2. STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Nov. 30, 2016

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

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

The following table summarizes the stock-based compensation expense related to the Company’s stock-based incentive plans for the three and six months ended November 30, 2016 and 2015 (in thousands):

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2016		2015		2016		2015
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in:
Cost of sales	$	23	$	20	$	47	$	42
Selling, general and administrative		141		186		388		424
Research and development		51		48		99		107
Total stock-based compensation	$	215	$	254	$	534	$	573

Assumptions for Options Valuation Model

Fair Value. The fair value of the Company’s stock options granted to employees for the three and six months ended November 30, 2016 and 2015 were estimated using the following weighted average assumptions in the Black-Scholes option valuation model:

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2016			2015			2016			2015
Expected term (in years)		4			4			4			4
Volatility		0.81			0.86			0.81			0.86
Risk-free interest rates		1.10	%		1.21	%		1.02	%		1.21	%
Weighted average grant date fair value	$	1.66		$	1.38		$	1.09		$	1.38

Stock option and RSU transactions

The following tables summarize the Company’s stock option and RSU transactions during the three and six months ended November 30, 2016 (in thousands):

	Available
	Shares
Balance, May 31, 2016		1,847
Options granted		(318	)
RSUs granted		(138	)
Shares cancelled		46
Balance, August 31, 2016		1,437
Additional shares reserved		2,238
Options granted		(50	)
Shares cancelled		1
2006 Plan available shares expired		(1,438	)
Balance, November 30, 2016		2,188

Stock option transactions

The following table summarizes the stock option transactions during the three and six months ended November 30, 2016 (in thousands, except per share data):

	Outstanding Options
				Weighted
	Number			Average		Aggregate
	of			Exercise		Intrinsic
	Shares			Price		Value
Balances, May 31, 2016	3,201		$	1.66	$	189
Options granted	318		$	1.68
Options cancelled	(46	)	$	1.40
Options exercised	(91	)	$	1.32
Balances, August 31, 2016	3,382		$	1.67	$	2,694
Options granted	50		$	2.81
Options cancelled	(1	)	$	2.08
Options exercised	(202	)	$	1.22
Balances, November 30, 2016	3,229		$	1.72	$	4,099
Options fully vested and expected to vest at November 30, 2016	3,185		$	1.72	$	4,058

Options Outstanding

The options outstanding and exercisable at November 30, 2016 were in the following exercise price ranges (in thousands, except per share data): 

			Options Outstanding						Options Exercisable
			at November 30, 2016						at November 30, 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		514		2.27	$	0.66		514		2.27	$	0.66
	$	1.09-$1.40		899		2.87	$	1.28		816		2.77	$	1.28
	$	1.68-$2.06		547		5.63	$	1.77		240		4.52	$	1.88
	$	2.10-$2.81		1,269		5.03	$	2.44		738		4.90	$	2.45
	$	0.59-$2.81		3,229		4.08	$	1.72		2,308		3.52	$	1.58	$	3,261