2. STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Aug. 31, 2012

Stock-Based Compensation Tables

Compensation costs related to the Company’s stock-based compensation

	Three Months Ended
	August 31, (in Thousands)
	2012		2011
Stock-based compensation in the form of employee
stock options and ESPP shares, included in:
Cost of sales	$	13	$	19
Selling, general and administrative		119		93
Research and development		37		53
Total stock-based compensation	$	169	$	165

Assumptions for Options Valuation Model

	Three Months Ended
	August 31,
	2012			2011
Option Plan Shares
Expected Term (in years)		5			5
Volatility		0.90			0.80
Expected Dividend	$	0.00		$	0.00
Risk-free Interest Rates		0.75	%		1.57	%
Estimated Forfeiture Rate		0.25	%		0.25	%
Weighted Average Grant Date Fair Value	$	0.88		$	0.80

Stock option transactions

(in thousands, except per share data)				Outstanding Options
							Weighted
				Number				Average		Aggregate
	Available			of				Exercise		Intrinsic
	Shares			Shares				Price		Value
Balances, May 31, 2012		839			2,957			$	2.40	$	587
Options granted		(439	)		439			$	1.28
Options terminated		402			(402	)		$	4.48
Plan shares expired		(180	)
Options exercised		--			(101	)		$	0.67
Balances, August 31, 2012		622			2,893			$	2.00	$	340
Options fully vested and expected to
vest at August 31, 2012					2,836			$	2.00	$	333
Options exercisable at August 31, 2012					1,541			$	2.70	$	164

Options Outstanding

	(in thousands, except per share data)	Options Outstanding at August 31, 2012							Options Excercisable at August 31, 2012
Range of Exercise Prices			Number Outstanding Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price			Number Exercisable  Shares		Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Aggregate Intrinsic Value
	$0.59-$0.89			956		4.32	$	0.74			606		3.16	$	0.83
	$1.10-$2.52			1,633		4.55	$	1.57			631		2.96	$	1.83
	$3.00-$3.66			38		0.14	$	3.51			38		0.14	$	3.51
	$6.00-$9.30			152		0.71	$	8.17			152		0.71	$	8.17
	$9.94-$9.94			114		0.81	$	9.94			114		0.81	$	9.94
	$0.59-$9.94			2,893		4.07	$	2.00			1,541		2.59	$	2.70	$	164