||||||||||||||||||||||
| $ | \r | 0.59-$2.81 | \r | 3,074 | \r | 3.63 | \r | $ | 1.73 | \r | 2,422 | \r | 3.21 | \r | $ | 1.63 | \r | $ | 7,148 |
\r\r
The total intrinsic values of options exercised\rwere $810,000, $185,000 and $540,000 during fiscal 2017, 2016 and 2015, respectively. The weighted average contractual life of\rthe options exercisable and expected to be exercisable at May 31, 2017 was 3.62 years.
\r\r\r\r
Options to purchase 2,422,000, 2,390,000\rand 2,189,000 shares were exercisable at May 31, 2017, 2016 and 2015, respectively. These exercisable options had weighted average\rexercise prices of $3.21, $3.69 and $1.43 as of May 31, 2017, 2016 and 2015, respectively.
\r\r\r\r
During the fiscal year ended May 31, 2017,\rRSUs for 74,000 shares were granted to employees. The market value on the date of the grant of these RSUs was $1.68 per share.\r42,000 RSUs became fully vested during the year ended May 31, 2017, and 32,000 RSUs were unvested at May 31, 2017. The intrinsic\rvalue of the unvested RSUs at May 31, 2017 was $145,000. During the fiscal year ended May 31, 2016, RSUs were granted to an employee\rfor 35,000 shares. The market value on the date of the grant of these RSUs was $2.16 per share. The RSUs are performance-based\rand immediately vest upon attainment of goals established and have a term of one year. The 35,000 RSUs were outstanding and fully\rvested at May 31, 2016. The intrinsic value of the outstanding RSUs at May 31, 2016 was $35,000. There were no RSUs granted during\rfiscal 2015.
\r\r\r\r
During the fiscal year ended May 31, 2017,\rRSUs for 83,000 shares were granted to members of the Company’s Board of Directors. The weighted average market value on\rthe date of the grant of these RSUs was $1.86 per share. All of these RSUs were fully vested at May 31, 2017. There were no RSUs\rgranted to members of the Board of Directors during fiscal 2016 or 2015.
\r\r"}]},{"name":"rpt:f-774","factDimensions":{"xbrl:concept":"us-gaap:CompensationAndEmployeeBenefitPlansTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
12. EMPLOYEE BENEFIT PLANS:
\r\r\r\r
EMPLOYEE STOCK OWNERSHIP PLAN:
\r\r\r\r
The Company has a non-contributory,\rtrusteed employee stock ownership plan for full-time employees who have completed three consecutive months of service and for\rpart-time employees who have completed one year of service and have attained an age of 21. The Company can contribute either\rshares of the Company’s stock or cash to the plan. The contribution is determined annually by the Company and cannot\rexceed 15% of the annual aggregate salaries of those employees eligible for participation in the plan. On May 31, 2007, the\rCompany converted the Aehr Test Systems Employee Stock Bonus Plan into the Aehr Test Systems Employee Stock Ownership Plan\r(the “Plan”). The stock bonus plan was converted to an employee stock ownership plan (“ESOP”) to\renable the Plan to better comply with changes in the law regarding Company stock. Individuals’ account balances vest at\ra rate of 20% per year commencing upon completion of two years of service. Non-vested balances, which are forfeited following\rtermination of employment, are allocated to the remaining employees in the Plan. Under the Plan provisions, each employee who\rreaches age fifty-five (55) and has been a participant in the Plan for ten years will be offered an election each year to\rdirect the transfer of up to 25% of his/her ESOP account to the employee self-directed account in the Savings and Retirement\rPlan. For anyone who met the above prerequisites, the first election to diversify holdings was offered after May 31, 2008. In\rthe sixth year, employees will be able to diversify up to 50% of their ESOP accounts. Contributions of $60,000 per year were\rauthorized for the plan during fiscal 2017, 2016 and 2015. The contribution amounts are recorded as compensation expense, in\rthe period authorized and included in accrued expenses, in the period authorized. Contributions of 59,000 shares were made to\rthe ESOP during fiscal 2017 for fiscal 2016. Contributions of 25,000 shares were made to the ESOP during fiscal 2016 for\rfiscal 2015. Contributions of 27,000 shares were made to the ESOP during fiscal 2015 for fiscal 2014. The contribution for\rfiscal 2017 will be made in fiscal 2018. Shares held in the ESOP are included in the EPS calculation.
\r\r\r\r
401(K) PLAN:
\r\r\r\r
The Company maintains a defined contribution\rsavings plan (the “401(k) Plan”) to provide retirement income to all qualified employees of the Company. The 401(k)\rPlan is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The 401(k) Plan is funded\rby voluntary pre-tax contributions from employees. Contributions are invested, as directed by the participant, in investment funds\ravailable under the 401(k) Plan. The Company is not required to make, and did not make, any contributions to the 401(k) Plan during\rfiscal 2017, 2016 and 2015.
\r\r\r\r
EMPLOYEE STOCK PURCHASE PLAN:
\r\r\r\r
In October 2006, the Company’s shareholders\rapproved the 2006 Employee Stock Purchase Plan. In October 2016, the Company’s Amended and Restated 2006 Employee Stock Purchase\rPlan, or Purchase Plan, was approved by the Company’s shareholders. The Purchase Plan extended the term of the 2006 Employee\rStock Purchase Plan indefinitely. A total of 532,000 shares of the Company’s common stock were reserved for issuance under\rthe Purchase Plan. See the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission\ron November 14, 2016 for further information regarding the Purchase Plan. The Purchase Plan has consecutive, overlapping, twenty-four\rmonth offering periods. Each twenty-four month offering period includes four six month purchase periods. The offering periods generally\rbegin 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\rand are customarily employed by the Company (or an affiliate thereof) for at least five months per calendar year are eligible to\rparticipate. Under the Purchase Plan, shares are purchased through employee payroll deductions at exercise prices equal to 85%\rof the lesser of the fair market value of the Company’s common stock at either the first day of an offering period or the\rlast day of the purchase period. If a participant’s rights to purchase stock under all employee stock purchase plans of the\rCompany accrue at a rate which exceeds $25,000 worth of stock for a calendar year, such participant may not be granted an option\rto purchase stock under the Purchase Plan. The maximum number of shares a participant may purchase during a single purchase period\ris 3,000 shares. During the fiscal years ended May 31, 2017, 2016 and 2015, ESPP purchase rights of 1,000, 304,000, and 222,000\rshares, respectively, were granted. For the years ended May 31, 2017, 2016 and 2015, approximately 151,000, 86,000 and 87,000 shares\rof common stock, respectively, were issued under the plans. As of May 31, 2017, 1,119,000 shares have been issued under the ESPP,\rand there were 381,000 ESPP shares available for issuance.
\r\r"}]},{"name":"rpt:f-775","factDimensions":{"xbrl:concept":"us-gaap:OtherIncomeAndOtherExpenseDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
13. OTHER (EXPENSE) INCOME, NET:
\r\r\r\r
Other (expense) income, net comprises the\rfollowing (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Foreign exchange (loss) gain | \r | $ | (21 | ) | \r | $ | (19 | ) | \r | $ | 194 | |
| Other, net | \r | — | \r | 3 | \r | 17 | ||||||
| \r | $ | (21 | ) | \r | $ | (16 | ) | \r | $ | 211 |
"}]},{"name":"rpt:f-776","factDimensions":{"xbrl:concept":"us-gaap:SegmentReportingDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
14. SEGMENT INFORMATION:
\r\r\r\r
The Company operates in one reportable segment:\rthe design, manufacture and marketing of advanced test and burn-in products to the semiconductor manufacturing industry.
\r\r\r\r
The following presents information about\rthe Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands):
\r\r\r\r
| \r | United | \r | \r | \r | ||||||||||||
| \r | States | \r | Asia | \r | Europe | \r | Total | |||||||||
| 2017: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 7,762 | \r | $ | 10,439 | \r | $ | 697 | \r | $ | 18,898 | ||||
| Property and equipment, net | \r | 1,364 | \r | 40 | \r | 15 | \r | 1,419 | ||||||||
| \r | \r | \r | \r | |||||||||||||
| 2016: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 2,957 | \r | $ | 10,228 | \r | $ | 1,316 | \r | $ | 14,501 | ||||
| Property and equipment, net | \r | 1,151 | \r | 39 | \r | 14 | \r | 1,204 | ||||||||
| \r | \r | \r | \r | |||||||||||||
| 2015: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 3,648 | \r | $ | 4,943 | \r | $ | 1,427 | \r | $ | 10,018 | ||||
| Property and equipment, net | \r | 432 | \r | 34 | \r | 12 | \r | 478 |
\r\r
The Company’s Japanese and German subsidiaries\rprimarily comprise the foreign operations. Substantially all of the sales of the subsidiaries are made to unaffiliated Japanese\ror European customers. Net sales from outside the United States include those of Aehr Test Systems Japan K.K. and Aehr Test Systems\rGmbH.
\r\r"}]},{"name":"rpt:f-777","factDimensions":{"xbrl:concept":"us-gaap:RelatedPartyTransactionsDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
15. RELATED PARTY TRANSACTIONS:
\r\r\r\r
Mario M. Rosati, one of the Company’s\rdirectors, is also a member of Wilson Sonsini Goodrich & Rosati, Professional Corporation, which has served as the Company’s\routside corporate counsel and has received compensation at normal commercial rates for these services. At May 31, 2017, the Company\rhad $188,000 payable to Wilson Sonsini Goodrich & Rosati.
\r\r"}]},{"name":"rpt:f-778","factDimensions":{"xbrl:concept":"us-gaap:CommitmentsAndContingenciesDisclosureTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
16. COMMITMENTS AND CONTINGENCIES:
\r\r\r\r
COMMITMENTS
\r\r\r\r
The Company leases most of its manufacturing\rand office space under operating leases. The Company entered into non-cancelable operating lease agreements for its United States\rmanufacturing and office facilities and maintains equipment under non-cancelable operating leases in Germany. The Company’s\rprincipal administrative and production facilities are located in Fremont, California, in a 51,289 square foot building. The Company’s\rlease was renewed in November 2014 and expires in June 2018. The Company has an option to extend the lease for an additional three\ryear period at rates to be determined. The Company’s facility in Japan is located in a 418 square foot office in Tokyo under\ra cancellable lease which expires in June 2019. The Company also maintains a 1,585 square foot warehouse in Yamanashi under a lease\rwhich expires in November 2017. The Company leases a sales and support office in Utting, Germany. The lease, which began February\r1, 1992 and expires on January 31, 2019, contains an automatic twelve months renewal, at rates to be determined, if no notice is\rgiven prior to six months from expiry. Under the lease agreements, the Company is responsible for payments of utilities, taxes\rand insurance.
\r\r\r\r
Minimum annual rentals payments under non-cancellable\roperating leases in each of the next five fiscal years and thereafter are as follows (in thousands):
\r\r\r\r
| Years Ending May 31, | \r\r | \r | \r | |
| 2018 | \r\r | $ | \r502 | \r\r |
| 2019 | \r\r | \r | 64 | \r\r |
| 2020 | \r\r | \r | 1 | \r\r |
| 2021 | \r\r | \r | -- | \r\r |
| 2022 | \r\r | \r | -- | \r\r |
| Thereafter | \r\r | \r | -- | \r\r |
Total | \r \r | $ | \r567 | \r\r |
| \r | \r | \r | \r | \r |
Rental expense for the years ended May 31,\r2017, 2016 and 2015 was $509,000, $499,000 and $554,000, respectively.
\r\r\r\r
At May 31, 2017 and 2016, the Company had\ra $50,000 certificate of deposit held by a financial institution representing a security deposit for its United States manufacturing\rand office space lease. This amount is included in other assets on the consolidated balance sheets.
\r\r\r\r
PURCHASE OBLIGATIONS
\r\r\r\r
The Company has purchase obligations to certain\rsuppliers. In some cases the products the Company purchases are unique and have provisions against cancellation of the order. At\rMay 31, 2017, the Company had $5,684,000 of purchase obligations which are due within the following 12 months. This amount does\rnot include contractual obligations recorded on the consolidated balance sheets as liabilities.
\r\r\r\r
CONTINGENCIES
\r\r\r\r
The Company may, from time to time, be\rinvolved in legal proceedings arising in the ordinary course of business. While there can be no assurances as to the ultimate\routcome of any litigation involving the Company, management does not believe any pending legal proceedings will result in\rjudgment or settlement that will have a material adverse effect on the Company’s consolidated financial position,\rresults of operations or cash flows.
\r\r\r\r
In the normal course of business to facilitate\rsales of its products, the Company indemnifies other parties, including customers, with respect to certain matters, for example,\rincluding against losses arising from a breach of representations or covenants, or from intellectual property infringement or other\rclaims. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition,\rthe Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws contain\rsimilar indemnification obligations to the Company’s agents.
\r\r\r\r
It is not possible to determine the maximum\rpotential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique\rfacts and circumstances involved in each particular agreement. To date, payments made by the Company under these agreements have\rnot had a material impact on the Company’s operating results, financial position or cash flows.
\r\r"}]},{"name":"rpt:f-779","factDimensions":{"xbrl:concept":"us-gaap:QuarterlyFinancialInformationTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
17. SELECTED QUARTERLY CONSOLIDATED FINANCIAL DATA (UNAUDITED)
\r\r\r\r
The following tables (presented in thousands,\rexcept per share data) sets forth selected unaudited condensed consolidated statements of operations data for each of the four\rquarters of the fiscal years ended May 31, 2017 and 2016. The unaudited quarterly information has been prepared on the same basis\ras the annual information presented elsewhere herein and, in the Company’s opinion, includes all adjustments (consisting\ronly of normal recurring entries) necessary for a fair statement of the information for the quarters presented. The operating results\rfor any quarter are not necessarily indicative of results for any future period and should be read in conjunction with the audited\rconsolidated financial statements of the Company’s and the notes thereto included elsewhere herein.
\r\r\r\r
| \r | Three Months Ended | |||||||||||||||
| \r | Aug. 31, | \r | Nov. 30, | \r | Feb. 28, | \r | May 31, | |||||||||
| \r | 2016 | \r | 2016 | \r | 2017 | \r | 2017 | |||||||||
| Net sales | \r | $ | 5,318 | \r | $ | 4,216 | \r | $ | 2,681 | \r | $ | 6,683 | ||||
| Gross profit | \r | $ | 2,206 | \r | $ | 1,463 | \r | $ | 503 | \r | $ | 2,608 | ||||
| Net loss | \r | $ | (755 | ) | \r | $ | (1,452 | ) | \r | $ | (2,651 | ) | \r | $ | (795 | ) |
| Net loss per share basic and diluted | \r | $ | (0.06 | ) | \r | $ | (0.09 | ) | \r | $ | (0.16 | ) | \r | $ | (0.04 | ) |
\r\r
| \r | Three Months Ended | |||||||||||||||
| \r | Aug. 31, | \r | Nov. 30, | \r | Feb. 29, | \r | May 31, | |||||||||
| \r | 2015 | \r | 2015 | \r | 2016 | \r | 2016 | |||||||||
| Net sales | \r | $ | 6,633 | \r | $ | 4,620 | \r | $ | 1,677 | \r | $ | 1,571 | ||||
| Gross profit (loss) | \r | $ | 3,383 | \r | $ | 1,691 | \r | $ | 169 | \r | $ | (98 | ) | |||
| Net income (loss) | \r | $ | 294 | \r | $ | (1,048 | ) | \r | $ | (2,975 | ) | \r | $ | (3,056 | ) | |
| Net income (loss) per share basic and diluted | \r | $ | 0.02 | \r | $ | (0.08 | ) | \r | $ | (0.23 | ) | \r | $ | (0.23 | ) |
"}]},{"name":"rpt:f-780","factDimensions":{"xbrl:concept":"us-gaap:BusinessDescriptionAndBasisOfPresentationTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
BUSINESS:
\r\r\r\r
Aehr Test Systems (the “Company”)\rwas incorporated in California in May 1977 and primarily designs, engineers and manufactures test and burn-in equipment used in\rthe semiconductor industry. The Company’s principal products are the Advanced Burn-In and Test System, or ABTS, the FOX full\rwafer contact parallel test and burn-in systems, the MAX burn-in system, WaferPak full wafer contactor, the DiePak carrier and\rtest fixtures.
\r\r"}]},{"name":"rpt:f-781","factDimensions":{"xbrl:concept":"AEHR:Liquidity","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
LIQUIDITY:
\r\r\r\r
Since inception, the Company has incurred\rsubstantial cumulative losses and negative cash flows from operations. In response, the Company took steps to minimize expense\rlevels, entered into credit arrangements, and raised capital through public and private equity offerings, to increase the likelihood\rthat it will have sufficient cash to support operations.
\r\r\r\r
In April 2017, the Company completed a public\roffering of its common stock raising net proceeds to the Company of $15.8 million. At May 31, 2017 the Company had $17.8 million\rin cash and cash equivalents. The Company anticipates that the existing cash balance together with income from operations, collections\rof existing accounts receivable, revenue from our existing backlog of products, the sale of inventory on hand, and deposits and\rdown payments against significant orders will be adequate to meet its working capital and capital equipment requirements.
\r\r"}]},{"name":"rpt:f-782","factDimensions":{"xbrl:concept":"us-gaap:ConsolidationPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
CONSOLIDATION:
\r\r\r\r
The consolidated financial statements include\rthe accounts of the Company and both its wholly-owned and majority-owned foreign subsidiaries. Intercompany accounts and transactions\rhave been eliminated.
\r\r"}]},{"name":"rpt:f-783","factDimensions":{"xbrl:concept":"us-gaap:ForeignCurrencyTransactionsAndTranslationsPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
FOREIGN CURRENCY TRANSLATION AND TRANSACTIONS:
\r\r\r\r
Assets and liabilities of the Company’s\rforeign subsidiaries and a branch office are translated into U.S. Dollars from their functional currencies of Japanese Yen, Euros\rand New Taiwan Dollars using the exchange rate in effect at the balance sheet date. Additionally, their net sales and expenses\rare translated using exchange rates approximating average rates prevailing during the fiscal year. Translation adjustments that\rarise from translating their financial statements from their local currencies to U.S. Dollars are accumulated and reflected as\ra separate component of shareholders’ equity (deficit).
\r\r\r\r
Transaction gains and losses that arise from\rexchange rate changes denominated in currencies other than the local currency are included in the Consolidated Statements of Operations\ras incurred. See Note 13 for the detail of foreign exchange transaction gains and losses for all periods presented.
\r\r"}]},{"name":"rpt:f-784","factDimensions":{"xbrl:concept":"us-gaap:UseOfEstimates","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
USE OF ESTIMATES:
\r\r\r\r
The preparation of financial statements in\rconformity with accounting principles generally accepted in the United States of America requires management to make estimates\rand assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at\rthe date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results\rcould differ from those estimates. Significant estimates in the Company’s consolidated financial statements include allowance\rfor doubtful accounts, valuation of inventory at the lower of cost or market, and warranty reserves.
\r\r"}]},{"name":"rpt:f-785","factDimensions":{"xbrl:concept":"us-gaap:CashAndCashEquivalentsPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
CASH EQUIVALENTS AND INVESTMENTS:
\r\r\r\r
Cash equivalents consist of money market\rinstruments purchased with an original maturity of three months or less. These investments are reported at fair value.
\r\r"}]},{"name":"rpt:f-786","factDimensions":{"xbrl:concept":"us-gaap:FairValueMeasurementPolicyPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
FAIR VALUE OF FINANCIAL INSTRUMENTS AND MEASUREMENT:
\r\r\r\r
The Company’s financial instruments\rare measured at fair value consistent with authoritative guidance. This authoritative guidance defines fair value, establishes\ra framework for using fair value to measure assets and liabilities, and disclosures required related to fair value measurements.
\r\r\r\r
The guidance establishes a fair value hierarchy\rbased on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable. Observable\rinputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent\rsources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair\rvalue hierarchy consists of the following three levels:
\r\r\r\r
Level 1 - instrument valuations are obtained from real-time quotes\rfor transactions in active exchange markets involving identical assets.
\r\r\r\r
Level 2 - instrument valuations are obtained from readily-available\rpricing sources for comparable instruments.
\r\r\r\r
Level 3 - instrument valuations are obtained without observable market\rvalues and require a high level of judgment to determine the fair value.
\r\r\r\r
The following table summarizes the Company’s\rfinancial assets measured at fair value on a recurring basis as of May 31, 2017 (in thousands):
\r\r\r\r
| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2017 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 15,516 | \r | $ | 15,516 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 15,566 | \r | $ | 15,516 | \r | $ | 50 | \r | $ | — | ||||
| \r | \r | \r | \r |
The following\rtable summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands):
\r\r\r\r
| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2016 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 1 | \r | $ | 1 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 51 | \r | $ | 1 | \r | $ | 50 | \r | $ | — | ||||
| \r | \r | \r | \r |
There were no financial liabilities measured\rat fair value as of May 31, 2017 and 2016.
\r\r\r\r
There were no transfers between Level 1 and\rLevel 2 fair value measurements during the fiscal year ended May 31, 2017 and 2016.
\r\r\r\r
The carrying amounts of financial instruments\rincluding cash, cash equivalents, receivables, accounts payable and certain other accrued liabilities, approximate fair value due\rto their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, the carrying\rvalue of the debt approximates the fair value.
\r\r\r\r
The Company has at times invested in debt\rand equity of private companies, and may do so again in the future, as part of its business strategy.
\r\r"}]},{"name":"rpt:f-787","factDimensions":{"xbrl:concept":"us-gaap:ReceivablesTradeAndOtherAccountsReceivableAllowanceForDoubtfulAccountsPolicy","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
\r\r\r\r
Accounts receivable are derived from the\rsale of products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers\rand burn-in and test service companies. Accounts receivable are recorded at the invoiced amount and are not interest bearing. The\rCompany maintains an allowance for doubtful accounts to reserve for potentially uncollectible trade receivables. The Company also\rreviews its trade receivables by aging category to identify specific customers with known disputes or collection issues. The Company\rexercises judgment when determining the adequacy of these reserves as the Company evaluates historical bad debt trends, general\reconomic conditions in the United States and internationally, and changes in customer financial conditions. Uncollectible receivables\rare recorded as bad debt expense when all efforts to collect have been exhausted and recoveries are recognized when they are received.\rNo significant adjustments to the allowance for doubtful accounts were recorded during the years ended May 31, 2017, 2016 or 2015.
\r\r"}]},{"name":"rpt:f-788","factDimensions":{"xbrl:concept":"us-gaap:ConcentrationRiskCreditRisk","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
CONCENTRATION OF CREDIT RISK:
\r\r\r\r
The Company sells its products\rprimarily to semiconductor manufacturers in North America, Asia, and Europe. As of May 31, 2017, approximately 55%, 0% and\r45% of gross accounts receivable were from customers located in Asia, Europe and North America, respectively. As of May 31,\r2016, approximately 7%, 68% and 25% of gross accounts receivable were from customers located in Asia, Europe and North\rAmerica, respectively. Three customers accounted for 47%, 40% and 11% of gross accounts receivable as of May 31, 2017. One\rcustomer accounted for 67% of gross accounts receivable as of May 31, 2016. Four customers accounted for 45%, 19%, 17% and\r10% of net sales in fiscal 2017. Two customers accounted for 47% and 32% of net sales in fiscal 2016. The Company performs\rongoing credit evaluations of its customers and generally does not require collateral. The Company uses letter of credit\rterms for some of its international customers.
\r\r\r\r
The Company’s cash and cash equivalents\rare generally deposited with major financial institutions in the United States, Japan, Germany and Taiwan. The Company invests\rits excess cash in money market funds. The money market funds bear the risk associated with each fund. The money market funds have\rvariable interest rates. The Company has not experienced any material losses on its money market funds or short-term cash deposits.
\r\r"}]},{"name":"rpt:f-789","factDimensions":{"xbrl:concept":"AEHR:ConcentrationOfSupplyRiskPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
CONCENTRATION OF SUPPLY RISK:
\r\r\r\r
The Company relies on subcontractors to manufacture\rmany of the components and subassemblies used in its products. Quality or performance failures of the Company’s products\ror changes in its manufacturers’ financial or business condition could disrupt the Company’s ability to supply quality\rproducts to its customers and thereby have a material and adverse effect on its business and operating results. Some of the components\rand technologies used in the Company’s products are purchased and licensed from a single source or a limited number of sources.\rThe loss of any of these suppliers may cause the Company to incur additional transition costs, result in delays in the manufacturing\rand delivery of its products, or cause it to carry excess or obsolete inventory and could cause it to redesign its products.
\r\r"}]},{"name":"rpt:f-790","factDimensions":{"xbrl:concept":"us-gaap:InventoryPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
INVENTORIES:
\r\r\r\r
Inventories include material, labor and overhead,\rand are stated at the lower of cost (first-in, first-out method) or market. Provisions for excess, obsolete and unusable inventories\rare made after management’s evaluation of future demand and market conditions. The Company adjusts inventory balances to\rapproximate the lower of its manufacturing costs or market value. If actual future demand or market conditions become less favorable\rthan those projected by management, additional inventory write-downs may be required, and would be reflected in cost of product\rrevenue in the period the revision is made.
\r\r"}]},{"name":"rpt:f-791","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
PROPERTY AND EQUIPMENT:
\r\r\r\r
Property and equipment are stated at cost\rless accumulated depreciation and amortization. Major improvements are capitalized, while repairs and maintenance are expensed\ras incurred. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the related lease.\rFurniture and fixtures, machinery and equipment, and test equipment are depreciated on a straight-line basis over their estimated\ruseful lives. The ranges of estimated useful lives are generally as follows:
\r\r\r\r
| Furniture and fixtures | \r2 to 6 years |
| Machinery and equipment | \r3 to 6 years |
| Test equipment | \r4 to 6 years |
"}]},{"name":"rpt:f-792","factDimensions":{"xbrl:concept":"us-gaap:RevenueRecognitionPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
REVENUE RECOGNITION:
\r\r\r\r
The Company recognizes revenue upon the shipment\rof products or the performance of services when: (1) persuasive evidence of the arrangement exists; (2) goods or services have\rbeen delivered; (3) the price is fixed or determinable; and (4) collectibility is reasonably assured. When a sales agreement involves\rmultiple deliverables, such as extended support provisions, training to be supplied after delivery of the systems, and test programs\rspecific to customers’ routine applications, the multiple deliverables are evaluated to determine the unit of accounting.\rJudgment is required to properly identify the accounting units of multiple element transactions and the manner in which revenue\ris allocated among the accounting units. Judgments made, or changes to judgments made, may significantly affect the timing or amount\rof revenue recognition.
\r\r\r\r
Revenue related to the multiple elements\ris allocated to each unit of accounting using the relative selling price hierarchy. Consistent with accounting guidance, the selling\rprice is based upon vendor specific objective evidence (VSOE). If VSOE is not available, third party evidence (TPE) is used to\restablish the selling price. In the absence of VSOE or TPE, estimated selling price is used.
\r\r\r\r
During the first quarter of fiscal 2013,\rthe Company entered into an agreement with a customer to develop a next generation system, and the Company shipped the first system\rin July 2016. The project identifies multiple milestones with values assigned to each. The consideration earned upon achieving\rthe milestone is required to meet the following conditions prior to recognition: (i) the value is commensurate with the vendor’s\rperformance to meet the milestone, (ii) it relates solely to past performance, (iii) and it is reasonable relative to all of the\rdeliverables and payment terms within the arrangement. Revenue is recognized for the milestone upon acceptance by the customer.
\r\r\r\r
Sales tax collected from customers is not\rincluded in net sales but rather recorded as a liability due to the respective taxing authorities. Provisions for the estimated\rfuture cost of warranty and installation are recorded at the time the products are shipped.
\r\r\r\r
Royalty-based revenue related to licensing\rincome from performance test boards and burn-in boards is recognized upon the earlier of the receipt by the Company of the licensee’s\rreport related to its usage of the licensed intellectual property or upon payment by the licensee.
\r\r\r\r
The Company’s terms of sales with\rdistributors are generally FOB shipping point with payment due within 60 days. All products go through in-house testing and\rverification of specifications before shipment. Apart from warranty reserves, credits issued have not been material as a\rpercentage of net sales. The Company’s distributors do not generally carry inventories of the Company’s products.\rInstead, the distributors place orders with the Company at or about the time they receive orders from their customers. The\rCompany’s shipment terms to our distributors do not provide for credits or rights of return. Because the\rCompany’s distributors do not generally carry inventories of our products, they do not have rights to price protection\ror to return products. At the time we ship products to the distributors, the price is fixed. Subsequent to the issuance of\rthe invoice, there are no discounts or special terms. The Company does not give the buyer the right to return the product or\rto receive future price concessions. The Company’s arrangements do not include vendor consideration.
\r\r"}]},{"name":"rpt:f-793","factDimensions":{"xbrl:concept":"us-gaap:ResearchAndDevelopmentExpensePolicy","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
PRODUCT DEVELOPMENT COSTS AND CAPITALIZED SOFTWARE:
\r\r\r\r
Costs incurred in the research and development\rof new products or systems are charged to operations as incurred. Costs incurred in the development of software programs for the\rCompany’s products are charged to operations as incurred until technological feasibility of the software has been established.\rGenerally, technological feasibility is established when the software module performs its primary functions described in its original\rspecifications, contains features required for it to be usable in a production environment, is completely documented and the related\rhardware portion of the product is complete. After technological feasibility is established, any additional costs are capitalized.\rCapitalization of software costs ceases when the software is substantially complete and is ready for its intended use. Capitalized\rcosts are amortized over the estimated life of the related software product using the greater of the units of sales or straight-line\rmethods over ten years. No system software development costs were capitalized or amortized in fiscal 2017, 2016 and 2015.
\r\r"}]},{"name":"rpt:f-794","factDimensions":{"xbrl:concept":"us-gaap:ImpairmentOrDisposalOfLongLivedAssetsPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
IMPAIRMENT OF LONG-LIVED ASSETS:
\r\r\r\r
In the event that facts and circumstances\rindicate that the carrying value of assets may be impaired, an evaluation of recoverability would be performed. If an evaluation\ris required, the estimated future undiscounted cash flows associated with the asset would be compared to the asset’s carrying\rvalue to determine if a write-down is required.
\r\r"}]},{"name":"rpt:f-795","factDimensions":{"xbrl:concept":"us-gaap:AdvertisingCostsPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
ADVERTISING COSTS:
\r\r\r\r
The Company expenses all advertising costs\ras incurred and the amounts were not material for all periods presented.
\r\r"}]},{"name":"rpt:f-796","factDimensions":{"xbrl:concept":"us-gaap:ShippingAndHandlingCostPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
SHIPPING AND HANDLING OF PRODUCTS:
\r\r\r\r
Amounts billed to customers for shipping\rand handling of products are included in net sales. Costs incurred related to shipping and handling of products are included in\rcost of sales.
\r\r"}]},{"name":"rpt:f-797","factDimensions":{"xbrl:concept":"us-gaap:IncomeTaxPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
INCOME TAXES:
\r\r\r\r
Income taxes have been provided using the\rliability method whereby deferred tax assets and liabilities are determined based on differences between financial reporting and\rtax bases of assets and liabilities and net operating loss and tax credit carryforwards measured using the enacted tax rates and\rlaws that will be in effect when the differences are expected to reverse or the carryforwards are utilized. Valuation allowances\rare established when it is determined that it is more likely than not that such assets will not be realized.
\r\r\r\r
A full valuation allowance was established\ragainst all deferred tax assets, as management determined that it is more likely than not that deferred tax assets will not be\rrealized, as of May 31, 2017 and 2016.
\r\r\r\r
The Company accounts for uncertain tax positions\rconsistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and\rmeasurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in\ra tax return. The Company does not expect any material change in its unrecognized tax benefits over the next twelve months. The\rCompany recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes.
\r\r\r\r
Although the Company files U.S. federal,\rvarious state, and foreign tax returns, the Company’s only major tax jurisdictions are the United States, California, Germany\rand Japan. Tax years 1997 – 2016 remain subject to examination by the appropriate governmental agencies due to tax loss carryovers\rfrom those years.
\r\r"}]},{"name":"rpt:f-798","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationOptionAndIncentivePlansPolicy","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
STOCK-BASED COMPENSATION:
\r\r\r\r
Stock-based compensation expense consists\rof expenses for stock options, restricted stock units, or RSUs, and employee stock purchase plan, or ESPP, purchase rights. Stock-based\rcompensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the\raward using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service\rperiod. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and\rare fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly\rtraded options. For RSUs, stock-based compensation expense is based on the fair value of the Company’s common stock at the\rgrant date. All of the Company’s stock-based compensation is accounted for as equity instruments.
\r\r\r\r
The following table summarizes the stock-based\rcompensation expense for the years ended May 31, 2017, 2016 and 2015 (in thousands, except per share data):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights,\r included in: | \r | \r | \r | |||||||||
| Cost of sales | \r | $ | 91 | \r | $ | 87 | \r | $ | 70 | |||
| Selling, general and administrative | \r | 714 | \r | 723 | \r | 726 | ||||||
| Research and development | \r | 194 | \r | 206 | \r | 201 | ||||||
| Net effect on net loss | \r | $ | 999 | \r | $ | 1,016 | \r | $ | 997 | |||
| Effect on net loss per share: | \r | \r | \r | |||||||||
| Basic | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 | |||
| Diluted | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 |
\r\r
During fiscal 2017, 2016 and fiscal 2015,\rthe Company recorded stock-based compensation related to stock options and restricted stock units of $884,000, $894,000 and $857,000,\rrespectively.
\r\r\r\r
As of May 31, 2017, the total compensation\rcost related to unvested stock-based awards under the Company’s 2006 Equity Incentive Plan and 2016 Equity Incentive Plan,\rbut not yet recognized, was $886,000 which is net of estimated forfeitures of $2,000. This cost will be amortized on a straight-line\rbasis over a weighted average period of approximately 2.3 years.
\r\r\r\r
During fiscal 2017, 2016 and fiscal 2015,\rthe Company recorded stock-based compensation related to its ESPP of $115,000, $122,000 and $140,000, respectively.
\r\r\r\r
As of May 31, 2017, 2016 and 2015, stock-based\rcompensation costs of zero, zero and $20,000, respectively, were capitalized as part of inventory.
\r\r\r\r
As of May 31, 2017, the total compensation\rcost related to purchase rights under the ESPP but not yet recognized was $33,000. This cost will be amortized on a straight-line\rbasis over a weighted average period of approximately 0.7 years.
\r\r\r\r
Valuation Assumptions
\r\r\r\r
Valuation and Amortization Method. The Company\restimates the fair value of stock options granted using the Black-Scholes option valuation method and a single option award approach.\rThe fair value under the single option approach is amortized on a straight-line basis over the requisite service periods of the\rawards, which is generally the vesting period.
\r\r\r\r
Expected Term. The Company’s expected\rterm represents the period that the Company’s stock-based awards are expected to be outstanding and was determined based\ron historical experience, giving consideration to the contractual terms of the stock-based awards, vesting schedules and expectations\rof future employee behavior as evidenced by changes to the terms of its stock-based awards.
\r\r\r\r
Volatility. Volatility is a measure of the\ramounts by which a financial variable such as stock price has fluctuated (historical volatility) or is expected to fluctuate (expected\rvolatility) during a period. The Company uses the historical volatility for the past five years, which matches the expected term\rof most of the option grants, to estimate expected volatility. Volatility for each of the ESPP’s four time periods of six\rmonths, twelve months, eighteen months, and twenty-four months is calculated separately and included in the overall stock-based\rcompensation expense recorded.
\r\r\r\r
Risk-Free Interest Rate. The Company bases\rthe risk-free interest rate used in the Black-Scholes option valuation method on the implied yield in effect at the time of option\rgrant on U.S. Treasury zero-coupon issues with a remaining term equivalent to the expected term of the stock awards including the\rESPP.
\r\r\r\r
Fair Value. The fair values of the Company’s\rstock options granted to employees in fiscal 2017, 2016 and 2015 were estimated using the following weighted average assumptions\rin the Black-Scholes option valuation method:
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Option plan shares | \r | \r | \r | |||||||||
| Expected term (in years) | \r | 4 | \r | 4 | \r | 4 | ||||||
| Volatility | \r | 0.81 | \r | 0.86 | \r | 0.90 | ||||||
| Risk-free interest rates | \r | 1.02% | \r | 1.21% | \r | 1.20% | ||||||
| Weighted-average grant date fair value | \r | $ | 1.09 | \r | $ | 1.31 | \r | $ | 1.52 |
\r\r
The fair value of our ESPP purchase rights\rfor the fiscal 2017, 2016 and 2015 was estimated using the following weighted-average assumptions:
\r\r\r\r
| \r | Year End May 31, | |||||||||||||||
| \r | 2017 | \r | \r | 2016 | \r | \r | 2015 | |||||||||
| Employee stock purchase plan shares | \r | \r | \r | \r | \r | |||||||||||
| Expected term (in years) | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | ||||||||
| Volatility | \r | 0.79 – 1.08 | \r | \r | 0.64 – 0.74 | \r | \r | 0.55 – 0.83 | ||||||||
| Risk-free interest rates | \r | 0.48%–0.80% | \r | \r | 0.40%–0.76% | \r | \r | 0.04%–0.55% | ||||||||
| Weighted-average grant date fair value | \r | $ | 1.65 | \r | \r | $ | 0.80 | \r | \r | $ | 1.43 |
"}]},{"name":"rpt:f-799","factDimensions":{"xbrl:concept":"us-gaap:EarningsPerSharePolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
EARNINGS PER SHARE (“EPS”):
\r\r\r\r
Basic EPS is determined using the weighted\raverage number of common shares outstanding during the period. Diluted EPS is determined using the weighted average number of common\rshares and potential common shares (representing the dilutive effect of stock options, and employee stock purchase plan shares)\routstanding during the period using the treasury stock method.
\r\r\r\r
The following table presents the computation\rof basic and diluted net loss per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Numerator: Net loss | \r | $ | (5,653 | ) | \r | $ | (6,785 | ) | \r | $ | (6,647 | ) |
| \r | \r | \r | ||||||||||
| Denominator for basic net loss per share: | \r | \r | \r | |||||||||
| Weighted-average shares outstanding | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Shares used in basic net loss per share calculation | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Effect of dilutive securities | \r | — | \r | — | \r | — | ||||||
| \r | \r | \r | ||||||||||
| Denominator for diluted net loss per share | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Basic net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
| \r | \r | \r | ||||||||||
| Diluted net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
\r\r
For the purpose of computing diluted earnings\rper share, the weighted average number of potential common shares does not include stock options with an exercise price greater\rthan the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive. In the fiscal\ryear’s ended May 31, 2017 and 2016, potential common shares have not been included in the calculation of diluted net loss\rper share as the effect would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted\rnet loss per share for these periods are the same. Stock options to purchase 3,074,000, 3,201,000, and 3,686,000 shares of common\rstock were outstanding on May 31, 2017, 2016 and 2015, respectively, but were not included in the computation of diluted net loss\rper share, because the inclusion of such shares would be anti-dilutive. RSUs for 32,000 and 35,000 shares were outstanding at May\r31, 2017 and 2016, respectively, but not included in the computation of diluted net loss per share, because the inclusion of such\rshares would be anti-dilutive. ESPP rights to purchase 169,000, 304,000 and 175,000 ESPP shares were outstanding on May 31, 2017,\r2016 and 2015, respectively, but were not included in the computation of diluted net loss per share, because the inclusion of such\rshares would be anti-dilutive. The 2,657,000 shares convertible under the Convertible Notes outstanding at May 31, 2017 and 2016\rwere not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.
\r\r"}]},{"name":"rpt:f-800","factDimensions":{"xbrl:concept":"us-gaap:ComprehensiveIncomePolicyPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
COMPREHENSIVE LOSS:
\r\r\r\r
Comprehensive loss generally represents all\rchanges in shareholders’ equity (deficit) except those resulting from investments or contributions by shareholders. Unrealized\rgains and losses on foreign currency translation adjustments are included in the Company’s components of comprehensive loss,\rwhich are excluded from net loss. Comprehensive loss is included in the statements of comprehensive loss.
\r\r"}]},{"name":"rpt:f-801","factDimensions":{"xbrl:concept":"us-gaap:Reclassifications","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
RECLASSIFICATION
\r\r\r\r
Certain reclassifications have been made\rto the consolidated financial statements to conform to the current period presentation. These reclassifications did not result\rin any change in previously reported net loss, total assets or shareholders’ equity (deficit).
\r\r"}]},{"name":"rpt:f-802","factDimensions":{"xbrl:concept":"us-gaap:NewAccountingPronouncementsPolicyPolicyTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
RECENT ACCOUNTING PRONOUNCEMENTS:
\r\r\r\r
In May 2014, as part of its ongoing efforts\rto assist in the convergence of GAAP and International Financial Reporting Standards (“IFRS”), the Financial Accounting\rStandards Board (“FASB”) issued an accounting standard update related to revenue from contracts with customers. This\rstandard sets forth a new five-step revenue recognition model which replaces the prior revenue recognition guidance in its entirety\rand is intended to eliminate numerous industry-specific pieces of revenue recognition guidance that have historically existed in\rGAAP. The underlying principle of the new standard is that a business or other organization will recognize revenue to depict the\rtransfer of promised goods or services to customers in an amount that reflects what it expects in exchange for the goods or services.\rThe standard also requires more detailed disclosures and provides additional guidance for transactions that were not addressed\rcompletely in the prior accounting guidance. The standard provides alternative methods of initial adoption and will become effective\rfor the Company beginning in the first quarter of fiscal 2019. The FASB has issued several updates to the standard which i) defer\rthe original effective date from January 1, 2017 to January 1, 2018, while allowing for early adoption as of January 1, 2017. ii)\rclarify the application of the principal versus agent guidance. and iii) clarify the guidance on inconsequential and perfunctory\rpromises and licensing. In May 2016, the FASB issued an update to address certain narrow aspects of the guidance including collectibility\rcriterion, collection of sales taxes from customers, noncash consideration, contract modifications and completed contracts. This\rissuance does not change the core principle of the guidance in the initial topic issued in May 2014. In December 2016, the FASB\rissued updated guidance regarding revenue from contracts with customers. Some topics that could impact the Company include corrections\rand improvements around the following: contract costs impairment testing, disclosure of remaining performance obligations and prior\rperiod obligations, contract modifications, and contract asset versus receivable. The Company is currently evaluating the impact\rof adopting this new guidance on its consolidated financial statements.
\r\r\r\r
In August 2014, the FASB issued authoritative\rguidance related to going concern. This guidance requires management to evaluate the conditions or events that raise substantial\rdoubt about the entity’s ability to continue as a going concern and whether or not it is probable that the entity will be\runable to meet its obligations as they become due within one year after the date the financial statements are issued. This guidance\rbecame effective for the Company for the annual period ending May 31, 2017. The adoption of this guidance did not have a significant\rimpact on the Company’s consolidated financial statements.
\r\r\r\r
In July 2015, the FASB issued an accounting\rstandard update that requires management to measure inventory at the lower of cost or net realizable value. Net realizable value\ris the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal,\rand transportation. This new standard will be effective for us in fiscal year 2018. The adoption of this guidance is not expected\rto have a significant impact on the Company’s consolidated financial statements.
\r\r\r\r
In November 2015, the FASB issued an accounting\rstandard update related to deferred tax assets and liabilities. This standard simplifies the presentation of deferred income taxes\rto be classified as noncurrent in the consolidated balance sheet. This new standard will be effective for us in fiscal year 2018.\rThe adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements.
\r\r\r\r
In January 2016, the FASB issued an accounting\rstandard update related to recognition and measurement of financial assets and financial liabilities. This standard changes accounting\rfor equity investments, financial liabilities under the fair value option and the presentation and disclosure requirements for\rfinancial instruments. In addition, it clarifies guidance related to the valuation allowance assessment when recognizing deferred\rtax assets resulting from unrealized losses on available-for-sale debt securities. This standard is effective for us in fiscal\ryear 2020. Early adoption is permitted. The Company is currently evaluating the impact of this new guidance on its consolidated\rfinancial statements.
\r\r\r\r
In February 2016, the FASB issued authoritative\rguidance related to leases. This guidance requires management to present all leases greater than one year on the balance sheet\ras a liability to make payments and an asset as the right to use the underlying asset for the lease term. This new standard will\rbe effective for us in fiscal year 2020, with early adoption permitted. The Company is currently evaluating the impact of adopting\rthis new guidance on its consolidated financial statements.
\r\r\r\r
In March 2016, the FASB released an accounting\rstandard update that simplifies several aspects of the accounting for share-based payment transactions, including the income tax\rconsequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash\rflows. The accounting standard will be effective for the Company beginning the first quarter of fiscal 2018, and early adoption\ris permitted. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial\rstatements.
\r\r\r\r
In June 2016, the FASB issued an accounting\rstandard update that requires measurement and recognition of expected credit losses for financial assets held based on historical\rexperience, current conditions, and reasonable and supportable forecasts that affect the collectibility of the reported amount.\rThe accounting standard update will be effective for the Company beginning in the first quarter of fiscal 2021 on a modified retrospective\rbasis, and early adoption in fiscal 2020 is permitted. The Company is currently evaluating the impact of this accounting standard\rupdate on its consolidated financial statements.
\r\r\r\r
In August 2016, the FASB issued authoritative\rguidance related to the classification of certain cash receipts and cash payments on the statement of cash flows. The accounting\rstandard update will be effective for the Company beginning in the first quarter of fiscal 2019 on a retrospective basis, and early\radoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated statements\rof cash flows.
\r\r\r\r
In October 2016, the FASB issued an accounting\rstandard update that requires recognition of the income tax consequences of intra-entity transfers of assets (other than inventory)\rat the transaction date. The accounting standard update will be effective for the Company beginning in the first quarter of fiscal\r2019 on a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this\raccounting standard update on its consolidated financial statements.
\r\r\r\r
In November 2016, the FASB issued authoritative\rguidance related to statements of cash flows. This guidance clarifies that amounts generally described as restricted cash and restricted\rcash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of period total\ramounts shown on the statement of cash flows. The accounting standard update will be effective for the Company beginning in the\rfirst quarter of fiscal 2019 on a retrospective basis, and early adoption is permitted. The Company is currently evaluating the\rimpact of this accounting standard update on its consolidated financial statements.
\r\r\r\r
In December 2016, the FASB issued authoritative\rguidance related to technical corrections and improvements. This guidance provides minor updates on a variety of codification topics\rand are not expected to have a significant effect on current accounting practice. Most of these corrections do not have a transition\rdate as they are minor in nature.
\r\r"}]},{"name":"rpt:f-803","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfFairValueAssetsAndLiabilitiesMeasuredOnRecurringBasisTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The following table summarizes the Company’s\rfinancial assets measured at fair value on a recurring basis as of May 31, 2017 (in thousands):
\r\r\r\r
| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2017 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 15,516 | \r | $ | 15,516 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 15,566 | \r | $ | 15,516 | \r | $ | 50 | \r | $ | — | ||||
| \r | \r | \r | \r |
The following\rtable summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands):
\r\r\r\r
| \r | Balance as of | \r | \r | \r | ||||||||||||
| \r | May 31, 2016 | \r | Level 1 | \r | Level 2 | \r | Level 3 | |||||||||
| Money market funds | \r | $ | 1 | \r | $ | 1 | \r | $ | — | \r | $ | — | ||||
| Certificate of deposit | \r | 50 | \r | — | \r | 50 | \r | — | ||||||||
| Assets | \r | $ | 51 | \r | $ | 1 | \r | $ | 50 | \r | $ | — | ||||
| \r | \r | \r | \r |
"}]},{"name":"rpt:f-804","factDimensions":{"xbrl:concept":"AEHR:ScheduleUsefulLifeForPropertyAndEquipmentTableTextblock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The ranges of estimated useful lives are generally as follows:
\r\r\r\r
| Furniture and fixtures | \r2 to 6 years |
| Machinery and equipment | \r3 to 6 years |
| Test equipment | \r4 to 6 years |
"}]},{"name":"rpt:f-805","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The following table summarizes the stock-based\rcompensation expense for the years ended May 31, 2017, 2016 and 2015 (in thousands, except per share data):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights,\r included in: | \r | \r | \r | |||||||||
| Cost of sales | \r | $ | 91 | \r | $ | 87 | \r | $ | 70 | |||
| Selling, general and administrative | \r | 714 | \r | 723 | \r | 726 | ||||||
| Research and development | \r | 194 | \r | 206 | \r | 201 | ||||||
| Net effect on net loss | \r | $ | 999 | \r | $ | 1,016 | \r | $ | 997 | |||
| Effect on net loss per share: | \r | \r | \r | |||||||||
| Basic | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 | |||
| Diluted | \r | $ | 0.06 | \r | $ | 0.08 | \r | $ | 0.08 |
"}]},{"name":"rpt:f-806","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Fair Value. The fair values of the Company’s\rstock options granted to employees in fiscal 2017, 2016 and 2015 were estimated using the following weighted average assumptions\rin the Black-Scholes option valuation method:
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Option plan shares | \r | \r | \r | |||||||||
| Expected term (in years) | \r | 4 | \r | 4 | \r | 4 | ||||||
| Volatility | \r | 0.81 | \r | 0.86 | \r | 0.90 | ||||||
| Risk-free interest rates | \r | 1.02% | \r | 1.21% | \r | 1.20% | ||||||
| Weighted-average grant date fair value | \r | $ | 1.09 | \r | $ | 1.31 | \r | $ | 1.52 |
"}]},{"name":"rpt:f-807","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedPaymentAwardEmployeeStockPurchasePlanValuationAssumptionsTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The fair value of our ESPP purchase rights\rfor the fiscal 2017, 2016 and 2015 was estimated using the following weighted-average assumptions:
\r\r\r\r
| \r | Year End May 31, | |||||||||||||||
| \r | 2017 | \r | \r | 2016 | \r | \r | 2015 | |||||||||
| Employee stock purchase plan shares | \r | \r | \r | \r | \r | |||||||||||
| Expected term (in years) | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | \r | \r | 0.5 – 2.0 | ||||||||
| Volatility | \r | 0.79 – 1.08 | \r | \r | 0.64 – 0.74 | \r | \r | 0.55 – 0.83 | ||||||||
| Risk-free interest rates | \r | 0.48%–0.80% | \r | \r | 0.40%–0.76% | \r | \r | 0.04%–0.55% | ||||||||
| Weighted-average grant date fair value | \r | $ | 1.65 | \r | \r | $ | 0.80 | \r | \r | $ | 1.43 |
"}]},{"name":"rpt:f-808","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The following table presents the computation\rof basic and diluted net loss per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Numerator: Net loss | \r | $ | (5,653 | ) | \r | $ | (6,785 | ) | \r | $ | (6,647 | ) |
| \r | \r | \r | ||||||||||
| Denominator for basic net loss per share: | \r | \r | \r | |||||||||
| Weighted-average shares outstanding | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Shares used in basic net loss per share calculation | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Effect of dilutive securities | \r | — | \r | — | \r | — | ||||||
| \r | \r | \r | ||||||||||
| Denominator for diluted net loss per share | \r | 16,267 | \r | 13,091 | \r | 12,047 | ||||||
| \r | \r | \r | ||||||||||
| Basic net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
| \r | \r | \r | ||||||||||
| Diluted net loss per share | \r | $ | (0.35 | ) | \r | $ | (0.52 | ) | \r | $ | (0.55 | ) |
"}]},{"name":"rpt:f-809","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfAccountsNotesLoansAndFinancingReceivableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Accounts receivable comprise (in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Accounts receivable | \r | $ | 4,071 | \r | $ | 530 | ||
| Less: Allowance for doubtful accounts | \r | (61 | ) | \r | (8 | ) | ||
| \r | $ | 4,010 | \r | $ | 522 |
\r\r
| \r | \r | Additions | \r | \r | ||||||||||||
| \r | Balance at | \r | charged to | \r | \r | Balance | ||||||||||
| \r | beginning | \r | costs and | \r | \r | at end | ||||||||||
| \r | of year | \r | expenses | \r | Deductions* | \r | of year | |||||||||
| \r | \r | \r | \r | |||||||||||||
| Allowance for doubtful accounts receivable: | \r | \r | \r | \r | ||||||||||||
| May 31, 2017 | \r | $ | 8 | \r | $ | 53 | \r | $ | — | \r | $ | 61 | ||||
| \r | \r | \r | \r | |||||||||||||
| May 31, 2016 | \r | $ | 21 | \r | $ | — | \r | $ | (13 | ) | \r | $ | 8 |
\r\r
* Deductions include write-offs of uncollectible\raccounts and collections of amounts previously reserved.
\r\r"}]},{"name":"rpt:f-810","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfInventoryCurrentTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Inventories comprise\r(in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Raw materials and sub-assemblies | \r | $ | 4,268 | \r | $ | 2,839 | ||
| Work in process | \r | 2,059 | \r | 4,151 | ||||
| Finished goods | \r | 277 | \r | 43 | ||||
| \r | $ | 6,604 | \r | $ | 7,033 |
"}]},{"name":"rpt:f-811","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Property and equipment, net comprise (in\rthousands):
\r\r| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Leasehold improvements | \r | $ | 1,145 | \r | $ | 1,072 | ||
| Furniture and fixtures | \r | 974 | \r | 974 | ||||
| Machinery and equipment | \r | 3,035 | \r | 2,330 | ||||
| Test equipment | \r | 2,268 | \r | 2,581 | ||||
| \r | \r | |||||||
| \r | 7,422 | \r | 6,957 | |||||
| Less: Accumulated depreciation and amortization | \r | (6,003 | ) | \r | (5,753 | ) | ||
| \r | $ | 1,419 | \r | $ | 1,204 |
"}]},{"name":"rpt:f-812","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfProductWarrantyLiabilityTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Following is a summary of changes in the\rCompany’s liability for product warranties during the fiscal years ended May 31, 2017 and 2016 (in thousands):
\r\r| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| \r | \r | |||||||
| Balance at the beginning of the year | \r | $ | 155 | \r | $ | 137 | ||
| Accruals for warranties issued during the year | \r | 123 | \r | 334 | ||||
| Accruals and adjustments (change in estimates) related to pre-existing warranties during the year | \r | (54 | ) | \r | — | |||
| Settlement made during the year (in cash or in kind) | \r | (111 | ) | \r | (316 | ) | ||
| \r | \r | |||||||
| Balance at the end of the year | \r | $ | 113 | \r | $ | 155 |
"}]},{"name":"rpt:f-813","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfAccountsPayableAndAccruedLiabilitiesTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Accrued expenses comprise (in thousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Payroll related | \r | $ | 934 | \r | $ | 706 | ||
| Professional services | \r | 161 | \r | 166 | ||||
| Accrued interest | \r | 139 | \r | 110 | ||||
| Commissions and bonuses | \r | 125 | \r | 227 | ||||
| Warranty | \r | 113 | \r | 155 | ||||
| Taxes payable | \r | 69 | \r | 63 | ||||
| Investor relations | \r | 25 | \r | 88 | ||||
| Other | \r | 43 | \r | 38 | ||||
| \r | $ | 1,609 | \r | $ | 1,553 |
"}]},{"name":"rpt:f-814","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
Domestic and foreign components of loss before\rincome tax (expense) benefit are as follows (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||||
| Domestic | \r | $ | (5,663 | ) | \r | $ | (6,794 | ) | \r | $ | (6,871 | ) | ||
| Foreign | \r | 35 | \r | 19 | \r | 258 | ||||||||
| \r | $ | (5,628 | ) | \r | $ | (6,775 | ) | \r | $ | (6,613 | ) |
\r\r
"}]},{"name":"rpt:f-815","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The income tax (expense) benefit consists\rof the following (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Federal income taxes: | \r | \r | \r | |||||||||
| Current | \r | $ | — | \r | $ | — | \r | $ | — | |||
| Deferred | \r | — | \r | — | \r | — | ||||||
| State income taxes: | \r | \r | \r | |||||||||
| Current | \r | (8 | ) | \r | 3 | \r | (19 | ) | ||||
| Deferred | \r | — | \r | — | \r | — | ||||||
| Foreign income taxes: | \r | \r | \r | |||||||||
| Current | \r | (17 | ) | \r | (13 | ) | \r | (15 | ) | |||
| Deferred | \r | — | \r | — | \r | — | ||||||
| \r | $ | (25 | ) | \r | $ | (10 | ) | \r | $ | (34 | ) |
"}]},{"name":"rpt:f-816","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The Company’s\reffective tax rate differs from the U.S. federal statutory tax rate, as follows:
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| U.S. federal statutory tax rate | \r | 34.0 | % | \r | 34.0 | % | \r | 34.0 | % | |||
| State taxes, net of federal tax effect | \r | (0.1 | ) | \r | — | \r | (0.2 | ) | ||||
| Foreign rate differential | \r | 0.1 | \r | 0.2 | \r | 1.4 | ||||||
| Stock-based compensation | \r | (2.8 | ) | \r | (3.8 | ) | \r | (2.2 | ) | |||
| Research and development credit | \r | 3.1 | \r | 2.1 | \r | 1.1 | ||||||
| Change in valuation allowance | \r | (33.8 | ) | \r | (32.5 | ) | \r | (34.4 | ) | |||
| Other | \r | (0.9 | ) | \r | (0.2 | ) | \r | (0.2 | ) | |||
| Effective tax rate | \r | (0.4 | )% | \r | (0.2 | )% | \r | (0.5 | )% |
"}]},{"name":"rpt:f-817","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The components\rof the net deferred tax assets are as follows (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| \r | \r | |||||||
| Net operating losses | \r | $ | 18,719 | \r | $ | 16,643 | ||
| Credit carryforwards | \r | 4,715 | \r | 4,430 | ||||
| Inventory reserves | \r | 870 | \r | 1,064 | ||||
| Reserves and accruals | \r | 1,566 | \r | 1,606 | ||||
| Other | \r | 393 | \r | 885 | ||||
| \r | \r | |||||||
| \r | 26,263 | \r | 24,628 | |||||
| \r | \r | |||||||
| Less: Valuation allowance | \r | (26,263 | ) | \r | (24,628 | ) | ||
| Net deferred tax assets | \r | $ | — | \r | $ | — |
"}]},{"name":"rpt:f-818","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r\r\r
The Company maintains liabilities for uncertain\rtax positions. These liabilities involve considerable judgment and estimation and are continuously monitored by management based\ron the best information available. The aggregate changes in the balance of gross unrecognized tax benefits are as follows (in thousands):
\r\r\r\r
| Beginning balance as of May 31, 2014 | \r | $ | 973 | |
| Decreases related to prior year tax positions | \r | — | ||
| Decreases related to lapse of statute of limitations | \r | (54 | ) | |
| \r | ||||
| Balance at May 31, 2015 | \r | $ | 919 | |
| \r | ||||
| Decreases related to prior year tax positions | \r | (124 | ) | |
| Decreases related to lapse of statute of limitations | \r | (6 | ) | |
| \r | ||||
| Balance at May 31, 2016 | \r | $ | 789 | |
| \r | ||||
| Decreases related to prior year tax positions | \r | — | ||
| Decreases related to lapse of statute of limitations | \r | — | ||
| \r | ||||
| Balance at May 31, 2017 | \r | $ | 789 |
\r\r
"}]},{"name":"rpt:f-819","factDimensions":{"xbrl:concept":"AEHR:CustomerDepositsAndDeferredRevenueTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
Customer deposits and deferred revenue (in\rthousands):
\r\r\r\r
| \r | May 31, | |||||||
| \r | 2017 | \r | 2016 | |||||
| Customer deposits | \r | $ | 3,264 | \r | $ | 540 | ||
| Deferred revenue | \r | 203 | \r | 1,174 | ||||
| \r | $ | 3,467 | \r | $ | 1,714 |
"}]},{"name":"rpt:f-820","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfShareBasedCompensationStockOptionsActivityTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The following tables summarize the Company’s\rstock option and RSU transactions during fiscal 2017, 2016 and 2015 (in thousands):
\r\r\r\r
| \r | \r | Available | ||
| \r | \r | Shares | ||
| Balances, May 31, 2014 | \r | 1,145 | ||
| \r | ||||
| Additional shares reserved | \r | 860 | ||
| Options granted | \r | (1,253 | ) | |
| Options terminated | \r | 93 | ||
| \r | ||||
| Balances, May 31, 2015 | \r | 845 | ||
| \r | ||||
| Additional shares reserved | \r | 800 | ||
| Options granted | \r | (92 | ) | |
| RSUs granted | \r | (35 | ) | |
| Options terminated | \r | 329 | ||
| \r | ||||
| Balances, May 31, 2016 | \r | 1,847 | ||
| \r | ||||
| Additional shares reserved | \r | 2,238 | ||
| Options granted | \r | (368 | ) | |
| RSUs granted | \r | (157 | ) | |
| Options terminated | \r | 55 | ||
| Plan shares expired | \r | (1,446 | ) | |
| \r | ||||
| Balances, May 31, 2017 | \r | 2,169 |
\r\r
The following table summarized the stock\roption transactions during fiscal 2017, 2016 and 2015 (in thousands, except per share data):
\r\r\r\r\r\r
| \r | \r | \r | Outstanding Options | \r|||||||||
| \r | \r | \r | \r | \r | \r | Weighted | \r\r | \r | \r | |||
| \r | \r | \r | Number | \r\r | \r | Average | \r\r | \r | Aggregate | \r|||
| \r | \r | \r | of | \r\r | \r | Exercise | \r\r | \r | Intrinsic | \r|||
| \r | \r | \r | Shares | \r\r | \r | Price | \r\r | \r | Value | \r|||
| Balances, May 31, 2014 | \r\r | \r | 3,002 | \r\r | \r | $ | \r1.31 | \r\r | \r | $ | \r2,913 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 1,253 | \r\r | \r | $ | \r2.38 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (93 | \r) | \r\r | $ | \r2.30 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (476 | \r) | \r\r | $ | \r1.33 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2015 | \r\r | \r | 3,686 | \r\r | \r | $ | \r1.66 | \r\r | \r | $ | \r2,946 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 92 | \r\r | \r | $ | \r2.12 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (329 | \r) | \r\r | $ | \r1.93 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (248 | \r) | \r\r | $ | \r1.34 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2016 | \r\r | \r | 3,201 | \r\r | \r | $ | \r1.66 | \r\r | \r | $ | \r189 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options granted | \r\r | \r | 368 | \r\r | \r | $ | \r1.83 | \r\r | \r | \r | \r | |
| Options terminated | \r\r | \r | (55 | \r) | \r\r | $ | \r1.42 | \r\r | \r | \r | \r | |
| Options exercised | \r\r | \r | (440 | \r) | \r\r | $ | \r1.35 | \r\r | \r | \r | \r | |
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Balances, May 31, 2017 | \r\r | \r | 3,074 | \r\r | \r | $ | \r1.73 | \r\r | \r | $ | \r8,763 | \r|
| \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | \r | |
| Options exercisable and expected to be exercisable at May 31, 2017 | \r\r | \r | 3,030 | \r\r | \r | $ | \r1.72 | \r\r | \r | $ | \r8,654 | \r
Other (expense) income, net comprises the\rfollowing (in thousands):
\r\r\r\r
| \r | Year Ended May 31, | |||||||||||
| \r | 2017 | \r | 2016 | \r | 2015 | |||||||
| Foreign exchange (loss) gain | \r | $ | (21 | ) | \r | $ | (19 | ) | \r | $ | 194 | |
| Other, net | \r | — | \r | 3 | \r | 17 | ||||||
| \r | $ | (21 | ) | \r | $ | (16 | ) | \r | $ | 211 |
"}]},{"name":"rpt:f-822","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfRevenuesFromExternalCustomersAndLongLivedAssetsByGeographicalAreasTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The following presents information about\rthe Company’s operations in different geographic areas. Net sales are based upon ship-to location (in thousands):
\r\r\r\r
| \r | United | \r | \r | \r | ||||||||||||
| \r | States | \r | Asia | \r | Europe | \r | Total | |||||||||
| 2017: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 7,762 | \r | $ | 10,439 | \r | $ | 697 | \r | $ | 18,898 | ||||
| Property and equipment, net | \r | 1,364 | \r | 40 | \r | 15 | \r | 1,419 | ||||||||
| \r | \r | \r | \r | |||||||||||||
| 2016: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 2,957 | \r | $ | 10,228 | \r | $ | 1,316 | \r | $ | 14,501 | ||||
| Property and equipment, net | \r | 1,151 | \r | 39 | \r | 14 | \r | 1,204 | ||||||||
| \r | \r | \r | \r | |||||||||||||
| 2015: | \r | \r | \r | \r | ||||||||||||
| Net sales | \r | $ | 3,648 | \r | $ | 4,943 | \r | $ | 1,427 | \r | $ | 10,018 | ||||
| Property and equipment, net | \r | 432 | \r | 34 | \r | 12 | \r | 478 |
\r\r
"}]},{"name":"rpt:f-823","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfFutureMinimumRentalPaymentsForOperatingLeasesTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
Minimum annual rentals payments under non-cancellable\roperating leases in each of the next five fiscal years and thereafter are as follows (in thousands):
\r\r\r\r
| Years Ending May 31, | \r\r | \r | \r | |
| 2018 | \r\r | $ | \r502 | \r\r |
| 2019 | \r\r | \r | 64 | \r\r |
| 2020 | \r\r | \r | 1 | \r\r |
| 2021 | \r\r | \r | -- | \r\r |
| 2022 | \r\r | \r | -- | \r\r |
| Thereafter | \r\r | \r | -- | \r\r |
Total | \r \r | $ | \r567 | \r\r |
| \r | \r | \r | \r | \r |
\r\r
"}]},{"name":"rpt:f-824","factDimensions":{"xbrl:concept":"us-gaap:ScheduleOfQuarterlyFinancialInformationTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"\r\r
The following tables (presented in thousands,\rexcept per share data) sets forth selected unaudited condensed consolidated statements of operations data for each of the four\rquarters of the fiscal years ended May 31, 2017 and 2016. The unaudited quarterly information has been prepared on the same basis\ras the annual information presented elsewhere herein and, in the Company’s opinion, includes all adjustments (consisting\ronly of normal recurring entries) necessary for a fair statement of the information for the quarters presented. The operating results\rfor any quarter are not necessarily indicative of results for any future period and should be read in conjunction with the audited\rconsolidated financial statements of the Company’s and the notes thereto included elsewhere herein.
\r\r\r\r
| \r | Three Months Ended | |||||||||||||||
| \r | Aug. 31, | \r | Nov. 30, | \r | Feb. 28, | \r | May 31, | |||||||||
| \r | 2016 | \r | 2016 | \r | 2017 | \r | 2017 | |||||||||
| Net sales | \r | $ | 5,318 | \r | $ | 4,216 | \r | $ | 2,681 | \r | $ | 6,683 | ||||
| Gross profit | \r | $ | 2,206 | \r | $ | 1,463 | \r | $ | 503 | \r | $ | 2,608 | ||||
| Net loss | \r | $ | (755 | ) | \r | $ | (1,452 | ) | \r | $ | (2,651 | ) | \r | $ | (795 | ) |
| Net loss per share basic and diluted | \r | $ | (0.06 | ) | \r | $ | (0.09 | ) | \r | $ | (0.16 | ) | \r | $ | (0.04 | ) |
\r\r
| \r | Three Months Ended | |||||||||||||||
| \r | Aug. 31, | \r | Nov. 30, | \r | Feb. 29, | \r | May 31, | |||||||||
| \r | 2015 | \r | 2015 | \r | 2016 | \r | 2016 | |||||||||
| Net sales | \r | $ | 6,633 | \r | $ | 4,620 | \r | $ | 1,677 | \r | $ | 1,571 | ||||
| Gross profit (loss) | \r | $ | 3,383 | \r | $ | 1,691 | \r | $ | 169 | \r | $ | (98 | ) | |||
| Net income (loss) | \r | $ | 294 | \r | $ | (1,048 | ) | \r | $ | (2,975 | ) | \r | $ | (3,056 | ) | |
| Net income (loss) per share basic and diluted | \r | $ | 0.02 | \r | $ | (0.08 | ) | \r | $ | (0.23 | ) | \r | $ | (0.23 | ) |
"}]},{"name":"rpt:f-825","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:FurnitureAndFixturesMember","us-gaap:RangeAxis":"us-gaap:MinimumMember"},"factValues":[{"value":"P2Y"}]},{"name":"rpt:f-826","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:MachineryAndEquipmentMember","us-gaap:RangeAxis":"us-gaap:MinimumMember"},"factValues":[{"value":"P3Y"}]},{"name":"rpt:f-827","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember","us-gaap:RangeAxis":"us-gaap:MinimumMember"},"factValues":[{"value":"P4Y"}]},{"name":"rpt:f-828","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:FurnitureAndFixturesMember","us-gaap:RangeAxis":"us-gaap:MaximumMember"},"factValues":[{"value":"P6Y"}]},{"name":"rpt:f-829","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:MachineryAndEquipmentMember","us-gaap:RangeAxis":"us-gaap:MaximumMember"},"factValues":[{"value":"P6Y"}]},{"name":"rpt:f-830","factDimensions":{"xbrl:concept":"us-gaap:PropertyPlantAndEquipmentUsefulLife","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:PropertyPlantAndEquipmentByTypeAxis":"us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember","us-gaap:RangeAxis":"us-gaap:MaximumMember"},"factValues":[{"value":"P6Y"}]},{"name":"rpt:f-831","factDimensions":{"xbrl:concept":"us-gaap:ProductWarrantyAccrualPreexistingIncreaseDecrease","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"-54000","decimals":-3}]},{"name":"rpt:f-832","factDimensions":{"xbrl:concept":"us-gaap:ProductWarrantyAccrualPreexistingIncreaseDecrease","xbrl:period":"2015-06-01T00:00:00/2016-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"0","decimals":-3}]},{"name":"rpt:f-833","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingWeightedAverageExercisePrice","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD/xbrla:shares","us-gaap:AwardTypeAxis":"us-gaap:StockOptionMember"},"factValues":[{"value":"1.72"}]},{"name":"rpt:f-834","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestExercisableAggregateIntrinsicValue","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD","us-gaap:AwardTypeAxis":"us-gaap:StockOptionMember"},"factValues":[{"value":"8654000","decimals":-3}]},{"name":"rpt:f-835","factDimensions":{"xbrl:concept":"us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis":"AEHR:RangeAMember"},"factValues":[{"value":"P1Y9M7D"}]},{"name":"rpt:f-836","factDimensions":{"xbrl:concept":"us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis":"AEHR:Range1Member"},"factValues":[{"value":"P2Y4M28D"}]},{"name":"rpt:f-837","factDimensions":{"xbrl:concept":"us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:ShareBasedCompensationSharesAuthorizedUnderStockOptionPlansByExercisePriceRangeAxis":"AEHR:Range2Member"},"factValues":[{"value":"P5Y1M13D"}]},{"name":"rpt:f-838","factDimensions":{"xbrl:concept":"us-gaap:SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:ShareBasedCompensationSharesAuthorize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Interest is payable quarterly on\rMarch 1, June 1, September 1 and December 1 of each year.
"}]},{"name":"rpt:f-866","factDimensions":{"xbrl:concept":"us-gaap:DebtInstrumentConvertibleTermsOfConversionFeature","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"The conversion price for the Convertible Notes\ris $2.30 per share and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all or any\rpart of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date. Upon conversion,\rthe Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion. The Company may\rnot redeem the Convertible Notes prior to maturity.
"}]},{"name":"rpt:f-867","factDimensions":{"xbrl:concept":"AEHR:ConversionFromCreditFacilityToConvertibleNote","xbrl:period":"2016-07-18T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"1100000","decimals":-3}]},{"name":"rpt:f-868","factDimensions":{"xbrl:concept":"AEHR:ConversionFromCreditFacilityToConvertibleNote","xbrl:period":"2016-04-15T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"900000","decimals":-3}]},{"name":"rpt:f-869","factDimensions":{"xbrl:concept":"us-gaap:LineOfCreditFacilityMaximumBorrowingCapacity","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2000000","decimals":-3}]},{"name":"rpt:f-870","factDimensions":{"xbrl:concept":"us-gaap:LineOfCreditFacilityMaximumBorrowingCapacity","xbrl:period":"2015-04-11T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"2000000","decimals":-3}]},{"name":"rpt:f-871","factDimensions":{"xbrl:concept":"AEHR:ConvertibleDebtPrincipalAmount","xbrl:period":"2015-04-11T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"4110000","decimals":-3}]},{"name":"rpt:f-872","factDimensions":{"xbrl:concept":"AEHR:DebtIssuanceCostsArrangementsNet","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"356000","decimals":-3}]},{"name":"rpt:f-873","factDimensions":{"xbrl:concept":"us-gaap:DebtInstrumentConvertibleConversionPrice1","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD/xbrla:shares"},"factValues":[{"value":"2.30"}]},{"name":"rpt:f-874","factDimensions":{"xbrl:concept":"us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedStockOptions","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD"},"factValues":[{"value":"33000","decimals":-3}]},{"name":"rpt:f-875","factDimensions":{"xbrl:concept":"us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"P8M12D"}]},{"name":"rpt:f-876","factDimensions":{"xbrl:concept":"us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognizedPeriodForRecognition1","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","us-gaap:MultiemployerPlanTypeAxis":"AEHR:StockOptionPlan20062016Member"},"factValues":[{"value":"P2Y3M18D"}]},{"name":"rpt:f-877","factDimensions":{"xbrl:concept":"us-gaap:EmployeeServiceShareBasedCompensationNonvestedAwardsTotalCompensationCostNotYetRecognized","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD","us-gaap:MultiemployerPlanTypeAxis":"AEHR:StockOptionPlan20062016Member"},"factValues":[{"value":"886000","decimals":-3}]},{"name":"rpt:f-878","factDimensions":{"xbrl:concept":"AEHR:EstimatedForfeituresOfUnvestedStockBasedAwards","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"iso4217:USD","us-gaap:MultiemployerPlanTypeAxis":"AEHR:StockOptionPlan20062016Member"},"factValues":[{"value":"2000","decimals":-3}]},{"name":"rpt:f-879","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardNumberOfSharesAuthorized","xbrl:period":"2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"xbrla:shares","us-gaap:MultiemployerPlanTypeAxis":"AEHR:StockOptionPlan20062016Member"},"factValues":[{"value":"5275000"}]},{"name":"rpt:f-880","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsExpirationsInPeriod","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470","xbrl:unit":"xbrla:shares","us-gaap:AwardTypeAxis":"us-gaap:StockOptionMember"},"factValues":[{"value":"1446000"}]},{"name":"rpt:f-881","factDimensions":{"xbrl:concept":"us-gaap:LongTermDebtTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"9. LONG-TERM DEBT:
\r\r\r\r
On April 10, 2015, the Company entered into\ra Convertible Note Purchase and Credit Facility Agreement (the “Purchase Agreement”) with QVT Fund LP and Quintessence\rFund L.P. (the “Purchasers”) providing for (a) the Company’s sale to the Purchasers of $4,110,000 in aggregate\rprincipal amount of 9.0% Convertible Secured Notes due 2017 (the “Convertible Notes”) and (b) a secured revolving loan\rfacility (the “Credit Facility”) in an aggregate principal amount of up to $2,000,000. On August 22, 2016 the Purchase\rAgreement was amended to extend the maturity date of the Convertible Notes to April 10, 2019, decrease the conversion price from\r$2.65 per share to $2.30 per share, decrease the forced conversion price from $7.50 per share to $6.51 per share, and allow for\radditional equity awards.
\r\r\r\r
The Convertible Notes bear interest at an\rannual rate of 9.0% and will mature on April 10, 2019 unless repurchased or converted prior to that date. Interest is payable quarterly\ron March 1, June 1, September 1 and December 1 of each year. Debt issuance costs of $356,000, which are being accreted over the\rterm of the original loan using the effective interest rate method, were offset against the loan balance. During fiscal years ended\rMay 31, 2017 and 2016, $148,000 and $177,000, respectively, of amortization costs were recognized as interest expense.
\r\r\r\r
The conversion price for the Convertible\rNotes is $2.30 per share and is subject to adjustment upon the occurrence of certain specified events. Holders may convert all\ror any part of the principal amount of their Convertible Notes in integrals of $10,000 at any time prior to the maturity date.\rUpon conversion, the Company will deliver shares of its common stock to the holder of Convertible Notes electing such conversion.\rThe Company may not redeem the Convertible Notes prior to maturity.
\r\r\r\r
On April 14, 2016, $900,000 drawn against\rthe Credit Facility was converted into Convertible Notes. As of May 31, 2016, the Company had a balance of $1,100,000 against the\rCredit Facility. Upon maturity in July 2016, the $1,100,000 balance of the Credit Facility was converted into Convertible Notes.\rAs of May 31, 2017, there was no remaining balance available on the Credit Facility.
\r\r\r\r
The Company’s obligations under the\rPurchase Agreement are secured by substantially all of the assets of the Company.
\r\r\r\r
Long-term debt, net of debt issuance costs\r(in thousands):
\r\r\r\r
| \r | May 31, | \r | May 31, | |||||
| \r | 2017 | \r | 2016 | |||||
| Principal | \r | $ | 6,110 | \r | $ | 6,110 | ||
| Unamortized debt issuance costs | \r | — | \r | (148 | ) | |||
| \r | $ | 6,110 | \r | $ | 5,962 |
"}]},{"name":"rpt:f-882","factDimensions":{"xbrl:concept":"us-gaap:ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsVestedAndExpectedToVestOutstandingAndExercisableTableTextBlock","xbrl:period":"2016-06-01T00:00:00/2017-06-01T00:00:00","xbrl:entity":"cik:0001040470"},"factValues":[{"value":"
The options outstanding and exercisable at\rMay 31, 2017 were in the following exercise price ranges (in thousands, except per share data):
\r\r\r\r
| \r | \r | Options Outstanding | \r | \r | Options Exercisable | |||||||||||||||||||||||||||||
| \r | \r | at May 31, 2017 | \r | \r | at May 31, 2017 | |||||||||||||||||||||||||||||
Range of Exercise Prices | \r | \r | Number Outstanding Shares | \r | Weighted Average Remaining Contractual Life (Years) | \r | Weighted Average Exercise Price | \r | \r | Number Exercisable Shares | \r | Weighted Average Remaining Contractual Life (Years) | \r | Weighted Average Exercise Price | \r | Aggregate Intrinsic Value | ||||||||||||||||||
| $ | \r | 0.59-$0.97 | \r | 514 | \r | 1.77 | \r | $ | 0.66 | \r | 514 | \r | 1.77 | \r | $ | 0.66 | \r | |||||||||||||||||
| $ | \r | 1.09-$1.40 | \r | 784 | \r | 2.41 | \r | $ | 1.28 | \r | 773 | \r | 2.40 | \r | $ | 1.28 | \r | |||||||||||||||||
| $ | \r | 1.68-$2.06 | \r | 542 | \r | 5.12 | \r | $ | 1.77 | \r | 287 | \r | 4.26 | \r | $ | 1.85 | \r | |||||||||||||||||
| $ | \r | 2.10-$2.81 | \r | 1,234 | \r | 4.53 | \r | $ | 2.44 | \r | 848 | \r | 4.46 | \r | $ | 2.46 | \r | |||||||||||||||||
| \r | \r | \r | \r | \r | \r | \r | \r | |||||||||||||||||||||||||||
| $ | \r | 0.59-$2.81 | \r | 3,074 | \r | 3.63 | \r | $ | 1.73 | \r | 2,422 | \r | 3.21 | \r | $ | 1.63 | \r | $ | 7,148 |
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Long-term debt, net of debt issuance costs\r(in thousands):
\r\r\r\r
| \r | May 31, | \r | May 31, | |||||
| \r | 2017 | \r | 2016 | |||||
| Principal | \r | $ | 6,110 | \r | $ | 6,110 | ||
| Unamortized debt issuance costs | \r | — | \r | (148 | ) | |||
| \r | $ | 6,110 | \r | $ | 5,962 |
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