7. INCOME TAXES (Tables)

12 Months Ended

May 31, 2019

Income Tax Disclosure [Abstract]

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

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

	Year Ended May 31,
	2019			2018		2017
Domestic	$	(5,273	)	$	433	$	(5,663	)
Foreign		65			22		35
	$	(5,208	)	$	455	$	(5,628	)

Income tax (expense) benefit

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

	Year Ended May 31,
	2019			2018			2017
Federal income taxes:
Current	$	—		$	99		$	—
Deferred		—			—			—
State income taxes:
Current		(6	)		(22	)		(8	)
Deferred		—			—			—
Foreign income taxes:
Current		(21	)		(4	)		(17	)
Deferred		—			—			—
	$	(27	)	$	73		$	(25	)

Income tax reconciliation

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

	Year Ended May 31,
	2019			2018			2017
U.S. federal statutory tax rate		21.0	%		28.6	%		34.0	%
State taxes, net of federal tax effect		(1.0	)		(16.7	)		(0.1	)
Foreign rate differential		(0.7	)		39.4			0.1
Stock-based compensation		(2.8	)		39.9			(2.8	)
Research and development credit		1.5			5.9			3.1
Change in valuation allowance		(15.6	)		(1,349.2	)		(33.8	)
Federal rate change impact		—			1,419.7			—
Federal AMT refund		—			(20.0	)		—
ASU 2016-09 adoption		—			(169.1	)		—
Other		(2.9	)		5.4			(0.9	)
Effective tax rate		(0.5	)%		(16.1	)%		(0.4	)%

Net deferred tax assets

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

	Year Ended May 31,
	2019			2018
Net operating losses	$	13,475		$	12,918
Credit carryforwards		4,995			4,952
Inventory reserves		790			588
Reserves and accruals		1,379			1,419
Other		298			247
		20,937			20,124
Less: Valuation allowance		(20,937	)		(20,124	)
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, 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
Decreases related to prior year tax positions		(41	)
Increases related to current year tax positions		65
Balance at May 31, 2019	$	1,809