STOCK-BASED COMPENSATION (Tables)

12 Months Ended

May 31, 2023

STOCK-BASED COMPENSATION

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

	Year Ended May 31,
	2023		2022		2021
Stock-based compensation in the form of stock options,
RSUs, and ESPP purchase rights, included in:
Cost of sales	$	331	$	234	$	70
Selling, general and administrative		1,711		1,721		816
Research and development		706		968		215
Net effect on net income (loss)	$	2,748	$	2,923	$	1,101
Effect on earnings (net loss) per share:
Basic	$	0.10	$	0.11	$	0.05
Diluted	$	0.09	$	0.11	$	0.05

Fair value assumptions for Option Valuation Model

Fair Value. The fair values of the Company’s stock options granted to employees in fiscal 2023, 2022 and 2021 were estimated using the following weighted average assumptions in the Black-Scholes option valuation method:

	Year Ended May 31,
	2023			2022			2021
Expected term (in years)	5 - 6			5 - 6				6
Volatility		86	%		88	%		72	%
Risk-free interest rates		3.12	%		1.50	%		0.44	%
Weighted average grant date fair value	$	6.29		$	4.01		$	1.12

Fair value assumption of the ESPP Purchase Rights

The fair value of our ESPP purchase rights for the fiscal 2023, 2022 and 2021 was estimated using the following weighted average assumptions:

	Year Ended May 31,
	2023			2022			2021
Expected term (in years)	0.5 – 2.0			0.5 – 2.0			0.5 – 2.0
Volatility	91% – 203		%	101% – 272		%	74% – 88		%
Risk-free interest rates	3.97%–4.94		%	0.05%–2.44		%	0.04%–0.17		%
Weighted average grant date fair value	$	13.60		$	9.68		$	1.03

Stock option and RSU transactions

The following tables summarize the Company’s stock option and RSU transactions during fiscal 2023, 2022 and 2021 (in thousands):

	Available
	Shares
Balance, May 31, 2020		1,416
Options granted		(297	)
RSUs granted		(680	)
RSUs cancelled		2
Shares withheld for taxes and not issued		18
Options terminated		455
Options expired		(341	)
Balance, May 31, 2021		573
Additional shares reserved		1,414
Options granted		(303	)
RSUs granted		(1,044	)
RSUs cancelled		20
Shares withheld for taxes and not issued		(30	)
Options terminated		105
Balance, May 31, 2022		735
Options granted		(110	)
RSUs granted		(674	)
RSUs cancelled		60
Options terminated		16
Balance, May 31, 2023		27

Stock option transactions

The following table summarized the stock option transactions during fiscal 2023, 2022 and 2021 (in thousands, except per share data):

	Outstanding Options
				Weighted
	Number			Average		Aggregate
	of			Exercise		Intrinsic
	Shares			Price		Value
Balances, May 31, 2020		3,153		$	2.17	$	102
Options granted		297		$	1.78
Options terminated		(455	)	$	2.31
Options exercised		(229	)	$	1.54
Balances, May 31, 2021		2,766		$	2.16	$	807
Options granted		303		$	5.37
Options terminated		(105	)	$	1.59
Options exercised		(1,367	)	$	2.28
Balances, May 31, 2022		1,597		$	2.70	$	9,290
Options granted		110		$	9.06
Options terminated		(16	)	$	5.42
Options exercised		(730	)	$	2.32
Balances, May 31, 2023		961		$	3.67	$	28,211
Options fully vested and expected to vest at May 31, 2023		947		$	3.66	$	27,796

Options outstanding

The options outstanding and exercisable at May 31, 2023 were in the following exercise price ranges (in thousands, except per share data):

		Options Outstanding						Options Exercisable
		at May 31, 2023						at May 31, 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		4.39	$	1.34		41		4.39	$	1.34
$1.64-$1.86			365		3.53	$	1.72		291		3.45	$	1.70
$2.03-$2.40			185		2.61	$	2.14		175		2.48	$	2.14
$	2.93		139		5.12	$	2.93		35		5.12	$	2.93
$3.46-$3.93			37		1.11	$	3.93		37		1.11	$	3.93
$8.00-34.00			194		5.97	$	9.77		41		5.90	$	10.18
$1.34-34.00			961		4.02	$	3.67		620		3.35	$	2.56	$	18,895

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 fiscal 2023, 2022 and 2021:

	Year Ended May 31,
	2023		2022		2021
Employees:
Annual RSUs granted		152,000		120,000		161,000
Weighted-average grant-date fair value of annual RSUs	$	8.03	$	3.17	$	1.86
Annual restricted shares granted		8,000		-		-
Weighted-average grant-date fair value of annual restricted shares	$	8.00		-		-
RSUs granted in lieu of cash payment for salary reductions and bonus		-		89,000		18,000
Weighted-average grant-date value of RSU in lieu of cash payment		-	$	2.50	$	2.21
Maximum PRSUs to be vested if all revenue goals are achieved		80,000		270,000		-
Maximum Performance restricted shares to be vested if all revenue goals are achieved		24,000		-		-
Weighted-average grant-date fair value of PRSUs and performance restricted shares	$	8.00	$	3.41		-
Members of Board of Directors:
RSUs granted		44,000		43,000		161,000
Weighted-average grant-date fair value of RSUs	$	11.35	$	8.02	$	1.81
Maximum PRSUs granted to be vested if all revenue goals are achieved		25,000		-		-
Weighted-average grant-date fair value of PRSUs	$	8.00		-		-

RSUs and PRSUs vested and unvested

The following table summarizes the RSUs and PRSUs vested and unvested during fiscal 2023, 2022 and 2021:

	Year Ended May 31,
	2023		2022		2021
Net RSUs and PRSUs vested		240,000		96,000		207,000
Shares withheld to settle payroll taxes		178,000		62,000		9,000
Weighted average grant-date fair value of vested RSUs and PRSUs	$	4.47	$	3.12	$	1.90
RSUs and PRSUs cancelled		30,000		10,000		1,000
Weighted average grant-date fair value of cancelled RSUs and PRSUs	$	8.56	$	2.93	$	3.46
RSUs and PRSUs unvested		345,000		185,000		132,000
Weighted average grant-date fair value of unvested RSUs and PRSUs	$	6.40	$	3.00	$	1.88
Intrinsic value of unvested RSUs and PRSUs (in thousands)	$	11,392	$	1,554	$	297