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