PROSPECTUS
SUPPLEMENT
Up
to $25,000,000 of Shares
Common
Stock
We have entered
into an Equity Distribution Agreement, or sales agreement, with
Craig-Hallum Capital Group LLC, or Craig-Hallum, relating to shares
of our common stock offered by this prospectus. In accordance with
the terms of the Sales Agreement, we may offer and sell shares of
our common stock having an aggregate offering price of up to
$25,000,000 from time to time through Craig-Hallum acting as
agent.
Our common stock is
listed on the Nasdaq Capital Market under the symbol
“AEHR.” On September 2, 2021, the last reported sale
price of our common stock on the Nasdaq Capital Market was $7.53
per share.
Sales of our common
stock, if any, under this prospectus may be made in sales deemed to
be “at-the-market” equity offerings as defined in Rule
415 promulgated under the Securities Act of 1933, as amended, or
the Securities Act, including sales made directly on or through the
Nasdaq Capital Market, the existing trading market for our common
stock, sales made to or through a market maker other than on an
exchange or otherwise, in negotiated transactions at market prices
prevailing at the time of sale or at prices related to such
prevailing market prices, and/or any other method permitted by law,
including in privately negotiated transactions. Craig-Hallum will
act as sales agent on a best efforts basis and use commercially
reasonable efforts to sell on our behalf all of the shares of
common stock requested to be sold by us, consistent with its normal
trading and sales practices, on mutually agreed terms between
Craig-Hallum and us. There is no arrangement for funds to be
received in any escrow, trust or similar arrangement.
Craig-Hallum will
be entitled to compensation at a commission rate of up to 3.0% of
the gross sales price per share sold. In connection with the
sale of our common stock on our behalf, Craig-Hallum will be deemed
to be an “underwriter” within the meaning of the
Securities Act and the compensation of Craig-Hallum will be deemed
to be underwriting commissions or discounts.
Investing
in our common stock involves a high degree of risk. Before making
an investment decision, please read the information under the
heading “Risk Factors” beginning on page
S-10
of this prospectus and in the documents incorporated by reference
into this prospectus.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
Craig-Hallum
The date of this
prospectus is September 17, 2021.
TABLE
OF CONTENTS
ABOUT THIS SALES
AGREEMENT PROSPECTUS
This prospectus is
part of a registration statement that we have filed with the U.S.
Securities and Exchange Commission, or the SEC, utilizing a
“shelf” registration process. By using a shelf
registration statement, we may offer shares of our common stock
having an aggregate offering price of up to $25,000,000 from time
to time under this prospectus at prices and on terms to be
determined by market conditions at the time of
offering.
We provide
information to you about this offering of shares of our common
stock in two separate documents that are bound together: (1) this
sales agreement prospectus, which describes the specific details
regarding this offering; and (2) the accompanying base prospectus,
which provides general information, some of which may not apply to
this offering. Generally, when we refer to this
“prospectus,” we are referring to both documents
combined. If information in this sales agreement prospectus is
inconsistent with the accompanying base prospectus, you should rely
on this prospectus. However, if any statement in one of these
documents is inconsistent with a statement in another document
having a later date—for example, a document incorporated by
reference in this prospectus—the statement in the document
having the later date modifies or supersedes the earlier statement
as our business, financial condition, results of operations and
prospects may have changed since the earlier dates.
You should rely
only on the information contained in, or incorporated by reference
into, this prospectus and in any free writing prospectus that we
may authorize for use in connection with this offering. We have
not, and Craig-Hallum, has not authorized any other person to
provide you with different information. If anyone provides you with
different or inconsistent information, you should not rely on it.
We are not, and Craig-Hallum is not, making an offer to sell or
soliciting an offer to buy our securities in any jurisdiction where
an offer or solicitation is not authorized or in which the person
making that offer or solicitation is not qualified to do so or to
anyone to whom it is unlawful to make an offer or solicitation. You
should assume that the information appearing in this prospectus,
the documents incorporated by reference into this prospectus, and
in any free writing prospectus that we may authorize for use in
connection with this offering, is accurate only as of the date of
those respective documents. Our business, financial condition,
results of operations and prospects may have changed since those
dates. You should read this prospectus, the documents incorporated
by reference into this prospectus, and any free writing prospectus
that we may authorize for use in connection with this offering, in
their entirety before making an investment decision. You should
also read and consider the information in the documents to which we
have referred you in the section of this prospectus entitled
“Where You Can Find More Information; Incorporation by
Reference.”
We are offering to
sell, and seeking offers to buy, shares of common stock only in
jurisdictions where offers and sales are permitted. The
distribution of this prospectus and the offering of the common
stock in certain jurisdictions may be restricted by law. Persons
outside the United States who come into possession of this
prospectus must inform themselves about, and observe any
restrictions relating to, the offering of the common stock and the
distribution of this prospectus outside the United States. This
prospectus does not constitute, and may not be used in connection
with, an offer to sell, or a solicitation of an offer to buy, any
securities offered by this prospectus by any person in any
jurisdiction in which it is unlawful for such person to make such
an offer or solicitation.
When we refer to
“AEHR,” “Aehr Test,” “we,”
“our,” “us” and the “Company”
in this prospectus, we mean AEHR Test Systems and its consolidated
subsidiaries, unless otherwise specified. When we refer to
“you,” we mean the holders of common stock of the
Company.
Aehr Test
Systems™, AEHR™ and our logo are some of our trademarks
used in this prospectus. This prospectus also includes trademarks,
tradenames and service marks that are the property of other
organizations. Solely for convenience, our trademarks and
tradenames referred to in this prospectus appear without the ®
or ™ symbols, but those references are not intended to
indicate, in any way, that we will not assert, to the fullest
extent under applicable law, our rights, or the right of the
applicable licensor to these trademarks and
tradenames.
MARKET, INDUSTRY AND
OTHER DATA
This prospectus,
including the information incorporated by reference, contains
estimates, projections and other information concerning our
industry, our business, and the markets for semiconductor testing,
as well as data regarding market research, estimates and forecasts
prepared by our management. Information that is based on estimates,
forecasts, projections, market research or similar methodologies is
inherently subject to uncertainties and actual events or
circumstances may differ materially from events and circumstances
that are assumed in this information. Unless otherwise expressly
stated, we obtained this industry, business, market and other data
from reports, research surveys, studies and similar data prepared
by market research firms and other third parties, industry, medical
and general publications, government data and similar sources. In
some cases, we do not expressly refer to the sources from which
this data is derived. In that regard, when we refer to one or more
sources of this type of data in any paragraph, you should assume
that other data of this type appearing in the same paragraph is
derived from the same sources, unless otherwise expressly stated or
the context otherwise requires.
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This summary does not contain all of the information you should
consider before buying our common stock. You should read the entire
prospectus carefully, especially the “Risk Factors”
section beginning on page S-10 and our consolidated financial
statements and the related notes appearing at the end of this
prospectus, before deciding to invest in our common
stock.
Unless the context requires otherwise, references in this
prospectus to “AEHR,” “Aehr Test,”
“we,” “us” and “our” refer to
AEHR Test Systems, and our consolidated subsidiary.
Overview
Aehr Test was
incorporated in the state of California on May 25, 1977. We
develop, manufacture and sell solutions that are designed to reduce
the cost of testing and to perform reliability screening and stress
testing, burn-in or cycling, of homogeneous and heterogeneous logic
and memory semiconductor integrated circuits, sensors, power and
optical devices. These solutions can be used to simultaneously
perform parallel testing and burn-in of packaged devices,
singulated bare die or semiconductor devices while still in wafer
form. The expanding automotive, mobility, networking, and
telecommunications markets require semiconductor devices that meet
increased quality and reliability specifications. To meet these
needs, device manufacturers are increasing capacity and performing
additional testing and burn-in of their products, creating
opportunities for Aehr Test products in package and wafer-level
testing. Leveraging its expertise as a long-time leading provider
of burn-in equipment, and having installed over 2,500 systems
worldwide, the Company has developed and introduced several
innovative product families, including the ABTSTM and FOXTM family
of systems, the WaferPakTM Contactor and the DiePak® Carrier
for making electrical and thermal contact with devices under test,
and WaferPak Aligners and DiePak Autoloaders for handling and
alignment of devices into the corresponding WaferPaks and DiePaks.
The ABTS family of packaged part burn-in and test systems can
perform test during burn-in of complex devices, such as digital
signal processors, microprocessors, microcontrollers, memory and
systems-on-a-chip, and offers individual temperature control for
high-power advanced logic devices while in a packaged form. The FOX
family of systems are parallel test and burn-in systems designed to
contact all devices on one or more wafers or panels of devices
simultaneously, thus enabling cost effective full wafer parallel
test and burn-in. The FOX systems are also used for parallel test
and burn-in of singulated die or very small multi-IC modules. The
WaferPak Contactor includes a full-wafer probe card for use in
testing wafers in FOX systems. The DiePak Carrier is a reusable,
temporary package that enables IC manufacturers to perform
cost-effective test and burn-in of singulated bare die or very
small multi-IC modules.
Industry Background
Semiconductor
manufacturing is a complex, multi-step process, and defects or
weaknesses that may result in the failure of an IC may be
introduced at any process step. Failures may occur immediately or
at any time during the operating life of an IC, sometimes after
several months of normal use. Semiconductor manufacturers rely on
testing and reliability screening to identify and eliminate defects
that occur during the manufacturing process.
Testing
and reliability screening involve multiple steps. The first set of
tests is typically performed by semiconductor device manufacturers
before the processed semiconductor wafer is cut into individual
die, in order to avoid the cost of packaging defective die into
their packages. This “wafer probe” testing can be
performed on one or many die at a time, including testing the
entire wafer at once. Most leading-edge microprocessors,
microcontrollers, digital signal processors, memory ICs, sensors,
power and optical devices (such as vertical-cavity surface-emitting
lasers, or VCSELs) then undergo an extensive reliability screening
and stress testing procedure known as burn-in or cycling, depending
on the application. This can either be done at the wafer level,
before the die are packaged, or at the package level, after the die
are packaged. The burn-in process screens for early failures by
operating the device at elevated voltages and temperatures, at up
to 150 degrees Celsius (302 degrees Fahrenheit) or higher.
Depending upon the application, the burn-in times can range
anywhere from minutes to hours or even days. A typical burn-in
system can process thousands of devices simultaneously. After
burn-in, the devices undergo a final test process using automatic
test equipment, or testers. For example, this cycling process
screens silicon carbide semiconductor devices used in electric
vehicle engine controller inverters and their corresponding
on-board battery chargers for failure to meet current carrying,
power loss and leakage specifications, as well as endurance
requirements.
Markets
The
Company’s semiconductor test and reliability qualification
solutions address multiple test and burn-in segments including
silicon carbide devices for electric vehicles, silicon photonics
markets that include data center infrastructure and worldwide 5G
infrastructure, 2D/3D sensor markets related to consumer
electronics and automotive applications, and the data storage and
memory markets.
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Silicon Carbide
Silicon
carbide power semiconductors have emerged as the preferred
technology for battery electric vehicle power conversion in
on-board and off-board electric vehicle battery chargers, and the
electric power conversion and control of the electric engines.
These devices reduce power loss by as much as greater than 75% over
power silicon alternatives like IGBT (Insulated-Gate Bipolar
Transistor) devices, which has essentially changed the entire
market dynamic. With this development, the Company sees most, if
not every automotive company that is working on electric vehicles,
moving to silicon carbide-based powertrain and charging systems in
the near future.
Aehr’s
FOX-XP test and burn-in system allows for one of the key
reliability screening tests to be completed on an entire wafer full
of devices, testing all of them at one time, while also testing and
monitoring every device for failures during the burn-in process to
provide critical information on those devices. This is an
enormously valuable capability, as it allows its customers to
screen devices that would otherwise fail after they are packaged
into multi-die modules where the yield impact is 10 times or even
100 times as costly. The Company’s FOX-P family of products
are very cost-effective solutions for ensuring the critical quality
and reliability of devices in this market, where performance and
reliability can not only mean increased battery life, but also
assurance against failure of a vehicle whose power semiconductor
fails in the power train.
Silicon Photonics
The
silicon photonics market is seeing increasing deployment of devices
used in the expansion of bandwidth and infrastructure to meet the
explosive growth of data center and 5G infrastructure.
The
rapid growth of integrated optical devices in data centers and data
center interconnect infrastructure, mobile devices, automotive
applications, and wearable biosensor markets is driving
substantially higher requirements for initial quality and long-term
reliability, and they are increasing with every new product
generation.
Silicon
photonics devices are highly integrated silicon-based
semiconductors that have embedded or integrated the non-silicon
based laser transmitters and receivers to enable a smaller, lower
cost, higher reliable alternative to traditional fiber optic
transceivers currently used in data center and telecommunication
infrastructure. These require a process step in manufacturing
called stabilization where the devices are subjected to high
temperatures and power to stabilize their output power. The
Company’s solution makes it feasible to burn-in integrated
silicon photonics devices while still in wafer form without adding
the cost to the transceiver printed circuit board and other
mechanical infrastructure of the final transceiver module, and that
has both yield and significant cost savings. In the case of silicon
photonics, the laser devices are bonded directly to a silicon-based
device that has all the logic multiplexing and de-multiplexing, and
other high-speed communication subsystems, all integrated into a
silicon-based integrated circuit.
Mobile 2D and 3D Sensors
Sensors
used in mobile devices such as smartphones, tablets, wearables such
as watches and fitness bands, and audio devices have become
pervasive. Initially, sensors on smartphones allowed basic
functions we have all come to expect such as touchscreens,
rotational sensors, and fingerprint sensors, but have gotten more
complex with added capabilities such as 3D facial recognition and
time of flight distance measurements. We will see the addition of
health monitoring sensors, 3D measurement capability, and other
advanced sensors in the future. As sensors become more pervasive
and add critical new functionality to devices, it becomes more and
more important that the data collected be accurate and reliable,
which we believe will drive more and more requirements for our
solutions for production test and burn-in of these
sensors.
In
addition, the rapid growth and increasing demand for reliability in
automotive sensor technologies is a key market driver for the
Company. These technologies include ADAS (Advanced Driver
Assistance Systems) capabilities such as collision avoidance
systems using laser, LIDAR (Light Detection and Ranging), and RADAR
(Radio Detection and Ranging) or other sensing technologies. More
and more new vehicles now include as standard capabilities
collision avoidance systems that detect obstacles and monitor the
vehicle’s surroundings to notify the driver of dangerous
conditions and take evasive action. In addition to autonomous
vehicles that require extremely high reliability of the devices in
these systems, more and more vehicles around the world are
embedding these systems and sensors into their everyday driving
features. The Company sees the rising tide of the increasing number
of embedded sensors and electrical and optical systems in vehicles
as a key driver of the increasing market need for more and more
reliable semiconductors. This, in turn, is increasing the need for
100% production test and burn-in of devices in order to lower the
infant mortality rate and ensure that these devices and systems
operate over the life of the vehicles.
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Data Storage and Memory
The
Company also sees the data storage and memory markets as critical
new opportunities for its systems where these end markets and
customers require devices to have extremely high levels of quality
and long-term reliability.
Products
The
Company manufactures and markets full wafer contact test systems,
test during burn-in systems, test fixtures and related
accessories.
All
of the Company’s systems are platform-based systems with a
portfolio of current, voltage, digital and thermal capabilities,
allowing them to be configured with optional features to meet
customer requirements. Systems can be configured for use in
production applications, where capacity, throughput and price are
most important, or for reliability engineering and quality
assurance applications, where performance and flexibility, such as
extended temperature ranges, are essential.
Full Wafer Contact Systems
The
FOX-XP test and burn-in system, introduced in July 2016, is
designed for devices in wafer, singulated die, and module form that
require test and burn-in times typically measured in hours to days.
The FOX-XP system can test and burn-in up to 18 wafers at a time.
For high reliability applications, such as automotive, mobile
devices, networking, telecommunications, sensors, power and
solid-state devices, the FOX-XP system is a cost-effective solution
for producing tested and burned-in die for use in multi-chip
packages. Using Known-Good Die, or KGD, which are fully burned-in
and tested die, in multi-chip/heterogeneous packages helps assure
the reliability of the final product and lowers costs by increasing
the yield of high-cost multi-chip packages. Wafer-level burn-in and
test enables lower cost production of KGD for multi-chip modules,
3-D stacked packages and systems-in-a-package. The FOX-P platform
has been extended for burn-in and test of small multi-die modules
by using DiePak Carriers. The DiePak Carrier with its multi-module
sockets and high wattage dissipation capabilities has a capacity of
hundreds of die or modules, much higher than the capacity of a
traditional burn-in system with traditional single-device sockets
and heat sinks. This capability was introduced in March
2017.
The
FOX-NP was introduced in January 2019 and is a low-cost entry-level
system to provide a configuration and price point for companies to
do initial production qualification and new product introduction,
enabling an easier transition to the FOX-XP system for high volume
production test. The FOX-NP system is 100% compatible with the
FOX-XP system and is configurable with up to two slot assemblies
per system compared to up to 18 slot assemblies in the FOX-XP
system.
The
FOX-CP was introduced in February 2019 and is a low-cost
single-wafer compact test and reliability verification solution for
logic, memory, power and photonic devices. The FOX-CP reduces test
cost by functionally testing wafers during reliability screening to
identify failing logic, memory, power or photonic die before the
die are integrated into their final package, and is optimal for
test times ranging from minutes to a few hours or where multiple
touchdowns are required to test the entire wafer. The FOX-CP
includes an integrated prober which is equipped with optics for
automatic pattern recognition so that the wafer is aligned properly
for the testing process. It complements the capabilities of the
FOX-XP and FOX-NP systems, which are optimal when the test time is
measured in hours or days and the full wafer can be tested in a
single touchdown.
The FOX-1P full wafer parallel test system,
introduced in October 2014, is designed for massively parallel
testing of devices at wafer level. The FOX-1P system is designed to
make electrical contact to and test all of the die on a wafer in a
single touchdown. The FOX-1P test head and WaferPak Contactor are
compatible with industry-standard 300 mm wafer probers, which
provide the wafer handling and alignment automation for the FOX-1P
system. The FOX-1P pattern
generator is designed to functionally test industry-standard memory
devices such as flash and DRAMs, and it is optimized to test memory
or logic ICs that incorporate design for testability, or DFT, and
built-in self-test, or BIST. The FOX-1P universal per-pin
architecture is designed to provide per-pin electronics and
per-device power supplies and is tailored to full-wafer functional
test. The Company believes that the FOX-1P system can significantly
reduce the cost of testing IC wafers. The Company’s FOX-1P
system was partially funded through a development agreement with a
leading semiconductor manufacturer. The Company received the first
production order of this new system and shipped the first system in
July 2016.
One
of the key components of the FOX systems is the patented WaferPak
Contactor. The WaferPak Contactor contains a full-wafer
single-touchdown probe card which is easily removable from the
system. Traditional probe cards often are only able to contact only
a portion of the wafer, requiring multiple touchdowns to test the
entire wafer. Traditional probe cards also require the use of a
dedicated wafer prober handler for each wafer in order to press the
wafer up to make contact with the probe card. The need for a wafer
prober per wafer is a significant cost adder to the cost of testing
a wafer, and also creates the need for significant clean room space
to facility the footprint of a wafer prober per wafer. The unique
design of the WaferPak as well as the FOX-XP and FOX-NP systems
remove the need for a dedicated wafer prober per wafer. A single
FOX-XP system with a set of WaferPak Contactors can test up to 18
wafers at a time in the same footprint as a single-wafer wafer
prober and test system offered by Aehr’s competitors.
The
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WaferPak
Contactor is intended to accommodate a wide range of contactor
technologies so that the contactor technology can evolve along with
the changing requirements of the customer’s wafers. The
WaferPak Contactors are custom designed for each device type, each
of which has a typical lifetime of two to seven years, depending on
the device life cycle. Therefore, multiple sets of WaferPak
Contactors could be purchased over the life of a FOX
system.
Another
key component of the FOX-XP and FOX-NP systems is the patented
DiePak Carrier. The DiePak Carrier, which is easily removable from
the system, contains many multi-module or die sockets with very
fine-pitch probes. Traditional sockets contact only a single
device, requiring multiple large numbers of sockets and burn-in
boards to test a production lot of devices. The unique design
accommodates a wide range of socket sizes and densities so that the
DiePak Carrier technology can evolve along with the changing
requirements of the customer’s devices. The DiePak Carriers
are custom designed for each device type, each of which has a
typical lifetime of two to seven years, depending on the device
life cycle. Therefore, multiple sets of DiePak Carriers could be
purchased over the life of a FOX-XP or FOX-NP system.
Another
key component of our FOX-XP and FOX-NP and test solution is the
WaferPak Aligner. The WaferPak Aligner performs alignment of the
customer’s wafer to the WaferPak Contactor so that the wafer
can be tested and burned-in by the FOX-XP and FOX-NP systems. The
Company offers an automated aligner for high volume production
applications, which can support several FOX-XP or FOX-NP systems,
and a manual aligner for low volume production or engineering
applications.
Similar
to the WaferPak Aligner for WaferPak Contactors, the Company offers
the DiePak Loader for DiePak Carriers. The DiePak Loader performs
automatic loading of the customer’s modules to the DiePak
Carrier so that the modules can be tested and burned-in by the
FOX-XP and FOX-NP system. Typically, one DiePak Loader can support
several FOX-XP or FOX-NP systems.
Net
sales of full wafer contact product lines, systems, WaferPak
Contactors, DiePaks Carriers and services for fiscal 2021, 2020 and
2019 were $15.0 million, $19.8 million, and $14.6 million,
respectively, and accounted for approximately 90%, 89% and 69% of
the Company’s net sales in fiscal 2021, 2020 and 2019,
respectively.
Systems for Packaged Parts
Test
during burn-in, or TDBI, systems consist of several subsystems:
pattern generation and test electronics, control software, network
interface and environmental chamber. The test pattern generator
allows duplication of most of the functional tests performed by a
traditional tester. Pin electronics at each burn-in board, or BIB,
position are designed to provide accurate signals to the ICs being
tested and detect whether a device is failing the
test.
Devices
being tested are placed on BIBs and loaded into environmental
chambers which typically operate at temperatures from 25 degrees
Celsius (77 degrees Fahrenheit) up to 150 degrees Celsius (302
degrees Fahrenheit). Using our optional chambers, our systems can
produce temperatures as low as -55 degrees Celsius (-67 degrees
Fahrenheit). A single BIB can hold up to several hundred ICs, and a
production chamber holds up to 72 BIBs, resulting in thousands of
memory or logic devices being tested in a single
system.
The Advanced Burn-in and Test System, or ABTS, was
introduced in fiscal 2008. Several updates to the ABTS system have
been made since its introduction, including the ABTS-P system
released in 2012. The ABTS family of products is based on a
hardware and software architecture that is intended to address not
only today’s devices, but also future devices for many years
to come. The ABTS system can test and burn-in both high-power logic
and low-power ICs. It can
be configured to provide individual device temperature control for
devices up to 70W or more and with up to 320 I/O
channels.
Net
sales of packaged part product lines, systems and services for
fiscal 2021, 2020 and 2019 were $1.6 million, $2.5 million, and
$6.4 million, respectively, and accounted for approximately 10%,
11% and 31% of the Company’s net sales in fiscal 2021, 2020
and 2019, respectively.
Customers
The
Company markets and sells its products throughout the world to
semiconductor manufacturers, semiconductor contract assemblers,
electronics manufacturers and burn-in and test service
companies.
Sales
to the Company’s five largest customers accounted for
approximately 84%, 87%, and 80% of its net sales in fiscal 2021,
2020 and 2019, respectively. During fiscal 2021, Advanced
Semiconductor Engineering, Inc., ON Semiconductor Korea, Ltd., or
ON Semiconductor, Intel Corporation, or Intel, and Inphi
International Pte. Ltd, or Inphi, accounted for approximately 24%,
23%, 20% and 10%, respectively, of the Company’s net sales.
During fiscal 2020, Intel, ON Semiconductor and STMicroelectronics,
Inc., or STMicroelectronics, accounted for approximately 43%, 16%
and 15%, respectively, of the Company’s net sales. During
fiscal
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2019,
Intel, Texas Instruments Incorporated, or Texas Instruments,
Cypress Semiconductor Corporation, or Cypress Semiconductor, and
STMicroelectronics accounted for approximately 36%, 14%, 12% and
10%, respectively, of the Company’s net sales. No other
customers accounted for more than 10% of the Company’s net
sales for any of these periods. The Company expects that sales of
its products to a limited number of customers will continue to
account for a high percentage of net sales for the foreseeable
future. In addition, sales to particular customers may fluctuate
significantly from quarter to quarter. Such fluctuations may result
in changes in utilization of the Company’s facilities and
resources. The loss of or reduction or delay in orders from a
significant customer or a delay in collecting or failure to collect
accounts receivable from a significant customer could materially
and adversely affect the Company’s business, financial
condition and operating results.
Marketing, Sales and Customer Support
The
Company has sales and service operations in the United States,
Philippines and Taiwan, dedicated service resources in Germany,
China and South Korea, and has established a network of
distributors and sales representatives in certain key parts of the
world. In fiscal 2020, the Company moved to a sales representative
distributorship model for sales in Japan and Germany, substantially
closing its subsidiary in Japan, see Note 17,
“Restructuring,” of the Notes to Consolidated Financial
Statements, and eliminating the direct sales staff at its Germany
subsidiary. See “REVENUE RECOGNITION” in Item 7 under
“Management’s Discussion and Analysis of Financial
Condition and Results of Operations” for a further discussion
of the Company’s relationship with distributors, and its
effects on revenue recognition.
The
Company’s customer service and support program includes
system installation, system repair, applications engineering
support, spare parts inventories, customer training and
documentation. The Company has applications engineering and field
service personnel located near and sometimes co-located at our
customers and includes resources at the corporate headquarters in
Fremont, California, at customer locations in Texas, at the
Company’s subsidiaries in Germany and Philippines, at its
branch office in Taiwan, and also through 3rd party agreements in
China and South Korea. The Company’s distributors provide
applications and field service support in other parts of the world.
The Company customarily provides a warranty on its products. The
Company offers service contracts on its systems directly and
through its subsidiaries, distributors and representatives. The
Company believes that maintaining a close relationship with
customers and providing them with ongoing engineering support
improves customer satisfaction and will provide the Company with a
competitive advantage in selling its products to the
Company’s customers.
Backlog
At
May 31, 2021, the Company’s backlog was $1.6 million compared
with $2.5 million at May 31, 2020. The Company’s backlog
consists of product orders for which confirmed purchase orders have
been received and which are scheduled for shipment within 12
months. Due to the possibility of customer changes in delivery
schedules or cancellations and potential delays in product
shipments or development projects, the Company’s backlog as
of a particular date may not be indicative of net sales for any
succeeding period.
Research and Product Development
The
Company historically has devoted a significant portion of its
financial resources to research and development programs and
expects to continue to allocate significant resources to these
efforts. Certain research and development expenditures related to
non-recurring engineering milestones have been transferred to cost
of goods sold, reducing research and development expenses. The
Company’s research and development expenses during fiscal
2021, 2020 and 2019 were $3.7 million, $3.4 million and $4.2
million, respectively.
The
Company conducts ongoing research and development to design new
products and to support and enhance existing product lines.
Building upon the expertise gained in the development of its
existing products, the Company has developed the FOX family of
systems for performing test and burn-in of entire processed wafers,
and burn-in of devices in singulated die and module form, including
the FOX-NP and FOX-CP systems released during fiscal 2019. The
Company is developing enhancements to our packaged parts and wafer
level burn-in products, intended to improve the capability and
performance for testing and burn-in of future generation devices
and provide the flexibility in a wide variety of
applications.
Manufacturing
The
Company assembles its products from components and parts
manufactured by others, including environmental chambers, power
supplies, metal fabrications, printed circuit assemblies, ICs,
burn-in sockets, high-density interconnects, wafer contactors and
interconnect substrates. The Company’s strategy is to use
in-house manufacturing only when necessary to protect a proprietary
process or when a significant improvement in quality, cost or lead
time can be achieved and relies on subcontractors to
manufacture many
of the components and subassemblies used in its products. Final
assembly and testing are performed at the Company’s principal
manufacturing facility located in Fremont, California.
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Risks Related to Our Business
Our
ability to implement our current business strategy is subject to
numerous risks, including those described in the section entitled
“Risk Factors” immediately following this prospectus
summary. These risks include, among others:
●
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.
●
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.
Corporate Information
We
filed our certificate of incorporation with the Secretary of State
of California on May 25, 1977. Our principal executive offices are
located at 400 Kato Terrace, Fremont, California 94539 and our
telephone number is (510) 623-9400. Our website address is
www.aehr.com. The information on, or that can be accessed through,
our website is not part of this prospectus. We have included our
website address as an inactive textual reference only.
AEHR,
Aehr Test and the AEHR Test Systems logo are our trademarks. Each
of the other trademarks, trade names, or service marks appearing in
this prospectus belongs to its respective holder.
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Common stock
offered by us
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Shares of our
common stock having an aggregate offering price of up to
$25,000,000.
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Common stock to be
outstanding after this offering
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Up to 27,045,281
shares (as more fully described in the notes following this table),
assuming sales of 3,320,053 shares of our common stock in this
offering at an offering price of $7.53 per share, which was the
last reported sale price of our common stock on the Nasdaq Capital
Market on September 2, 2021. The actual number of shares issued
will vary depending on the sales price under this
offering.
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Manner of offering
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“At-the-market”
offering that may be made from time to time through our sales
agent, Craig-Hallum. See “Plan of Distribution” on page
S-14.
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Use of Proceeds
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We intend to use
the net proceeds from this offering, if any, for general corporate
purposes, which may include, among other things, increasing our
working capital and funding research and development, commercial
activities, and capital expenditures. See “Use of
Proceeds” on page S-12.
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Risk
Factors
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You should read the
“Risk Factors” section of this prospectus and in the
documents incorporated by reference in this prospectus for a
discussion of factors to consider before deciding to purchase
shares of our common stock.
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Symbol on the
Nasdaq Capital Market
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The number of
shares of common stock shown above to be outstanding after this
offering is based on 23,725,228 shares outstanding as of May 31,
2021, and excludes, in each case as of May 31, 2021:
●
2,766,186 shares of
common stock issuable upon the exercise of outstanding stock
options having a weighted-average exercise price of $2.16 per
share;
●
132,076 shares of
common stock issuable upon vesting of outstanding restricted stock
units;
●
1,137,426 shares of
common stock reserved for issuance pursuant to future awards under
our 2016 Equity Incentive Plan, as well as any automatic increases
in the number of shares of our common stock reserved for future
issuance under this plan; and
●
436,035 shares of
common stock reserved for future issuance under our Amended and
Restated 2006 Emplyee Stock Purchase Plan, as well as any automatic
increases in the number of shares of our common stock reserved for
future issuance under this plan.
Unless otherwise
stated, all information contained in this prospectus reflects an
assumed public offering price of $7.53 per share, which was the
last reported sale price of our common stock on the Nasdaq Capital
Market on September 2, 2021.
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You should consider carefully the risks described below and
discussed under the section captioned “Risk Factors”
contained in our annual report on Form 10-K for the year ended
May 31, 2021 and in our quarterly reports for the quarterly
periods ended February 28, 2021, November 30, 2020 and August 31,
2021, as updated by our subsequent filings under the Securities
Exchange Act of 1934, as amended, or the Exchange Act, each of
which is incorporated by reference in this prospectus in their
entirety, together with other information in this prospectus, and
the information and documents incorporated by reference in this
prospectus, and any free writing prospectus that we have authorized
for use in connection with this offering before you make a decision
to invest in our common stock. If any of the following events
actually occur, our business, operating results, prospects or
financial condition could be materially and adversely affected.
This could cause the trading price of our common stock to decline
and you may lose all or part of your investment. The risks
described below are not the only ones that we face. Additional
risks not presently known to us or that we currently deem
immaterial may also affect our business operations.
Risks
Relating to this Offering
Our management team may invest or spend the proceeds of this
offering in ways with which you may not agree or in ways which may
not yield a significant return.
Our management will
have broad discretion over the use of proceeds from this offering.
The net proceeds from this offering will be used for general
corporate purposes, which may include, among other things,
increasing our working capital and funding research and
development, commercial activities, and capital expenditures. Our
management will have considerable discretion in the application of
the net proceeds, and you will not have the opportunity, as part of
your investment decision, to assess whether the proceeds are being
used appropriately. The net proceeds may be used for corporate
purposes that do not increase our operating results or enhance the
value of our common stock.
You may experience immediate and substantial dilution in the net
tangible book value per share of the common stock you
purchase.
The price per share
of our common stock being offered may be higher than the net
tangible book value per share of our common stock outstanding prior
to this offering. Assuming that an aggregate of 3,320,053 shares
are sold at a price of $7.53 per share, the last reported sale
price of our common stock on the Nasdaq Capital Market on September
2, 2021, for aggregate proceeds of $25,000,000 in this offering,
and after deducting commissions and estimated aggregate offering
expenses payable by us, you will suffer immediate and substantial
dilution of $6.27 per share, representing the difference between
the as adjusted net tangible book value per share of our common
stock as of May 31, 2021 after giving effect to this offering and
the assumed offering price. See the section entitled
“Dilution” below for a more detailed discussion of the
dilution you will incur if you purchase common stock in this
offering.
You may experience future dilution as a result of future equity
offerings.
In order to raise
additional capital, we may in the future offer additional shares of
our common stock or other securities convertible into or
exchangeable for our common stock. We cannot assure you that we
will be able to sell shares or other securities in any other
offering at a price per share that is equal to or greater than the
price per share paid by investors in this offering, and investors
purchasing shares or other securities in the future could have
rights superior to existing stockholders. The price per share at
which we sell additional shares of our common stock or other
securities convertible into or exchangeable for our common stock in
future transactions may be higher or lower than the price per share
in this offering. As of May 31, 2021, approximately 1,915,287
shares of common stock that are either subject to outstanding
options, issuable upon vesting of outstanding restricted stock
units, reserved for future issuance under our equity incentive
plans or subject to outstanding warrants are eligible for sale in
the public market to the extent permitted by the provisions of
various vesting schedules and Rule 144 and Rule 701 under the
Securities Act.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus
contains forward-looking statements that involve risks and
uncertainties. All statements other than statements of historical
facts contained in this prospectus are forward-looking statements.
In some cases, you can identify forward-looking statements by
terminology such as “may,” “could,”
“will,” “would,” “should,”
“expect,” “plan,” “anticipate,”
“believe,” “estimate,”
“intend,” “predict,” “seek,”
“contemplate,” “potential” or
“continue” or the negative of these terms or other
comparable terminology. These forward-looking statements include,
but are not limited to, statements about:
●
our future research
and development programs;
●
the implementation
of our business model, strategic plans for our business, product
candidates and technology;
●
the scope of
protection we are able to establish and maintain for intellectual
property rights covering our product candidates and
technology;
●
estimates of our
expenses, future revenues, capital requirements and our needs for
additional financing;
●
our use of proceeds
from this offering;
●
our financial
performance; and
●
developments
relating to our competitors and our industry.
Any forward-looking
statements in this prospectus reflect our current views with
respect to future events or to our future financial performance and
involve known and unknown risks, uncertainties and other factors
that may cause our actual results, performance or achievements to
be materially different from any future results, performance or
achievements expressed or implied by these forward-looking
statements. Factors that may cause actual results to differ
materially from current expectations include, among other things,
those listed under “Risk Factors” and elsewhere in this
prospectus. Given these risks and uncertainties, you should not
place undue reliance on these forward-looking statements. Except as
required by law, we assume no obligation to update or revise these
forward-looking statements for any reason, even if new information
becomes available in the future.
The amount of
proceeds from this offering will depend upon the number of shares
of our common stock sold and the market price at which they are
sold. There can be no assurance that we will be able to sell any
shares under or fully utilize the sales agreement with Craig-Hallum
as a source of financing. We intend to use the net proceeds, if
any, from this offering for general corporate purposes, which may
include, among other things, increasing our working capital and
funding research and development, commercial activities and capital
expenditures.
The amounts and
timing of our actual expenditures will depend on numerous factors
as well as the amount of cash used in our operations. We therefore
cannot estimate with certainty the amount of net proceeds to be
used for the purposes described above. We may find it necessary or
advisable to use the net proceeds for other purposes, and we will
have broad discretion in the application of the net proceeds.
Pending the uses described above, we plan to invest the net
proceeds from this offering in short-term, investment-grade,
interest-bearing securities.
Our net tangible
book value as of May 31, 2021 was approximately $9,843,000, or
$0.41 per share. Net tangible book value per share is determined by
dividing our total tangible assets, less total liabilities, by the
number of shares of our common stock outstanding as of May 31,
2021. Dilution in net tangible book value per share represents the
difference between the amount per share paid by purchasers of
shares of common stock in this offering and the as adjusted net
tangible book value per share of our common stock immediately after
giving effect to this offering.
After giving effect
to the sale of our common stock in the aggregate amount of $25.0
million in this offering at an assumed offering price of $7.53, the
last reported sale price of our common stock on the Nasdaq Capital
Market on September 2, 2021, and after deducting commissions and
estimated aggregate offering expenses payable by us, our as
adjusted net tangible book value as of May 31, 2021 would have been
approximately $34,073,067, or $1.26 per share. This represents an
immediate increase in net tangible book value of $0.84 per share to
existing stockholders and immediate dilution in net tangible book
value of $6.27 per share to new investors purchasing our common
stock in this offering. The following table illustrates this
dilution on a per share basis:
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Assumed public
offering price per share
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$7.53
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Net tangible book
value per share as of May 31, 2021
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$0.41
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Increase per share
attributable to new investors
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0.84
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As adjusted net
tangible book value per share after this offering
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1.26
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Dilution per share
to new investors
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6.27
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The shares sold in
this offering, if any, will be sold from time to time at various
prices. An increase of $1.00 per share in the price at which the
shares are sold from the assumed offering price of $7.53 per share
shown in the table above, assuming all of our common stock in the
aggregate amount of $25.0 million is sold at that price, would
increase our as adjusted net tangible book value per share after
the offering to $1.28 per share and would increase the dilution in
net tangible book value per share to new investors to $7.25 per
share, after deducting commissions and estimated aggregate offering
expenses payable by us. A decrease of $1.00 per share in the price
at which the shares are sold from the assumed offering price of
$7.53 per share shown in the table above, assuming all of our
common stock in the aggregate amount of $25.0 million is sold at
that price, would increase our as adjusted net tangible book value
per share after the offering to $1.24 per share and would decrease
the dilution in net tangible book value per share to new investors
to $5.29 per share, after deducting commissions and estimated
aggregate offering expenses payable by us. This information is
supplied for illustrative purposes only.
To the extent that
outstanding options or warrants are exercised or outstanding
restricted stock units vest, investors purchasing our common stock
in this offering will experience further dilution. In addition, we
may choose to raise additional capital due to market conditions or
strategic considerations even if we believe we have sufficient
funds for our current or future operating plans. To the extent that
we raise additional capital through the sale of equity or
convertible debt securities, the issuance of these securities could
result in further dilution to our stockholders.
The above
discussion and table are based on 23,725,228 shares of common stock
outstanding as of May 31, 2021, and exclude as of that
date:
●
2,766,186 shares of
common stock issuable upon the exercise of outstanding stock
options having a weighted-average exercise price of $2.16 per
share;
●
132,076 shares of
common stock issuable upon vesting of outstanding restricted stock
units;
●
1,137,426 shares of
common stock reserved for issuance pursuant to future awards under
our 2016 Equity Incentive Plan, as well as any automatic increases
in the number of shares of our common stock reserved for future
issuance under this plan; and
●
436,035 shares of
common stock reserved for future issuance under our Amended and
Restated 2006 Emplyee Stock Purchase Plan, as well as any automatic
increases in the number of shares of our common stock reserved for
future issuance under this plan.
PLAN
OF DISTRIBUTION
We have entered
into an Equity Distribution Agreement, or sales agreement with
Craig-Hallum under which we may issue and sell shares of our common
stock having an aggregate gross sales price of up to $25,000,000
from time to time through Craig-Hallum acting as agent. The sales
agreement has been filed as an exhibit to our registration
statement on Form S-3 of which this prospectus forms a
part.
Upon delivery of a
placement notice and subject to the terms and conditions of the
sales agreement, Craig-Hallum may sell our common stock by any
method permitted by law deemed to be an “at-the-market”
offering as defined in Rule 415 promulgated under the Securities
Act, including sales made directly on the Nasdaq Capital Market, on
any other existing trading market for our common stock or to or
through a market maker. Craig-Hallum may also sell our common stock
by any other method permitted by law, including in privately
negotiated transactions. We may instruct Craig-Hallum not to sell
common stock if the sales cannot be effected at or above the price
designated by us from time to time. We or Craig-Hallum may suspend
the offering of common stock upon notice and subject to other
conditions.
We will pay
Craig-Hallum commissions, in cash, for its services in acting as
agent in the sale of our common stock. Craig-Hallum will be
entitled to compensation at a commission rate of up to 3.0% of the
gross sales price per share sold. Because there is no minimum
offering amount required as a condition to close this offering, the
actual total public offering amount, commissions and proceeds to
us, if any, are not determinable at this time. We have also agreed
to reimburse Craig-Hallum for certain specified expenses, including
the fees and disbursements of its legal counsel, in an amount not
to exceed $45,000 plus $5,000 quarterly for ongoing diligence
requirements, including ongoing legal fees, following the execution
date and during the term of the sales agreement. We estimate that
the total expenses for the offering, excluding discounts and
commissions payable to Craig-Hallum under the terms of the sales
agreement, will be approximately $19,933.
Settlement for
sales of common stock will occur on the third business day
following the date on which any sales are made, or on some other
date that is agreed upon by us and Craig-Hallum in connection with
a particular transaction, in return for payment of the net proceeds
to us. Sales of our common stock as contemplated in this prospectus
will be settled through the facilities of The Depository Trust
Company or by such other means as we and Craig-Hallum may agree
upon. There is no arrangement for funds to be received in an
escrow, trust or similar arrangement.
Craig-Hallum will
use its commercially reasonable efforts, consistent with its sales
and trading practices, to solicit offers to purchase the common
stock shares under the terms and subject to the conditions set
forth in the sales agreement. In connection with the sale of the
common stock on our behalf, Craig-Hallum will be deemed to be an
“underwriter” within the meaning of the Securities Act
and the compensation of Craig-Hallum will be deemed to be
underwriting commissions or discounts. We have agreed to provide
indemnification and contribution to Craig-Hallum against certain
civil liabilities, including liabilities under the Securities
Act.
The offering of our
common stock pursuant to the sales agreement will terminate upon
the earlier of (1) the sale of all shares of our common stock
subject to the sales agreement, or (2) termination of the
sales agreement as permitted therein. We and Craig-Hallum may each
terminate the sales agreement at any time upon ten days’
prior notice.
Any portion of the
$25,000,000 included in this sales agreement prospectus that is not
previously sold or included in an active placement notice pursuant
to the sales agreement is available for sale in other offerings
pursuant to the base prospectus, and if no shares are sold under
the sales agreement, the full $75,000,000 of securities may be sold
in other offerings pursuant to the base prospectus and a
corresponding prospectus supplement.
Craig-Hallum and
its affiliates may in the future provide various investment
banking, commercial banking and other financial services for us and
our affiliates, for which services they may in the future receive
customary fees. To the extent required by Regulation M,
Craig-Hallum will not engage in any market making activities
involving our common stock while the offering is ongoing under this
prospectus.
This prospectus in
electronic format may be made available on a website maintained by
Craig-Hallum and Craig-Hallum may distribute this prospectus
electronically.
Latham &
Watkins LLP will pass upon certain legal matters relating to the
issuance and sale of the securities offered hereby on behalf of
AEHR Test Systems. Certain legal matters in connection with this
offering will be passed upon for Craig-Hallum by Faegre Drinker
Biddle & Reath LLP.
The consolidated
financial statements of AEHR Test Systems as of May 31, 2021 and
2020 and for each of the three years in the period ended May 31,
2021 incorporated in this prospectus by reference to the Annual
Report on Form 10-K for the year ended May 31, 2021, have been so
incorporated in reliance on the report of BPM LLP, an independent
registered public accounting firm.
Such consolidated
financial statements are, and audited consolidated financial
statements to be included in subsequently filed documents will be,
incorporated by reference in reliance upon the reports of BPM LLP
relating to such consolidated financial statements to the extent
covered by consents filed with the Securities and Exchange
Commission, given on the authority of said firm as experts in
auditing and accounting.
WHERE YOU CAN FIND MORE
INFORMATION
We have filed with
the SEC a registration statement on Form S-3 under the Securities
Act, of which this prospectus forms a part. The rules and
regulations of the SEC allow us to omit from this prospectus
certain information included in the registration statement. For
further information about us and the securities we are offering
under this prospectus, you should refer to the registration
statement and the exhibits and schedules filed with the
registration statement. With respect to the statements contained in
this prospectus regarding the contents of any agreement or any
other document, in each instance, the statement is qualified in all
respects by the complete text of the agreement or document, a copy
of which has been filed as an exhibit to the registration
statement.
We file reports,
proxy statements and other information with the SEC under the
Exchange Act. You may read and copy this information from the
Public Reference Room of the SEC, 100 F Street, N.E., Room 1580,
Washington, D.C. 20549, at prescribed rates. You may obtain
information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330. The SEC also maintains an
Internet website that contains reports, proxy statements and other
information about issuers, like us, that file electronically with
the SEC. The address of that website is www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us
to “incorporate by reference” the information we file
with them which means that we can disclose important information to
you by referring you to those documents instead of having to repeat
the information in this prospectus. The information incorporated by
reference is considered to be part of this prospectus, and later
information that we file with the SEC will automatically update and
supersede this information. We incorporate by reference the
documents listed below and any future information filed (rather
than furnished) with the SEC under Sections 13(a), 13(c), 14, or
15(d) of the Exchange Act between the date of this prospectus and
the termination of this offering, provided, however, that we are
not incorporating any information furnished under Item 2.02 or
Item 7.01 of any current report on Form 8-K:
●
Our Annual Report
on Form 10-K for the year ended May 31, 2021, filed with the SEC on
August 27, 2021.
●
The description of
our Common Stock contained in Exhibit 4.3 to our Annual Report on
Form 10-K filed with the SEC on August 27, 2021 and any amendment
or report filed with the SEC for the purpose of updating the
description.
These documents may
also be accessed on our website at www.aehr.com. Except as
otherwise specifically incorporated by reference in this
prospectus, information contained in, or accessible through, our
website is not a part of this prospectus.
We will furnish
without charge to you, upon written or oral request, a copy of any
or all of the documents incorporated by reference, including
exhibits to these documents by writing or telephoning us at the
following address:
AEHR TEST
SYSTEMS
400 KATO
TERRACE
FREMONT, CALIFORNIA
94539
(510)
623-9400
Up to $25,000,000 of Shares
Common Stock
PROSPECTUS
Craig-Hallum
September
17, 2021
PROSPECTUS
Aehr Test Systems
$75,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Depositary
Shares
Warrants
Subscription
Rights
Units
We may
offer and sell up to $75,000,000 in the aggregate of the securities
identified above from time to time in one or more offerings. This
prospectus provides you with a general description of the
securities.
Each
time we offer and sell securities, we will file a supplement to
this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The
supplement may also add, update or change information contained in
this prospectus with respect to that offering. You should carefully
read this prospectus and the applicable prospectus supplement
before you invest in any of our securities.
We may
offer and sell the securities described in this prospectus and any
prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a
combination of these methods. If any underwriters, dealers or
agents are involved in the sale of any of the securities, their
names and any applicable purchase price, fee, commission or
discount arrangement between or among them will be set forth, or
will be calculable from the information set forth, in the
applicable prospectus supplement. See the sections of this
prospectus entitled “About this Prospectus” and
“Plan of Distribution” for more information. No
securities may be sold without delivery of this prospectus and the
applicable prospectus supplement describing the method and terms of
the offering of such securities.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 4
OF THIS PROSPECTUS AND ANY SIMILAR SECTION CONTAINED IN THE
APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD
CONSIDER BEFORE INVESTING IN OUR SECURITIES.
Our
common stock is listed on the Nasdaq Capital Market under the
symbol “AEHR.” On September 2, 2021, the last reported
sale price of our common stock on the Nasdaq Capital Market was
$7.53 per share.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
The date of this prospectus is September 17, 2021.
TABLE OF CONTENTS
This
prospectus is part of a registration statement that we filed with
the U.S. Securities and Exchange Commission, or the SEC, using a
“shelf” registration process. By using a shelf
registration statement, we may sell securities from time to time
and in one or more offerings up to a total dollar amount of
$75,000,000 as described in this prospectus. Each time that we
offer and sell securities, we will provide a prospectus supplement
to this prospectus that contains specific information about the
securities being offered and sold and the specific terms of that
offering. We may also authorize one or more free writing
prospectuses to be provided to you that may contain material
information relating to these offerings. The prospectus supplement
or free writing prospectus may also add, update or change
information contained in this prospectus with respect to that
offering. If there is any inconsistency between the information in
this prospectus and the applicable prospectus supplement or free
writing prospectus, you should rely on the prospectus supplement or
free writing prospectus, as applicable. Before purchasing any
securities, you should carefully read both this prospectus and the
applicable prospectus supplement (and any applicable free writing
prospectuses), together with the additional information described
under the heading “Where You Can Find More Information;
Incorporation by Reference.”
We have
not authorized anyone to provide you with any information or to
make any representations other than those contained in this
prospectus, any applicable prospectus supplement or any free
writing prospectuses prepared by or on behalf of us or to which we
have referred you. We take no responsibility for, and can provide
no assurance as to the reliability of, any other information that
others may give you. We will not make an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information appearing in this
prospectus and the applicable prospectus supplement to this
prospectus is accurate only as of the date on its respective cover,
that the information appearing in any applicable free writing
prospectus is accurate only as of the date of that free writing
prospectus, and that any information incorporated by reference is
accurate only as of the date of the document incorporated by
reference, unless we indicate otherwise. Our business, financial
condition, results of operations and prospects may have changed
since those dates. This prospectus incorporates by reference, and
any prospectus supplement or free writing prospectus may contain
and incorporate by reference, market data and industry statistics
and forecasts that are based on independent industry publications
and other publicly available information. Although we believe these
sources are reliable, we do not guarantee the accuracy or
completeness of this information and we have not independently
verified this information. In addition, the market and industry
data and forecasts that may be included or incorporated by
reference in this prospectus, any prospectus supplement or any
applicable free writing prospectus may involve estimates,
assumptions and other risks and uncertainties and are subject to
change based on various factors, including those discussed under
the heading “Risk Factors” contained in this
prospectus, the applicable prospectus supplement and any applicable
free writing prospectus, and under similar headings in other
documents that are incorporated by reference into this prospectus.
Accordingly, investors should not place undue reliance on this
information.
When we
refer to “AEHR,” “Aehr Test,”
“we,” “our,” “us” and the
“Company” in this prospectus, we mean Aehr Test Systems
and its consolidated subsidiaries, unless otherwise specified. When
we refer to “you,” we mean the potential holders of the
applicable series of securities.
Aehr
Test Systems™, AEHR™ and our logo are some of our
trademarks used in this prospectus. This prospectus also includes
trademarks, tradenames and service marks that are the property of
other organizations. Solely for convenience, our trademarks and
tradenames referred to in this prospectus appear without the ®
or ™ symbols, but those references are not intended to
indicate, in any way, that we will not assert, to the fullest
extent under applicable law, our rights, or the right of the
applicable licensor to these trademarks and
tradenames.
WHERE YOU CAN FIND MORE INFORMATION;
INCORPORATION BY REFERENCE
Available Information
We file
reports, proxy statements and other information with the SEC. The
SEC maintains a web site that contains reports, proxy and
information statements and other information about issuers, such as
us, who file electronically with the SEC. The address of that
website is http://www.sec.gov.
Our web
site address is www.aehr.com. The information on our web site,
however, is not, and should not be deemed to be, a part of this
prospectus.
This
prospectus and any prospectus supplement are part of a registration
statement that we filed with the SEC and do not contain all of the
information in the registration statement. The full registration
statement may be obtained from the SEC or us, as provided below.
Forms of the indenture and other documents establishing the terms
of the offered securities are or may be filed as exhibits to the
registration statement or documents incorporated by reference in
the registration statement. Statements in this prospectus or any
prospectus supplement about these documents are summaries and each
statement is qualified in all respects by reference to the document
to which it refers. You should refer to the actual documents for a
more complete description of the relevant matters. You may inspect
a copy of the registration statement through the SEC’s
website, as provided above.
Incorporation by Reference
The
SEC’s rules allow us to “incorporate by
reference” information into this prospectus, which means that
we can disclose important information to you by referring you to
another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus,
and subsequent information that we file with the SEC will
automatically update and supersede that information. Any statement
contained in this prospectus or a previously filed document
incorporated by reference will be deemed to be modified or
superseded for purposes of this prospectus to the extent that a
statement contained in this prospectus or a subsequently filed
document incorporated by reference modifies or replaces that
statement.
This
prospectus and any accompanying prospectus supplement incorporate
by reference the documents set forth below that have previously
been filed with the SEC:
●
Our Annual Report
on Form 10-K for the year ended May 31, 2021, filed with the SEC on
August 27, 2021.
●
The description of
our Common Stock contained in Exhibit 4.3 to our Annual Report on
Form 10-K filed with the SEC on August 27, 2021 and any amendment
or report filed with the SEC for the purpose of updating the
description.
All
reports and other documents we subsequently file pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, as amended, which we refer to as the “Exchange
Act” in this prospectus, prior to the termination of this
offering, including all such documents we may file with the SEC
after the date of the initial registration statement and prior to
the effectiveness of the registration statement, but excluding any
information furnished to, rather than filed with, the SEC, will
also be incorporated by reference into this prospectus and deemed
to be part of this prospectus from the date of the filing of such
reports and documents.
You may
request a free copy of any of the documents incorporated by
reference in this prospectus by writing or telephoning us at the
following address:
AEHR
TEST SYSTEMS
400
KATO TERRACE
FREMONT,
CALIFORNIA 94539
(510)
623-9400
Exhibits to the
filings will not be sent, however, unless those exhibits have
specifically been incorporated by reference in this prospectus or
any accompanying prospectus supplement.
Aehr
Test Systems develops and manufactures burn-in and test equipment
for the semiconductor industry.
We filed our certificate of incorporation with
the Secretary of State of California on May 25, 1977. Our principal
executive offices are located at 400 Kato Terrace, Fremont,
California 94539 and our telephone number is (510) 623-9400.
Our website address is www.aehr.com.
The information on, or that can be accessed through, our website is
not part of this prospectus. We have included our website address
as an inactive textual reference only.
Investment in any
securities offered pursuant to this prospectus and the applicable
prospectus supplement involves risks. You should carefully consider
the risk factors incorporated by reference to our most recent
Annual Report on Form 10-K and any subsequent Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K, and all other information
contained or incorporated by reference into this prospectus, as
updated by our subsequent filings under the Exchange Act, and the
risk factors and other information contained in the applicable
prospectus supplement and any applicable free writing prospectus
before acquiring any of such securities. The occurrence of any of
these risks might cause you to lose all or part of your investment
in the offered securities.
We
intend to use the net proceeds from the sale of the securities as
set forth in the applicable prospectus supplement.
DESCRIPTION OF CAPITAL
STOCK
The
following description of our capital stock is not complete and may
not contain all the information you should consider before
investing in our capital stock. This description is summarized
from, and qualified in its entirety by reference to, our restated
articles of incorporation, which have been publicly filed with the
SEC, and to the applicable provisions of California law. See
“Where You Can Find More Information; Incorporation by
Reference.”
Our
authorized capital stock consists of:
●
75,000,000 shares
of common stock, $0.01 par value; and
●
10,000,000 shares
of preferred stock, $0.01 par value.
Common Stock
Outstanding Shares
As
of May 31, 2021, there were 23,725,228 shares of common stock
outstanding, held of record by 122 stockholders. Our board of
directors is authorized, without stockholder approval, to issue
additional shares of our capital stock.
Dividend Rights
Subject
to preferences that may be applicable to any then outstanding
convertible preferred stock, holders of our common stock are
entitled to receive dividends, if any, as may be declared from time
to time by our board of directors out of legally available funds.
We have never declared or paid cash dividends on any of our capital
stock and currently do not anticipate paying any cash dividends
after this offering or in the foreseeable future.
Voting Rights
There
are 75,000,000 shares of common stock authorized for issuance. Each
holder of our common stock is entitled to one vote for each share
on all matters submitted to a vote of stockholders. Pursuant to our
restated articles of incorporation and amended and restated bylaws,
corporate actions can generally be taken by a majority of our board
and/or stockholders holding a majority of our outstanding shares.
Additionally, our stockholders have cumulative voting rights in the
election of directors.
Right to Receive Liquidation Distributions
In
the event of our liquidation, dissolution or winding up, holders of
our common stock are entitled to share ratably in the net assets
legally available for distribution to stockholders after the
payment of all of our debts and other liabilities and the
satisfaction of any liquidation preference granted to the holders
of any then outstanding shares of preferred stock.
Rights and Preferences
Holders
of our common stock have no preemptive, conversion, subscription or
other rights, and there are no redemption or sinking fund
provisions applicable to our common stock. The rights, preferences
and privileges of the holders of our common stock are subject to,
and may be adversely affected by, the rights of the holders of
shares of any series of our preferred stock that we may designate
in the future.
Fully Paid and Nonassessable
All
of our outstanding shares of common stock are, and the shares of
common stock to be issued pursuant to this offering, when paid for,
will be fully paid and nonassessable.
The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A. Our shares of common stock are issued in
uncertificated form only, subject to limited
circumstances.
Preferred Stock
Our
board of directors has the authority, without further action by our
stockholders, to issue up to 10,000,000 shares of preferred stock
in one or more series and to fix the rights, preferences,
privileges and restrictions thereof. These rights, preferences and
privileges could include dividend rights, conversion rights, voting
rights, terms of redemption, liquidation preferences, sinking fund
terms and the number of shares constituting any series or the
designation of such series, any or all of which may be greater than
the rights of common stock. The issuance of preferred stock by us
could adversely affect the voting power of holders of common stock
and the likelihood that such holders will receive dividend payments
and payments upon liquidation. In addition, the issuance of
preferred stock could have the effect of delaying, deferring or
preventing a change of control of our company or other corporate
action. No shares of preferred stock are outstanding, and we have
no present plan to issue any shares of preferred
stock.
Stock Options
As
of May 31, 2021 there were 2,766,186 shares of our common stock
issuable upon exercise of outstanding stock options, at a
weighted-average exercise prices of $2.16 per share.
Restricted Stock Options
As
of May 31, 2021, there were 132,076 shares of our common stock
issuable upon vesting of outstanding restricted stock
units.
DESCRIPTION OF DEBT
SECURITIES
The
following description, together with the additional information we
include in any applicable prospectus supplement or free writing
prospectus, summarizes certain general terms and provisions of the
debt securities that we may offer under this prospectus. When we
offer to sell a particular series of debt securities, we will
describe the specific terms of the series in a supplement to this
prospectus. We will also indicate in the supplement to what extent
the general terms and provisions described in this prospectus apply
to a particular series of debt securities.
We may
issue debt securities either separately, or together with, or upon
the conversion or exercise of or in exchange for, other securities
described in this prospectus. Debt securities may be our senior,
senior subordinated or subordinated obligations and, unless
otherwise specified in a supplement to this prospectus, the debt
securities will be our direct, unsecured obligations and may be
issued in one or more series.
The
debt securities will be issued under an indenture between us and a
trustee. We have summarized select portions of the indenture below.
The summary is not complete. The form of the indenture has been
filed as an exhibit to the registration statement and you should
read the indenture for provisions that may be important to you. In
the summary below, we have included references to the section
numbers of the indenture so that you can easily locate these
provisions. Capitalized terms used in the summary and not defined
herein have the meanings specified in the indenture.
As used
in this section only, “AEHR,” “Aehr Test,”
“we,” “our” or “us” refer to
AEHR Test Systems, excluding our subsidiaries, unless expressly
stated or the context otherwise requires.
General
The
terms of each series of debt securities will be established by or
pursuant to a resolution of our board of directors and set forth or
determined in the manner provided in a resolution of our board of
directors, in an officer’s certificate or by a supplemental
indenture. (Section 2.2) The particular terms of each series of
debt securities will be described in a prospectus supplement
relating to such series (including any pricing supplement or term
sheet).
We can
issue an unlimited amount of debt securities under the indenture
that may be in one or more series with the same or various
maturities, at par, at a premium, or at a discount. (Section 2.1)
We will set forth in a prospectus supplement (including any pricing
supplement or term sheet) relating to any series of debt securities
being offered, the aggregate principal amount and the following
terms of the debt securities, if applicable:
●
the title and
ranking of the debt securities (including the terms of any
subordination provisions);
●
the price or prices
(expressed as a percentage of the principal amount) at which we
will sell the debt securities;
●
any limit on the
aggregate principal amount of the debt securities;
●
the date or dates
on which the principal of the securities of the series is
payable;
●
the rate or rates
(which may be fixed or variable) per annum or the method used to
determine the rate or rates (including any commodity, commodity
index, stock exchange index or financial index) at which the debt
securities will bear interest, the date or dates from which
interest will accrue, the date or dates on which interest will
commence and be payable and any regular record date for the
interest payable on any interest payment date;
●
the place or places
where principal of, and interest, if any, on the debt securities
will be payable (and the method of such payment), where the
securities of such series may be surrendered for registration of
transfer or exchange, and where notices and demands to us in
respect of the debt securities may be delivered;
●
the period or
periods within which, the price or prices at which and the terms
and conditions upon which we may redeem the debt
securities;
●
any obligation we
have to redeem or purchase the debt securities pursuant to any
sinking fund or analogous provisions or at the option of a holder
of debt securities and the period or periods within which, the
price or prices at which and in the terms
and
conditions upon which securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such
obligation;
●
the dates on which
and the price or prices at which we will repurchase debt securities
at the option of the holders of debt securities and other detailed
terms and provisions of these repurchase obligations;
●
the denominations
in which the debt securities will be issued, if other than
denominations of $1,000 and any integral multiple
thereof;
●
whether the debt
securities will be issued in the form of certificated debt
securities or global debt securities;
●
the portion of
principal amount of the debt securities payable upon declaration of
acceleration of the maturity date, if other than the principal
amount;
●
the currency of
denomination of the debt securities, which may be United States
Dollars or any foreign currency, and if such currency of
denomination is a composite currency, the agency or organization,
if any, responsible for overseeing such composite
currency;
●
the designation of
the currency, currencies or currency units in which payment of
principal of, premium and interest on the debt securities will be
made;
●
if payments of
principal of, premium or interest on the debt securities will be
made in one or more currencies or currency units other than that or
those in which the debt securities are denominated, the manner in
which the exchange rate with respect to these payments will be
determined;
●
the manner in which
the amounts of payment of principal of, premium, if any, or
interest on the debt securities will be determined, if these
amounts may be determined by reference to an index based on a
currency or currencies or by reference to a commodity, commodity
index, stock exchange index or financial index;
●
any provisions
relating to any security provided for the debt
securities;
●
any addition to,
deletion of or change in the Events of Default described in this
prospectus or in the indenture with respect to the debt securities
and any change in the acceleration provisions described in this
prospectus or in the indenture with respect to the debt
securities;
●
any addition to,
deletion of or change in the covenants described in this prospectus
or in the indenture with respect to the debt
securities;
●
any depositaries,
interest rate calculation agents, exchange rate calculation agents
or other agents with respect to the debt securities;
●
the provisions, if
any, relating to conversion or exchange of any debt securities of
such series, including if applicable, the conversion or exchange
price and period, provisions as to whether conversion or exchange
will be mandatory, the events requiring an adjustment of the
conversion or exchange price and provisions affecting conversion or
exchange;
●
any other terms of
the debt securities, which may supplement, modify or delete any
provision of the indenture as it applies to that series, including
any terms that may be required under applicable law or regulations
or advisable in connection with the marketing of the securities;
and
●
whether any of our
direct or indirect subsidiaries will guarantee the debt securities
of that series, including the terms of subordination, if any, of
such guarantees. (Section 2.2)
We may
issue debt securities that provide for an amount less than their
stated principal amount to be due and payable upon declaration of
acceleration of their maturity pursuant to the terms of the
indenture. We will provide you with information on the
federal
income
tax considerations and other special considerations applicable to
any of these debt securities in the applicable prospectus
supplement.
If we
denominate the purchase price of any of the debt securities in a
foreign currency or currencies or a foreign currency unit or units,
or if the principal of and any premium and interest on any series
of debt securities is payable in a foreign currency or currencies
or a foreign currency unit or units, we will provide you with
information on the restrictions, elections, general tax
considerations, specific terms and other information with respect
to that issue of debt securities and such foreign currency or
currencies or foreign currency unit or units in the applicable
prospectus supplement.
Transfer and Exchange
Each
debt security will be represented by either one or more global
securities registered in the name of The Depository Trust Company,
or the Depositary, or a nominee of the Depositary (we will refer to
any debt security represented by a global debt security as a
“book-entry debt security”), or a certificate issued in
definitive registered form (we will refer to any debt security
represented by a certificated security as a “certificated
debt security”) as set forth in the applicable prospectus
supplement. Except as set forth under the heading “Global
Debt Securities and Book-Entry System” below, book-entry debt
securities will not be issuable in certificated form.
Certificated Debt
Securities. You may transfer or exchange certificated debt
securities at any office we maintain for this purpose in accordance
with the terms of the indenture. (Section 2.4) No service charge
will be made for any transfer or exchange of certificated debt
securities, but we may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection with a
transfer or exchange. (Section 2.7)
You may
effect the transfer of certificated debt securities and the right
to receive the principal of, premium and interest on certificated
debt securities only by surrendering the certificate representing
those certificated debt securities and either reissuance by us or
the trustee of the certificate to the new holder or the issuance by
us or the trustee of a new certificate to the new
holder.
Global
Debt Securities and Book-Entry System. Each global debt security
representing book-entry debt securities will be deposited with, or
on behalf of, the Depositary, and registered in the name of the
Depositary or a nominee of the Depositary. Please see “Global
Securities.”
Covenants
We will
set forth in the applicable prospectus supplement any restrictive
covenants applicable to any issue of debt securities. (Article
IV)
No Protection in the Event of a Change of Control
Unless
we state otherwise in the applicable prospectus supplement, the
debt securities will not contain any provisions which may afford
holders of the debt securities protection in the event we have a
change in control or in the event of a highly leveraged transaction
(whether or not such transaction results in a change in control)
which could adversely affect holders of debt
securities.
Consolidation, Merger and Sale of Assets
We may
not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all of our properties and assets to any
person (a “successor person”) unless:
●
we are the
surviving entity or the successor person (if other than AEHR) is a
corporation, partnership, trust or other entity organized and
validly existing under the laws and expressly assumes our
obligations on the debt securities and under the indenture;
and
●
immediately after
giving effect to the transaction, no Default or Event of Default,
shall have occurred and be continuing.
Notwithstanding the
above, any of our subsidiaries may consolidate with, merge into or
transfer all or part of its properties to us. (Section
5.1)
“Event of
Default” means with respect to any series of debt securities,
any of the following:
●
default in the
payment of any interest upon any debt security of that series when
it becomes due and payable, and continuance of such default for a
period of 30 days (unless the entire amount of the payment is
deposited by us with the trustee or with a paying agent prior to
the expiration of the 30-day period);
●
default in the
payment of principal of any security of that series at its
maturity;
●
default in the
performance or breach of any other covenant or warranty by us in
the indenture (other than a covenant or warranty that has been
included in the indenture solely for the benefit of a series of
debt securities other than that series), which default continues
uncured for a period of 60 days after we receive written notice
from the trustee or AEHR and the trustee receive written notice
from the holders of not less than 25% in principal amount of the
outstanding debt securities of that series as provided in the
indenture;
●
certain voluntary
or involuntary events of bankruptcy, insolvency or reorganization
of AEHR;
●
any other Event of
Default provided with respect to debt securities of that series
that is described in the applicable prospectus supplement. (Section
6.1)
No
Event of Default with respect to a particular series of debt
securities (except as to certain events of bankruptcy, insolvency
or reorganization) necessarily constitutes an Event of Default with
respect to any other series of debt securities. (Section 6.1) The
occurrence of certain Events of Default or an acceleration under
the indenture may constitute an event of default under certain
indebtedness of ours or our subsidiaries outstanding from time to
time.
We will
provide the trustee written notice of any Default or Event of
Default within 30 days of becoming aware of the occurrence of such
Default or Event of Default, which notice will describe in
reasonable detail the status of such Default or Event of Default
and what action we are taking or propose to take in respect
thereof. (Section 6.1)
If an
Event of Default with respect to debt securities of any series at
the time outstanding occurs and is continuing, then the trustee or
the holders of not less than 25% in principal amount of the
outstanding debt securities of that series may, by a notice in
writing to us (and to the trustee if given by the holders), declare
to be due and payable immediately the principal of (or, if the debt
securities of that series are discount securities, that portion of
the principal amount as may be specified in the terms of that
series) and accrued and unpaid interest, if any, on all debt
securities of that series. In the case of an Event of Default
resulting from certain events of bankruptcy, insolvency or
reorganization, the principal (or such specified amount) of and
accrued and unpaid interest, if any, on all outstanding debt
securities will become and be immediately due and payable without
any declaration or other act on the part of the trustee or any
holder of outstanding debt securities. At any time after a
declaration of acceleration with respect to debt securities of any
series has been made, but before a judgment or decree for payment
of the money due has been obtained by the trustee, the holders of a
majority in principal amount of the outstanding debt securities of
that series may rescind and annul the acceleration if all Events of
Default, other than the non-payment of accelerated principal and
interest, if any, with respect to debt securities of that series,
have been cured or waived as provided in the indenture. (Section
6.2) We refer you to the prospectus supplement relating to any
series of debt securities that are discount securities for the
particular provisions relating to acceleration of a portion of the
principal amount of such discount securities upon the occurrence of
an Event of Default.
The
indenture provides that the trustee may refuse to perform any duty
or exercise any of its rights or powers under the indenture unless
the trustee receives indemnity satisfactory to it against any cost,
liability or expense which might be incurred by it in performing
such duty or exercising such right or power. (Section 7.1(e))
Subject to certain rights of the trustee, the holders of a majority
in principal amount of the outstanding debt securities of any
series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the trustee
or exercising any trust or power conferred on the trustee with
respect to the debt securities of that series. (Section
6.12)
No
holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to
the indenture or for the appointment of a receiver or trustee, or
for any remedy under the indenture, unless:
●
that holder has
previously given to the trustee written notice of a continuing
Event of Default with respect to debt securities of that series;
and
●
the holders of not
less than 25% in principal amount of the outstanding debt
securities of that series have made written request, and offered
indemnity or security satisfactory to the trustee, to the trustee
to institute the proceeding as trustee, and the trustee has not
received from the holders of not less than a majority in principal
amount of the outstanding debt securities of that series a
direction inconsistent with that request and has failed to
institute the proceeding within 60 days. (Section 6.7)
Notwithstanding any
other provision in the indenture, the holder of any debt security
will have an absolute and unconditional right to receive payment of
the principal of, premium and any interest on that debt security on
or after the due dates expressed in that debt security and to
institute suit for the enforcement of payment. (Section
6.8)
The
indenture requires us, within 120 days after the end of our fiscal
year, to furnish to the trustee a statement as to compliance with
the indenture. (Section 4.3) If a Default or Event of Default
occurs and is continuing with respect to the securities of any
series and if it is known to a responsible officer of the trustee,
the trustee shall mail to each Securityholder of the securities of
that series notice of a Default or Event of Default within 90 days
after it occurs or, if later, after a responsible officer of the
trustee has knowledge of such Default or Event of Default. The
indenture provides that the trustee may withhold notice to the
holders of debt securities of any series of any Default or Event of
Default (except in payment on any debt securities of that series)
with respect to debt securities of that series if the trustee
determines in good faith that withholding notice is in the interest
of the holders of those debt securities. (Section 7.5)
Modification and Waiver
We and
the trustee may modify, amend or supplement the indenture or the
debt securities of any series without the consent of any holder of
any debt security:
●
to cure any
ambiguity, defect or inconsistency;
●
to comply with
covenants in the indenture described above under the heading
“Consolidation, Merger and Sale of
Assets”;
●
to provide for
uncertificated securities in addition to or in place of
certificated securities;
●
to add guarantees
with respect to debt securities of any series or secure debt
securities of any series;
●
to surrender any of
our rights or powers under the indenture;
●
to add covenants or
events of default for the benefit of the holders of debt securities
of any series;
●
to comply with the
applicable procedures of the applicable depositary;
●
to make any change
that does not adversely affect the rights of any holder of debt
securities;
●
to provide for the
issuance of and establish the form and terms and conditions of debt
securities of any series as permitted by the
indenture;
●
to effect the
appointment of a successor trustee with respect to the debt
securities of any series and to add to or change any of the
provisions of the indenture to provide for or facilitate
administration by more than one trustee; or
●
to comply with
requirements of the SEC in order to effect or maintain the
qualification of the indenture under the Trust Indenture Act.
(Section 9.1)
We may
also modify and amend the indenture with the consent of the holders
of at least a majority in principal amount of the outstanding debt
securities of each series affected by the modifications or
amendments. We may not make any modification or amendment without
the consent of the holders of each affected debt security then
outstanding if that amendment will:
●
reduce the amount
of debt securities whose holders must consent to an amendment,
supplement or waiver;
●
reduce the rate of
or extend the time for payment of interest (including default
interest) on any debt security;
●
reduce the
principal of or premium on or change the fixed maturity of any debt
security or reduce the amount of, or postpone the date fixed for,
the payment of any sinking fund or analogous obligation with
respect to any series of debt securities;
●
reduce the
principal amount of discount securities payable upon acceleration
of maturity;
●
waive a default in
the payment of the principal of, premium or interest on any debt
security (except a rescission of acceleration of the debt
securities of any series by the holders of at least a majority in
aggregate principal amount of the then outstanding debt securities
of that series and a waiver of the payment default that resulted
from such acceleration);
●
make the principal
of or premium or interest on any debt security payable in currency
other than that stated in the debt security;
●
make any change to
certain provisions of the indenture relating to, among other
things, the right of holders of debt securities to receive payment
of the principal of, premium and interest on those debt securities
and to institute suit for the enforcement of any such payment and
to waivers or amendments; or
●
waive a redemption
payment with respect to any debt security. (Section
9.3)
Except
for certain specified provisions, the holders of at least a
majority in principal amount of the outstanding debt securities of
any series may on behalf of the holders of all debt securities of
that series waive our compliance with provisions of the indenture.
(Section 9.2) The holders of a majority in principal amount of the
outstanding debt securities of any series may on behalf of the
holders of all the debt securities of such series waive any past
default under the indenture with respect to that series and its
consequences, except a default in the payment of the principal of,
premium or any interest on any debt security of that series;
provided, however, that the holders of a majority in principal
amount of the outstanding debt securities of any series may rescind
an acceleration and its consequences, including any related payment
default that resulted from the acceleration. (Section
6.13)
Defeasance of Debt Securities and Certain Covenants in Certain
Circumstances
Legal Defeasance. The indenture
provides that, unless otherwise provided by the terms of the
applicable series of debt securities, we may be discharged from any
and all obligations in respect of the debt securities of any series
(subject to certain exceptions). We will be so discharged upon the
irrevocable deposit with the trustee, in trust, of money and/or
U.S. government obligations or, in the case of debt securities
denominated in a single currency other than U.S. Dollars,
government obligations of the government that issued or caused to
be issued such currency, that, through the payment of interest and
principal in accordance with their terms, will provide money or
U.S. government obligations in an amount sufficient in the opinion
of a nationally recognized firm of independent public accountants
or investment bank to pay and discharge each installment of
principal, premium and interest on and any mandatory sinking fund
payments in respect of the debt securities of that series on the
stated maturity of those payments in accordance with the terms of
the indenture and those debt securities.
This
discharge may occur only if, among other things, we have delivered
to the trustee an opinion of counsel stating that we have received
from, or there has been published by, the United States Internal
Revenue Service a ruling or, since the date of execution of the
indenture, there has been a change in the applicable United States
federal income tax law, in either case to the effect that, and
based thereon such opinion shall confirm that, the holders of the
debt securities of that series will not recognize income, gain or
loss for United States federal income tax purposes as a result of
the deposit, defeasance and discharge and will be subject to United
States federal income tax on the same amounts and in the same
manner and at the same times as would have been the case if the
deposit, defeasance and discharge had not occurred. (Section
8.3)
Defeasance of Certain Covenants. The
indenture provides that, unless otherwise provided by the terms of
the applicable series of debt securities, upon compliance with
certain conditions:
●
we may omit to
comply with the covenant described under the heading
“Consolidation, Merger and Sale of Assets” and certain
other covenants set forth in the indenture, as well as any
additional covenants which may be set forth in the applicable
prospectus supplement; and
●
any omission to
comply with those covenants will not constitute a Default or an
Event of Default with respect to the debt securities of that series
(“covenant defeasance”).
The
conditions include:
●
depositing with the
trustee money and/or U.S. government obligations or, in the case of
debt securities denominated in a single currency other than U.S.
Dollars, government obligations of the government that issued or
caused to be issued such currency, that, through the payment of
interest and principal in accordance with their terms, will provide
money in an amount sufficient in the opinion of a nationally
recognized firm of independent public accountants or investment
bank to pay and discharge each installment of principal of, premium
and interest on and any mandatory sinking fund payments in respect
of the debt securities of that series on the stated maturity of
those payments in accordance with the terms of the indenture and
those debt securities; and
●
delivering to the
trustee an opinion of counsel to the effect that the holders of the
debt securities of that series will not recognize income, gain or
loss for United States federal income tax purposes as a result of
the deposit and related covenant defeasance and will be subject to
United States federal income tax on the same amounts and in the
same manner and at the same times as would have been the case if
the deposit and related covenant defeasance had not occurred.
(Section 8.4)
No Personal Liability of Directors, Officers, Employees or
Securityholders
None of
our past, present or future directors, officers, employees or
securityholders, as such, will have any liability for any of our
obligations under the debt securities or the indenture or for any
claim based on, or in respect or by reason of, such obligations or
their creation. By accepting a debt security, each holder waives
and releases all such liability. This waiver and release is part of
the consideration for the issue of the debt securities. However,
this waiver and release may not be effective to waive liabilities
under U.S. federal securities laws, and it is the view of the SEC
that such a waiver is against public policy.
Governing Law
The
indenture and the debt securities, including any claim or
controversy arising out of or relating to the indenture or the
securities, will be governed by the laws of the State of New
York.
The
indenture will provide that we, the trustee and the holders of the
debt securities (by their acceptance of the debt securities)
irrevocably waive, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding
arising out of or relating to the indenture, the debt securities or
the transactions contemplated thereby.
The
indenture will provide that any legal suit, action or proceeding
arising out of or based upon the indenture or the transactions
contemplated thereby may be instituted in the federal courts of the
United States of America located in the City of New York or the
courts of the State of New York in each case located in the City of
New York, and we, the trustee and the holder of the debt securities
(by their acceptance of the debt securities) irrevocably submit to
the non-exclusive jurisdiction of such courts in any such suit,
action or proceeding. The indenture will further provide that
service of any process, summons, notice or document by mail (to the
extent allowed under any applicable statute or rule of court) to
such party’s address set forth in the indenture will be
effective service of process for any suit, action or other
proceeding brought in any such court. The indenture will further
provide that we, the trustee and the holders of the debt securities
(by their acceptance of the debt securities) irrevocably and
unconditionally waive any objection to the laying of venue of any
suit, action or other proceeding in the courts specified above and
irrevocably and unconditionally waive and agree not to plead or
claim any such suit, action or other proceeding has been brought in
an inconvenient forum. (Section 10.10)
DESCRIPTION OF DEPOSITARY SHARES
We may,
at our option, elect to offer depositary shares rather than full
shares of preferred stock. Each depositary share will represent
ownership of and entitlement to all rights and preferences of a
fraction of a share of preferred stock of a specified series
(including dividend, voting, redemption and liquidation rights).
The applicable fraction will be specified in a prospectus
supplement. The shares of preferred stock represented by the
depositary shares will be deposited with a depositary named in the
applicable prospectus supplement, under a deposit agreement among
us, the depositary and the holders of the certificates evidencing
depositary shares, or depositary receipts. Depositary receipts will
be delivered to those persons purchasing depositary shares in the
offering. The depositary will be the transfer agent, registrar and
dividend disbursing agent for the depositary shares. Holders of
depositary receipts agree to be bound by the deposit agreement,
which requires holders to take certain actions such as filing proof
of residence and paying certain charges.
The
summary of the terms of the depositary shares contained in this
prospectus does not purport to be complete and is subject to, and
qualified in its entirety by, the provisions of the deposit
agreement and our articles of incorporation and the certificate of
designation that are, or will be, filed with the SEC for the
applicable series of preferred stock.
Dividends
The
depositary will distribute all cash dividends or other cash
distributions received in respect of the series of preferred stock
represented by the depositary shares to the record holders of
depositary receipts in proportion to the number of depositary
shares owned by such holders on the relevant record date, which
will be the same date as the record date fixed by us for the
applicable series of preferred stock. The depositary, however, will
distribute only such amount as can be distributed without
attributing to any depositary share a fraction of one cent, and any
balance not so distributed will be added to and treated as part of
the next sum received by the depositary for distribution to record
holders of depositary receipts then outstanding.
In the
event of a distribution other than in cash, the depositary will
distribute property received by it to the record holders of
depositary receipts entitled thereto, in proportion, as nearly as
may be practicable, to the number of depositary shares owned by
such holders on the relevant record date, unless the depositary
determines (after consultation with us) that it is not feasible to
make such distribution, in which case the depositary may (with our
approval) adopt any other method for such distribution as it deems
equitable and appropriate, including the sale of such property (at
such place or places and upon such terms as it may deem equitable
and appropriate) and distribution of the net proceeds from such
sale to such holders.
Liquidation Preference
In the
event of the liquidation, dissolution or winding up of the affairs
of AEHR, whether voluntary or involuntary, the holders of each
depositary share will be entitled to the fraction of the
liquidation preference accorded each share of the applicable series
of preferred stock as set forth in the applicable prospectus
supplement.
Redemption
If the
series of preferred stock represented by the applicable series of
depositary shares is redeemable, such depositary shares will be
redeemed from the proceeds received by the depositary resulting
from the redemption, in whole or in part, of the preferred stock
held by the depositary. Whenever we redeem any preferred stock held
by the depositary, the depositary will redeem as of the same
redemption date the number of depositary shares representing the
shares of preferred stock so redeemed. The depositary will mail the
notice of redemption promptly upon receipt of such notice from us
and not less than 30 nor more than 60 days prior to the date fixed
for redemption of the preferred stock and the depositary shares to
the record holders of the depositary receipts.
Voting
Promptly upon
receipt of notice of any meeting at which the holders of the series
of preferred stock represented by the applicable series of
depositary shares are entitled to vote, the depositary will mail
the information contained in such notice of meeting to the record
holders of the depositary receipts as of the record date for such
meeting. Each such record holder of depositary receipts will be
entitled to instruct the depositary as to the exercise of the
voting rights pertaining to the number of shares of preferred stock
represented by such record holder’s depositary shares. The
depositary will endeavor, insofar as practicable, to vote such
preferred stock represented by such depositary shares in accordance
with such instructions, and we will agree to take all action which
may be deemed necessary by the depositary in order to enable the
depositary to do so. The depositary will abstain from voting any of
the preferred stock to the extent that it does not receive specific
instructions from the holders of depositary receipts.
Withdrawal of Preferred Stock
Upon
surrender of depositary receipts at the principal office of the
depositary and payment of any unpaid amount due the depositary, and
subject to the terms of the deposit agreement, the owner of the
depositary shares evidenced thereby is entitled to delivery of the
number of whole shares of preferred stock and all money and other
property, if any, represented by such depositary shares. Partial
shares of preferred stock will not be issued. If the depositary
receipts delivered by the holder evidence a number of depositary
shares in excess of the number of depositary shares representing
the number of whole shares of preferred stock to be withdrawn, the
depositary will deliver to such holder at the same time a new
depositary receipt evidencing such excess number of depositary
shares. Holders of preferred stock thus withdrawn will not
thereafter be entitled to deposit such shares under the deposit
agreement or to receive depositary receipts evidencing depositary
shares therefor.
Amendment and Termination of Deposit Agreement
The
form of depositary receipt evidencing the depositary shares and any
provision of the deposit agreement may at any time and from time to
time be amended by agreement between us and the depositary.
However, any amendment which materially and adversely alters the
rights of the holders (other than any change in fees) of depositary
shares will not be effective unless such amendment has been
approved by at least a majority of the depositary shares then
outstanding. No such amendment may impair the right, subject to the
terms of the deposit agreement, of any owner of any depositary
shares to surrender the depositary receipt evidencing such
depositary shares with instructions to the depositary to deliver to
the holder of the preferred stock and all money and other property,
if any, represented thereby, except in order to comply with
mandatory provisions of applicable law.
The
deposit agreement will be permitted to be terminated by us upon not
less than 30 days prior written notice to the applicable depositary
if a majority of each series of preferred stock affected by such
termination consents to such termination, whereupon such depositary
will be required to deliver or make available to each holder of
depositary receipts, upon surrender of the depositary receipts held
by such holder, such number of whole or fractional shares of
preferred stock as are represented by the depositary shares
evidenced by such depositary receipts together with any other
property held by such depositary with respect to such depositary
receipts. In addition, the deposit agreement will automatically
terminate if (a) all outstanding depositary shares thereunder shall
have been redeemed, (b) there shall have been a final distribution
in respect of the related preferred stock in connection with any
liquidation, dissolution or winding-up of AEHR and such
distribution shall have been distributed to the holders of
depositary receipts evidencing the depositary shares representing
such preferred stock or (c) each share of the related preferred
stock shall have been converted into stock of AEHR not so
represented by depositary shares.
Charges of Depositary
We will
pay all transfer and other taxes and governmental charges arising
solely from the existence of the depositary arrangements. We will
pay charges of the depositary in connection with the initial
deposit of the preferred stock and initial issuance of the
depositary shares, and redemption of the preferred stock and all
withdrawals of preferred stock by owners of depositary shares.
Holders of depositary receipts will pay transfer, income and other
taxes and governmental charges and certain other charges as are
provided in the deposit agreement to be for their accounts. In
certain circumstances, the depositary may refuse to transfer
depositary shares, may withhold dividends and distributions and
sell the depositary shares evidenced by such depositary receipt if
such charges are not paid. The applicable prospectus supplement
will include information with respect to fees and charges, if any,
in connection with the deposit or substitution of the underlying
securities, the receipt and distribution of dividends, the sale or
exercise of rights, the withdrawal of the underlying security, and
the transferring, splitting or grouping of receipts. The applicable
prospectus supplement will also include information with respect to
the right to collect the fees and charges, if any, against
dividends received and deposited securities.
Miscellaneous
The
depositary will forward to the holders of depositary receipts all
notices, reports and proxy soliciting material from us which are
delivered to the depositary and which we are required to furnish to
the holders of the preferred stock. In addition, the depositary
will make available for inspection by holders of depositary
receipts at the principal office of the depositary, and at such
other places as it may from time to time deem advisable, any
notices, reports and proxy soliciting material received from us
which are received by the depositary as the holder of preferred
stock. The applicable prospectus supplement will include
information about the rights, if any, of holders of receipts to
inspect the transfer books of the depositary and the list of
holders of receipts.
Neither
the depositary nor AEHR assumes any obligation or will be subject
to any liability under the deposit agreement to holders of
depositary receipts other than for its negligence or willful
misconduct. Neither the depositary nor AEHR will be liable if
it is prevented or
delayed by law or any circumstance beyond its control in performing
its obligations under the deposit agreement. The obligations of
AEHR and the depositary under the deposit agreement will be limited
to performance in good faith of their duties thereunder, and they
will not be obligated to prosecute or defend any legal proceeding
in respect of any depositary shares or preferred stock unless
satisfactory indemnity is furnished. AEHR and the depositary may
rely on written advice of counsel or accountants, on information
provided by holders of the depositary receipts or other persons
believed in good faith to be competent to give such information and
on documents believed to be genuine and to have been signed or
presented by the proper party or parties.
In the
event the depositary shall receive conflicting claims, requests or
instructions from any holders of depositary receipts, on the one
hand, and us, on the other hand, the depositary shall be entitled
to act on such claims, requests or instructions received from
us.
Resignation and Removal of Depositary
The
depositary may resign at any time by delivering to us notice of its
election to do so, and we may at any time remove the depositary,
any such resignation or removal to take effect upon the appointment
of a successor depositary and its acceptance of such appointment.
Such successor depositary must be appointed within 60 days after
delivery of the notice for resignation or removal and must be a
bank or trust company having its principal office in the United
States and having a combined capital and surplus of at least
$150,000,000.
We may
issue warrants for the purchase of shares of our common stock or
preferred stock or of debt securities. We may issue warrants
independently or together with other securities, and the warrants
may be attached to or separate from any offered securities. Each
series of warrants will be issued under a separate warrant
agreement to be entered into between us and the investors or a
warrant agent. The following summary of material provisions of the
warrants and warrant agreements are subject to, and qualified in
their entirety by reference to, all the provisions of the warrant
agreement and warrant certificate applicable to a particular series
of warrants. The terms of any warrants offered under a prospectus
supplement may differ from the terms described below. We urge you
to read the applicable prospectus supplement and any related free
writing prospectus, as well as the complete warrant agreements and
warrant certificates that contain the terms of the
warrants.
The
particular terms of any issue of warrants will be described in the
prospectus supplement relating to the issue. Those terms may
include:
●
the number of
shares of common stock or preferred stock purchasable upon the
exercise of warrants to purchase such shares and the price at which
such number of shares may be purchased upon such
exercise;
●
the designation,
stated value and terms (including, without limitation, liquidation,
dividend, conversion and voting rights) of the series of preferred
stock purchasable upon exercise of warrants to purchase preferred
stock;
●
the principal
amount of debt securities that may be purchased upon exercise of a
debt warrant and the exercise price for the warrants, which may be
payable in cash, securities or other property;
●
the date, if any,
on and after which the warrants and the related debt securities,
preferred stock or common stock will be separately
transferable;
●
the terms of any
rights to redeem or call the warrants;
●
the date on which
the right to exercise the warrants will commence and the date on
which the right will expire;
●
United States
Federal income tax consequences applicable to the warrants;
and
●
any additional
terms of the warrants, including terms, procedures, and limitations
relating to the exchange, exercise and settlement of the
warrants.
Holders
of equity warrants will not be entitled:
●
to vote, consent or
receive dividends;
●
receive notice as
shareholders with respect to any meeting of shareholders for the
election of our directors or any other matter; or
●
exercise any rights
as shareholders of AEHR.
Each
warrant will entitle its holder to purchase the principal amount of
debt securities or the number of shares of preferred stock or
common stock at the exercise price set forth in, or calculable as
set forth in, the applicable prospectus supplement. Unless we
otherwise specify in the applicable prospectus supplement, holders
of the warrants may exercise the warrants at any time up to the
specified time on the expiration date that we set forth in the
applicable prospectus supplement. After the close of business on
the expiration date, unexercised warrants will become
void.
A
holder of warrant certificates may exchange them for new warrant
certificates of different denominations, present them for
registration of transfer and exercise them at the corporate trust
office of the warrant agent or any other office indicated in the
applicable prospectus supplement. Until any warrants to purchase
debt securities are exercised, the holder of the warrants will not
have any rights of holders of the debt securities that can be
purchased upon exercise, including any rights to receive payments
of principal, premium or interest on the underlying debt securities
or to enforce covenants in the applicable indenture. Until any
warrants to purchase common stock or preferred stock are exercised,
the holders of the warrants will not have any rights of holders of
the underlying common stock or preferred stock, including any
rights to receive dividends or payments upon any liquidation,
dissolution or winding up on the common stock or preferred stock,
if any.
DESCRIPTION OF SUBSCRIPTION RIGHTS
We
may issue subscription rights to purchase our common stock,
preferred stock or debt securities. These subscription rights may
be offered independently or together with any other security
offered hereby and may or may not be transferable by the
stockholder receiving the subscription rights in such offering. In
connection with any offering of subscription rights, we may enter
into a standby arrangement with one or more underwriters or other
purchasers pursuant to which the underwriters or other purchasers
may be required to purchase any securities remaining unsubscribed
for after such offering.
The
prospectus supplement relating to any subscription rights we offer,
if any, will, to the extent applicable, include specific terms
relating to the offering, including some or all of the
following:
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the
price, if any, for the subscription rights;
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the
exercise price payable for our common stock, preferred stock or
debt securities upon the exercise of the
subscription
rights;
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the
number of subscription rights to be issued to each
stockholder;
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the
number and terms of our common stock, preferred stock or debt
securities which may be purchased per each
subscription
right;
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the
extent to which the subscription rights are
transferable;
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any
other terms of the subscription rights, including the terms,
procedures and limitations relating to the exchange
and
exercise of the subscription rights;
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the
date on which the right to exercise the subscription rights shall
commence, and the date on which the
subscription
rights shall expire;
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the
extent to which the subscription rights may include an
over-subscription privilege with respect to
unsubscribed
securities or an over-allotment privilege to the extent the
securities are fully subscribed; and
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if
applicable, the material terms of any standby underwriting or
purchase arrangement which may be entered
into by
AEHR in connection with the offering of subscription
rights.
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The
description in the applicable prospectus supplement of any
subscription rights we offer will not necessarily be complete and
will be qualified in its entirety by reference to the applicable
subscription rights certificate, which will be filed with the SEC
if we offer subscription rights. We urge you to read the applicable
subscription rights certificate and any applicable prospectus
supplement in their entirety.
We may
issue units consisting of any combination of the other types of
securities offered under this prospectus in one or more series. We
may evidence each series of units by unit certificates that we will
issue under a separate agreement. We may enter into unit agreements
with a unit agent. Each unit agent will be a bank or trust company
that we select. We will indicate the name and address of the unit
agent in the applicable prospectus supplement relating to a
particular series of units.
The
following description, together with the additional information
included in any applicable prospectus supplement, summarizes the
general features of the units that we may offer under this
prospectus. You should read any prospectus supplement and any free
writing prospectus that we may authorize to be provided to you
related to the series of units being offered, as well as the
complete unit agreements that contain the terms of the units.
Specific unit agreements will contain additional important terms
and provisions and we will file as an exhibit to the registration
statement of which this prospectus is a part, or will incorporate
by reference from another report that we file with the SEC, the
form of each unit agreement relating to units offered under this
prospectus.
If we
offer any units, certain terms of that series of units will be
described in the applicable prospectus supplement, including,
without limitation, the following, as applicable:
●
the title of the
series of units;
●
identification and
description of the separate constituent securities comprising the
units;
●
the price or prices
at which the units will be issued;
●
the date, if any,
on and after which the constituent securities comprising the units
will be separately transferable;
●
a discussion of
certain United States federal income tax considerations applicable
to the units; and
●
any other terms of
the units and their constituent securities.
Book-Entry, Delivery and Form
Unless
we indicate differently in any applicable prospectus supplement or
free writing prospectus, the securities initially will be issued in
book-entry form and represented by one or more global notes or
global securities, or, collectively, global securities. The global
securities will be deposited with, or on behalf of, The Depository
Trust Company, New York, New York, as depositary, or DTC, and
registered in the name of Cede & Co., the nominee of DTC.
Unless and until it is exchanged for individual certificates
evidencing securities under the limited circumstances described
below, a global security may not be transferred except as a whole
by the depositary to its nominee or by the nominee to the
depositary, or by the depositary or its nominee to a successor
depositary or to a nominee of the successor
depositary.
DTC has
advised us that it is:
●
a limited-purpose
trust company organized under the New York Banking
Law;
●
a “banking
organization” within the meaning of the New York Banking
Law;
●
a member of the
Federal Reserve System;
●
a “clearing
corporation” within the meaning of the New York Uniform
Commercial Code; and
●
a “clearing
agency” registered pursuant to the provisions of Section 17A
of the Exchange Act.
DTC
holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
participants’ accounts, thereby eliminating the need for
physical movement of securities certificates. “Direct
participants” in DTC include securities brokers and dealers,
including underwriters, banks, trust companies, clearing
corporations and other organizations. DTC is a wholly-owned
subsidiary of The Depository Trust & Clearing Corporation, or
DTCC. DTCC is the holding company for DTC, National Securities
Clearing Corporation and Fixed Income Clearing Corporation, all of
which are registered clearing agencies. DTCC is owned by the users
of its regulated subsidiaries. Access to the DTC system is also
available to others, which we sometimes refer to as indirect
participants, that clear through or maintain a custodial
relationship with a direct participant, either directly or
indirectly. The rules applicable to DTC and its participants are on
file with the SEC.
Purchases of
securities under the DTC system must be made by or through direct
participants, which will receive a credit for the securities on
DTC’s records. The ownership interest of the actual purchaser
of a security, which we sometimes refer to as a beneficial owner,
is in turn recorded on the direct and indirect participants’
records. Beneficial owners of securities will not receive written
confirmation from DTC of their purchases. However, beneficial
owners are expected to receive written confirmations providing
details of their transactions, as well as periodic statements of
their holdings, from the direct or indirect participants through
which they purchased securities. Transfers of ownership interests
in global securities are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners.
Beneficial owners will not receive certificates representing their
ownership interests in the global securities, except under the
limited circumstances described below.
To
facilitate subsequent transfers, all global securities deposited by
direct participants with DTC will be registered in the name of
DTC’s partnership nominee, Cede & Co., or such other name
as may be requested by an authorized representative of DTC. The
deposit of securities with DTC and their registration in the name
of Cede & Co. or such other nominee will not change the
beneficial ownership of the securities. DTC has no knowledge of the
actual beneficial owners of the securities. DTC’s records
reflect only the identity of the direct participants to whose
accounts the securities are credited, which may or may not be the
beneficial owners. The participants are responsible for keeping
account of their holdings on behalf of their
customers.
So long
as the securities are in book-entry form, you will receive payments
and may transfer securities only through the facilities of the
depositary and its direct and indirect participants. We will
maintain an office or agency in the location specified in the
prospectus supplement for the applicable securities, where notices
and demands in respect of the securities and the indenture may be
delivered to us and where certificated securities may be
surrendered for payment, registration of transfer or
exchange.
Conveyance of
notices and other communications by DTC to direct participants, by
direct participants to indirect participants and by direct
participants and indirect participants to beneficial owners will be
governed by arrangements among them, subject to any legal
requirements in effect from time to time.
Redemption notices
will be sent to DTC. If less than all of the securities of a
particular series are being redeemed, DTC’s practice is to
determine by lot the amount of the interest of each direct
participant in the securities of such series to be
redeemed.
Neither
DTC nor Cede & Co. (or such other DTC nominee) will consent or
vote with respect to the securities. Under its usual procedures,
DTC will mail an omnibus proxy to us as soon as possible after the
record date. The omnibus proxy assigns the consenting or voting
rights of Cede & Co. to those direct participants to whose
accounts the securities of such series are credited on the record
date, identified in a listing attached to the omnibus
proxy.
So long
as securities are in book-entry form, we will make payments on
those securities to the depositary or its nominee, as the
registered owner of such securities, by wire transfer of
immediately available funds. If securities are issued in definitive
certificated form under the limited circumstances described below
and unless if otherwise provided in the description of the
applicable securities herein or in the applicable prospectus
supplement, we will have the option of making payments by check
mailed to the addresses of the persons entitled to payment or by
wire transfer to bank accounts in the United States designated in
writing to the applicable trustee or other designated party at
least 15 days before the applicable payment date by the persons
entitled to payment, unless a shorter period is satisfactory to the
applicable trustee or other designated party.
Redemption
proceeds, distributions and dividend payments on the securities
will be made to Cede & Co., or such other nominee as may be
requested by an authorized representative of DTC. DTC’s
practice is to credit direct participants’ accounts upon
DTC’s receipt of funds and corresponding detail information
from us on the payment date in accordance with their respective
holdings shown on DTC records. Payments by participants to
beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the
account of customers in bearer form or registered in “street
name.” Those payments will be the responsibility of
participants and not of DTC or us, subject to any statutory or
regulatory requirements in effect from time to time. Payment of
redemption proceeds, distributions and dividend payments to Cede
& Co., or such other nominee as may be requested by an
authorized representative of DTC, is our responsibility,
disbursement of payments to direct participants is the
responsibility of DTC, and disbursement of payments to the
beneficial owners is the responsibility of direct and indirect
participants.
Except
under the limited circumstances described below, purchasers of
securities will not be entitled to have securities registered in
their names and will not receive physical delivery of securities.
Accordingly, each beneficial owner must rely on the procedures of
DTC and its participants to exercise any rights under the
securities and the indenture.
The
laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form.
Those laws may impair the ability to transfer or pledge beneficial
interests in securities.
DTC may
discontinue providing its services as securities depositary with
respect to the securities at any time by giving reasonable notice
to us. Under such circumstances, in the event that a successor
depositary is not obtained, securities certificates are required to
be printed and delivered.
As
noted above, beneficial owners of a particular series of securities
generally will not receive certificates representing their
ownership interests in those securities. However, if:
●
DTC notifies us
that it is unwilling or unable to continue as a depositary for the
global security or securities representing such series of
securities or if DTC ceases to be a clearing agency registered
under the Exchange Act at a time when it is required to be
registered and a successor depositary is not appointed within 90
days of the notification to us or of our becoming aware of
DTC’s ceasing to be so registered, as the case may
be;
●
we determine, in
our sole discretion, not to have such securities represented by one
or more global securities; or
●
an Event of Default
has occurred and is continuing with respect to such series of
securities,
we will
prepare and deliver certificates for such securities in exchange
for beneficial interests in the global securities. Any beneficial
interest in a global security that is exchangeable under the
circumstances described in the preceding sentence will be
exchangeable for securities in definitive certificated form
registered in the names that the depositary directs. It is expected
that these directions will be based upon
directions received by the depositary from its participants with
respect to ownership of beneficial interests in the global
securities.
Euroclear and Clearstream
If so
provided in the applicable prospectus supplement, you may hold
interests in a global security through Clearstream Banking S.A.,
which we refer to as “Clearstream,” or Euroclear Bank
S.A./N.V., as operator of the Euroclear System, which we refer to
as “Euroclear,” either directly if you are a
participant in Clearstream or Euroclear or indirectly through
organizations which are participants in Clearstream or Euroclear.
Clearstream and Euroclear will hold interests on behalf of their
respective participants through customers’ securities
accounts in the names of Clearstream and Euroclear, respectively,
on the books of their respective U.S. depositaries, which in turn
will hold such interests in customers’ securities accounts in
such depositaries’ names on DTC’s books.
Clearstream and
Euroclear are securities clearance systems in Europe. Clearstream
and Euroclear hold securities for their respective participating
organizations and facilitate the clearance and settlement of
securities transactions between those participants through
electronic book-entry changes in their accounts, thereby
eliminating the need for physical movement of
certificates.
Payments,
deliveries, transfers, exchanges, notices and other matters
relating to beneficial interests in global securities owned through
Euroclear or Clearstream must comply with the rules and procedures
of those systems. Transactions between participants in Euroclear or
Clearstream, on one hand, and other participants in DTC, on the
other hand, are also subject to DTC’s rules and
procedures.
Investors will be
able to make and receive through Euroclear and Clearstream
payments, deliveries, transfers and other transactions involving
any beneficial interests in global securities held through those
systems only on days when those systems are open for business.
Those systems may not be open for business on days when banks,
brokers and other institutions are open for business in the United
States.
Cross-market
transfers between participants in DTC, on the one hand, and
participants in Euroclear or Clearstream, on the other hand, will
be effected through DTC in accordance with the DTC’s rules on
behalf of Euroclear or Clearstream, as the case may be, by their
respective U.S. depositaries; however, such cross-market
transactions will require delivery of instructions to Euroclear or
Clearstream, as the case may be, by the counterparty in such system
in accordance with the rules and procedures and within the
established deadlines (European time) of such system. Euroclear or
Clearstream, as the case may be, will, if the transaction meets its
settlement requirements, deliver instructions to its U.S.
depositary to take action to effect final settlement on its behalf
by delivering or receiving interests in the global securities
through DTC, and making or receiving payment in accordance with
normal procedures for same-day fund settlement. Participants in
Euroclear or Clearstream may not deliver instructions directly to
their respective U.S. depositaries.
Due to
time zone differences, the securities accounts of a participant in
Euroclear or Clearstream purchasing an interest in a global
security from a direct participant in DTC will be credited, and any
such crediting will be reported to the relevant participant in
Euroclear or Clearstream, during the securities settlement
processing day (which must be a business day for Euroclear or
Clearstream) immediately following the settlement date of DTC. Cash
received in Euroclear or Clearstream as a result of sales of
interests in a global security by or through a participant in
Euroclear or Clearstream to a direct participant in DTC will be
received with value on the settlement date of DTC but will be
available in the relevant Euroclear or Clearstream cash account
only as of the business day for Euroclear or Clearstream following
DTC’s settlement date.
Other
The
information in this section of this prospectus concerning DTC,
Clearstream, Euroclear and their respective book-entry systems has
been obtained from sources that we believe to be reliable, but we
do not take responsibility for this information. This information
has been provided solely as a matter of convenience. The rules and
procedures of DTC, Clearstream and Euroclear are solely within the
control of those organizations and could change at any time.
Neither we nor the trustee nor any agent of ours or of the trustee
has any control over those entities and none of us takes any
responsibility for their activities. You are urged to contact DTC,
Clearstream and Euroclear or their respective participants directly
to discuss those matters. In addition, although we expect that DTC,
Clearstream and Euroclear will perform the foregoing procedures,
none of them is under any obligation to perform or continue to
perform such procedures and such procedures may be discontinued at
any time. Neither we nor any agent of ours will have any
responsibility for the performance or nonperformance by DTC,
Clearstream and Euroclear or their respective participants of these
or any other rules or procedures governing their respective
operations.
We may sell the securities from time to time pursuant to
underwritten public offerings, negotiated transactions, block
trades or a combination of these methods or through underwriters or
dealers, through agents and/or directly to one or more purchasers.
The securities may be distributed from time to time in one or more
transactions:
●
at a fixed price or
prices, which may be changed;
●
at market prices
prevailing at the time of sale;
●
at prices related
to such prevailing market prices; or
Each time that we sell securities covered by this prospectus, we
will provide a prospectus supplement or supplements that will
describe the method of distribution and set forth the terms and
conditions of the offering of such securities, including the
offering price of the securities and the proceeds to us, if
applicable.
Offers to purchase the securities being offered by this prospectus
may be solicited directly. Agents may also be designated to solicit
offers to purchase the securities from time to time. Any agent
involved in the offer or sale of our securities will be identified
in a prospectus supplement.
If a dealer is utilized in the sale of the securities being offered
by this prospectus, the securities will be sold to the dealer, as
principal. The dealer may then resell the securities to the public
at varying prices to be determined by the dealer at the time of
resale.
If an underwriter is utilized in the sale of the securities being
offered by this prospectus, an underwriting agreement will be
executed with the underwriter at the time of sale and the name of
any underwriter will be provided in the prospectus supplement that
the underwriter will use to make resales of the securities to the
public. In connection with the sale of the securities, we or the
purchasers of securities for whom the underwriter may act as agent,
may compensate the underwriter in the form of underwriting
discounts or commissions. The underwriter may sell the securities
to or through dealers, and those dealers may receive compensation
in the form of discounts, concessions or commissions from the
underwriters and/or commissions from the purchasers for which they
may act as agent. Unless otherwise indicated in a prospectus
supplement, an agent will be acting on a best efforts basis and a
dealer will purchase securities as a principal, and may then resell
the securities at varying prices to be determined by the
dealer.
Any compensation paid to underwriters, dealers or agents in
connection with the offering of the securities, and any discounts,
concessions or commissions allowed by underwriters to participating
dealers will be provided in the applicable prospectus supplement.
Underwriters, dealers and agents participating in the distribution
of the securities may be deemed to be underwriters within the
meaning of the Securities Act of 1933, as amended, and any
discounts and commissions received by them and any profit realized
by them on resale of the securities may be deemed to be
underwriting discounts and commissions. We may enter into
agreements to indemnify underwriters, dealers and agents against
civil liabilities, including liabilities under the Securities Act,
or to contribute to payments they may be required to make in
respect thereof and to reimburse those persons for certain
expenses.
Any common stock will
be listed on the Nasdaq Global Capital Market, but any
other securities may or may not be listed on
a national securities exchange. To facilitate the offering of
securities, certain persons participating in the offering may
engage in transactions that stabilize, maintain or otherwise affect
the price of the securities. This may include over-allotments or
short sales of the securities, which involve the sale by persons
participating in the offering of more securities than were sold to
them. In these circumstances, these persons would cover such
over-allotments or short positions by making purchases in the open
market or by exercising their over-allotment option, if any. In
addition, these persons may stabilize or maintain the price of the
securities by bidding for or purchasing securities in the open
market or by imposing penalty bids, whereby selling concessions
allowed to dealers participating in the offering may be reclaimed
if securities sold by them are repurchased in connection with
stabilization transactions. The effect of these transactions may be
to stabilize or maintain the market price of the securities at a
level above that which might otherwise prevail in the open market.
These transactions may be discontinued at any
time.
We may engage in at the market offerings into an existing trading
market in accordance with Rule 415(a)(4) under the Securities Act.
In addition, we may enter into derivative transactions with third
parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable
prospectus supplement so indicates, in connection with those
derivatives, the third parties may sell securities covered by this
prospectus and the applicable prospectus supplement, including in
short sale
transactions. If so, the third party may use securities pledged by
us or borrowed from us or others to settle those sales or to close
out any related open borrowings of stock, and may use securities
received from us in settlement of those derivatives to close out
any related open borrowings of stock. The third party in such sale
transactions will be an underwriter and, if not identified in this
prospectus, will be named in the applicable prospectus supplement
(or a post-effective amendment). In addition, we may otherwise loan
or pledge securities to a financial institution or other third
party that in turn may sell the securities short using this
prospectus and an applicable prospectus supplement. Such financial
institution or other third party may transfer its economic short
position to investors in our securities or in connection with a
concurrent offering of other securities.
The specific terms of any lock-up provisions in respect of any
given offering will be described in the applicable prospectus
supplement.
The underwriters, dealers and agents may engage in transactions
with us, or perform services for us, in the ordinary course of
business for which they receive compensation.
Latham
& Watkins LLP will pass upon certain legal matters relating to
the issuance and sale of the securities offered hereby on behalf of
AEHR Test Systems. Additional legal matters may be passed upon for
us or any underwriters, dealers or agents, by counsel that we will
name in the applicable prospectus supplement.
The
consolidated financial statements of AEHR Test Systems as of May
31, 2021 and 2020 and for each of the three years in the period
ended May 31, 2021 incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended May 31, 2021,
have been so incorporated in reliance on the report of BPM LLP, an
independent registered public accounting firm.
Such
consolidated financial statements are, and audited consolidated
financial statements to be included in subsequently filed documents
will be, incorporated by reference in reliance upon the reports of
BPM LLP relating to such consolidated financial statements to the
extent covered by consents filed with the Securities and Exchange
Commission, given on the authority of said firm as experts in
auditing and accounting.
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