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STOCK BASED COMPENSATION

6 Months Ended

Aug. 31, 2024

Equity [Abstract]

STOCK BASED COMPENSATION

NOTE 5: STOCK BASED COMPENSATION

Stock Options - Until June 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 10 years after the date of grant. As of August 31, 2024, there were 212,202 options outstanding under the 2013 Plan, of which 185,300 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, 2024, there were 219,558 options outstanding under the 2023 Plan, of which 8,808 are vested.

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, 2024, the Company granted options to acquire 134,657 shares to employees exercisable at prices ranging from $4.12 to $4.87 and options to acquire 26,667 shares to non-employee members of the board of directors with an exercise price of $4.12. The options granted to employees and directors vest over three 3 years and expire ten 10 years from the date of issuance. The options granted during the first six months of fiscal 2025 had a combined weighted average grant date fair value of $2.54 per share.

The weighted-average fair value of options is 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, 2024
Expected Life		5 - 8 years
Risk free interest rate		3.64% - 4.39%
Expected volatility		55.19% - 60.34%
Expected dividend yield		0%

For the three and six months ended August 31, 2024, the Company recognized $43,000 and $97,000 in stock-based compensation expense, respectively. Such amounts are included in general and administration expenses on the unaudited condensed consolidated statements of income. For the three and six months ended August 31, 2023, the Company recognized approximately $46,000 and $95,000 of stock-based compensation expense, respectively. Total compensation expense related to non-vested options not yet recognized as of August 31, 2024 was $585,000 and will be recognized over the next three years based on vesting date. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures.

The aggregate intrinsic value of the Company’s vested and exercisable options at August 31, 2024 was approximately $85,000.