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NOTE 6: STOCK BASED COMPENSATION

6 Months Ended

Aug. 31, 2021

Equity [Abstract]

NOTE 6: STOCK BASED COMPENSATION

NOTE 6: STOCK BASED COMPENSATION

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

During the three and six months ended August 31, 2021, the Company granted options to acquire 62,750 shares to employees and directors exercisable at $3.19. The options granted to employees and directors vest over three years and expire in ten years. The options had a weighted average grant date fair value of $1.60 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, 2021
Expected Life		5 - 8 years
Risk free interest rate		0.78% - 1.04%
Expected volatility		50.73% - 52.1%
Expected dividend yield		0%

Total compensation related to non-vested options not yet recognized as of August 31, 2021 was $243,000 and will be recognized on a straight line basis over the next 2.5 years.

For the three and six months ended August 31, 2021 and 2020, net income and earnings per share reflect the actual deduction for stock-based compensation expense. The impact of applying ASC 718 approximated $19,000 and $8,000 in additional compensation expense during the three months ended August 31, 2021 and 2020, respectively. The impact of applying ASC 718 approximated $41,000 and $16,000 in additional compensation expense during the six months ended August 31, 2021 and 2020, respectively. Such amounts are included in general and administrative expenses on the unaudited consolidated statements of income.