Quarterly report pursuant to Section 13 or 15(d)

Stockholders' Equity

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Stockholders' Equity
 9 Months Ended
May 31, 2013
SHAREHOLDERS' EQUITY:  
Shareholders' Equity
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 May 31, 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 nine months ended May 31, 2013:

   
Number of Options
    
Weighted-Average Exercise Price
    
Weighted-Average Remaining Contractual Term
    
Approximate Aggregate Instrinsic Value
  
Outstanding at beginning of period (Aug. 31, 2012)
     215,000     $ 5.88              
Granted
     32,500       3.15              
Exercised
     —       —              
Forfeited or expired
     —       —              
Outstanding at May 31, 2013
     247,500       5.52       6.4     $ 161,475  
Options exercisable at May 31, 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 nine months ended May 31, 2013:

   
Number of Options
    
Weighted-Average Grant Date Fair Value
  
Non-vested options outstanding at beginning of period
     22,500     $ 1.72  
Granted
     32,500       2.36  
Vested
     (12,500 )     1.50  
Forfeited
     —       —  
Options not vested at May 31, 2013
     42,500     $ 2.28  
 
All non-vested options are expected to vest. The total fair value of options vested during the three and nine months ended May 31, 2013 and 2012 was $18,800 and $38,900, respectively.

Stock-based compensation expense for the three months ended May 31, 2013 and 2012, was $19,200 and $13,600, respectively. Stock-based compensation expense for the nine months ended May 31, 2013 and 2012, was $42,300 and $42,300, respectively.

At May 31, 2013, the Company had unrecognized expenses relating to non-vested options that are expected to vest totaling $51,200 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.