6. SHAREHOLDERS' EQUITY

12 Months Ended

Aug. 31, 2015

Equity [Abstract]

SHAREHOLDERS' EQUITY

Dividend

The Company’s Board of Directors declared cash dividends during fiscal years 2015 and 2014. The details of the dividends paid are in the following tables:

FY2015

Record Date	Distribution Date	Number of Shares Outstanding on Record Date		Dividend per Share		Total Amount
11/7/2014	11/14/2014		16,841,114	$	0.05	$	842,056
1/26/2015	2/2/2015		16,852,117	$	0.05	$	842,606
5/11/2015	5/18/2015		16,875,117	$	0.05	$	843,754
7/23/2015	7/30/2015		16,943,001	$	0.05	$	847,150
Total						$	3,375,566

FY2014

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
8/04/2014	8/11/2014		16,337,955	$	0.05	$	816,897
Total						$	3,075,585

Although dividend distributions are currently expected to continue on a quarterly basis, the Company’s Board of Directors reserves the right to discontinue the dividend distribution any time.

Stock Option Plan

In September 1996, the Company’s Board of Directors adopted, and the Company’s shareholders approved, the 1996 Stock Option Plan (the "1996 Plan") under which a total of 1,000,000 shares of common stock had been reserved for issuance. The total number of shares that may be granted under the 1996 Plan was increased to 2,000,000 in March 1999, to 4,000,000 in February 2000, to 5,000,000 in December 2000 and to 6,000,000 in February 2005. All such increases were approved by the Company’s Board of Directors and the Company’s shareholders. The 1996 Plan terminated in September 2006 in accordance with its terms.

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

Incentive Stock Options (“ISOs”)

As of August 31, 2015, employees of the Company held ISOs to purchase in the aggregate 621,000 shares of the Company’s common stock at exercise prices ranging from $1.00 to $7.10 per share.

Transactions in FY14 (ISOs)	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		447,500		$	6.57
Exercised		(175,000	)	$	1.34
Canceled/Forfeited		(6,000	)	$	1.00
Outstanding, August 31, 2014		798,500		$	4.59		6.27
Vested and Exercisable, August 31, 2014		299,000		$	1.82		3.16
Vested and Expected to Vest, August 31, 2014		728,079		$	4.41		5.99

Transactions in FY15 (ISOs)	Number of Options			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2014		798,500		$	4.59		6.27
Granted		37,000		$	6.99
Exercised		(95,384	)	$	2.49
Canceled/Forfeited		(119,116	)	$	4.86
Outstanding, August 31, 2015		621,000		$	5.01		6.48
Vested and Exercisable, August 31, 2015		265,700		$	2.81		4.40
Vested and Expected to Vest, August 31, 2015		576,952		$	4.87		6.32

Non-Qualified Stock Options (“NQSOs”)

As of August 31, 2015, the outside members of the Company’s Board of Directors held NQSOs to purchase in the aggregate 49,350 shares of the Company’s common stock at exercise prices ranging from $1.78 to $6.75 per share.

Transactions in FY14 (NQSOs)	Number of Options			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2013		48,600		$	3.79		7.85
Granted		15,000		$	6.72
Exercised		(7,000	)	$	1.30
Outstanding, August 31, 2014		56,600		$	4.82		7.96
Exercisable,  August 31, 2014		31,400		$	3.96		6.74

Transactions in FY15 (NQSOs)	Number of Options			Weighted-Average Exercise Price Per Share		Weighted-Average Remaining Contractual Life
Outstanding, August 31, 2014		56,600		$	4.82		7.96
Granted		13,750		$	6.75
Exercised		(6,503	)	$	3.28
Cancelled/Forfeited		(14,497	)	$	4.97
Outstanding, August 31, 2015		49,350		$	5.52		7.75
Exercisable, August 31, 2015		27,200		$	4.70		6.31

The fair value of the options, including both ISOs and NQSOs, granted during fiscal year 2015 is estimated at $113,435. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 3.03%, pre-vest forfeiture rate of 6.20%, expected volatility of 47.13%, risk-free interest rate of 2.09%, and expected life of 6.89 years. The total fair value of non-vested stock options as of August 31, 2015 was $904,560 and is amortizable over a weighted average period of 3.64 years.

During the fiscal year ended August 31, 2014, the fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions: dividend yield of 3.01%, pre-vest forfeiture rate of 6.25%, expected volatility of 46.18%, risk-free interest rate of 1.80%, and expected life of 6.27 years.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because our stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, in management's opinion, the existing models do not necessarily provide a reliable single measure of the fair value of its stock options.

Intrinsic Value of options outstanding and options exercisable

	Intrinsic Value of Options Outstanding		Intrinsic Value of Options Exercisable		Intrinsic Value of Options Exercised
FY15	$	1,182,797	$	1,109,489	$	396,485
FY14	$	1,850,239	$	1,552,171	$	737,266

The weighted-average remaining contractual life of options outstanding issued under the 1996 and 2007 Plan was 6.57 years at August 31, 2015. The exercise prices for the options outstanding at August 31, 2015 ranged from $1.00 to $7.10 per share, 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		158,500	3.0 years	$1.02		158,500	3.0 years	$1.03
$1.51	$3.00		8,600	4.7 years	$2.37		8,600	4.7 years	$2.37
$3.01	$4.50		41,000	3.4 years	$3.25		41,000	3.4 years	$3.25
$4.51	$6.00		74,000	3.7 years	$5.48		11,600	4.9 years	$4.92
$6.01	$7.10		388,250	9.0 years	$6.85		73,200	8.6 years	$6.83
			670,350				292,900