13.  Stock Option Plans:

In 2025, the Company adopted a stock option plan which permits the Company to grant both incentive stock options and non-qualified stock options.  The incentive stock options qualify for preferential treatment under the Internal Revenue Code.  Under this plan, 316,200 shares of common stock have been reserved for grant to key employees and directors of the Company and 83,850 shares have been granted as of May 31, 2026. Under the plan, the option price may not be less than the fair market value of the stock at the time the options are granted. Options vest immediately and expire ten years from the date of grant.

Using the Black-Scholes option pricing model, the weighted average estimated fair value of each option granted under the plan was $19.53 during 2026 and $13.61 during 2025.  The pricing model uses the assumptions noted in the following table.  Expected volatility is based on the historical volatility of the Company's stock.  The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.  The expected life of options granted is derived from previous history of stock exercises from the grant date and represents the period of time that options granted are expected to be outstanding.  The Company uses historical data to estimate option exercise and employee termination assumptions under the valuation model.  The Company has never paid dividends on its common stock and does not anticipate doing so in the foreseeable future.

The following is a summary of stock option activity:

We calculated intrinsic value for those options that had an exercise price lower than the market price of our common shares as of the balance sheet dates.  The aggregate intrinsic value of outstanding options as of the end of each fiscal year is calculated as the difference between the exercise price of the underlying options and the market price of our common shares for the options that were in-the-money at that date (346,445 at May 31, 2026 and 309,500 at May 31, 2025).  The Company's closing stock price was $51.00 and $36.93 as of May 31, 2026 and 2025.  As of May 31, 2026, there are 232,350 options available for future grants under the 2025 stock option plan.  $1,920,098 was received from the exercise of options during the fiscal year ended May 31, 2026; $356,883 was received from the exercise of options during the fiscal year ended May 31, 2025.

The following table summarizes information about stock options outstanding at May 31, 2026:

The following table summarizes information about stock options outstanding at May 31, 2025: