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BALANCE SHEET INFORMATION

9 Months Ended

Feb. 28, 2025

4. BALANCE SHEET INFORMATION

Inventories

Inventories consisted of the following:

	February 28,		May 31,
(In thousands)	2025		2024
Raw materials and sub-assemblies	$	26,164	$	22,410
Work in process		12,018		13,593
Finished goods		4,147		1,467
	$	42,329	$	37,470

Property and equipment

Property and equipment, net consisted of the following:

	Useful life	February 28,			May 31,
(In thousands)	(in years)	2025			2024
Leasehold improvements	*	$	1,461		$	1,298
Machinery and equipment	3 - 5		3,844			4,180
Test equipment	4 - 5		2,604			1,928
Furniture and fixtures	2 - 5		205			175
Construction-in-process			4,155			638
			12,269			8,219
Less: accumulated depreciation			(5,241	)		(4,966	)
		$	7,028		$	3,253

* Lesser of estimated useful life or lease term.

Depreciation expense was $0.2 million and $0.6 million for the three and nine months ended February 28, 2025, respectively. Depreciation expense was $0.2 million and $0.5 million for the three and nine months ended February 29, 2024, respectively.

Product warranties

The Company provides for the estimated cost of product warranties at the time revenues are recognized on the products shipped. While the Company engages in extensive product quality programs and processes, including actively monitoring and evaluating the quality of its component suppliers, the Company’s warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from the Company’s estimates, revisions to the estimated warranty liability would be required. The standard warranty period is one year for systems and ninety days for parts and service.

The following is a summary of changes in the Company's liability for product warranties during the three and nine months ended February 28, 2025 and February 29, 2024:

	Three Months Ended						Nine Months Ended
	February 28,			February 29,			February 28,			February 29,
(In thousands)	2025			2024			2025			2024
Balance at the beginning of the period	$	358		$	221		$	234		$	267
Accruals for warranties issued during the period		158			117			466			344
Warranties acquired through business combination		-			-			144			-
Consumption of reserves		(184	)		(123	)		(512	)		(396	)
Balance at the end of the period	$	332		$	215		$	332		$	215

The accrued warranty balance is included in accrued expenses and other current liabilities on the accompanying Condensed Consolidated Balance Sheets.

Deferred revenue

Deferred revenue, short-term consisted of the following:

	February 28,		May 31,
(In thousands)	2025		2024
Customer deposits	$	605	$	1,248
Deferred revenue		239		97
	$	844	$	1,345