Quarterly report pursuant to Section 13 or 15(d)

Note 5 - Shareholders' Equity

v2.4.0.6
Note 5 - Shareholders' Equity
 6 Months Ended
Feb. 28, 2013
Stockholders' Equity Note Disclosure [Text Block]
NOTE 5 – SHAREHOLDERS’ EQUITY

The Company maintains the 2004 Incentive Plan (the “Equity Plan”), which was approved by shareholders in April 2004. Executives, eligible employees, consultants and non-employee directors are eligible to receive options and stock grants pursuant to the Equity Plan. Pursuant to the 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. The Company initially reserved 1.6 million shares of common stock for issuance under the Equity Plan. At February 28, 2013, the Company had 1,318,311 common shares remaining that can be granted to eligible participants pursuant to the Equity Plan.

The following table summarizes the stock option activity for the Equity Plan for the six months ended February 28, 2013:

   
Number of Options
   
Weighted-Average Exercise Price
   
Weighted-Average Remaining Contractual Term
   
Approximate Aggregate Instrinsic Value
 
Oustanding at beginning of period (Aug. 31, 2012)
    215,000     $ 5.88              
Granted
    32,500       3.15              
Exercised
    -       -              
Forfeited or expired
    -       -              
Outstanding at February 28, 2013
    247,500       5.52       6.4     $ 161,475  
Options exercisable at February 28, 2013
    205,000     $ 6.03       5.5     $ 114,165  

The following table summarizes the activity and value of non-vested options as of and for the six months ended February 28, 2013:

   
Number of
Options
   
Weighted-
Average Grant
Date Fair
Value
 
Non-vested options oustanding at beginning of period
    22,500     $ 1.72  
Granted
    32,500       2.36  
Vested
    (12,500 )     1.50  
Forfeited
    -       -  
Options not vested at February 28, 2013
    42,500     $ 2.28  

All non-vested options are expected to vest. The total fair value of options vested during the three and six months ended February 28, 2013 and February 29, 2012 was $18,800 and $38,900, respectively.

Stock-based compensation expense for the three months ended February 28, 2013 and February 29, 2012, was $12,500 and $21,300, respectively. Stock-based compensation expense for the six months ended February 28, 2013 and February 29, 2012, was $23,100 and $40,100, respectively.

At February 28, 2013, the Company had unrecognized expenses relating to non-vested options that are expected to vest totaling $70,400 which have a weighted average life of less than 1 year. The Company has not recorded any excess tax benefits to additional paid-in capital.