Note C - Earnings Per Share and Stockholders’ Equity

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


	Three Months Ended				Six Months Ended
	October 31,				October 31,
	2017		2016		2017		2016

Net income	$	736,115	$	33,295	$	1,118,997	$	179,892
Weighted-average shares
Basic		4,201,442		4,185,752		4,198,714		4,184,854
Effect of dilutive stock options		125,412		40,122		104,263		40,990

Diluted		4,326,854		4,225,874		4,302,977		4,225,844

Basic earnings per share	$	0.18	$	0.01	$	0.27	$	0.04

Diluted earnings per share	$	0.17	$	0.01	$	0.26	$	0.04

Options to purchase 359,763 and 366,763 shares of common stock were outstanding at October 31, 2017 and 2016, respectively. There were no options granted during the six month periods ended October 31, 2017 and 2016, respectively. The Company recognized $0 and $82,731 in stock option expense for the three month periods ended October 31, 2017 and 2016, respectively. The Company recognized $83,659 and $166,404 in stock option expense for the six month periods ended October 31, 2017 and 2016, respectively. The balance of unrecognized compensation expense related to the Company’s stock option plans was $0 and $246,479 at October 31, 2017 and 2016, respectively. There were no anti-dilutive common stock equivalents outstanding during the three and six month periods ended October 31, 2017. There were 35,067 and 29,500 anti-dilutive common stock equivalents outstanding during the three and six month periods ended October 31, 2016 which were excluded from the calculation of diluted earnings per share.

On October 1, 2016, the Company issued 11,250 shares of restricted stock pursuant to the 2013 Non-Employee Director Restricted Stock Plan, which fully vested on April 1, 2017. The Company recognized no compensation expense with respect to such shares for the three and six month periods ended October 31, 2017. The Company recognized $10,274 in compensation expense for the three and six month periods ended October 31, 2016.

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. The ESPP was terminated effective August 15, 2016. Final purchases under the ESPP were completed on August 31, 2016. The Company recorded $0 and $1,677 in compensation expense for the three months ended October 31, 2017 and 2016 respectively. The Company recorded $0 and $3,559 in compensation expense for the six months ended October 31, 2017 and 2016 respectively. During the three months ended October 31, 2017 and 2016, the Company recorded $0 and $1,472, respectively, to stockholders’

Note C - Earnings Per Share and Stockholders’ Equity - Continued

equity relating to purchases under the ESPP. During the six months ended October 31, 2017 and 2016, the Company recorded $0 and $8,347, respectively, to stockholders’ equity relating to purchases under the ESPP.