6. SHAREHOLDERS' EQUITY
 9 Months Ended
May 31, 2014
Equity [Abstract]  
Note 6. SHAREHOLDERS' EQUITY

Dividend

The Board of Directors declared cash dividends during fiscal year 2013. The details of dividends paid are in the following table:

 

Record Date   Distribution Date   Number of Shares Outstanding on Record Date     Dividend per Share     Total Amount  
11/8/2012   11/13/2012     15,927,806     $ 0.05     $ 796,390  
12/24/2012   12/28/2012     16,021,309     $ 0.14     $ 2,242,983  
5/7/2013   5/10/2013     16,030,433     $ 0.03     $ 480,913  
8/12/2013   8/15/2013     16,030,894     $ 0.03     $ 480,926  
Total                       $ 4,001,212  

 

The Board of Directors has also declared cash dividends during fiscal year 2014. The details of dividends paid are in the following table:

 

Record Date   Distribution Date   Number of Shares Outstanding on Record Date     Dividend per Share     Total Amount  
11/08/2013   11/15/2013     16,073,894     $ 0.04     $ 642,956  
2/17/2014   2/24/2014     16,149,460     $ 0.05     $ 807,473  
5/09/2014   5/16/2014     16,165,171     $ 0.05     $ 808,259  
Total                       $ 2,258,688  

 

Stock Option Plan

In September 1996, the Board of Directors adopted, and the shareholders approved, the 1996 Stock Option Plan (the "Option Plan") under which a total of 1,000,000 shares of common stock had been reserved for issuance. In March 1999, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 2,000,000. In February 2000, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 4,000,000. In December 2000, the shareholders approved an increase in the number of shares that may be granted under the Option Plan to 5,000,000. Furthermore, in February 2005, the shareholders approved an additional 1,000,000 shares, resulting in the total number of shares that may be granted under the Option Plan to 6,000,000. The 1996 Stock Option Plan terminated in September 2006 by its term.

 

On February 23, 2007, the Board of Directors adopted and the shareholders approved the 2007 Stock Option Plan under which a total of 1,000,000 shares of common stock had been reserved for issuance. On February 25, 2014 the shareholders approved an additional 1,000,000 shares increasing the total number of shares that may be granted under the Option Plan to 2,000,000.

 

Qualified Incentive Stock Options (Qualified ISO)

As of May 31, 2014, employees hold Qualified ISO to purchase 466,000 shares of common stock at exercise prices ranging from $1.00 to $5.61 which were granted prior to May 31, 2014.

 

Transactions in FY14   Number of Options     Weighted-Average Exercise Price 
Per Share		     Weighted-Average Remaining Contractual Life  
                   
Outstanding, August 31, 2013     532,000     $ 1.82       3.95  
Granted     100,000     $ 5.61          
Exercised     (160,000 )   $ 1.36          
Cancelled/Forfeited     (6,000 )   $ 1.00          
Outstanding, May 31, 2014     466,000     $ 2.80       3.57  
Exercisable,  May 31, 2014     314,000     $ 1.78       3.31  

 

The fair value of the options, including both ISO and NQSO options, granted during the nine months ended May 31, 2014 is estimated at $130,781. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions for FQE May 31, 2014: dividend yield of 3.14%, pre-vest forfeiture rate of 6.25%, expected volatility of 38.95%, risk-free interest rate of 1.36%, and expected life of 5.0 years.

 

Non-Qualified Stock Options (Non-Qualified ISO)

As of May 31, 2014, the outside members of the Board of Directors hold options to purchase 45,600 shares of common stock at exercise prices ranging from $1.67 to $6.68, which were granted prior to May 31, 2014.

 

Transactions in FY14   Number of Options    

Weighted-Average Exercise Price

Per Share

     Weighted-Average Remaining Contractual Life  
                   
Outstanding, August 31, 2013     48,600     $ 3.79       7.85  
Exercised     (3,000 )   $ 1.80          
Outstanding, May 31, 2014     45,600     $ 3.92       7.29  
Exercisable,  May 31, 2014     25,200     $ 3.45       6.12  

 

The weighted-average remaining contractual life of options outstanding issued under the Plan, both Qualified ISO and Non-Qualified SO, was 4.19 years at May 31, 2014. The exercise prices for the options outstanding at May 31, 2014 ranged from $1.00 to $6.68, and the information relating to these options is as follows:

  

Exercise Price     Awards Outstanding     Awards Exercisable  
Low     High     Quantity     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price     Quantity     Weighted Average Remaining Contractual Life     Weighted Average Exercise Price  
$ 1.00     $ 1.50       212,500       3.54     $ 1.05       212,500       3.54     $ 1.05  
$ 1.51     $ 3.00       21,600       5.86     $ 2.28       11,600       5.83     $ 2.11  
$ 3.01     $ 4.50       141,900       3.38     $ 3.28       103,500       3.24     $ 3.23  
$ 4.51     $ 6.68       136,000       4.70     $ 5.49       12,000       3.27     $ 5.59  
                  511,600       3.90     $ 2.90       339,200       3.52     $ 1.90