Aehr Test Systems (AEHR)

Risks

• The effects of the COVID-19 pandemic have disrupted, and may continue to significantly disrupt, our operations, including our ability to manufacture and supply products and perform research and development activities, and our customers’ usage of our products, all of which have had and may continue to have a material and adverse effect on our business, future revenues and financial condition. We are unable to predict the extent to which the pandemic and related impacts will continue to adversely impact our business operations, financial performance, results of operations and the achievement of our strategic objectives.
• We generate a large portion of our sales from a small number of customers. If we were to lose one or more of our large customers, operating results could suffer dramatically.
• The semiconductor equipment industry is intensely competitive. In each of the markets we serve, we face competition from established competitors and potential new entrants, many of which have greater financial, engineering, manufacturing and marketing resources than us.
• We rely on increasing market acceptance for our FOX system, and we may not be successful in attracting new customers or maintaining our existing customers.
• A substantial portion of our net sales is generated by relatively small volume, high value transactions.
• We may experience increased costs associated with new product introductions.
• The Company is exposed to cybersecurity threats or incidents.
• Our industry is subject to rapid technological change and our ability to remain competitive depends on our ability to introduce new products in a timely manner.
• A decrease in customer device failure rates may result in a decrease in demand for our products.
• Future changes in semiconductor technologies may make our products obsolete.
• Supply chain issues, including a shortage of critical components or contract manufacturing capacity, could result in a delay in fulfillment of customer orders, or an increase in costs, resulting in an adverse impact on our business and operating results.
• We sell our products and services worldwide, and our business is subject to risks inherent in conducting business activities in geographic regions outside of the United States.
• We purchase materials from suppliers worldwide, which subjects the Company to increased risk.
• Our dependence on subcontractors and sole source suppliers may prevent us from delivering our products on a timely basis and expose us to intellectual property infringement.
• Periodic economic and semiconductor industry downturns could negatively affect our business, results of operations and financial condition.
• If we are not able to reduce our operating expenses sufficiently during periods of weak revenue, or if we utilize significant amounts of cash to support operating losses, we may erode our cash resources and may not have sufficient cash to operate our business.
• We may be subject to litigation relating to intellectual property infringement which would be time-consuming, expensive and a distraction from our business.
• While we believe we have complied with all applicable environmental laws, our failure to do so could adversely affect our business as a result of having to pay substantial amounts in damages or fees.
• Our stock price may fluctuate.
• We depend on our key personnel and our success depends on our ability to attract and retain talented employees.
• If we fail to maintain effective internal control over financial reporting in the future, the accuracy and timing of our financial reporting may be adversely affected.