Company: AEHR
Filing Date: 2025-07-28
Form Type: 10-K
Source: 0001654954-25-008553
Chunk: 732

Company: AEHR TEST SYSTEMS
Filing Date: 2025-07-28
Form: 10-K
Item: Item 7A
Chunk 732
---
 and estimation and are continuously monitored by management based on the best information available.  The aggregate changes in the balance of gross unrecognized tax benefits are as follows: (In thousands)   Balance at May 31, 2022  $2,018 Increases related to prior year tax positions  90 Increases related to current year tax positions  168 Balance at May 31, 2023   2,276 Increases related to prior year tax positions  35 Decreases related to prior year tax positions  (28)Increases related to current year tax positions  233 Decreases related to current year tax positions  (32)Balance at May 31, 2024  2,484 Decreases related to prior year tax positions  (23)Balance at May 30, 2025 $2,461  As of May 30, 2025 and May 31, 2024, the total amount of unrecognized tax benefits was approximately $2.5 million and $2.5 million, respectively. The unrecognized tax benefit of $2.5 million would impact the effective tax rate, if recognized. The Company had zero accrued interest and accrued penalties related to unrecognized tax benefit as of May 30, 2025. The Company does not expect its unrecognized tax benefits to change materially over the next 12 months. The Company policy is to recognize interest and penalties in income tax expense. The Company’s federal and state income tax returns are subject to possible examination by the taxing authorities until the expiration of the related statutes of limitations on those tax returns. In general, the federal income tax returns have a three-year statute of limitations, and the state income tax returns have a four-year statute of limitations. The Company’s foreign income tax returns are also subject to examination by the foreign tax authorities with the longest statute of limitations period of four-year. The Company is not currently under audit with the Internal Revenue Service, or any foreign, state or local jurisdictions, nor has it been notified of any other potential future income tax audit.

 47Table of Contents

7. LEASES The Company leases its manufacturing and office space under operating leases. The principal administrative and production facility is located in Fremont, California, in a 51,289 square foot building. The Company entered into a non-cancelable operating lease agreement for its United States manufacturing and office facility, which was amended in December 2022 to extend the lease term to September