3. EARNINGS PER SHARE

6 Months Ended

Nov. 30, 2016

Earnings Per Share [Abstract]

3. EARNINGS PER SHARE

3. EARNINGS PER SHARE

Basic earnings per share is determined using the weighted average number of common shares outstanding during the period. Diluted earnings per share is determined using the weighted average number of common shares and potential common shares (representing the dilutive effect of stock options, RSUs and ESPP shares) outstanding during the period using the treasury stock method.

The following table presents the computation of basic and diluted net loss per share attributable to the Company’s common shareholders (in thousands, except per share data): 

	Three Months Ended						Six Months Ended
	November 30,						November 30,
	2016			2015			2016			2015
Numerator: Net loss	$	(1,452	)	$	(1,048	)	$	(2,207	)	$	(754	)
Denominator for basic net loss per share:
Weighted average shares outstanding		16,029			13,048			14,673			13,005
Shares used in basic net loss per share calculation		16,029			13,048			14,673			13,005
Effect of dilutive securities		—			—			—			—
Denominator for diluted net loss per share		16,029			13,048			14,673			13,005
Basic net loss per share	$	(0.09	)	$	(0.08	)	$	(0.15	)	$	(0.06	)
Diluted net loss per share	$	(0.09	)	$	(0.08	)	$	(0.15	)	$	(0.06	)

For the purpose of computing diluted earnings per share, the weighted average number of potential common shares does not include stock options with an exercise price greater than the average fair value of the Company’s common stock for the period, as the effect would be anti-dilutive. In the three and six months ended November 30, 2016 and 2015 potential common shares have not been included in the calculation of diluted net loss per share as the effect would be anti-dilutive. As such, the numerator and the denominator used in computing both basic and diluted net loss per share for these periods are the same. Stock options to purchase 3,229,000 shares of common stock, RSUs for 72,000 shares and ESPP rights to purchase 246,000 ESPP shares were outstanding as of November 30, 2016, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive. Stock options to purchase 3,385,000 shares of common stock and ESPP rights to purchase 131,000 ESPP shares were outstanding as of November 30, 2015, but were not included in the computation of diluted net loss per share, because the inclusion of such shares would be anti-dilutive.