Company: AEHR
Filing Date: 2025-07-28
Form Type: 10-K
Source: 0001654954-25-008553
Chunk: 558

Company: AEHR TEST SYSTEMS
Filing Date: 2025-07-28
Form: 10-K
Item: Item 5
Chunk 558
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3,366  Changes in the Company’s warranty reserve were as follows:   May 30,  May 31, (In thousands) 2025  2024 Balance at the beginning of the period $234  $267 Accruals for warranties issued during the period  679   511 Warranties acquired through business combination  144   - Consumption of reserves  (629)  (544)Balance at the end of the period $428  $234  The accrued warranty balance is included in accrued expenses and other current liabilities on the consolidated balance sheets. Deferred revenue, short-term consisted of the following:   May 30,  May 31, (In thousands) 2025  2024 Customer deposits $1,802  $1,248 Deferred revenue  179   97   $1,981  $1,345 

4. BUSINESS COMBINATION On July 31, 2024, the Company completed its acquisition of Incal Technology, Inc. (“Incal”), a company that specializes in packaged part reliability/burn-in test solutions. The acquisition date fair value of the consideration transferred for Incal was approximately $22.2 million, which consisted of the following: (In thousands) Fair Value Cash $10,631 Common stock under transfer restriction  9,381 Escrow payable  2,381 Working capital adjustments (1)  (240)Total $22,153  (1) Included in Prepaid expenses and other current assets As part of the purchase consideration, the Company issued 552,355 shares of its restricted common stock. The restricted stock issued to the shareholders of Incal is subject to a six-month holding period, during which time the shares cannot be transferred or sold without registration under the Securities Act of 1933, as amended, or pursuant to an available exemption. The fair value of the restricted shares was determined based on the closing price of the Company’s common stock on the acquisition date, adjusted for a discount related to the lack of marketability due to the transfer restrictions. The total fair value of the restricted shares issued as part of the consideration was $9.4 million.

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The escrow payable represented the present value of total escrow amount, net of certain indemnification, and was initially recorded within