Quarterly report pursuant to Section 13 or 15(d)

5. SHAREHOLDERS' EQUITY

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5. SHAREHOLDERS' EQUITY
 9 Months Ended
May 31, 2017
Shareholders Equity  
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, 2017:

 

    Number of Options   Weighted-Average Exercise Price   Weighted-Average Remaining Contractual Term   Approximate Aggregate Instrinsic Value
Oustanding at August 31, 2016     338,000     $ 4.83                  
Granted     142,500       5.47                  
Exercised     —         —                    
Forfeited or expired     (10,000 )     8.02                  
Outstanding at May 31, 2017     470,500     $ 4.91       6.48     $ 1,354,390  
                                 
Options exercisable at May 31, 2017     323,000     $ 4.68       5.16     $ 1,003,990  

 

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, 2017:

 

    Number of Options   Weighted-Average Grant Date Fair Value
Non-vested options outstanding at August 31, 2016     36,000     $ 4.59  
Granted     142,500       3.67  
Vested     (31,000 )     2.95  
Forfeited     —         —    
Non-vested options outstanding at May 31, 2017     147,500     $ 3.52  

 

All non-vested options are expected to vest.

 

Stock-based compensation expense was $63,500 and $58,200 for the three months ended May 31, 2017 and 2016, respectively. Stock-based compensation expense was $168,000 and $167,100 for the nine months ended May 31, 2017 and 2016, respectively.

 

At May 31, 2017, the Company had unrecognized expenses totaling $392,500 relating to non-vested options that are expected to vest, which options have a weighted average life of less than three years. The Company has not recorded any excess tax benefits to additional paid-in capital.