INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Consolidated Financial Statements of Aehr Test Systems Report of Independent Registered Public Accounting Firm (Firm ID 207) 34 Consolidated Balance Sheets 35 Consolidated Statements of Operations 36 Consolidated Statements of Comprehensive Income (Loss) 37 Consolidated Statements of Shareholders' Equity 38 Consolidated Statements of Cash Flows 39 Notes to Consolidated Financial Statements 40 33 Tab le of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and Board of Directors of Aehr Test Systems Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Aehr Test Systems and its subsidiaries (the “Company”) as of May 29, 2026 and May 30, 2025, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the three years in the period ended May 29, 2026, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of May 29, 2026 and May 30, 2025, and the results of its operations and its cash flows for each of the three years in the period ended May 29, 2026, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. Inventory Valuation – Adjustments for Excess or Obsolete Inventory The Company’s consolidated inventories balance was $41.4 million as of May 29, 2026. As described in Note 1 to the consolidated financial statements, the Company’s inventory is stated at the lower of cost, which is determined on a standard cost basis on a first-in, first-out method, or net realizable value. The Company evaluates the net realizable value by considering obsolescence, excessive levels of inventory, deterioration and other factors. Adjustments to reduce the cost of inventory to its net realizable value, if required, are made for estimated excess, obsolescence or impaired inventory. If actual demand were to be substantially lower than estimated, there could be a significant adverse impact on the carrying value of the inventory and results of operations. The principal considerations for our determination that performing procedures relating to adjustments for excess or obsolete inventory is a critical audit matter are the significant amount of judgement by management in developing the assumptions of the forecasted product demand, which in turn led to significant auditor judgement, subjectivity, and effort in performing audit procedures and evaluating audit evidence relating to the forecasted product demand. Additionally, for certain new sales channels there may be limited historical data with which to evaluate forecasts. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included, among others, testing management’s process for developing the estimate of the adjustments for excess or obsolete inventory, testing the completeness and accuracy of the underlying data used in the estimate, and evaluating management’s assumptions of forecasted product demand. Evaluating management’s demand forecast for reasonableness involved considering historical sales of its products, comparing prior period estimates to actual results of the same period, and determining whether the demand forecast used was consistent with evidence obtained in other areas of the audit. /s/ BPM LLP We have served as the Company’s auditor since 2005. San Jose, California July 27, 2026 34 Table of Contents AEHR TEST SYSTEMS CONSOLIDATED BALANCE SHEETS May 29, May 30, (In thousands, except par value) 2026 2025 ASSETS Current assets: Cash and cash equivalents $ 116,358 $ 24,529 Accounts receivable 17,473 14,191 Inventories 41,354 41,997 Prepaid expenses and other current assets 9,263 8,061 Total current assets 184,448 88,778 Property and equipment, net 8,940 8,969 Goodwill 10,719 10,719 Intangible assets, net 9,552 10,781 Deferred tax assets, net 23,829 19,114 Operating lease right-of-use assets, net 8,901 9,601 Other non-current assets 305 546 Total assets $ 246,694 $ 148,508 LIABILITIES AND SHAREHOLDERS EQUITY Current liabilities: Accounts payable $ 6,754 $ 6,728 Accrued expenses and other current liabilities 5,283 6,020 Operating lease liabilities, short-term 626 909 Deferred revenue, short-term 5,192 1,981 Total current liabilities 17,855 15,638 Operating lease liabilities, long-term 9,256 9,921 Deferred revenue, long-term 34 36 Other long-term liabilities 38 42 Total liabilities 27,183 25,637 Commitments and contingencies (Note 9) Shareholders equity: Preferred stock, $0.01 par value: Authorized: 10,000 shares; Issued and outstanding: none - - Common stock, $0.01 par value: Authorized: 75,000 shares; Issued and outstanding: 32,480 shares and 29,877 shares at May 29, 2026 and May 30, 2025, respectively 325 299 Additional paid-in capital 249,477 145,758 Accumulated other comprehensive loss (105 ) (126 ) Accumulated deficit (30,186 ) (23,060 ) Total shareholders' equity 219,511 122,871 Total liabilities and shareholders equity $ 246,694 $ 148,508 The accompanying notes are an integral part of these consolidated financial statements. 35 Table of Contents AEHR TEST SYSTEMS CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended May 29, May 30, May 31, (In thousands, except per share data) 2026 2025 2024 Revenue $ 50,001 $ 58,968 $ 66,218 Cost of revenue 32,350 35,035 33,675 Gross profit 17,651 23,933 32,543 Operating expenses: Research and development 12,633 10,463 8,719 Selling, general and administrative 19,161 18,283 13,746 Restructuring charges 6 864 - Total operating expenses 31,800 29,610 22,465 Income (loss) from operations (14,149 ) (5,677 ) 10,078 Interest income, net 1,361 1,401 2,388 Other income (expense), net 1,052 (15 ) (8 ) Income (loss) before income tax benefit (11,736 ) (4,291 ) 12,458 Income tax benefit (4,610 ) (381 ) (20,698 ) Net income (loss) $ (7,126 ) $ (3,910 ) $ 33,156 Net income (loss) per share: Basic $ (0.23 ) $ (0.13 ) $ 1.15 Diluted $ (0.23 ) $ (0.13 ) $ 1.12 Shares used in per share calculations: Basic 30,669 29,581 28,818 Diluted 30,669 29,581 29,617 The accompanying notes are an integral part of these consolidated financial statements. 36 Table of Contents AEHR TEST SYSTEMS CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Net income (loss) $ (7,126 ) $ (3,910 ) $ 33,156 Other comprehensive income (loss), net of tax: Net change in cumulative translation adjustment 21 32 (20 ) Net change in unrealized gain on investments - - 17 Comprehensive income (loss) $ (7,105 ) $ (3,878 ) $ 33,153 The accompanying notes are an integral part of these consolidated financial statements. 37 Table of Contents AEHR TEST SYSTEMS CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Accumulated Additional Other Total Common Stock Paid-in Comprehensive Accumulated Shareholders' (In thousands) Shares Amount Capital Income (Loss) Deficit Equity Balances, May 31, 2023 28,539 $ 285 $ 127,776 $ (155 ) $ (52,306 ) $ 75,600 Issuance of common stock under employee plans 501 4 1,803 - - 1,807 Issuance cost of common stock offering - - (72 ) - - (72 ) Shares repurchased for tax withholdings on vesting of restricted stock units (45 ) - (1,596 ) - - (1,596 ) Stock-based compensation - - 2,701 - - 2,701 Net income - - - - 33,156 33,156 Net unrealized gain on investments - - - 17 - 17 Foreign currency translation adjustment - - - (20 ) - (20 ) Balances, May 31, 2024 28,995 289 130,612 (158 ) (19,150 ) 111,593 Issuance of common stock for business acquisition 552 6 9,375 - - 9,381 Issuance of common stock under employee plans 393 4 1,405 - - 1,409 Shares repurchased for tax withholdings on vesting of restricted stock units and in connection with the termination of ESOP (63 ) - (784 ) - - (784 ) Stock-based compensation - - 5,150 - - 5,150 Net loss - - - - (3,910 ) (3,910 ) Foreign currency translation adjustment - - - 32 - 32 Balances, May 30, 2025 29,877 299 145,758 (126 ) (23,060 ) 122,871 Issuance of common stock in public offerings, net of issuance costs 1,942 20 97,079 - - 97,099 Issuance of common stock under employee plans 737 7 2,193 - - 2,200 Shares repurchased for tax withholdings on vesting of restricted stock units (76 ) (1 ) (2,383 ) - - (2,384 ) Stock-based compensation - - 6,830 - - 6,830 Net loss - - - - (7,126 ) (7,126 ) Foreign currency translation adjustment - - - 21 - 21 Balances, May 29, 2026 32,480 $ 325 $ 249,477 $ (105 ) $ (30,186 ) $ 219,511 The accompanying notes are an integral part of these consolidated financial statements. 38 Table of Contents AEHR TEST SYSTEMS Consolidated Statements of Cash Flows Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Cash flows from operating activities: Net income (loss) $ (7,126 ) $ (3,910 ) $ 33,156 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Stock-based compensation expense 6,761 5,162 2,518 Depreciation and amortization 2,799 2,312 657 Deferred income taxes (4,715 ) (421 ) (20,773 ) Amortization of operating lease right-of-use assets 731 1,076 706 Impairment of assets - 584 - Accretion of investment discount - - (130 ) Changes in operating assets and liabilities: Accounts receivable (3,307 ) (3,037 ) 6,790 Inventories 11 (2,441 ) (13,732 ) Prepaid expenses and other assets (2,763 ) (5,012 ) (875 ) Accounts payable 991 (714 ) (3,891 ) Accrued expenses 1,020 (378 ) (792 ) Deferred revenue 3,209 143 (1,469 ) Operating lease liabilities (979 ) (699 ) (423 ) Income taxes payable 58 (65 ) 14 Net cash provided by (used in) operating activities (3,310 ) (7,400 ) 1,756 Cash flows from investing activities: Purchases of property and equipment (2,066 ) (4,992 ) (749 ) Proceeds from maturities of investments - - 18,000 Payments for business acquisition, net of cash and cash equivalents acquired (1,801 ) (11,075 ) - Net cash provided by (used in) investing activities (3,867 ) (16,067 ) 17,251 Cash flows from financing activities: Proceeds from issuance of common stock from public offerings, net of issuance costs 97,395 - (72 ) Proceeds from issuance of common stock under employee plans 2,200 1,409 1,807 Shares repurchased for tax withholdings on vesting of restricted stock units (2,384 ) (784 ) (1,596 ) Net cash provided by financing activities 97,211 625 139 Effect of exchange rate changes on cash, cash equivalents and restricted cash (6 ) 13 (41 ) Net increase (decrease) in cash, cash equivalents and restricted cash 90,028 (22,829 ) 19,105 Cash, cash equivalents and restricted cash, beginning of period(1) 26,480 49,309 30,204 Cash, cash equivalents and restricted cash, end of period (1) $ 116,508 $ 26,480 $ 49,309 Supplemental cash flow information: Income taxes paid $ 60 $ 100 $ 90 Interest paid $ - $ - $ - Supplemental disclosure of non-cash flow information: Net transfer of equipment between inventory and property and equipment $ 702 $ 458 $ 357 Purchases of property and equipment included in accounts payable and accrued liabilities $ - $ 1,259 $ 53 Common stock issuance costs included in accounts payable $ 296 $ - $ - (1) Includes restricted cash equivalents in prepaid expenses and other current assets and other non-current assets. The accompanying notes are an integral part of these consolidated financial statements. 39 Table of Contents AEHR TEST SYSTEMS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES Organization Aehr Test Systems (the “Company”) was incorporated in California in May 1977 and primarily designs, engineers and manufactures test and burn-in equipment used in the semiconductor industry. The Company’s principal products are the FOX-XP, FOX-NP, and FOX-CP wafer contact parallel test and burn-in systems; the Sonoma, Tahoe and Echo package-level burn-in products; the WaferPak full wafer contactor; the DiePak Carrier; the WaferPak Aligner; the DiePak Autoloader; and test fixtures. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated. Change in Fiscal Year On April 2, 2026, the Company’s board of directors approved a change in the Company’s fiscal year-end from the 52- or 53-week period ending on the Friday nearest May 31 to the 52- or 53-week period ending on the Friday nearest June 30. The change will be effective beginning in fiscal year 2027, which begins on June 27, 2026 and ends on June 25, 2027. Foreign Currency Translation and Transactions Assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. Dollars from their functional currencies using the exchange rate in effect at the balance sheet date. Additionally, revenues and expenses are translated using exchange rates approximating average rates prevailing during the fiscal year. Translation adjustments that arise from translating their financial statements from their local currencies to U.S. Dollar are accumulated and reflected as a separate component of shareholders’ equity. Transaction gains and losses that arise from exchange rate changes denominated in currencies other than the local currency are included in the consolidated statements of operations as incurred. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates in the Company’s consolidated financial statements include revenue recognition, inventory valuation, business combination, impairment of goodwill and long-lived assets, and accounting for income taxes. Cash and Cash Equivalents Cash equivalents consist of money market instruments purchased with an original maturity of three months or less. These investments are reported at fair value. Accounts Receivable and Allowance for Credit Losses Accounts receivable are derived from the sale of products throughout the world to semiconductor manufacturers, semiconductor contract assemblers, electronics manufacturers and burn-in and test service companies. Accounts receivable are recorded at the invoiced amount and are not interest bearing. 40 Table of Contents The Company maintains an allowance for credit losses for expected uncollectible accounts receivable and assess collectibility by reviewing accounts receivable on a collective basis where similar risk characteristics exist and on an individual basis when specific customers with known disputes or collectibility issues are identified. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Changes in circumstances, such as an unexpected material adverse change in a major customer’s ability to meet its financial obligation to the Company, may require the Company to further adjust its estimates of the recoverability of accounts receivable. The credit losses recognized on accounts receivable during the years ended May 29, 2026, May 30, 2025 and May 31, 2024, were not significant and management has determined that no allowance for credit losses was required as of May 29, 2026 and May 30, 2025. Concentration of Credit Risk Financial instruments which subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. The Company’s cash and cash equivalents are generally deposited with major financial institutions in the United States, Philippines, Germany and Taiwan. The Company invests its excess cash in money market funds. The Company’s cash and investment balances held at banks and brokerage firms may at time exceed federally insured levels. The Company has not experienced any material losses on its money market funds or short-term cash deposits. The Company performs credit evaluations of its customers’ financial condition and generally requires no collateral. The Company had revenues from individual customers in excess of 10% of total revenues as follows: Year Ended May 29, May 30, May 31, 2026 2025 2024 Customer A 26.3 % * * Customer B 14.2 % * * Customer C 10.9 % 15.1 % * Customer D * 38.6 % 67.3 % Customer E * * 16.7 % * Amount was less than 10% of total revenue The Company had gross accounts receivable from individual customers in excess of 10% of gross accounts receivable as follows: May 29, May 30, 2026 2025 Customer A 18.8 % 17.1 % Customer B 35.0 % * Customer C 19.3 % * Customer D * 12.0 % Customer F * 26.2 % Customer G * 17.2 % * Amount was less than 10% of total gross accounts receivable Inventories Inventories include material, labor and overhead, and are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out (FIFO) basis. Net realizable value is the estimated selling prices in the ordinary course of business, less costs of completion, disposal and transportation. Provisions for excess, obsolete and unusable inventories are made after management’s evaluation of future demand and market conditions. If actual future demand or market conditions become less favorable than those projected by management, additional adjustment for excess or obsolete inventory may be required, and would be reflected in cost of revenue in the period the revision is made. 41 Table of Contents Property and Equipment Property and equipment are stated at cost less accumulated depreciation and amortization. Major improvements are capitalized, while repairs and maintenance are expensed as incurred. Leasehold improvements are amortized over the lesser of their estimated useful lives or the term of the related lease. Furniture and fixtures, machinery and equipment, and test equipment are depreciated on a straight-line basis over their estimated useful lives. The ranges of estimated useful lives are generally as follows: Furniture and fixtures 2 to 10 years Machinery and equipment 3 to 5 years Test equipment 4 to 5 years Business Combination The Company recognizes identifiable assets acquired and liabilities assumed at their acquisition date fair values. Goodwill is measured as the excess of the consideration transferred over the fair value of assets acquired and liabilities assumed on the acquisition date. While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed, these estimates are inherently uncertain and subject to refinement. Key estimates and assumptions in valuing certain of the intangible assets and goodwill the Company has acquired include, but are not limited to, expected future cash flows from acquired developed technology, customer relationships, and trade names. Unanticipated events and circumstances could impact the accuracy or validity of such assumptions, estimates or actual results. The authoritative guidance allows a measurement period of the purchase price allocation that ends when the entity has obtained all relevant information about facts that existed at the acquisition date, and that cannot exceed one year from the date of acquisition. As a result, during the measurement period, the Company may record adjustments to the fair values of assets acquired and liabilities assumed, with the corresponding offset to goodwill to the extent that it identifies adjustments to the preliminary purchase price allocation. Upon conclusion of the measurement period or final determination of the values of the assets acquired and liabilities assumed, whichever comes first, any subsequent adjustments will be recorded in the consolidated statements of operations. Goodwill Goodwill represents the excess of the total purchase price over the fair value of net identifiable assets acquired in a business combination. The Company assesses goodwill for impairment annually during each fourth fiscal quarter or whenever events or changes in circumstances indicate the carrying value may not be fully recoverable. In the valuation of goodwill, management estimates future cash flows to be derived from the Company’s business. If these estimates or their related assumptions change in the future, the Company may be required to record an impairment. Management may first evaluate qualitative factors to assess if it is more likely than not that the fair value of a reporting unit is less than its carrying amount and to determine if an impairment test is necessary. Management may choose to proceed directly to the quantitative impairment test, bypassing the initial qualitative assessment. The quantitative test compares the fair value of the reporting unit to its carrying value, including goodwill allocated to that reporting unit. A goodwill impairment loss would be the amount by which a reporting unit’s carrying value exceeds its fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Definite-Lived Intangible Assets The Company performs valuations of assets acquired and liabilities assumed on the acquisition accounted for as a business combination and allocates the purchase price of the acquired business to the identifiable net tangible and intangible assets. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method which approximates the pattern of consumption of economic benefits. Impairment of Long-Lived Assets The Company evaluates long-lived assets, including property and equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by a comparison of the carrying amount of an asset or an asset group to estimated undiscounted future net cash flows expected to be generated by the asset or asset group. If such evaluation indicates that the carrying amount of the asset or the asset group is not recoverable, any impairment loss would be equal to the amount the carrying value exceeds the fair value. 42 Table of Contents Warranty Reserves The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The standard warranty period is one year for systems and ninety days for parts and service. Revenue Recognition The Company recognizes revenue when promised goods or services are transferred to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services by following a five-step process: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price, and (5) recognize revenue when or as the Company satisfies a performance obligation, as further described below. Performance obligations include sales of systems, WaferPak contactors, spare parts, and services, as well as installation and training services included in customer contracts. A contract’s transaction price is allocated to each distinct performance obligation. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. The Company generally does not grant return privileges, except for defective products during the warranty period. For contracts that contain multiple performance obligations, the Company allocates the transaction price to the performance obligations on a relative standalone selling price basis. Standalone selling prices are based on multiple factors including, but not limited to, historical discounting trends for products and services and pricing practices in different geographies. Revenue for systems and spares is recognized at a point in time, which is generally upon shipment or delivery and evidenced by transfer of title and risk of loss to the customer. Revenue from services is recognized over time as the customer receives the benefit over the contractual period of generally one year or less. The Company has elected the practical expedient to not assess whether a contract has a significant financing component as the Company’s standard payment terms are less than one year. The Company sells its products primarily through a direct sales force. In certain international markets, the Company sells its products through independent distributors. Shipping And Handling Costs Amounts billed to customers for shipping and handling of products are included in revenue. Costs incurred related to shipping and handling of products are included in cost of revenue. Stock-based Compensation Expense Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs (“PRSUs”), and an employee stock purchase plan (“ESPP”). Stock-based compensation cost for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. For RSUs, PRSUs, restricted shares and performance restricted shares, stock-based compensation expense is based on the fair value of the Company’s common stock at the grant date, and is recognized as expense over the employee’s requisite service period. All of the Company’s stock-based compensation is accounted for as an equity instrument. The Company grants cash-settled Stock Appreciation Rights (“SARs”) to certain employees. These awards generally vest over a one-year period of continuous service and have a contractual term of one year. Participants must be full-time employees at the time of payment and are entitled to receive a cash payment equal to the excess, if any, of the Company's common stock closing market price at the reporting date over the stock price on the grant date. No cash payment is made if the stock price at the reporting date is lower than the grant-date stock price. Because the awards are settled in cash, they are accounted for as liability-classified awards. The related liability and compensation expense are recognized over the one-year vesting period. The liability is remeasured at fair value at the end of each reporting period until the awards vest, with changes in fair value recognized as adjustments to compensation expense. 43 Table of Contents Income Taxes The Company accounts for income taxes in accordance with the authoritative guidance, which requires income tax effects for changes in tax laws to be recognized in the period in which the law is enacted. Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the book and tax bases of assets and liabilities. Deferred tax assets are also recognized for net operating loss and tax credit carryforwards. Deferred tax assets are offset by a valuation allowance to the extent it is more likely than not that they are not expected to be realized. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets and liabilities are adjusted for the effect of a change in tax rates, laws, or status when the change is enacted. At each reporting date, management evaluates the realizability of the Company’s deferred tax assets and records a valuation allowance when, based on all available evidence, management concludes that it is not more likely than not that some portion or all of the Company’s deferred tax assets will be realized. This assessment requires significant judgment because it involves weighing both positive and negative evidence, with the most objective evidence generally carrying the greatest weight. In making this determination, the Company considers, among other factors: (i) recent operating results and cumulative pretax income (loss) in the United States; (ii) the duration and severity of any recent losses; (iii) projections of future taxable income based on operating plans (including expected revenues, margins, and cost structure); (iv) the availability and feasibility of tax planning strategies; and (v) the expected utilization periods and limitations applicable to carryforwards. As of May 29, 2026 and May 30, 2025, the Company did not maintain a valuation allowance against its deferred tax assets. During the year ended May 31, 2024, the Company concluded that its deferred tax assets are more likely than not to become realizable, and as such, the Company reversed all $21.9 million of its existing valuation allowance. The conclusion that a valuation allowance was no longer needed was based on three years of cumulative pre-tax income, utilization of federal and state net operating losses, combined with estimates of future years' pre-tax income that were sufficient to realize the remaining deferred tax assets. The amount of the deferred tax asset considered realizable can change if estimates of future taxable income change or if objective negative and positive evidence change. Changes in estimates of future taxable income, or in the weight assigned to positive and negative evidence, could result in the recording or adjustment of a valuation allowance in a future period. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not such tax position will be sustained on examination by the taxing authorities, based solely on the technical merits of the respective tax position. The tax benefits recognized in the consolidated financial statements from such a tax position should be measured based on the largest benefit having a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority. Interest and penalties related to uncertain tax positions are recognized in the provision for income taxes. Comprehensive Income (Loss) Comprehensive income (loss) generally represents all changes in shareholders’ equity except those resulting from investments or contributions by shareholders. Unrealized gains and losses from available-for-sale securities and on foreign currency translation adjustments are included in the Company’s components of comprehensive income (loss), which are excluded from net income (loss). Comprehensive income (loss) is included in the consolidated statements of comprehensive income (loss). Accounting Standards Adopted In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which expands the disclosures required for income taxes. The Company adopted ASU 2023-09 on a prospective basis in fiscal 2026. The adoption did not have a material impact on the Company’s consolidated financial statements but resulted in expanded income tax disclosures. See Note 6, Income Taxes. Recent Accounting Pronouncements Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, an accounting standard update to improve income statement expenses disclosures. The standard requires more detailed information related to the types of expenses, including (among other items) the amounts of purchases of inventory, employee compensation, depreciation and intangible asset amortization included within each interim and annual income statement’s expense caption, as applicable. This authoritative guidance can be applied prospectively or retrospectively and will be effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company is currently evaluating the effect of this pronouncement on its disclosures. 44 Table of Contents In July 2025, the FASB issued ASU 2025-05, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses for Accounts Receivable and Contract Assets. The new guidance allows companies to apply a practical expedient when estimating credit losses on current accounts receivable and contract assets. This ASU is effective for fiscal years beginning after December 15, 2025. Early adoption is permitted for periods in which financial statements have not yet been issued or made ready for issuance on a prospective basis. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This update clarifies certain interim reporting requirements, including the applicability of interim reporting guidance and the form and content of interim financial statements. This ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and related disclosures. In December 2025, the FASB issued ASU 2025-12, Codification Improvements, which clarifies, corrects errors, and makes minor improvements to various areas of the Accounting Standards Codification. This ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures. 2. FAIR VALUE OF FINANCIAL INSTRUMENTS The Company’s financial instruments are measured at fair value consistent with authoritative guidance. This authoritative guidance defines fair value, establishes a framework for using fair value to measure assets and liabilities, and disclosures required related to fair value measurements. The guidance establishes a fair value hierarchy based on inputs to valuation techniques that are used to measure fair value that is either observable or unobservable. Observable inputs reflect assumptions market participants would use in pricing an asset or liability based on market data obtained from independent sources while unobservable inputs reflect a reporting entity’s pricing based upon their own market assumptions. The fair value hierarchy consists of the following three levels: Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 - Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs including interest rate curves, foreign exchange rates, and credit ratings. Level 3 - Unobservable inputs that are supported by little or no market activities. The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 29, 2026: Balance as of (In thousands) May 29, 2026 Level 1 Level 2 Level 3 Money market funds $ 112,661 $ 112,661 $ - $ - Total $ 112,661 $ 112,661 $ - $ - 45 Table of Contents The following table summarizes the Company’s financial assets measured at fair value on a recurring basis as of May 30, 2025: Balance as of (In thousands) May 30, 2025 Level 1 Level 2 Level 3 Money market funds $ 21,461 $ 21,461 $ - $ - Total $ 21,461 $ 21,461 $ - $ - As of May 29, 2026 and May 30, 2025, money market funds included restricted cash of $0.2 million, representing a security deposit for the Company’s manufacturing and office space lease in the United States, which is included in other non-current assets in the consolidated balance sheets. There were no financial liabilities measured at fair value as of May 29, 2026 and May 30, 2025. There were no transfers between Level 1 and Level 2 fair value measurements during the fiscal years ended May 29, 2026 and May 30, 2025. The carrying amounts of financial instruments including cash equivalents, accounts receivables, accounts payable and certain other accrued liabilities, approximate fair value due to their short maturities. 3. BALANCE SHEET INFORMATION Inventories consisted of the following: May 29, May 30, (In thousands) 2026 2025 Raw materials and sub-assemblies $ 29,247 $ 30,644 Work in process 11,441 9,263 Finished goods 666 2,090 $ 41,354 $ 41,997 Property and equipment, net consisted of the following: May 29, May 30, (In thousands) 2026 2025 Leasehold improvements $ 6,096 $ 5,999 Machinery and equipment 4,375 3,846 Test equipment 3,523 2,898 Furniture and fixtures 1,518 1,331 Construction-in-process 405 362 15,917 14,436 Less: accumulated depreciation and amortization (6,977 ) (5,467 ) $ 8,940 $ 8,969 Depreciation expense was $1.5 million, $1.0 million, and $0.7 million in fiscal years 2026, 2025, and 2024, respectively. 46 Table of Contents Accrued expenses and other current liabilities consisted of the following: May 29, May 30, (In thousands) 2026 2025 Commissions and bonuses $ 1,466 $ 1,420 Payroll related 1,514 1,335 Professional services 576 436 Warranty reserve 676 428 Escrow payable - 1,762 Other 1,051 639 $ 5,283 $ 6,020 Changes in the Company’s warranty reserve were as follows: May 29, May 30, (In thousands) 2026 2025 Balance at the beginning of the period $ 428 $ 234 Accruals for warranties 809 679 Warranties acquired through business combination - 144 Consumption of reserves (1,277 ) (629 ) Adjustments to previously existing warranty accruals 716 - Balance at the end of the period $ 676 $ 428 Adjustments to previously existing warranty accruals represent changes in estimates based on updated information regarding historical warranty experience and expected future claims. The accrued warranty balance is included in accrued expenses and other current liabilities on the consolidated balance sheets. Deferred revenue, short-term consisted of the following: May 29, May 30, (In thousands) 2026 2025 Customer deposits $ 4,554 $ 1,802 Deferred revenue 638 179 $ 5,192 $ 1,981 4. BUSINESS COMBINATION On July 31, 2024, the Company completed its acquisition of Incal Technology, Inc. (“Incal”), a company that specializes in packaged part reliability/burn-in test solutions. The acquisition date fair value of the consideration transferred for Incal was approximately $22.2 million, which consisted of the following: (In thousands) Fair Value Cash $ 10,631 Common stock under transfer restriction 9,381 Escrow payable 2,381 Working capital adjustments (1) (240 ) Total $ 22,153 (1) Included in Prepaid expenses and other current assets as of May 30, 2025 47 Table of Contents As part of the purchase consideration, the Company issued 552,355 shares of its restricted common stock. The restricted stock issued to the shareholders of Incal is subject to a six-month holding period, during which time the shares cannot be transferred or sold without registration under the Securities Act of 1933, as amended, or pursuant to an available exemption. The fair value of the restricted shares was determined based on the closing price of the Company’s common stock on the acquisition date, adjusted for a discount related to the lack of marketability due to the transfer restrictions. The total fair value of the restricted shares issued as part of the consideration was $9.4 million. The escrow payable represented the present value of total escrow amount, net of certain indemnification, and was initially recorded within accrued expenses and other current liabilities and other long-term liabilities, respectively. The total escrow amount at the acquisition date included: (1) $2.1 million designated for the sellers' indemnification obligations and expected to be settled after 15 months, and (2) $0.7 million designated for the sellers' payment obligations and expected to be settled after 60 days. The escrow payable will be settled with cash of $2.8 million held in an escrow account for working capital adjustments and potential indemnification obligations in connection with the acquisition of Incal. Of the $2.8 million cash restricted in escrow, the Company initially recorded $0.7 million within prepaid expenses and other current assets and $2.1 million within Other non-current assets. During the year ended May 30, 2025, the Company updated the purchase consideration, which reflects a reduction in the receivable related to the working capital adjustment from $0.8 million to $0.2 million and a reduction in escrow payable related to indemnification from $2.8 million to $2.5 million, based on negotiations with the seller. As a result, the total purchase consideration has been adjusted from $21.9 million to $22.2 million. Accordingly, the goodwill balance has increased from $10.4 million to $10.7 million. During the year ended May 30, 2025, the Company released $0.7 million of cash previously held in escrow related to working capital adjustments. During the year ended May 29, 2026, the Company released $1.8 million of cash previously held in escrow related to indemnification obligation. During the year ended May 30, 2025, the Company recorded immaterial adjustments to certain assets and liability balances and finalized the fair value of the assets acquired and liabilities assumed at the acquisition date in the table below: (In thousands) Fair Value Cash $ 16 Accounts receivable 1,285 Inventory 2,558 Goodwill 10,719 Property and equipment 165 Intangible assets 12,000 Operating lease right-of-use assets 810 Other assets, current and noncurrent 63 Accounts payable, accrued expenses and other liabilities, current and noncurrent (2,180 ) Deferred revenue (489 ) Operating lease liabilities, current and noncurrent (714 ) Deferred tax liabilities, net (2,080 ) Total $ 22,153 The goodwill recognized in connection with the acquisition is primarily attributable to anticipated synergies from future growth and will not be deductible for income tax purposes. 48 Table of Contents The following table summarizes the fair value of the separately identifiable intangible assets at the time of acquisition: Estimated Useful life (In thousands) Fair Value (in years) Developed technology $ 9,130 12 Trade names 1,050 10 Customer relationships 810 11 Non-compete agreements and others 1,010 1-3 Total intangible assets acquired $ 12,000 Acquisition-related costs were $0.5 million during the year ended May 30, 2025 and were expensed in the period incurred within selling, general and administrative expense in the Company's consolidated statements of operations. The Company's consolidated statement of operations for the year ended May 30, 2025 included $18.6 million in revenue and $3.8 million in net income contributed by Incal from the date of acquisition through May 30, 2025. 5. GOODWILL AND PURCHASED INTANGIBLE ASSETS Goodwill The Company's goodwill activity during the years ended May 29, 2026 and May 30, 2025 was as follows: (In thousands) Total Balance as of May 31, 2024 $ - Addition due to business combination 10,719 Balance as of May 30, 2025 10,719 Activity during the year - Balance as of May 29, 2026 $ 10,719 Goodwill was tested for impairment in the fourth quarter at the reporting unit level. There were no impairments to goodwill during the years ended May 29, 2026 and May 30, 2025. Purchased Intangible Assets The Company’s purchased intangible assets, net, were as follows: May 29, 2026 May 30, 2025 (In thousands) Accumulated Accumulated Finite-lived intangible assets: Gross Amortization Net Gross Amortization Net Developed technology $ 9,130 $ (1,395 ) $ 7,735 $ 9,130 $ (634 ) $ 8,496 Trade names 1,050 (192 ) 858 1,050 (88 ) 962 Customer relationship 810 (135 ) 675 810 (61 ) 749 Non-compete agreements and others 1,010 (726 ) 284 1,010 (436 ) 574 Total $ 12,000 $ (2,448 ) $ 9,552 $ 12,000 $ (1,219 ) $ 10,781 Amortization expense related to purchased intangible assets with finite lives was $1.2 million and $1.2 million for the years ended May 29, 2026 and May 30, 2025. 49 Table of Contents As of May 29, 2026, the estimated future amortization expense of purchased intangible assets with finite lives is as follows: (In thousands) Amount 2027 $ 1,183 2028 981 2029 939 2030 939 2031 939 Thereafter 4,571 Total $ 9,552 There were no impairment charges related to purchased intangible assets for the years ended May 29, 2026 and May 30, 2025. 6. INCOME TAXES Domestic and foreign components of income (loss) before income tax benefit are as follows: Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Domestic $ (11,825 ) $ (4,422 ) $ 12,355 Foreign 89 131 103 $ (11,736 ) $ (4,291 ) $ 12,458 The income tax benefit consists of the following: Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Federal income taxes: Current $ - $ - $ 6 Deferred (4,170 ) (409 ) (14,377 ) State income taxes: Current - 7 14 Deferred (545 ) (12 ) (6,396 ) Foreign income taxes: Current 105 33 55 Deferred - - - $ (4,610 ) $ (381 ) $ (20,698 ) 50 Table of Contents The Company adopted ASU 2023-09 "Income Taxes (Topic 740): Improvements To Income Tax Disclosures" on a prospective basis beginning with the year ended May 29, 2026. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the U.S. federal statutory tax amount and rate to the actual effective amount and rate for the year ended May 29, 2026: May 29, 2026 (In thousands) Amount Percent Income taxes benefit at U.S. federal statutory tax $ (2,465 ) 21.0 % State and local taxes, net of federal income tax effect (546 ) 4.7 % Foreign tax effects 25 (0.2 )% Effect of cross-border tax laws: Global intangible low-taxed income 1 (0.0 )% Tax credits: Change in research and development reserves 61 (0.5 )% Nontaxable or nondeductible items: Permanent Items 20 (0.2 )% Stock-based compensation (1,720 ) 14.6 % Section 162(m) compensation limitation 987 (8.4 )% Excess tax (benefit) or deficit on stock awards (1,299 ) 11.1 % Other Adjustments: Return-to-provision adjustments and other true ups 326 (2.8 )% Effective tax rate $ (4,610 ) 39.3 % More than 50% of the effect of the state and local income tax category in the rate reconciliation is attributable to California state income taxes. The following table presents the required disclosures prior to the adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate to the actual effective income tax rate for the years ended May 30, 2025 and May 31, 2024: Year Ended May 30, May 31, 2025 2024 U.S. federal statutory tax rate 21.0 % 21.0 % State taxes, net of federal tax effect 0.1 (51.1 ) Foreign rate differential 0.1 0.2 Stock-based compensation (10.3 ) (8.4 ) Research and development credit (1.3 ) (1.5 ) Change in valuation allowance - (126.0 ) Other (0.7 ) (0.3 ) Effective tax rate 8.9 % (166.1 )% 51 Table of Contents The components of the net deferred tax assets and liabilities are as follows: May 29, May 30, (In thousands) 2026 2025 Deferred tax assets: Net operating losses $ 13,308 $ 7,945 Lease liability 2,301 2,295 Research and development credit carryforwards 6,620 6,681 Inventory reserves 1,150 1,067 Reserves and accruals 1,571 1,368 Capitalized research and development 3,155 4,291 Stock-based compensation 662 619 Other 45 28 Less: valuation allowance - - 28,812 24,294 Deferred tax liabilities: Operating lease right-of-use assets (2,073 ) (2,035 ) Intangibles (2,224 ) (2,285 ) Fixed assets (686 ) (860 ) Net deferred tax assets $ 23,829 $ 19,114 During the year ended May 31, 2024, the Company concluded that its deferred tax assets are more likely than not to become realizable, and as such, the Company reversed all its existing valuation allowance totaling $21.9 million. The conclusion that a valuation allowance was no longer needed was based on three years of cumulative pre-tax income, utilization of federal and state net operating losses, combined with estimates of future years' pre-tax income that were sufficient to realize the remaining deferred tax assets. The amount of the deferred tax asset considered realizable can change if estimates of future taxable income change or if objective negative and positive evidence change. At May 29, 2026 and May 30, 2025, the Company has federal net operating loss carryforwards of approximately $51.5 million and $28.0 million, respectively, that are available to reduce future taxable income. A portion of the federal net operating losses will begin to expire in 2034. Federal net operating losses of $38.1 million will carryforward indefinitely and would be subject to an 80% taxable income limitation in the year utilized. At May 29, 2026 and May 30, 2025, the Company has state net operating loss carryforwards of $35.9 million and $29.7 million, respectively, that are available to reduce future taxable income. The state net operating loss carryforwards will begin to expire in 2028. At May 29, 2026 and May 30, 2025, the Company has federal research and development credit carryforwards of approximately $3.1 million and $3.2 million, respectively, that are available to offset future tax liability. The federal credit carryforwards began to expire in 2026. At May 29, 2026 and May 30, 2025, the Company has state research and development credit carryforwards of approximately $7.1 million and $7.1 million, respectively, that are available to offset future tax liability. The state credit carryforwards are not subject to expiration. The Company also has alternative minimum tax credit carryforwards of $34.1 thousand for state purposes. The credits may be used to offset regular tax and do not expire. Sections 382 and 383 of the Internal Revenue Code limit the annual use of NOL carryforwards and tax credit carryforwards, respectively, following an ownership change. NOL carryforwards may be subject to annual limitations under Section 382 (or comparable provisions of state law) if certain changes in ownership of our company were to occur. In general, an ownership change occurs for the purposes of Section 382 if there is a more than 50% change in ownership of a company by 5% shareholders over a 3-year testing period. During the year ended May 31, 2024, a Section 382 study was completed and it was determined that there is no limitation on the Company’s ability to utilize its NOLs under Section 382. During the years ended May 29, 2026 and May 30, 2025, the Company did not complete a formal Section 382 study on the potential limitation of its tax attributes due to no significant change in ownership. The Company has made no provision for U.S. income taxes on undistributed earnings of certain foreign subsidiaries because it is the Company’s intention to permanently reinvest such earnings in its foreign subsidiaries. If such earnings were distributed, the Company would be subject to additional U.S. income tax expense. The Company maintains liabilities for uncertain tax positions and such liabilities relate primarily to estimated tax credits and are treated as a reduction of deferred tax assets for tax credit carryforward. These liabilities involve considerable judgment and estimation and are continuously monitored by management based on the best information available. 52 Table of Contents The aggregate changes in the balance of gross unrecognized tax benefits are as follows: (In thousands) 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 Decreases related to prior year tax positions (30 ) Balance at May 29, 2026 $ 2,431 As of May 29, 2026 and May 30, 2025, the total amount of unrecognized tax benefits was approximately $2.4 million and $2.5 million, respectively. The unrecognized tax benefit of $2.4 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 29, 2026. 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. The Company adopted ASU 2023-09 on a prospective basis for the year ended May 29, 2026 and have included the following table as a result of the adoption, which presents income taxes paid, net of refunds received, for the year ended May 29, 2026: May 29, (In thousands) 2026 Federal taxes $ - State taxes (32 ) Foreign taxes Taiwan 42 Philippine 32 Germany 18 Total cash taxes paid $ 60 Below is a summary of income taxes paid for the years ended May 30, 2025 and May 31, 2024: Year Ended May 30, May 31, (In thousands) 2025 2024 Cash paid during the year for: Income taxes, net of refunds $ 100 $ 90 53 Table 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 2030. The total commitments, net of tenant incentives of up to $0.3 million, under the modified lease are $8.6 million. The modified lease contains an option to further extend the lease for five years. The lease modification resulted in an increase in the Company’s operating lease right-of-use assets and operating lease liabilities of $5.9 million each in December 2022. In April 2025, it became reasonably certain that the Company would exercise the five-year lease extension option ending in September 2035 due to the remodeling of the Fremont manufacturing and administrative office. As a result, the lease modification increased the Company’s operating lease right-of-use assets and operating lease liabilities by $4.6 million each. The Company leases a 492 square foot sales and support office in Utting, Germany. The lease, which began on February 1, 1992, contains an automatic twelve months renewal. The Company leases a facility in the Philippines located in a 6,458 square foot building in Clark Freeport Zone, Pampanga. The lease, amended in 2023, began on November 1, 2023 and expires on June 30, 2029 with an option to renew for another three or five years at the prevailing market rate. Under the lease agreements, the Company is responsible for payments of utilities, taxes and insurance. In connection with the acquisition of Incal, the Company assumed the lease obligation for Incal’s office located in Fremont, California, which expires on July 31, 2026. Management decided to vacate the Incal office in May 2025 following the relocation of employees to the Company’s principal facilities in Fremont to consolidate the Company’s California operations. As a result of this decision and the associated change in the facility's intended use, the Company determined that the carrying value of the right-of-use asset associated with the Incal facility was no longer recoverable and recorded an impairment charge of $0.5 million as of May 30, 2025. The charge is reflected in restructuring charges in the consolidated statements of operations. In November 2025, the Company entered into a lease termination agreement with the landlord and was released from its remaining lease obligation. The Company has only operating leases for real estate including corporate offices, warehouse space and certain equipment. A lease with an initial term of 12 months or less is generally not recorded on the consolidated balance sheets, unless the arrangement includes an option to purchase the underlying asset, or renew the arrangement that the Company is reasonably certain to exercise. The Company recognizes lease expense on a straight-line basis over the lease term for short-term leases that the Company does not record on its consolidated balance sheets. The Company’s operating leases have remaining lease terms of one year to ten years. The Company determines whether an arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term at an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. As of May 29, 2026, the weighted average remaining lease term for the Company’s operating leases was 9.2 years and the weighted average discount rate was 6.93%. The Company’s operating lease cost was $1.4 million, $1.6 million, and $1.2 million for the years ended May 29, 2026, May 30, 2025, and May 31, 2024. The following table presents supplemental cash flow information related to the Company’s operating leases: May 29, May 30, May 31, (In thousands) 2026 2025 2024 Operating cash flows paid for operating leases $ 1,246 $ 1,239 $ 916 Right-of-use assets obtained in exchange for operating leases liabilities $ 31 $ 4,619 $ 318 54 Table of Contents The following table presents the maturities of the Company’s operating lease liabilities as of May 29, 2026: (In thousands) Fiscal year Operating Leases 2027 $ 1,291 2028 1,323 2029 1,368 2030 1,348 2031 1,428 Thereafter 6,901 Total future minimum operating lease payments 13,659 Less: imputed interest (3,777 ) Present value of operating lease liabilities $ 9,882 8. RETIREMENT PLAN The Company maintains a defined contribution savings plan named AEHR Test Systems 401(k) Savings & Retirement Plan (the “401(k) Plan”) to provide retirement savings to all qualified employees of the Company. The 401(k) Plan is intended to be qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. The 401(k) Plan is funded by voluntary pre-tax contributions from employees. Contributions are invested, as directed by the participant, in investment funds available under the 401(k) Plan. Effective July 1, 2024, the Company implemented a discretionary matching contribution under its 401(k) Plan. All matching contributions are 100% vested immediately. The Company’s matching contributions to the 401(k) Plan totaled $0.4 million and $0.3 million during fiscal 2026 and 2025. No matching contributions were made during fiscal year 2024. 9. COMMITMENTS AND CONTINGENCIES Commitment Purchase obligations consist of non-cancelable significant contractual obligations. As of May 29, 2026, the Company’s unconditional purchase obligations, which have a remaining term in excess of 12 months, were not material. 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 October 16, 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 consolidated financial statements. The Company has also incurred and expects to continue to incur legal expenses related to this matter. On November 15 and December 6, 2024, Semight filed a petition for invalidation to the two aforementioned Chinese patents with the Department of National Intellectual Properties in Beijing, respectively. The oral hearings for both of the patents have been held, and the decision has been issued for both patents that upholds part of the claims. In addition, the Company received a suspension ruling from Suzhou Intermediate People’s Court on the infringement proceedings, pending the outcome of the validity rulings. With both patents having been upheld, the suspended infringement proceedings have resumed. The hearing for the divisional patent was held on August 28, 2025, and the hearing for the parent patent was held on October 17, 2025. In December 2025, the Company received a first-instance judgment from the Suzhou Intermediate People’s Court with respect to the infringement cases, which dismissed the Company’s claims based on the court’s opinion that there was insufficient evidence to establish infringement. The Company filed the appeals for both cases on January 4, 2026. On January 27, 2026, Semight filed another petition for invalidation of one of the two aforementioned Chinese patents with the Department of National Intellectual Properties in Beijing. On June 2, 2026, a hearing was held before the Supreme People’s Court of China in connection with the Company’s appeal. The hearing focused primarily on infringement comparison issues, including whether the accused products contain certain claim features at issue. The appeal proceedings remain ongoing, and the Company expects that an additional hearing may be scheduled. In June 2026, the Company received a first-instance judgment from the Beijing Intellectual Property Court in connection with one of the patent invalidation proceedings. The judgment was favorable to the Company on certain issues but did not resolve all matters in the Company’s favor. The Company has decided to appeal certain aspects of the judgment. 55 Table of Contents 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. 10. EQUITY On October 15, 2024, the Board of Directors authorized management to execute a new $100 million shelf registration, and a Registration Statement on Form S-3 was filed with the SEC. Additionally, a Prospectus Supplement for sales of $40 million of common stock pursuant to an “At the Market” (“ATM”) offering program was subsequently filed on October 29, 2024. In November 2025, the Company sold 384,380 shares of common stock at an average selling price of $25.89 per share. The gross proceeds to the Company were approximately $10.0 million, before professional fees of $0.6 million. In February 2026, the Company sold 269,439 shares of common stock at an average selling price of $39.20 per share. The gross proceeds to the Company were approximately $10.5 million, before professional fees of $0.3 million. In March 2026, the Company sold an additional 476,649 shares of common stock at an average selling price of $40.88 per share. The gross proceeds to the Company were approximately $19.5 million, before professional fees of $0.5 million. On April 7, 2026, the Board of Directors authorized the filing of an additional Prospectus Supplement for the sale of $60 million of its common stock pursuant to a new ATM offering program under the Company’s existing $100 million shelf registration statement. In April 2026, the Company sold 812,185 shares of common stock at an average selling price of $73.87 per share. The gross proceeds to the Company were approximately $60.0 million, before professional fees of $1.2 million. The ATM offering program has been fully utilized. 11. REVENUE Disaggregation of Revenue The following tables show revenues by major product categories. Within each product category, contract terms, conditions and economic factors affecting the nature, amount, timing and uncertainty around revenue recognition and cash flow are substantially similar. The Company’s revenues by product category are as follows: Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Systems $ 28,669 $ 21,978 $ 24,169 Contactors 14,887 30,848 37,560 Services 6,445 6,142 4,489 $ 50,001 $ 58,968 $ 66,218 56 Table of Contents The following presents information about the Company’s operations in different geographic areas. Net revenues are based on ship-to locations: Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Asia $ 22,823 $ 37,095 $ 58,076 United States 20,643 17,673 3,532 Europe and Middle East 6,535 4,200 4,610 $ 50,001 $ 58,968 $ 66,218 With the exception of the amount of service contracts and extended warranties, the Company’s product category revenues are recognized at point in time when control transfers to customers. The following presents revenue based on timing of recognition: Year Ended May 29, May 30, May 31, (In thousands) 2026 2025 2024 Timing of revenue recognition: Products and services transferred at a point in time $ 46,820 $ 57,745 $ 64,590 Services transferred over time 3,181 1,223 1,628 $ 50,001 $ 58,968 $ 66,218 Contract Balances Accounts receivable are recognized in the period the Company delivers goods and provides services or when the Company’s right to consideration is unconditional. Contract assets include unbilled receivables which represent revenues that are earned in advance of scheduled billings to customers. These amounts are primarily related to product sales where transfer of control has occurred but the Company has not yet invoiced. As of May 29, 2026 and May 30, 2025, unbilled receivables were $1.9 million and $3.6 million, respectively, and were included in prepaid expenses and other current assets on the accompanying consolidated balance sheets. Contract liabilities include payments received in advance of performance under a contract and are satisfied as the associated revenue is recognized. Contract liabilities as of May 29, 2026 and May 30, 2025 were $5.2 million and $2.0 million, respectively, and were included in deferred revenue, short-term and deferred revenue, long-term on the accompanying consolidated balance sheets. During the fiscal years ended May 29, 2026 and May 30, 2025, the Company recognized $1.9 million and $1.3 million, respectively, of revenues that were included in contract liabilities as of May 30, 2025 and May 31, 2024, respectively. Remaining Performance Obligations As of May 29, 2026, the remaining performance obligations, exclusive of customer deposits, which were comprised of deferred service contracts and extended warranty contracts not yet delivered, are not material. The foregoing excludes the value of the remaining performance obligations that have original durations of one year or less, and also excludes information about variable consideration allocated entirely to a wholly unsatisfied performance obligation. Costs to Obtain or Fulfill a Contract The Company generally expenses sales commissions when incurred as a component of selling, general and administrative expense as the amortization period is typically less than one year. Additionally, the majority of the Company’s cost of fulfillment as a manufacturer of products is classified as inventory and fixed assets, which are accounted for under the respective guidance for those asset types. Other costs of contract fulfillment are immaterial due to the nature of the Company’s products and their respective manufacturing process. 57 Table of Contents 12. EMPLOYEE STOCK PLANS 2023 Equity Incentive Plan On October 23, 2023, the shareholders of the Company approved the 2023 Equity Incentive Plan (the "2023 Plan") to replace the Company’s 2016 Equity Incentive Plan (the “2016 Plan”) and reserved a total of 1,500,000 shares of common stock under the 2023 Plan. The 2023 Plan permits grants to employees of share-based awards, including stock options, RSUs, PRSUs, restricted shares, performance restricted shares. Full value awards, which are equity awards other than options, stock appreciation rights or other awards that are based solely on an increase in value of the shares following the grant date, when granted or forfeited will be counted as the same number of common stock shares added or deducted to the remaining available shares for issuance under the 2023 Plan. On October 20, 2025, the Company’s shareholders approved amendments to the 2023 Equity Incentive Plan to increase the share reserves by 2,500,000 shares. The additional shares became available for future issuance upon shareholder approval. 2016 Equity Incentive Plan In October 2016, the Company’s 2016 Plan was approved by the Company’s shareholders. The 2016 Plan replaced the 2006 Equity Incentive Plan and would continue in effect until 2026. The exercise price of each stock option equals the market value of the Company's common stock on the date of grant. Options typically vest over four years, subject to the grantee’s continued service with the Company through the scheduled vesting date, and expire in seven years from the grant date. A total of 4,848,000 shares of common stock have been reserved for issuance under the Company’s 2016 Plan. Full value awards, which are equity awards other than options, stock appreciation rights or other awards that are based solely on an increase in value of the shares following the grant date, when granted or forfeited will be counted as two times the number of shares added or deducted to the remaining available shares for issuance under the 2016 Plan. The following table summarizes the total stock-based compensation expense for the fiscal years ended May 29, 2026, May 30, 2025 and May 31, 2024: Year Ended May 29, May 30, May 31, (In thousands, except per share data) 2026 2025 2024 Cost of sales $ 792 $ 737 $ 330 Research and development 1,473 1,476 639 Selling, general and administrative 4,496 2,949 1,549 Net effect on net income (loss) $ 6,761 $ 5,162 $ 2,518 Effect on net income (loss) per share: Basic $ 0.22 $ 0.17 $ 0.09 Diluted $ 0.22 $ 0.17 $ 0.09 As of May 29, 2026 and May 30, 2025, stock-based compensation totaling $0.4 million and $0.3 million and, respectively, was capitalized as part of inventory. 58 Table of Contents The following table presents the combined stock activities and the total number of shares available for grant under the Company’s equity incentive plans: (in thousands) Available Shares for Grant Balance, May 31, 2023 27 Shares issued under 2023 Equity Incentive Plan 1,500 Shares retired under 2016 Equity Incentive Plan (95 ) Options granted (4 ) RSUs granted (221 ) RSUs cancelled 144 Options terminated 12 Balance, May 31, 2024 1,363 RSUs granted (634 ) RSUs cancelled 70 Options terminated 2 Balance, May 30, 2025 801 Shares issued under 2023 Equity Incentive Plan 2,500 RSUs granted (533 ) RSUs cancelled 225 Options terminated 4 Balance, May 29, 2026 2,997 Restricted Stock Units, Performance Restricted Stock Units and Restricted Stock Awards The Company’s nonvested RSU, PRSU and restricted stock awards granted to employees and members of the Company’s Board of Directors for the fiscal year ended May 29, 2026 were as follows: Number of Shares Weighted Average Grant Date Fair Value Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (in thousands) Per Share (In Years) (in thousands) Unvested, May 30, 2025 664 $ 16.89 2.1 $ 6,330 Granted (1) 533 15.39 Vested (265 ) 15.26 Forfeited (2) (225 ) 17.68 Unvested, May 29, 2026 707 $ 16.12 2.1 $ 65,252 (1) Includes 241,000 shares of performance-based awards, of which approximately 70,000 shares of performance-based awards have target achievement goals whereby the grantee can earn up to 200% of the original award (up to 141,000 shares) if the maximum target goals are met. The remaining awards are earned at 100% if the target goals are achieved. (2) Includes 213,000 performance-based awards for which target goals have not been achieved. During fiscal 2026, 2025, and 2024, the Company recorded stock-based compensation related to RSUs, PRSUs, performance restricted shares and restricted shares of $5.5 million, $3.7 million and $1.3 million. As of May 29, 2026, the total unrecognized compensation expense related to unvested RSU, PRSU and restricted shares was $8.9 million. This expense will be amortized on a straight-line basis over a weighted average period of approximately 2.1 years. 59 Table of Contents Stock Options The following table summarized the stock option transactions during fiscal 2026: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregated Intrinsic Value (in thousands) Per Share (In Years) (in thousands) Balances, May 30, 2025 645 $ 4.47 2.3 $ 3,619 Options terminated (4 ) Options exercised (325 ) Balances, May 29, 2026 316 $ 5.11 1.8 $ 27,529 Options exercisable, May 29, 2026 310 $ 4.77 1.7 $ 27,143 Options exercisable and expected to vest 316 $ 5.11 1.8 $ 27,528 The fair value of the Company’s stock options granted to employees was estimated on the date of grant using the Black-Scholes model and the straight-line attribution approach with the following weighted average assumptions: Year Ended May 31, 2024 Expected term (in years) 5 Volatility 93 % Risk-free interest rates 4.34 % Weighted average grant date fair value $ 36.02 No stock options were granted during fiscal year 2025. The stock option granted during fiscal year 2026 was immaterial. The total intrinsic values of options exercised were $11.3 million, $0.6 million, and $9.5 million during fiscal 2026, 2025, and 2024, respectively. During fiscal year 2026, 2025, and 2024, the Company recorded stock-based compensation related to its stock options of $0.3 million, $0.5 million, and $0.4 million, respectively. As of May 29, 2026, the total unrecognized compensation expense related to unvested stock options granted and outstanding is immaterial. Stock Appreciation Rights (Cash-Settled Awards) The Company grants cash-settled Stock Appreciation Rights (“SARs”) to certain employees. These awards generally vest over a one-year period of continuous service and have a contractual term of one year. Participants must be full-time employees at the time of payment and are entitled to receive a cash payment equal to the excess, if any, of the Company's common stock closing market price at the reporting date over the stock price on the grant date. No cash payment is made if the stock price at the reporting date is lower than the grant-date stock price. Because the awards are settled in cash, they are accounted for as liability-classified awards. The related liability and compensation expense are recognized over the one-year vesting period. The liability is remeasured at fair value at the end of each reporting period until the awards vest, with changes in fair value recognized as adjustments to compensation expense. 60 Table of Contents The following table summarized the SARs transactions during fiscal 2026: Number of Shares Weighted Average Grant Price Weighted Average Remaining Contractual Term Aggregated Intrinsic Value (in thousands) Per Share (In Years) (in thousands) Outstanding, May 30, 2025 4 $ 15.11 - $ - Granted 7 15.13 Cancelled (4 ) 15.11 Outstanding, May 29, 2026 7 $ 15.13 - $ 570 Vested, May 29, 2026 7 $ 15.13 - $ 570 During fiscal year 2026, 2025, and 2024, the Company recorded compensation related to its SARs of $0.6 million, nil, and nil, respectively. As of May 29, 2026, the total liability recognized for cash-settled SARs was $0.6 million (nil as of May 30, 2025), all of which is included within Accrued expenses and other current liabilities. As of May 29, 2026, there were no nonvested SARs and unrecognized compensation expense was nil. Employee Stock Purchase Plan The ESPP permits employees to purchase common stock at a discount through payroll withholdings at certain specified dates (purchase period) within a defined offering period. The purchase price is 85.0% of the fair market value of the common stock at the end of the purchase period and is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. On October 20, 2025, the Company’s shareholders approved amendments to the Amended and Restated 2006 Employee Stock Purchase Plan to increase the share reserves by 300,000 shares. The additional shares became available for future issuance upon shareholder approval. For the fiscal years ended May 29, 2026, May 30, 2025, and May 31, 2024, approximately 146,000, 116,000, and 72,000 shares of common stock were issued under the ESPP. As of May 29, 2026, 363,000 shares remain available for issuance under the ESPP. The fair value of each purchase right under the ESPP was estimated on the date of grant using the Black-Scholes model with the following weighted average assumptions: Year Ended May 29, May 30, May 31, 2026 2025 2024 Expected term (in years) 0.5 – 2.0 0.5 – 2.0 0.5 – 2.0 Volatility 92%-113% 80% - 95% 70% – 94% Risk-free interest rates 3.55%-4.23% 3.61%-4.36% 4.72%–5.53% Weighted average grant date fair value $42.96 $2.01 $6.30 During fiscal years 2026, 2025, and 2024, the Company recorded stock-based compensation related to its ESPP of $1.0 million, $1.0 million, and $0.8 million, respectively. As of May 29, 2026, the total unrecognized compensation expense related to purchase rights under the ESPP was $0.7 million. This expense will be amortized on a straight-line basis over a weighted average period of approximately 0.7 years. Employee Stock Ownership Plan The Company had a non-contributory, trusteed employee stock ownership plan or Employee Stock Ownership Plan (“ESOP”) for full-time and part-time employees. The Company can contribute either shares of the Company’s stock or cash to the ESOP. During the fiscal years ended May 30, 2025 and May 31, 2024, the Company contributed 26,064, and 9,085 shares to the ESOP. As a result, the Company recognized stock-based compensation expense totaling zero and $0.3 million during the fiscal years ended May 30, 2025 and May 31, 2024, respectively. The Company terminated its ESOP plan in fiscal year 2025 and began to provide a matching contribution to the participants of the 401(k) Plan. 61 Table of Contents 13. RESTRUCTURING CHARGES In the fourth quarter of fiscal 2025, the Company initiated a restructuring plan to consolidate facilities and optimize cost structure in order to more effectively support the Company’s long-term strategic objectives. Restructuring charges relate to impairment of long-lived assets that will no longer be used in operations, including right-of-use assets and facility-related property, contract termination costs and facility exit-related costs. During fiscal year 2026, the Company entered into a lease termination agreement with the landlord, paid a termination fee of $0.2 million and was released from its remaining lease obligation. Consequently, the Company recognized a credit to the restructuring charge of $0.2 million during the period. Separately, the Company implemented a workforce reduction to align resources with its business needs in fiscal year 2026. The Company recorded $0.2 million of restructuring charges, primarily related to employee termination benefits. The following table presents restructuring charges included in the consolidated statements of operations: May 29, May 30, (In thousands) 2026 2025 Asset impairments $ (104 ) $ 584 Contract termination (109 ) 188 Facility exit-related - 92 Employee termination benefits 219 - Total $ 6 $ 864 There were no restructuring charges for the year ended May 31, 2024. The Company recorded a restructuring liability of $0.2 million as of May 30, 2025, primarily related to contract termination costs, which was included as a component of accrued expenses and other current liabilities. There was no restructuring liability outstanding as of May 29, 2026. 14. EMPLOYEE RETENTION CREDIT The Company filed claims for the Employee Retention Credit (“ERC”) with the Internal Revenue Service in February 2024 under the provisions of the Coronavirus Aid, Relief, and Economic Security Act, as amended. During the first quarter of fiscal 2026, the Company received a refund of approximately $1.3 million, which was recognized as other income in the consolidated statements of operations. In connection with filing the ERC claims, the Company engaged a third-party service provider under a contingent-fee arrangement. As a result, the Company incurred a service fee of approximately $0.3 million, which was recorded in other income (expense), net. 15. NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is determined using the weighted average number of common shares outstanding during the period. Diluted net income per share is determined using the weighted average number of common shares and potential common shares (representing the hypothetical number of incremental shares issuable under the assumed exercise of outstanding stock options, and vesting of outstanding RSUs and ESPP shares) during the period using the treasury stock method. The calculation of dilutive shares outstanding excludes securities that would have an antidilutive effect on net income per share. 62 Table of Contents The following table presents the computation of basic and diluted net income (loss) per share: Year Ended May 29, May 30, May 31, (In thousands, except per share data) 2026 2025 2024 Numerator: Net income (loss) $ (7,126 ) $ (3,910 ) $ 33,156 Denominator: Basic weighted average shares outstanding 30,669 29,581 28,818 Dilutive effect of common equivalent shares outstanding - - 799 Diluted weighted average shares outstanding 30,669 29,581 29,617 Net income (loss) per share - Basic $ (0.23 ) $ (0.13 ) $ 1.15 Net income (loss) per share - Diluted $ (0.23 ) $ (0.13 ) $ 1.12 Antidilutive employee share-based awards, excluded 1,765 1,781 351 16. ACCUMULATED OTHER COMPREHENSIVE LOSS Changes in the components of accumulated other comprehensive loss, net of tax, were as follows: Cumulative (In thousands) translation adjustment Balance as of May 31, 2024 $ (158 ) Other comprehensive income (loss) before reclassifications 32 Balance as of May 30, 2025 (126 ) Other comprehensive income (loss) before reclassifications 21 Balance as of May 29, 2026 $ (105 ) 17. SEGMENT INFORMATION The Company's chief executive officer, who is the chief operating decision maker ("CODM"), reviews discrete financial information presented at the consolidated basis, to assess performance and allocate resources. There are no segment managers who are held accountable for operations or operating results below the consolidated unit level. Accordingly, the Company has only one operating and reportable segment. The measure of segment profit or loss that our CODM uses to allocate resources and assess performance is our consolidated net income (loss). The information for revenue category by type, geography and timing of revenue recognition, is summarized in Note 11, “Revenue.” The CODM reviews consolidated expense information under the categories that are reported on the consolidated statement of operations, for the purpose of allocating resources and evaluating financial performance. Property and equipment information is based on the physical location of the assets. The following table presents property and equipment information for geographic areas: May 29, May 30, (In thousands) 2026 2025 United States $ 8,913 $ 8,892 International 27 77 Total property and equipment, net $ 8,940 $ 8,969 As of May 29, 2026, the operating lease right-of-use assets of $8.7 million and $0.2 million were allocated to the United States and international locations, respectively. As of May 30, 2025, the operating lease right-of-use assets of $9.3 million and $0.3 million were allocated to the United States and international locations, respectively. 63 Table of Contents