STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Feb. 28, 2023

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 nine months ended February 28, 2023 and 2022 (in thousands):

	Three Months Ended				Nine Months Ended
	February 28,				February 28,
	2023		2022		2023		2022
Stock-based compensation in the form of stock options, RSUs, restricted shares and ESPP purchase rights, included in:
Cost of sales	$	75	$	90	$	252	$	248
Selling, general and administrative		359		487		1,330		1,259
Research and development		158		303		513		679
Total stock-based compensation	$	592	$	880	$	2,095	$	2,186

Fair value assumptions for Option Valuation Model

Fair Value. The fair values of the Company’s stock options granted to employees for the three and nine months ended February 28, 2023 and 2022, was estimated using the following weighted average assumptions in the Black-Scholes option valuation model:

	Three Months Ended						Nine Months Ended
	February 28,						February 28,
	2023			2022			2023			2022
Expected term (in years)		5			5			5			6
Volatility		90	%		117	%		116	%		77	%
Risk-free interest rate		3.58	%		1.56	%		3.11	%		1.03	%
Weighted average grant date fair value	$	24.30		$	9.43		$	7.24		$	2.56

Fair value assumptions of the ESPP purchase rights

The fair values of the ESPP purchase rights granted for the nine months ended February 28, 2023 and 2022 were estimated using the following assumptions:

	Nine Months Ended			Nine Months Ended
	February 28, 2023			February 28, 2022
Expected term (in years)	0.5-2.0			0.5-2.0
Volatility	90%-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 nine months ended February 28, 2023 and shows the shares available to be issued at the end of each period (in thousands):

	Available
	Shares
Balance, May 31, 2022		1,826
Options granted		(103	)
RSUs granted		(323	)
Options cancelled and adjusted		6
Balance, August 31, 2022		1,406
Options granted		(5	)
RSUs granted		(14	)
Balance, November 30, 2022		1,387
Options granted		(1	)
RSUs cancelled		--
Options cancelled		8
Balance, February 28, 2023		1,394

Stock option transactions

The following table summarizes the stock option transactions during the three and nine months ended February 28, 2023 (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 granted		1		$	34.00
Options cancelled		(8	)	$	7.40
Options exercised		(360	)	$	2.36
Balances, February 28, 2023		1,061		$	3.54	$	31,629
Options fully vested and expected to vest on February 28, 2023		1,045		$	3.53	$	31,177

Options outstanding

The options outstanding and exercisable on February 28, 2023 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding						Options Exercisable
		at February 28, 2023						at February 28, 2023
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		41		4.64	$	1.34		41		4.64	$	1.34
$1.64-$1.86			413		3.57	$	1.72		298		3.43	$	1.70
$2.03-$2.40			196		2.85	$	2.15		184		2.71	$	2.15
$2.76-$2.93			167		4.98	$	2.92		50		4.07	$	2.89
$3.46-$3.93			47		1.42	$	3.83		47		1.42	$	3.83
$8.00-$34.00			197		6.22	$	9.63		32		6.14	$	10.17
$1.34-$34.00			1,061		4.10	$	3.54		652		3.33	$	2.46	$	20,151

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 nine months ended February 28, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	February 28,				February 28,
	2023		2022		2023		2022
Employees:
Annual RSUs granted		--		--		151,800		120,000
Weighted average market value on the date of the grant of annual RSUs		-		-	$	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
Maximum PRSUs to be vested if all revenue goals are achieved		--		--		80,400		270,000
Maximum Performance restricted shares to be vested if all revenue goals are achieved		--		--		23,700		--
Weighted average market value on the date of the grant of PRSUs, performance restricted shares		-		-	$	8.00	$	3.41
Members of Board of Directors:
RSUs granted		-		--		44,000		43,000
Weighted average market value on the date of the grant of RSUs		-		-	$	11.35	$	8.02
Maximum PRSUs granted to be vested if all revenue goals are achieved		-		-		30,000		--
Weighted average market value on the date of the grant of PRSUs		--		--	$	8.00		--

RSUs and PRSUs vested and unvested during period

The following table summarizes the RSUs and PRSUs vested and unvested during the three and nine months ended February 28, 2023 and 2022:

	Three Months Ended				Nine Months Ended
	February 28,				February 28,
	2023		2022		2023		2022
Net RSUs and PRSUs vested		19,000		21,000		221,000		83,000
Shares withheld to settle payroll taxes		16,000		--		165,000		--
RSUs and PRSUs unvested		406,000		485,000		406,000		485,000
Intrinsic value of unvested RSUs and PRSUs (in thousands)	$	13,540	$	6,596	$	13,540	$	6,596