Quarterly report pursuant to Section 13 or 15(d)

SHAREHOLDERS' EQUITY

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SHAREHOLDERS' EQUITY
 3 Months Ended
Nov. 30, 2014
Shareholders Equity  
SHAREHOLDERS' EQUITY

The Company maintains the 2014 Incentive Plan (the “2014 Incentive Plan”), which was approved by shareholders in January 2014 and became effective April 12, 2014. Executives, eligible employees, consultants and non-employee directors are eligible to receive options and stock grants pursuant to the 2014 Incentive Plan. Pursuant to the 2014 Incentive Plan, options to purchase shares of stock and restricted stock awards can be granted with exercise prices, vesting conditions and other performance criteria determined by the Compensation Committee of the Board. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Incentive Plan. No awards have been made under the 2014 Incentive Plan. Prior to the effective date of the 2014 Incentive Plan, the Company granted stock awards to eligible participants under its 2004 Incentive Plan (the “2004 Equity Plan”), which expired April 11, 2014. No additional awards may be granted pursuant to the 2004 Equity Plan; however, awards outstanding as of April 11, 2014, will continue to vest and expire and may be exercised in accordance with the terms of the 2004 Equity Plan.

 

The following table summarizes the stock option activity for the 2004 Equity Plan for the three months ended November 30, 2014:

 

   

Number of

Options

    

Weighted-

Average

Exercise Price

    

Weighted-

Average

Remaining

Contractual

Term

    

Approximate

Aggregate

Instrinsic

Value

  
Oustanding at beginning of period     315,000     $ 5.76              
Granted     -       -              
Exercised     -       -              
Forfeited or expired     -       -              
Outstanding at November 30, 2014     315,000     $ 5.14       6.49     $ 42,575  
                                 
Options exercisable at November 30, 2014     215,833     $ 4.94       5.40     $ 74,315  

 

The following table summarizes the activity and value of non-vested options under the 2004 Equity Plan as of and for the three months ended November 30, 2014:

 

   

Number of

Options

    

Weighted-

Average Grant

Date Fair

Value

  
Non-vested options oustanding at beginning of period     99,167     $ 4.85  
Granted     -       -  
Vested     -       -  
Forfeited     -       -  
Non-vested options outstanding at November 30, 2014     99,167     $ 4.85  

 

All non-vested options are expected to vest. The total fair value of options vested was nil for each of the three months ended November 30, 2014 and November 30, 2013.

 

Stock-based compensation expense was $68,800 and $54,800 for the three months ended November 30, 2014 and 2013, respectively.

 

At November 30, 2014, the Company had unrecognized expenses relating to non-vested options that are expected to vest totaling $348,900 which have a weighted average life of less than three years. The Company has not recorded any excess tax benefits to additional paid-in capital.