Company: AEHR
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001654954-25-000285
Chunk: 18

Company: AEHR TEST SYSTEMS
Filing Date: 2025-01-13
Form: 10-Q
Item: Part I, Item 1
Chunk 18
---
less and intends to vigorously defend its position. Given the procedural posture and the nature of the case, including that the pending proceeding is in the early stages, that alleged damages have not been specified, that uncertainty exists as to the likelihood of a class or classes being certified or the ultimate size of any class or classes if certified, and that there are significant factual and legal issues to be resolved, the Company is unable to make a reasonable estimate of the potential loss or range of losses, if any, that might arise from this matter. On October 18, 2024, the Company filed a complaint with the China Suzhou Intermediate Court to protect its intellectual property rights in China against Suzhou Semight Instruments Co., Ltd. (“Semight”) and its related entities and/or distributors, alleging infringement of the Company’s two patents related to wafer burn-in systems and wafer reliability test systems. The Company is seeking injunctive relief, claiming that Semight’s actions have infringed upon its intellectual property rights and caused substantial harm to its business. The Company believes its claims are valid and is vigorously pursuing its legal remedies. At this stage, the outcome of the litigation is uncertain, and the Company is unable to predict the likelihood of success or estimate the potential financial impact, if any, on its condensed consolidated financial statements. The Company has also incurred and expects to continue to incur legal expenses related to this matter. On December 19, 2024, Semight filed a petition for acceptance of request for invalidation to the aforementioned Chinese patents with the Department of National Intellectual Properties in Beijing. In the normal course of business to facilitate sales of its products, the Company indemnifies other parties, including customers, with respect to certain matters, for example, including against losses arising from a breach of representations or covenants, or from intellectual property infringement or other claims. These agreements may limit the time within which an indemnification claim can be made and the amount of the claim. In addition, the Company has entered into indemnification agreements with its officers and directors, and the Company’s bylaws contain similar indemnification obligations to the Company’s agents. It is not possible to determine the maximum potential amount under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. To date, payments made by the Company under these agreements have not had a material impact on the Company’s operating results, financial position or cash flow.

8. SHAREHOLDERS’ EQU