Company: AEHR
Filing Date: 2025-10-08
Form Type: 10-Q
Source: 0001654954-25-011582
Chunk: 16

Company: AEHR TEST SYSTEMS
Filing Date: 2025-10-08
Form: 10-Q
Item: Part I, Item 1
Chunk 16
---
 about variable consideration allocated entirely to a wholly unsatisfied performance obligation. Costs to obtain or fulfill a contract The Company generally expenses sales commissions when incurred as a component of selling, general and administrative expenses as the amortization period is typically less than one year. Additionally, the majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory and fixed assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing process.

9. STOCK-BASED COMPENSATION Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs (“PRSUs”), restricted shares, performance restricted shares and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, PRSUs, restricted shares and performance restricted shares, stock-based compensation expense is based on the fair value of the Company’s common stock at the grant date and is recognized as expense over the employee’s requisite service period. All of the Company’s stock-based compensation is accounted for as equity instruments. See Note 12 in the Company’s Annual Report on Form 10-K for fiscal 2025 filed on July 28, 2025 for further information regarding the equity incentive plans and the ESPP.  The following table summarizes the stock-based compensation expense for the three months ended August 29, 2025 and August 30, 2024:   Three Months Ended    August 29,   August 30,  (In thousands) 2025  2024 Cost of sales $159  $93 Research and development  365   208 Selling, general and administrative  1,147   569   $1,671  $870  Stock-based compensation expense totaling $0.4 million and $0.3 million was capitalized as part of inventory as of August 29, 2025 and May 30, 202