2. STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Aug. 31, 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 months ended August 31, 2013 and 2012 (in thousands):

	Three Months Ended
	August 31,
	2013		2012
Stock-based compensation in the form of employee stock options and ESPP shares, included in:
Cost of sales	$	8	$	13
Selling, general and administrative		104		119
Research and development		31		37
Total stock-based compensation	$	143	$	169

Assumptions for Options Valuation Model

 Fair Value.  The fair value of the Company’s stock options granted to employees for the three months ended August 31, 2013 and 2012 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:

	Three Months Ended
	August 31,
	2013			2012
Option plan shares
Expected term (in years)		4			5
Volatility		0.95			0.90
Expected dividend	$	0.00		$	0.00
Risk-free interest rates		1.46	%		0.75	%
Estimated forfeiture rate		0.25	%		0.25	%
Weighted average grant date fair value	$	0.92		$	0.88

Stock option transactions

 The following table summarizes the stock option transactions during the three months ended August 31, 2013 (in thousands, except per share data):

				Outstanding Options
								Weighted
					Number			Average		Aggregate
	Available				of			Exercise		Intrinsic
	Shares				Shares			Price		Value
Balances, May 31, 2013		1,737				2,956		$	1.79	$	964
Options granted		(725	)			725		$	1.38
Options terminated		289				(289	)	$	6.99
Plan shares expired		(104	)			--
Options exercised		--				(69	)	$	0.86
Balances, August 31, 2013		1,197				3,323		$	1.27	$	1,301
Options fully vested and expected to vest at August 31, 2013						3,257		$	1.27	$	1,275
Options exercisable at August 31, 2013						1,816		$	1.28	$	769

Options Outstanding

 The options outstanding and exercisable at August 31, 2013 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding at August 31, 2013						Options Exercisable at August 31, 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		1,101		3.94	$	0.76		846		3.51	$	0.80
	$1.09-$1.42		1,484		5.59	$	1.28		453		4.53	$	1.28
	$1.55-$1.95		487		3.45	$	1.88		277		2.04	$	1.93
	$2.15-$2.52		251		0.55	$	2.24		240		0.49	$	2.25
	$0.59-$2.52		3,323		4.35	$	1.27		1,816		3.14	$	1.28	$	769