1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

May. 31, 2015

Organization And Summary Of Significant Accounting Policies Tables

Financial assets and liabilities measured at fair value on a recurring basis

    The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of May 31, 2015 (in thousands):

	Balance as of
	May 31, 2015		Level 1		Level 2		Level 3
Money market funds	$	4,650	$	4,650	$	--	$	--
Certificate of deposit		50		--		50		--
Assets	$	4,700	$	4,650	$	50	$	--
Liabilities	$	--	$	--	$	--	$	--

    The following table summarizes the Company’s financial assets and liabilities measured at fair value on a recurring basis as of May 31, 2014 (in thousands):

	Balance as of
	May 31, 2014		Level 1		Level 2		Level 3
Money market funds	$	477	$	477	$	--	$	--
Certificate of deposit		50		--		50		--
Assets	$	527	$	477	$	50	$	--
Liabilities	$	--	$	--	$	--	$	--

Useful life for property and equipment

The ranges of estimated useful lives are generally as follows:

Furniture and fixtures	2 to 6 years
Machinery and equipment	3 to 6 years
Test equipment	4 to 6 years

Compensation costs related to the Company's stock-based compensation

    The following table summarizes compensation costs related to the Company’s stock-based compensation for the years ended May 31, 2015, 2014 and 2013 (in thousands, except per share data):

	Year Ended May 31,
	2015		2014		2013
Stock-based compensation in the form of employee
stock options and ESPP purchase rights, included in:
Cost of sales	$	70	$	43	$	36
Selling, general and administrative		726		643		446
Research and development		201		167		119
Net effect on net (loss) income	$	997	$	853	$	601
Effect on net (loss) income per share:
Basic	$	0.08	$	0.08	$	0.06
Diluted	$	0.08	$	0.07	$	0.06

Fair value assumptions for Option Valuation Model

    Fair Value.  The fair values of the Company’s stock options granted to employees shares in fiscal 2015, 2014 and 2013 were estimated using the following weighted average assumptions in the Black-Scholes option valuation method:

	Year Ended May 31,
	2015			2014			2013
Option plan shares
Expected term (in years)		4			4			5
Volatility		0.90			0.95			0.91
Expected dividend	$	0.00		$	0.00		$	0.00
Risk-free interest rates		1.20	%		1.39	%		0.72	%
Weighted-average grant date fair value	$	1.52		$	1.09		$	0.78

Fair value assumption of the ESPP Purchase Rights

The fair value of our ESPP purchase rights for the fiscal 2015, 2014 and 2013 was estimated using the following weighted-average assumptions:

	Year End May 31,
	2015			2014			2013
Employee stock purchase plan shares
Expected term (in years)		0.5 – 2.0			0.5 – 2.0			0.5 – 2.0
Volatility		0.55 – 0.83			0.86 – 1.00			0.45 – 1.05
Expected dividend	$	0.00		$	0.00		$	0.00
Risk-free interest rates		0.04%–0.55	%		0.04%–0.44	%		0.11%–0.23	%
Weighted-average grant date fair value	$	1.43		$	1.34		$	0.52

Basic and diluted EPS

The following table presents the computation of basic and diluted net (loss) income per share attributable to Aehr Test Systems common shareholders (in thousands, except per share data):

	Year Ended May 31,
	2015			2014		2013
Numerator: Net (loss) income	$	(6,647	)	$	422	$	(3,419	)
Denominator for basic net (loss) income per share:
Weighted-average shares outstanding		12,047			10,877		9,549
Shares used in basic net (loss) income per share calculation		12,047			10,877		9,549
Effect of dilutive securities		--			1,012		--
Denominator for diluted net (loss) income per share		12,047			11,889		9,549
Basic net (loss) income per share	$	(0.55	)	$	0.04	$	(0.36	)
Diluted net (loss) income per share	$	(0.55	)	$	0.04	$	(0.36	)