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

12 Months Ended

May 31, 2017

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 measured at fair value on a recurring basis as of May 31, 2017 (in thousands):

	Balance as of
	May 31, 2017		Level 1		Level 2		Level 3
Money market funds	$	15,516	$	15,516	$	—	$	—
Certificate of deposit		50		—		50		—
Assets	$	15,566	$	15,516	$	50	$	—

The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 31, 2016 (in thousands):

	Balance as of
	May 31, 2016		Level 1		Level 2		Level 3
Money market funds	$	1	$	1	$	—	$	—
Certificate of deposit		50		—		50		—
Assets	$	51	$	1	$	50	$	—

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 the stock-based compensation expense for the years ended May 31, 2017, 2016 and 2015 (in thousands, except per share data):

	Year Ended May 31,
	2017		2016		2015
Stock-based compensation in the form of stock options, RSUs, and ESPP purchase rights, included in:
Cost of sales	$	91	$	87	$	70
Selling, general and administrative		714		723		726
Research and development		194		206		201
Net effect on net loss	$	999	$	1,016	$	997
Effect on net loss per share:
Basic	$	0.06	$	0.08	$	0.08
Diluted	$	0.06	$	0.08	$	0.08

Fair value assumptions for Option Valuation Model

 Fair Value. The fair values of the Company’s stock options granted to employees in fiscal 2017, 2016 and 2015 were estimated using the following weighted average assumptions in the Black-Scholes option valuation method:

	Year Ended May 31,
	2017		2016		2015
Option plan shares
Expected term (in years)		4		4		4
Volatility		0.81		0.86		0.90
Risk-free interest rates		1.02%		1.21%		1.20%
Weighted-average grant date fair value	$	1.09	$	1.31	$	1.52

Fair value assumption of the ESPP Purchase Rights

The fair value of our ESPP purchase rights for the fiscal 2017, 2016 and 2015 was estimated using the following weighted-average assumptions:

	Year End May 31,
	2017		2016		2015
Employee stock purchase plan shares
Expected term (in years)		0.5 – 2.0		0.5 – 2.0		0.5 – 2.0
Volatility		0.79 – 1.08		0.64 – 0.74		0.55 – 0.83
Risk-free interest rates		0.48%–0.80%		0.40%–0.76%		0.04%–0.55%
Weighted-average grant date fair value	$	1.65	$	0.80	$	1.43

Basic and diluted EPS

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

	Year Ended May 31,
	2017			2016			2015
Numerator: Net loss	$	(5,653	)	$	(6,785	)	$	(6,647	)
Denominator for basic net loss per share:
Weighted-average shares outstanding		16,267			13,091			12,047
Shares used in basic net loss per share calculation		16,267			13,091			12,047
Effect of dilutive securities		—			—			—
Denominator for diluted net loss per share		16,267			13,091			12,047
Basic net loss per share	$	(0.35	)	$	(0.52	)	$	(0.55	)
Diluted net loss per share	$	(0.35	)	$	(0.52	)	$	(0.55	)