7. INCOME TAXES (Tables)

12 Months Ended

May 31, 2018

Income Tax Disclosure [Abstract]

Domestic and foreign components of income (loss) before income tax benefit (expense)

    Domestic and foreign components of income (loss) before income tax benefit (expense) are as follows (in thousands):

	Year Ended May 31,
	2018		2017			2016
Domestic	$	433	$	(5,663	)	$	(6,794	)
Foreign		22		35			19
	$	455	$	(5,628	)	$	(6,775	)

Income tax benefit (expense)

    The income tax benefit (expense) consists of the following (in thousands):

	Year Ended May 31,
	2018			2017			2016
Federal income taxes:
Current	$	99		$	—		$	—
Deferred		—			—			—
State income taxes:
Current		(22	)		(8	)		3
Deferred		—			—			—
Foreign income taxes:
Current		(4	)		(17	)		(13	)
Deferred		—			—			—
	$	73		$	(25	)	$	(10	)

Income tax reconciliation

    The Company’s effective tax rate differs from the U.S. federal statutory tax rate, as follows:

	Year Ended May 31,
	2018			2017			2016
U.S. federal statutory tax rate		28.6	%		34.0	%		34.0	%
State taxes, net of federal tax effect		(16.7	)		(0.1	)		—
Foreign rate differential		39.4			0.1			0.2
Stock-based compensation		39.9			(2.8	)		(3.8	)
Research and development credit		5.9			3.1			2.1
Change in valuation allowance		(1,349.2	)		(33.8	)		(32.5	)
Federal rate change impact		1,419.7			—			—
Federal AMT refund		(20.0	)		—			—
ASU 2016-09 adoption		(169.1	)		—			—
Other		5.4			(0.9	)		(0.2	)
Effective tax rate		(16.1	)%		(0.4	)%		(0.2	)%

Net deferred tax assets

     The components of the net deferred tax assets are as follows (in thousands):

	Year Ended May 31,
	2018			2017
Net operating losses	$	12,918		$	18,719
Credit carryforwards		4,952			4,715
Inventory reserves		588			870
Reserves and accruals		1,419			1,566
Other		247			393
		20,124			26,263
Less: Valuation allowance		(20,124	)		(26,263	)
Net deferred tax assets.	$	—		$	—

Unrecognized tax benefits

     The aggregate changes in the balance of gross unrecognized tax benefits are as follows (in thousands):

Beginning balance as of May 31, 2015	$	919
Decreases related to prior year tax positions		(124	)
Decreases related to lapse of statute of limitations		(6	)
Balance at May 31, 2016	$	789
Decreases related to prior year tax positions		—
Decreases related to lapse of statute of limitations		—
Balance at May 31, 2017	$	789
Increases related to prior year tax positions		889
Increases related to current year tax positions		107
Balance at May 31, 2018	$	1,785