Company: AEHR
Filing Date: 2025-10-08
Form Type: 10-Q
Source: 0001654954-25-011582
Chunk: 7

Company: AEHR TEST SYSTEMS
Filing Date: 2025-10-08
Form: 10-Q
Item: Part I, Item 1
Chunk 7
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The new guidance allows companies to apply a practical expedient when estimating credit losses on current accounts receivable and contract assets. This ASU is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for periods in which financial statements have not yet been issued or made ready for issuance on a prospective basis. The Company is currently evaluating the impact of adopting this guidance on its Consolidated Financial Statements.

2. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company measures its cash equivalents and money market funds at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that is determined based on assumptions that market participants would use in pricing an asset or a liability. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value: Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 — Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings. Level 3 — Unobservable inputs that are supported by little or no market activities.

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 The following table represents the Company’s assets measured at fair value on a recurring basis as of August 29, 2025, and the basis for that measurement:   Balance as of       (In thousands) August 29, 2025  Level 1  Level 2  Level 3 Money market funds $20,863  $20,863  $-  $- Total $20,863  $20,863  $-  $-  The following table represents the Company’s assets measured at fair value on a recurring basis as of May 30, 2025, and the basis for that measurement:   Balance as of