STOCK BASED COMPENSATION

6 Months Ended

Aug. 31, 2023

Equity [Abstract]

STOCK BASED COMPENSATION

NOTE 5: STOCK BASED COMPENSATION

Stock Options - Until May 2023, options were available to be granted to officers, directors, consultants and employees of the Company and its subsidiaries to purchase up to 2,500,000 shares of the Company's common stock, under the Company’s 2013 Stock Incentive Plan (the "2013 Plan"). Under the 2013 Plan options expire ten years after the date of grant. As of August 31, 2023, there were 247,483 options outstanding under the 2013 Plan, of which 158,520 are vested. No additional options may be granted under the 2013 Plan.

In August 2023, the Company’s shareholders approved the Company’s 2023 Stock Incentive Plan (the “2023 Plan”) under which 2,500,000 options may be granted to officers, directors, consultants and employees of the Company and its subsidiaries. As of August 31, 2023, there were 23,250 options outstanding under the 2023 Plan.

The Company accounts for stock based compensation under ASC 718, “Share Based Payments.” which requires companies to expense the value of employee stock options and similar awards.

During the six months ended August 31, 2023, the Company granted options to acquire 9,094 shares to employees exercisable at prices ranging from $4.79 to $5.60 and options to acquire 18,380 shares to non-employee members of the board of directors with an exercise price of $4.79. The options granted to employees and directors vest over three years and expire in ten years. The options granted during the first six months of fiscal 2024 had a combined weighted average grant date fair value of $2.91 per share.

The weighted-average fair value of options are estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows:

	Six Months Ended August 31, 2023
Expected Life	5 - 8 years
Risk free interest rate	2.82% - 4.39%
Expected volatility	55.02% - 62.48%
Expected dividend yield	0%

For the three and six months ended August 31, 2023 and 2022, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended August 31, 2023 and 2022, the Company recognized approximately $46,000 and $43,000 of stock based compensation expense, respectively. For the six months ended August 31, 2023 and 2022, the Company recognized approximately $95,000 and $112,000 of stock based compensation expense, respectively. Such amounts are included in general and administrative expenses on the unaudited consolidated statements of income.