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STOCK-BASED COMPENSATION

9 Months Ended

Nov. 30, 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 November 30, 2024, there were 212,202 options outstanding under the 2013 Plan, of which 193,139 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 November 30, 2024, there were 217,229 options outstanding under the 2023 Plan, of which 22,016 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 nine months ended November 30, 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 grant. The options granted during the first nine 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 are estimated on the date of grant using the Black-Scholes options-pricing model. The weighted-average Black-Scholes assumptions are as follows:

		Nine Months Ended November 30, 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 nine months ended November 30, 2024 and 2023, net income and earnings per share reflect the actual deduction for stock-based compensation expense. For the three months ended November 30, 2024 and 2023, the Company recognized approximately $79,000 and $53,000 of stock based compensation expense, respectively. For the nine months ended November 30, 2024 and 2023, the Company recognized approximately $176,000 and $147,000 of stock based compensation expense, respectively. Such amounts are included in general and administrative expenses on the unaudited condensed consolidated statements of income. Total compensation expense related to non-vested options not yet recognized as of November 30, 2024 was $484,000 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 November 30, 2024 was approximately $126,000.