2. STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Feb. 29, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

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 29, 2016 and February 28, 2015 (in thousands):

	Three Months Ended				Nine Months Ended
	Feb. 29,		Feb. 28,		Feb. 29,		Feb. 28,
	2016		2015		2016		2015
Stock-based compensation in the form of  employee stock options and ESPP shares, included in:
Cost of sales	$	20	$	17	$	62	$	47
Selling, general and administrative		145		148		569		508
Research and development		48		54		155		138
Total stock-based compensation	$	213	$	219	$	786	$	693

Assumptions for Options Valuation Model

Fair Value.  The fair value of the Company’s stock options granted to employees for the three and nine months ended February 29, 2016 and February 28, 2015 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:

	Three Months Ended						Nine Months Ended
	Feb. 29,			Feb. 28,			Feb. 29,			Feb. 28,
	2016			2015			2016			2015
Option plan shares
Expected term (in years)		4			4			4			4
Volatility		0.80			0.90			0.86			0.91
Expected dividend	$	0.00		$	0.00		$	0.00		$	0.00
Risk-free interest rates		1.23	%		1.16	%		1.21	%		1.25	%
Estimated forfeiture rate		0.25	%		0.25	%		0.25	%		0.25	%
Weighted average grant date fair value	$	0.80		$	1.62		$	1.31		$	1.64

Fair values of the ESPP shares

The fair values of the ESPP purchase rights granted for the nine months ended February 28, 2015 were estimated using the following weighted-average assumptions:

	Nine Months Ended
	February 28,
	2015
Expected term (in years)		0.5-2.0
Volatility		0.55-0.83
Expected dividend	$	0.00
Risk-free interest rates		0.04%-0.53	%
Estimated forfeiture rate		0	%
Weighted average grant date fair value	$	1.47

Stock option transactions

The following table summarizes the stock option transactions during the three and nine months ended February 29, 2016 (in thousands, except per share data):

				Outstanding Options
							Weighted
				Number			Average		Aggregate
	Available			of			Exercise		Intrinsic
	Shares			Shares			Price		Value
Balances, May 31, 2015		845			3,686		$	1.66	$	2,946
Options granted		--			--			--
Options terminated		122			(122	)	$	2.04
Options exercised		--			(130	)	$	1.72
Balances, August 31, 2015		967			3,434		$	1.63	$	2,587
Additional shares reserved		800			--
Options granted		(82	)		82		$	2.22
Options terminated		15			(15	)	$	1.61
Options exercised		--			(116	)	$	0.91
Balances, November 30, 2015		1,700			3,385		$	1.67	$	1,643
Options granted		(11	)		11		$	1.36
Options terminated		110			(110	)	$	2.19
Options exercised		--			--			--
Balances, February 29, 2016		1,799			3,286		$	1.66	$	294
Options fully vested and expected to vest at February 29, 2016					3,220		$	1.66	$	288
Options exercisable at February 29, 2016					2,339		$	1.47	$	293

Options Outstanding

The options outstanding and exercisable at February 29, 2016 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding						Options Exercisable
		at February 29, 2016						at February 29, 2016
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		578		3.07	$	0.68		577		3.07	$	0.68
$	1.09-$1.40		1,214		3.37	$	1.28		1,001		3.18	$	1.28
$	1.73-$2.06		248		4.95	$	1.88		216		5.02	$	1.90
$	2.10-$2.71		1,246		5.70	$	2.43		545		5.55	$	2.47
$	0.59-$2.71		3,286		4.32	$	1.66		2,339		3.87	$	1.47	$	293