Quarterly report pursuant to Section 13 or 15(d)

Stock Based Compensation

v3.22.2
Stock Based Compensation
 9 Months Ended
May 31, 2022
Share-Based Payment Arrangement [Abstract]  
Stock Based Compensation Stock Based Compensation
Employee Stock Option Plan Increase
In March 2017, the Company adopted its 2017 Stock Option/Stock Issuance Plan (the “Plan”). The Plan provides incentives to eligible employees, officers, directors and consultants in the form of incentive stock options (“ISOs”), non-qualified stock options (“NQs”), (each of which is exercisable into shares of common stock) (collectively, “Options”) or shares of common stock (“Share Grants”).
On July 1, 2020, the Company's board of directors unanimously approved an increase in the number of shares of common stock issuable under the Plan from 250,000 to 3,000,000. On March 31, 2021, the Company’s shareholders approved the increase in the number of shares of common stock issuable under the Plan as well as any contingent grant awards under the Plan on or
subsequent to July 1, 2020. On June 4, 2021, the Company filed a registration statement on Form S-8 with the SEC to register the issuance of up to an aggregate of 3,000,000 shares, par value $0.0001 per share, reserved for issuance under the Plan.
For all options granted prior to July 1, 2020, each option has a term of service vesting provision over a period of time as follows: 25% vest after a 12-month service period following the award, with the balance vesting in equal monthly installments over the succeeding 36 months. Options granted on or after July 1, 2020 typically vest over four years, with 25% of the grant vesting one year from the grant date, and the remainder in equal quarterly installments over the succeeding 12 quarters. All options granted to date have a stated ten-year term and, as of May 31, 2022, all options granted to date are exercisable.
Stock grants are issued at fair value, considered to be the market price on the grant date. The fair value of option awards is estimated on the grant date using the Black-Scholes stock option pricing model.
Following its adoption of ASU 2016-9, the Company elected to account for forfeitures under the Plan as they occur. Any compensation cost previously recognized for an unvested award that is forfeited because of a failure to satisfy a service condition is reversed in the period of the forfeiture.
The Company recognized approximately $321,000 and $1,069,000 of compensation expense for the three and nine months ended May 31, 2022, respectively.
The Company compensates its board members through grants of common stock for services performed. These services have been accrued within the accounts payable and other accrued liabilities on the condensed consolidated balance sheet. The Company has incurred $56,250 and $168,750 for the three and nine months ended May 31, 2022, respectively.

The following table summarizes option activity during the nine months ended May 31, 2022:
  Options Outstanding and Exercisable
Number
of
Options		 Weighted
Average
Remaining
Contractual
Life		 Weighted
Average
Exercise
Price
    (In years)  
Balance Outstanding, August 31, 2021 1,776,115  8.9 $ 6.80 
Granted 140,000  9.9 1.05 
Exercised —  0.0 — 
Forfeited (366,270) 8.7 4.83 
Balance Outstanding at May 31, 2022 1,549,845  8.3 $ 6.55 
Balance Exercisable at May 31, 2022 1,549,845     
 
Options outstanding as of May 31, 2022 had an aggregate intrinsic value of $0. 
At May 31, 2022, the total unrecognized deferred share-based compensation expected to be recognized over the remaining weighted average vesting periods of 2.8 years for outstanding grants was $2,477,000. Option vesting activity from August 31, 2021, through May 31, 2022 was as follows:
Options Vested Number
of
Options		 Weighted
Remaining
Contractual
Life		 Weighted
Average
Exercise
Price
(In years)
Balance, August 31, 2021 309,257  8.6 $ 16.92 
Vested 316,888  8.6 5.11 
Exercised —  0.0 — 
Forfeited (65,657) 8.3 8.98 
Balance, May 31, 2022 560,487  8.1 $ 11.17 
The following table summarizes information about stock options outstanding and vested at May 31, 2022: 
  Options Outstanding Options Vested
Exercise Prices Number of
Options
Exercisable		 Weighted
Average
Remaining
Contractual
Life		 Weighted
Average
Exercise
Price		 Number
of
Options		 Weighted
Average
Remaining
Contractual
Life		 Weighted
Average
Exercise
Price
    (In Years)     (In Years)  
$0.50 - 10.00
 1,513,648  8.4 $ 4.38  526,244  8.2 $ 4.79 
$10.01 - $40.00
 2,000  7.0 18.95  1,563  7.0 18.99 
$40.01 - $80.00
 12,146  6.8 51.21  10,686  6.8 51.21 
$80.01 - $120.00
 10,052  6.0 102.98  10,021  6.0 102.98 
$120.01 - $160.00
 10,875  5.1 155.84  10,849  5.1 155.89 
$160.01 - $391.60
 1,125  5.1 391.60  1,125  5.1 391.60 
  1,549,845  8.3 $ 6.55  560,487  8.1 $ 11.17