Note 6 – STOCK-BASED COMPENSATION

We account for stock-based compensation whereby share-based payment transactions with employees, such as stock options and restricted stock, are measured at estimated fair value at the date of grant. For awards subject to service conditions, compensation expense is recognized over the vesting period on a straight-line basis. Awards subject to performance conditions are attributed separately for each vesting tranche of the award and are recognized ratably from the service inception date to the vesting date for each tranche. Forfeitures are recognized when they occur.

In July 2018, our shareholders approved the Company’s 2019 Long-Term Incentive Plan (“2019 LTI Plan”). The 2019 LTI Plan establishes up to 600,000 shares of restricted stock which can be granted to certain members of management based on exceeding specified net revenues and pre-tax performance metrics during fiscal years 2019, 2020 or 2021. The number of restricted shares to be distributed depends on attaining the performance metrics defined by the 2019 LTI Plan and may result in the distribution of a number of shares that is less than but not greater to the number of restricted shares outlined in the terms of the 2019 LTI Plan. Restricted shares granted under the 2019 LTI Plan “cliff vest” after five years.

During fiscal year 2019, the Company granted 308,000 restricted shares under the 2019 LTI Plan with an average grant-date fair value of $9.94 per share. The remaining compensation expense for these awards, totaling approximately $1,829,000, will be recognized ratably over the remaining vesting period of approximately 33 months.

During the first quarter of fiscal 2021, the Company granted approximately 151,000 restricted shares under the 2019 LTI Plan with an average grant-date fair value of $6.30 per share. The remaining compensation expense of the awards, totaling approximately $948,500, will be recognized ratably over the remaining vesting period of approximately 57 months. As of May 31, 2020, 141,000 restricted shares were available for issuance as future awards under the 2019 LTI Plan.

A summary of compensation expense recognized in connection with restricted share awards are as follows:

	Three Months Ended May 31,
	2020		2019

Share-based compensation expense	$	169,000	$	166,300

The following tables summarizes stock award activity during the first quarter of fiscal 2021 under the 2019 LTI Plan:

	Shares		Weighted Average Fair Value (per share)

Outstanding at February 29, 2020		308,000	$	9.94
Granted		151,000		6.30
Vested		-		-
Forfeited		-		-
Outstanding at May 31, 2020		459,000	$	8.74

As of May 31, 2020, total unrecognized stock-based compensation expense related to unvested restricted shares was $2,777,500, which we expect to recognize over a weighted-average period of approximately 41.2 months.