NOTE 7 – SHAREHOLDERS’ EQUITY

The Company reserved 1.6 million shares of common stock for issuance to employees and directors pursuant to the Company’s 2014 Equity Incentive Plan (2014 Equity Plan). As of May 31, 2022 and August 31, 2021, there were 912,953 and 974,965 shares available for grant under the 2014 Equity Plan. Prior to the effective date of the 2014 Equity Plan, the Company granted options and stock awards to eligible participants under its 2004 Incentive Plan (2004 Incentive Plan), which expired on April 11, 2014. No additional awards may be granted pursuant to 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, 2022:

​

On January 12, 2022, the Company’s six non-employee Board members were each granted 2,000 shares of unrestricted stock. The fair market value of the unrestricted shares for share-based compensation expense is equal to the closing price of the Company's common stock on the date of grant of $13.23. There is no vesting requirement for the unrestricted stock grants and the Company recognized the full expense of $0.2 million during the three months ended February 28, 2022.

​

During the three and nine months ended May 31, 2022, the Company had net settlement exercises of stock options, whereby the optionee did not pay cash for the options exercised but instead received the number of shares equal to the difference between the exercise price and the market price on the date of exercise. During the three months ended May 31, 2022, net settlement exercises resulted in 22,123 shares being issued and 23,377 options being cancelled in settlement of the shares issued. During the nine months ended May 31, 2022, net settlement exercises resulted in 46,012 shares being issued and 51,655 options being cancelled in settlement of shares issued. During the three and nine months ended May 31, 2022, the Company issued 0 and 6,000 shares of common stock upon the exercise of stock options, with an exercise price of $5.66, where the option holder used cash to exercise the options.

​

On January 13, 2021, the Company’s six non-employee Board members were each granted 2,000 shares of unrestricted stock. The fair market value of the unrestricted shares for share-based compensation expense is equal to the closing price of the Company's common stock on the date of grant of $11.33. There is no vesting requirement for the unrestricted stock grants and the Company recognized the full expense of $0.1 million during the three months ended February 28, 2021.

​

During the three and nine months ended May 31, 2021, the Company had net settlement exercises of stock options, whereby the optionee did not pay cash for the options but instead received the number of shares equal to the difference between the exercise price and the market price on the date of exercise. During the three months ended May 31, 2021, net settlement exercises resulted in 8,758 shares being issued and 4,242 options being cancelled in settlement of shares issued. During the nine months ended May 31, 2021, net settlement exercises resulted in 24,035 shares being issued and 13,465 options being cancelled in settlement of shares issued.

​

The following table summarizes the combined activity and value of non-vested options under the 2004 Equity Plan and 2014 Incentive Plan as for the nine months ended May 31, 2022:

For the three months ended May 31, 2022 and 2021, the Company recorded $0.1 million and $0.1 million of stock-based compensation expense, which includes the amounts expensed related to the unrestricted stock granted to the Company’s Board members.  For the nine months ended May 31, 2022 and 2021, the Company recorded $0.5 million and $0.4 million of stock-based compensation expense, which includes the amounts expensed related to the unrestricted stock granted to the Company’s Board members.  

At May 31, 2022, the Company had unrecognized compensation expenses totaling $0.7 million 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 and a half years.