Quarterly report pursuant to Section 13 or 15(d)

SHAREHOLDERS' EQUITY

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SHAREHOLDERS' EQUITY
 9 Months Ended
May 31, 2018
SHAREHOLDERS EQUITY [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 5 – SHAREHOLDERS’ EQUITY

The Company maintains the 2014 Equity Incentive Plan (the “2014 Equity 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 Equity Plan. Pursuant to the 2014 Equity 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 of directors. The Company has reserved 1.6 million shares of common stock for issuance under the 2014 Equity Plan. The Company began awarding options under the 2014 Equity Plan during January 2015. Prior to the effective date of the 2014 Equity Plan, the Company granted stock awards to eligible participants under its 2004 Incentive Plan (the “2004 Incentive Plan”), which expired April 11, 2014. No additional awards may be granted pursuant to the 2004 Incentive 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 Incentive Plan.

The following table summarizes the combined stock option activity for the 2004 Incentive Plan and 2014 Equity Plan for the nine months ended May 31, 2018:

   
Number of
Options
    
Weighted-
Average
Exercise Price
    
Weighted-
Average
Remaining
Contractual
Term
    
Approximate
Aggregate
Instrinsic
Value
  
Oustanding at August 31, 2017
    
465,500
    
$
4.88
      
6.30
    
$
1,007,740
  
Granted (1)
   
82,500
      
8.05
                  
Exercised
    
(10,000
)
    
7.50
                  
Forfeited or expired
    
(2,500
)
    
7.50
                  
Outstanding at May 31, 2018
    
535,500
    
$
5.31
      
6.29
    
$
2,163,540
  
                                 
Options exercisable at May 31, 2018
    
379,668
    
$
4.66
      
5.21
    
$
1,780,275
  

 
(1)
Includes 50,000 shares granted to Mr. Harding on September 27, 2017 and 32,500 total shares granted to the board of directors on January 17, 2018.

The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as of and for the nine months ended May 31, 2018:

   
Number of
Options
    
Weighted-
Average Grant
Date Fair
Value
  
Non-vested options oustanding at August 31, 2017
    
147,500
    
$
3.64
  
Granted
    
82,500
      
4.41
  
Vested
    
(74,168
)
    
2.84
  
Forfeited
    
-
      
-
  
Non-vested options outstanding at February 28, 2018
    
155,832
    
$
3.76
  

All non-vested options are expected to vest.

Stock-based compensation expense was $83,600 and $63,500 for the three months ended May 31, 2018 and 2017, respectively. Stock-based compensation expense was $241,200 and $168,000 for the nine months ended May 31, 2018 and 2017, respectively.
 
At May 31, 2018, the Company had unrecognized expenses totaling $378,400 relating to non-vested options that are expected to vest. The weighted-average period over which these options are expected to vest is approximately two years.