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STOCK BASED COMPENSATION
 6 Months Ended
Aug. 31, 2022
Equity [Abstract]  
STOCK BASED COMPENSATION

NOTE 6: STOCK BASED COMPENSATION

 

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, 2022, the Company granted options to acquire 2,972 shares to employees exercisable at prices ranging from $5.50 to $5.80 and options to acquire 16,500 shares to non-employee members of the board of directors with an exercise price of $5.50. 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 2023 had a combined weighted average grant date fair value of $3.04 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, 2022
Expected Life   5 - 8 years
Risk free interest rate   2.82% - 3.02%
Expected volatility   55.02% - 61.42%
Expected dividend yield   0%

 

Total compensation related to non-vested options not yet recognized as of August 31, 2022 was $322,000 and will be recognized over the next three years based on vesting date.

 

For the three and six months ended August 31, 2022 and 2021, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended August 31, 2022 and 2021, the Company recognized approximately $43,000 and $19,000 of stock based compensation, respectively. For the six months ended August 31, 2022, the Company recognized approximately $112,000 and $41,000 of stock based compensation, respectively. Stock based compensation is included in general and administrative expenses on the unaudited consolidated statements of income.