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STOCK-BASED COMPENSATION
 9 Months Ended
Feb. 28, 2025
STOCK-BASED COMPENSATION  
STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

 

Stock-based compensation expense consists of expenses for stock options, restricted stock units (“RSUs”), performance RSUs (“PRSUs”), restricted shares, performance restricted shares and employee stock purchase plan (“ESPP”) purchase rights. Stock-based compensation expense for stock options and ESPP purchase rights is measured at each grant date, based on the fair value of the award using the Black-Scholes option valuation model, and is recognized as expense over the employee’s requisite service period. This model was developed for use in estimating the value of publicly traded options that have no vesting restrictions and are fully transferable. The Company’s employee stock options have characteristics significantly different from those of publicly traded options. For RSUs, PRSUs, restricted shares and performance restricted shares, stock-based compensation expense is based on the fair value of the Company’s common stock at the grant date and is recognized as expense over the employee’s requisite service period. All of the Company’s stock-based compensation is accounted for as equity instruments. See Note 11 in the Company’s Annual Report on Form 10-K for fiscal 2024 filed on July 30, 2024 for further information regarding the equity incentive plans and the ESPP.

 

The following table summarizes the stock-based compensation expense for the three and nine months ended February 28, 2025 and February 29, 2024:

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

February 28,

 

 

February 29,

 

 

February 28,

 

 

February 29,

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Cost of sales

 

$218

 

 

$58

 

 

$380

 

 

$222

 

Research and development

 

 

690

 

 

 

148

 

 

 

1,176

 

 

 

440

 

Selling, general and administrative

 

 

888

 

 

 

377

 

 

 

2,185

 

 

 

1,082

 

 

 

$1,796

 

 

$583

 

 

$3,741

 

 

$1,744

 

 

Stock-based compensation expense totaling $0.5 million and $0.3 million was capitalized as part of inventory as of February 28, 2025 and May 31, 2024, respectively.

 

The Company’s nonvested RSU, PRSU and restricted shares activities during the nine months ended February 28, 2025 were as follows:

   

 

 

 

 

 

Weighted

 

 

 

 

 

Average Grant

 

 

 

 

 

Date Fair

 

 

 

Shares

 

 

Value

 

 

 

(in thousands)

 

 

Per Share

 

Unvested, May 31, 2024

 

 

294

 

 

$20.08

 

Granted (1)

 

 

555

 

 

 

15.23

 

Vested

 

 

(32)

 

 

12.42

 

Forfeited

 

 

-

 

 

 

-

 

Unvested, August 30, 2024

 

 

817

 

 

$17.09

 

Granted (1)

 

 

10

 

 

 

13.01

 

Vested

 

 

(47)

 

 

15.33

 

Forfeited

 

 

-

 

 

 

-

 

Unvested, November 29, 2024

 

 

780

 

 

$17.14

 

Granted

 

 

2

 

 

 

14.14

 

Vested

 

 

(69)

 

 

16.11

 

Forfeited

 

 

(15)

 

 

17.79

 

Unvested, February 28, 2025

 

 

698

 

 

$17.22

 

 

(1)

Includes 262,000 performance-based awards, of which 80,000 performance-based awards have target achievement goals whereby the grantee can earn up to 200% of the original award (up to 161,000 shares) if the maximum target goals are met. The remaining awards are earned at 100% if the target goals are achieved.

There were no options granted during the three and nine months ended February 28, 2025 and February 29, 2024.

 

During the nine months ended February 28, 2025 and February 29, 2024, the Company issued 41,000 and 24,000 shares, respectively, under the ESPP. As of February 28, 2025 and February 29, 2024, ESPP shares of 285,000 and 373,000, respectively, were available for issuance.