2. STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Feb. 28, 2017

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 nine months ended February 28, 2017 and February 29, 2016 (in thousands):

	Three Months Ended				Nine Months Ended
	Feb. 28,		Feb. 29,		Feb. 28,		Feb. 29,
	2017		2016		2017		2016
Stock-based compensation in the form of employee stock options, RSUs and ESPP purchase rights, included in:
Cost of sales	$	22	$	20	$	69	$	62
Selling, general and administrative		187		145		575		569
Research and development		48		48		147		155
Total stock-based compensation	$	257	$	213	$	791	$	786

Assumptions for Options Valuation Model

Fair Value. The fair value of the Company’s stock options granted to employees for the three months ended February 29, 2016 and nine months ended February 28, 2017 and February 29, 2016 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,
	2016			2017			2016
Expected term (in years)		4			4			4
Volatility		0.80			0.81			0.86
Risk-free interest rates		1.23	%		1.02	%		1.21	%
Weighted average grant date fair value	$	0.80		$	1.09		$	1.31

Stock option and RSU transactions

The following tables summarize the Company’s stock option and RSU transactions during the three and nine months ended February 28, 2017 (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
RSUs granted		(19	)
Balance, February 28, 2017		2,169

Stock option transactions

The following table summarizes the stock option transactions during the three and nine months ended February 28, 2017 (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 exercised	(72	)	$	1.60
Balances, February 28, 2017	3,157		$	1.72	$	11,101
Options fully vested and expected to vest at February 28, 2017	3,113		$	1.72	$	10,961

Options Outstanding

The options outstanding and exercisable at February 28, 2017 were in the following exercise price ranges (in thousands, except per share data):

			Options Outstanding						Options Exercisable
			at February 28, 2017						at February 28, 2017
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		2.03	$	0.66		514		2.03	$	0.66
	$	1.09-$1.40		847		2.66	$	1.28		796		2.60	$	1.28
	$	1.68-$2.06		546		5.38	$	1.77		264		4.40	$	1.86
	$	2.10-$2.81		1,250		4.78	$	2.44		792		4.68	$	2.45
	$	0.59-$2.81		3,157		3.87	$	1.72		2,366		3.37	$	1.60	$	8,608