Company: AEHR
Filing Date: 2025-10-08
Form Type: 10-Q
Source: 0001654954-25-011582
Chunk: 11

Company: AEHR TEST SYSTEMS
Filing Date: 2025-10-08
Form: 10-Q
Item: Part I, Item 1
Chunk 11
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 the three months ended August 29, 2025, the Company utilized the discrete effective tax rate method as allowed by Accounting Standards Codification (“ASC”) 740-270-30-18 to compute the interim tax provision for the U.S. jurisdiction. Considering the near break-even level of pretax income (loss) forecasted for the year and significant permanent differences, relatively small changes in estimates of pretax income would result in significant volatility in the estimated annual effective tax rate. As a result of this potential volatility, the Company computed the interim tax provision on a year-to-date discrete basis for U.S. operations. For the three months ended August 29, 2025, the Company recognized a tax benefit due to year-to-date losses in the United States. Tax expense for the three months ended August 30, 2024 was primarily due to taxable income in the U.S. and in profitable foreign subsidiaries.   The Company accounts for uncertain tax positions consistent with authoritative guidance. The guidance prescribes a “more likely than not” recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of income taxes.

6. COMMITMENTS AND CONTINGENCIES Purchase Obligations The Company has purchase obligations to certain suppliers. In some cases, the products the Company purchases are unique and have provisions against cancellation of the order. Contingencies The Company may, from time to time, be involved in legal proceedings arising in the ordinary course of business. While there can be no assurances as to the ultimate outcome of any litigation involving the Company, management does not believe any pending legal proceedings will result in judgment or settlement that will have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. On December 3, 2024, a putative shareholder class action lawsuit captioned Lucid Alternative Fund, LP v. Aehr Test Systems, Inc. was filed in the United States District Court for the Northern District of California against the Company. The lawsuit alleged, in part, that the Company and certain of its executives made materially false and misleading statements regarding the Company’s earnings guidance and other financial projections for 2024. The lawsuit sought unspecified monetary damages and purported to represent purchasers of the Company’s securities between January 9, 2024 and March 24, 2024. On February 3, 2025, Lucid