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STOCK BASED COMPENSATION

6 Months Ended

Aug. 31, 2025

Equity [Abstract]

STOCK BASED COMPENSATION

NOTE 5: STOCK BASED COMPENSATION

Stock Options - In May 2023, the Company’s Board of Directors authorized the creation of the 2023 Stock Incentive Plan (the “2023 Plan”) pursuant to which the Company may grant up to 2,500,000 options or shares to officers, directors, employees and consultants of the Company and its subsidiaries. The Company’s shareholders approved the adoption of the 2023 Plan in August 2023. The 2023 Plan replaced the 2013 Stock Incentive Plan (the “2013 Plan”) under which no additional options or shares could be granted after June 2023. At August 31, 2025, 392,594 and 210,770 options were outstanding, respectively, under the 2023 Plan and the 2013 Plan.

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. The Company accounts for forfeitures as they occur.

During the six months ended August 31, 2025, the Company granted options to acquire 140,277 shares to employees exercisable at prices ranging from $3.25 to $3.77 and options to acquire 35,088 shares to non-employee members of the board of directors with an exercise price of $3.25. The options granted to employees and directors vest over three years and expire ten years from the date of issuance. The options granted during the first six months of fiscal 2026 had a combined weighted average grant date fair value of $3.26 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, 2025
Expected Life		5 - 8 years
Risk free interest rate		3.81% - 4.32%
Expected volatility		54.49% - 56.95%
Expected dividend yield		0%

For the three and six months ended August 31, 2025, the Company recognized $71,000 and $146,000 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, 2024, the Company recognized approximately $43,000 and $97,000 of stock-based compensation expense, respectively. Total compensation expense related to non-vested options not yet recognized as of August 31, 2025 was $608,000 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, 2025 was approximately $30,000.