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STOCK-BASED COMPENSATION (Tables) | 9 Months Ended
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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 |

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