5. Stockholders' Equity

9 Months Ended

Feb. 28, 2019

Equity [Abstract]

Stockholders' Equity

5. Stockholders’ Equity

Share-based Compensation

Summary of Assumptions and Activity

The fair value of share-based awards to employees and directors is calculated using the Black-Scholes option pricing model, even though this model was developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from our stock options.

The Black-Scholes model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of options granted is derived from historical data on employee exercises and post-vesting employment termination behavior. The risk-free rate selected to value any particular grant is based on the U.S. Treasury rate that corresponds to the pricing term of the grant effective as of the date of the grant. The expected volatility is based on the historical volatilities of our common stock. These factors could change in the future, affecting the determination of share-based compensation expense in future periods.

A summary of option activity as of February 28, 2019 and changes during the nine months then ended, is presented below:

	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Options outstanding at June 1, 2018		2,600,000		$	0.06
Options granted		–		$	–
Options exercised		–		$	–
Options forfeited/expired		(1,000,000	)	$	0.10
Options outstanding at February 28, 2019		1,600,000		$	0.03		1.17	$	–
Options vested and expected to vest at February 28, 2019		1,600,000		$	0.03		1.17	$	–
Options exercisable at February 28, 2019		1,600,000		$	0.03		1.17	$	–

The aggregate intrinsic value represents the differences in market price at the close of the quarter ($0.003 per share on February 28, 2019) and the exercise price of outstanding, in-the-money options (those options with exercise prices below $0.003 per share) on February 28, 2019.