Stock Options and Stock-Based Compensation

3 Months Ended

Aug. 31, 2020

Share-based Payment Arrangement [Abstract]

Stock Options and Stock-Based Compensation

Stock-based compensation includes expense charges for all stock-based awards to employees and directors granted under the Company’s stock option plan. Stock-based compensation recognized during the period is based on the portion of the grant date fair value of the stock-based award that will vest during the period, adjusted for expected forfeitures. Compensation cost for all stock-based awards is recognized using the straight-line method.

Stock Options

At August 31, 2020, the Company had outstanding stock options to purchase 22,500 shares of Common Stock all of which are vested and exercisable with a weighted average exercise price of $1.70. As all options outstanding as of August 31, 2020 were fully vested; the Company estimates that $0 will be recorded as additional stock-based compensation expense related to stock options during the year ending May 31, 2021.

Outstanding Options						Exercisable Options
Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (yrs)		Number of Shares		Weighted Average Exercise Price
	22,500	$	1.70		6.6		22,500	$	1.70

Options granted, exercised, canceled and expired under the Company’s stock-based compensation plans during the three months ended August 31, 2020 are summarized as follows:

	Three Months Ended August 31, 2020
	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (yrs)		Aggregate Intrinsic Value
Options outstanding and exercisable - May 31, 2020		22,500	$	1.70		6.9	$	38,250
Options granted		—		—		—		—
Options exercised		—		—		—		—
Options forfeited/canceled		—		—		—		—
Options outstanding and exercisable - August 31, 2020		22,500	$	1.70		6.6	$	38,250

Restricted Stock Units

Service-based and market-based restricted stock units are granted to key employees and members of the Company’s Board of Directors. Service-based restricted stock units generally fully vest on the first anniversary date of the award. Market-based restricted stock units are contingent on continued service and vest based on the 15-day average closing price of the Company’s Common Stock equal or exceeding certain targets established by the Compensation Committee of the Board of Directors. No market-based restricted stock units were granted in the three months ended August 31, 2020.

During the three months ended August 31, 2020, six tranches of the market-based restricted stock units granted in Fiscal 2020 and Fiscal 2019 vested.

During the three months ended August 31, 2020, 25,922 service-based restricted stock units were granted and 2,609 immediately vested on the date of the grants.

Restricted stock unit activity under the Company’s stock-based compensation plans during the three months ended August 31, 2020 is summarized as follows:

	Number of Units			Weighted Average Price at Grant Date		Aggregate Intrinsic Value
Non-vested restricted stock units - May 31, 2020		55,147		$	3.28	$	180,882
Restricted stock units granted		25,922			3.71		96,234
Restricted stock units vested		(40,031	)		3.26		(130,572	)
Non-vested restricted stock units - August 31, 2020		41,038		$	3.57	$	146,544

During the three months ended August 31, 2020, total restricted stock unit compensation expense recognized was $182,822 and has been recorded as general, administration and sales expense in the Consolidated Statements of Operations and Comprehensive Loss. Stock compensation expense related to non-vested restricted stock units with a time vesting condition was $25,826.