STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Nov. 30, 2022

STOCK-BASED COMPENSATION

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

The following table summarizes the stock-based compensation expense for the three and six months ended November 30, 2022 and 2021 (in thousands):

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2022		2021		2022		2021
Stock-based compensation in the form of stock options, RSUs, restricted shares and ESPP purchase rights, included in:
Cost of sales	$	85	$	76	$	177	$	158
Selling, general and administrative		507		377		971		772
Research and development		201		265		355		376
Total stock-based compensation	$	793	$	718	$	1,503	$	1,306

Fair value assumptions for Option 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, 2022 and 2021 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,
	2022			2021			2022			2021
Expected term (in years)		6			6			5			6
Volatility		112.45	%		85	%		116.41	%		76	%
Risk-free interest rate		4.07	%		1.32	%		3.10	%		1.02	%
Weighted average grant date fair value	$	18.06		$	14.16		$	7.07		$	2.50

Fair value assumptions of the ESPP purchase rights

The fair values of the ESPP purchase rights granted for the three and six months ended November 30, 2022 and 2021 were estimated using the following assumptions:

	Three and Six Months Ended			Three and Six Months Ended
	November 30, 2022			November 30, 2021
Expected term (in years)	0.5-2.0			0.5-2.0
Volatility	91%-203		%	101%-143		%
Risk-free interest rates	3.97%-4.12		%	0.05%-0.27		%
Weighted average grant date fair value	$	11.17		$	9.57

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, 2022 (in thousands):

	Available
	Shares
Balance, May 31, 2022		1,826
Options granted		(103	)
RSUs granted		(276	)
Options cancelled and adjusted		6
Balance, August 31, 2022		1,453
Options granted		(5	)
RSUs granted		(14	)
Balance, November 30, 2022		1,434

Stock option transactions

The following table summarizes the stock option transactions during the three and six months ended November 30, 2022 (in thousands, except per share data):

	Outstanding Options
				Weighted
	Number			Average		Aggregate
	of			Exercise		Intrinsic
	Shares			Price		Value
Balances, May 31, 2022		1,597		$	2.70	$	9,290
Options granted		103		$	8.00
Options cancelled		(6	)	$	2.41
Options exercised		(102	)	$	2.00
Balances, August 31, 2022		1,592		$	3.08	$	18,287
Options granted		4		$	21.22
Options exercised		(168	)	$	2.31
Balances, November 30, 2022		1,428		$	3.23	$	32,614
Options fully vested and expected to vest at November 30, 2022		1,409		$	3.23	$	32,190

Options outstanding

The options outstanding and exercisable at November 30, 2022 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding						Options Exercisable
		at November 30, 2022						at November 30, 2022
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
$	1.34		51		4.89	$	1.34		51		4.89	$	1.34
$1.64-$1.86			542		3.76	$	1.71		385		3.61	$	1.69
$2.03-$2.40			341		2.96	$	2.21		328		2.87	$	2.21
$2.76-$2.93			197		5.05	$	2.91		65		3.89	$	2.88
$3.46-$3.93			93		1.67	$	3.83		93		1.67	$	3.83
$8.00-$24.83			204		6.47	$	9.52		23		6.38	$	10.24
$1.34-$24.83			1,428		4.04	$	3.23		945		3.32	$	2.36	$	22,412

RSUs, PRSUs, restricted shares and performance restricted shares granted

The following table summarizes RSUs, PRSUs, restricted shares and performance restricted shares granted to employees and members of the Company’s Board of Directors during the three and six months ended November 30, 2022 and 2021:

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2022		2021		2022		2021
Employees:
Annual RSUs granted		-		1,000		151,800		120,000
Weighted average market value on the date of the grant of annual RSUs		-	$	24.57	$	8.03	$	3.17
Annual restricted shares granted		-		-		7,500		-
Weighted average market value on the date of the grant of annual restricted shares		-		-	$	8.00		-
RSUs granted in lieu of cash payment for salary reductions		-		-		-		89,000
Weighted average market value on the date of the grant of RSU in lieu of cash payment		-		-		-	$	2.50
PRSUs granted based on revenue target thresholds maximum		-		-		80,400		270,000
Performance restricted shares granted based on revenue target thresholds maximum		-		-		23,700		-
Weighted average market value on the date of the grant of PRSUs, performance restricted shares		-		-	$	8.00	$	3.41
Stock-based compensation expense	$	179,000	$	-	$	283,000	$	246,000
Members of Board of Directors:
RSUs granted		14,000		13,000		44,000		43,000
Weighted average market value on the date of the grant of RSUs	$	18.50	$	19.85	$	11.35	$	8.02
PRSUs granted based on revenue target thresholds maximum		-		-		30,000		-
Weighted average market value on the date of the grant of PRSUs		-		-	$	8.00		-
Stock-based compensation expense	$	245,000	$	-	$	490,000	$	-

RSUs and PRSUs vested and unvested during period

The following table summarizes the RSUs and PRSUs vested and unvested during the three and six months ended November 30, 2022 and 2021:

	Three Months Ended				Six Months Ended
	November 30,				November 30,
	2022		2021		2022		2021
Net RSUs and PRSUs vested		60,000		18,000		202,000		29,000
Shares withheld to settle payroll taxes		2,000		-		150,000		-
RSUs and PRSUs unvested		394,000		237,000		394,000		237,000
Intrinsic value of unvested RSUs and PRSUs (in thousands)	$	10,272	$	4,129	$	10,272	$	4,129