2. STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Feb. 28, 2013

Stock-Based Compensation Tables

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

The following table summarizes compensation costs related to the Company’s stock-based compensation for the three and nine months ended February 28, 2013 and February 29, 2012, respectively (in thousands):

	Three Months Ended				Nine Months Ended
	February 28,		February 29,		February 28,		February 29,
	2013		2012		2013		2012
Stock-based compensation in the form of employee stock options and ESPP shares, included in:
Cost of sales	$	9	$	25	$	26	$	71
Selling, general and administrative		159		111		315		299
Research and development		33		46		86		149
Total stock-based compensation	$	201	$	182	$	427	$	519

Assumptions for Options Valuation Model

The fair value of the Company’s stock options granted to employees for the three and nine months ended February 28, 2013 and February 29, 2012 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model.

	Three Months Ended			Nine Months Ended
	February 28,	February 29,		February 28,		February 29,
	2013	2012		2013		2012
Option Plan Shares
Expected Term (in years)	5		5	5	5
Volatility	0.94		0.85	0.91	0.83
Expected Dividend	$0.00		$0.00	$0.00	$0.00
Risk-free Interest Rates	0.76%		0.84%	0.72%	1.14%
Estimated Forfeiture Rate	0.25%		0.25%	0.25%	0.25%
Weighted Average Grant Date Fair Value	$0.62		$0.43	$0.78	$0.59

Fair values of the ESPP Purchase Rights

The fair values of the ESPP purchase rights granted for the nine months ended February 29, 2012 were estimated using the following weighted-average assumptions:

	Nine Months Ended
	February 29, 2012
Employee Stock Purchase Plan Purchase Rights
Expected Term (in years)		0.5-2.0
Volatility		0.79-0.98
Expected Dividend	$	0.00
Risk-free Interest Rates		0.1%-1.1%
Estimated Forfeiture Rate		0	%
Weighted Average Grant Date Fair Value	$	0.40

Stock option transactions

The following table summarizes the stock option transactions during the three and nine months ended February 28, 2013 (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
Additional shares reserved	1,185		--
Options granted	(180)		180	$0.81
Options terminated	91		(91)	$3.92
Balances, November 30, 2012	1,718		2,982	$1.87	$167
Options granted	(50)		50	$0.97
Options terminated	65		(65)	$4.33
Plan shares expired	(4)		--
Balances, February 28, 2013	1,729		2,967	$1.80	$166
Options fully vested and expected to
vest at February 28, 2013			2,908	$1.80	$162
Options exercisable at February 28, 2013			1,750	$2.26	$66

Options Outstanding

The options outstanding and exercisable at February 28, 2013 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding						Options Exercisable
		at February 28, 2013						at February 28, 2013
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-$0.97		1,167		4.45	$	0.76		750		3.51	$	0.81
	$1.10-$2.52		1,587		4.06	$	1.56		787		2.90	$	1.76
	$6.00-$9.30		108		0.37	$	8.53		108		0.37	$	8.53
	$9.94-$9.94		105		0.32	$	9.94		105		0.32	$	9.94
	$0.59-$9.94		2,967		3.95	$	1.80		1,750		2.85	$	2.26	$	66