Note C - Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share:


	Three Months Ended				Six Months Ended
	October 31,				October 31,
	2015		2014		2015		2014

Net income	$	1,156,298	$	146,429	$	1,815,104	$	163,239
Weighted-average shares
Basic		4,166,758		4,044,240		4,157,516		4,036,387
Effect of dilutive stock options		47,559		75,938		83,484		82,324

Diluted		4,214,317		4,120,178		4,241,000		4,118,711

Basic earnings per share	$	0.28	$	0.04	$	0.44	$	0.04

Diluted earnings per share	$	0.27	$	0.04	$	0.43	$	0.04

Options to purchase 368,963 and 90,354 shares of common stock were outstanding at October 31, 2015 and 2014, respectively. There were 285,000 options granted during the six month period ended October 31, 2015 and no options were granted during the six month period ended October 31, 2014. The Company recognized $402,469 and $4,559 in stock option expense for the three month period ended October 31, 2015 and 2014, respectively. The Company recognized $407,028 and $22,931 in stock option expense for the six months ended October 31, 2015 and 2014, respectively. The balance of unrecognized compensation expense related to the Company’s stock option plans was $580,372 and $30,680 at October 31, 2015 and 2014, respectively.

The Company issued 10,000 shares of restricted stock on October 1, 2015, which will fully vest on April 1, 2016. The Company recognized $11,692 in compensation expense for the three and six month periods ended October 31, 2015. The balance of unrecognized compensation expense related to the Company’s restricted stock award was $57,708 at October 31, 2015.

On October 1, 2014, the Company granted 1,750 shares to each non-employee director pursuant to the 2013 Non-Employee Director Restricted Stock Plan. A total of 8,750 restricted shares were granted and the shares vested in six months from the date of grant. The shares were fully vested by April 1, 2015 and thus, the Company recognized no compensation expense for the three and six months ended October 31, 2015. The Company recognized $10,254 in compensation expense for the three and six months ended October 31, 2014.

The Company implemented an employee stock purchase plan (“ESPP”) for all eligible employees on February 1, 2014. The ESPP reserved 500,000 shares of common stock for issuance to employees. In addition, the number of shares of common stock reserved for issuance under the plan automatically increases on the first day of the Company’s fiscal years by 25,000 shares. For the three months ended October 31, 2015 and 2014, 2,185 and 5,839 shares, respectively, were issued under the ESPP. The Company recorded $3,010 and $10,208 in compensation expense for the three months ended October 31,

Note C - Earnings Per Share - Continued

2015 and 2014, respectively. For the six months ended October 31, 2015 and 2014, 6,332 and 9,629 shares, respectively, were issued under the ESPP. The Company recorded $8,600 and $19,874 in compensation expense for the six months ended October 31, 2015 and 2014, respectively. During the three months ended October 31, 2015 and 2014, the Company recorded $11,602 and $34,684, respectively, to stockholders’ equity relating to purchases under the ESPP. During the six months ended October 31, 2015 and 2014, the Company recorded $34,338 and $84,336, respectively, to stockholders’ equity relating to purchases under the ESPP.