Video Display Corporation and Subsidiaries
November 30, 2020
Stock-Based Compensation Plans
For the nine-month period ended November 30, 2020, there was no expense related to share-based compensation as all options were fully
vested. For the period ended November 30, 2019, the Company recognized general and administrative expenses of $5 thousand related to share-based compensation.
The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model, which requires the Company to
estimate the expected term of the stock option grants and expected future stock price volatility over the term. The term represents the expected period of time the Company believes the options will remain outstanding based on historical information.
Estimates of expected future stock price volatility are based on the historic volatility of the Companys common stock, which represents the standard deviation of the differences in the weekly stock closing price, adjusted for dividends and
stock splits.
No options were granted for the nine month period ending November 30, 2020 or for the nine month period ended
November 30, 2019.
Stock Repurchase Program
The Company has a stock repurchase program, pursuant to which it had been authorized to repurchase up to 2,632,500 shares of the Companys
common stock in the open market. On January 20, 2014, the Board of Directors of the Company approved a one-time continuation of the stock repurchase program, and authorized the Company to repurchase up to
1,500,000 additional shares of the Companys common stock in the open market. There is no minimum number of shares required to be repurchased under the program.
For the nine months ending November 30, 2020 and November 30, 2019, the Company did not purchase any shares of the Video Display
Corporation stock. Under the Companys stock repurchase program, an additional 490,186 shares remain authorized to be repurchased by the Company at November 30, 2020.
Note 10. Income Taxes
Due to the
Companys overall and historical net loss position, no income tax expense was reported for the nine month period ending November 30, 2020 and November 30, 2019 and a full valuation allowance has been allocated to the deferred tax
assets created by these accumulated losses.
Note 11. Legal Proceedings
The Company is involved in various legal proceedings related to claims arising in the ordinary course of business. The Company is not currently
a party to any legal proceedings the result of which management believes is likely to have a material adverse impact on its business, financial position, results of operation or cash flows.
Note 12. Subsequent Events
On
December 9, 2020, the Company received forgiveness on the $772,000 Video Display PPP loan. As disclosed in Note 5, the extinguishment of the loan liability and recording of the forgiveness income will be reflected in fiscal fourth quarter 2021
results as forgiveness notification was received after the fiscal third quarter 2021 balance sheet date.
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