STOCKHOLDERS' EQUITY

6 Months Ended

Feb. 28, 2022

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY [Text Block]

6. STOCKHOLDERS' EQUITY

[a] Common stock issued and authorized

The Company is authorized to issue up to 20,000,000 shares of common stock, par value $0.001 per share.

On January 15, 2021, the Company commenced a Normal Course Issuer Bid ("NCIB"), pursuant to which the Company may purchase up to a maximum of 522,532 common shares, through the TSX Venture Exchange (the "TSX") at the market price at the time of purchase, subject to daily limits and compliance with the applicable rules of the TSX and Canadian securities laws. During the six-month period ended February 28, 2022, the Company repurchased and cancelled 143,100 common shares for $179,401. At January 15, 2022, the Company had repurchased 328,385 common shares for $437,180.

[b] Stock option plans

The Company has a stock option plan, namely the 2015 Stock Option Plan (the "2015 Plan"), under which up to 530,000 shares of common stock, has been reserved for issuance. A total of Nil common shares remain eligible for issuance under the 2015 Plan. On February 18, 2022 the Company received shareholder approval for the 2022 Stock Option Plan (the "2022 Plan), whereby 1,000,000 common shares would be reserved for issuance. As at February 28, 2022, 634,000 common shares remain eligible for issuance under the 2022 Plan.

The options generally vest over a range of periods from the date of grant, some are immediate, and others are 12 or 24 months. Any options that do not vest as the result of a grantee leaving the Company are forfeited and the common shares underlying them are returned to the reserve. The options generally have a contractual term of five years.

Stock-Based Payment Award Activity

A summary of stock option activity under the Plans as of February 28, 2022, and changes during the period then ended is presented below:

				Weighted
			Weighted	Average	Aggregate
			Average	Remaining	Intrinsic
			Exercise Price	Contractual	Value
Options	Shares		$	Term	$
Outstanding at August 31, 2020	410,000		1.34	2.26	-
Granted	521,000		1.50	5.00	-
Forfeited	(30,000	)	1.33	2.81	-
Exercised	(30,000	)	1.00	2.50	-
Outstanding at February 28, 2022	871,000		1.45	3.41	20,700
Exercisable at February 28, 2022	418,500		1.41	1.98	19,688

The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying awards and the quoted price of the Company's common stock for the options that were in-the-money at February 28, 2022.

The following table summarizes information regarding the non-vested options outstanding as of February 28, 2022 and changes during the period then ended:

			Weighted Average Grant Date
	Number of Options		Fair Value
			$
Non-vested options at August 31, 2021	98,750		0.48
Granted	521,000		1.11
Vested	(142,250	)	0.75
Forfeited	(25,000	)	(0.98	)
Non-vested options at February 28, 2022	452,500		1.09

As of February 28, 2022, there was $478,476 of total unrecognized compensation cost related to non-vested stock-based compensation awards. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.91 years.

During the six months ended February 28, 2022, the total stock-based compensation expense is reported in the statement of comprehensive income (loss) as follows:

	2022	2021
	$	$
Stock-based compensation
General and administrative	28,408	9,063
Sales and marketing	37,878	9,573
Product development	28,408	7,347
Total stock-based compensation	94,694	25,983

Valuation Assumptions

The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model based on the following assumptions:

		2022		2021
Expected term of stock options (years)		3.25		3.25
Expected volatility		122.7%		105.4%
Risk-free interest rate		0.35%		0.35%
Dividend yields		-		-
Weighted average grant date fair value	$	0.40	$	0.34

Expected volatilities are based on historical volatility of the Company's stock. The Company uses historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted represents the period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the options is based on US Treasury bill rates in effect at the time of grant.

[c] Employee Stock Purchase Plan

The Company's 2011 Employee Stock Purchase Plan (the "Plan") became effective on February 22, 2011. Under the Plan, employees of the Company are able to contribute up to 5% of their annual salary into a pool which is matched equally by the Company in order to purchase Company shares under certain terms. Directors are able to contribute a maximum of $12,500 each for a combined maximum annual purchase of $25,000. The maximum annual combined contributions will be $400,000. All purchases are made through the Toronto Stock Exchange by a third-party plan agent. The third-party plan agent is also responsible for the administration of the Plan on behalf of the Company and the participants.

During the six month period ended February 28, 2022, the Company recognized compensation expense of $77,527 (2021: $52,857) in salaries and wages on the consolidated statement of comprehensive income (loss) in respect of the Plan, representing the Company's employee matching of cash contributions to the Plan. The shares were purchased on the open market at an average price of $1.29 (2021: $0.81). The shares are held in trust by the Company for a period of one year from the date of purchase.

[d] Earnings Per Share

Net income (loss) per common share (basic) is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Net income per common share (diluted) is calculated by dividing net income for the period by the weighted average number of common shares outstanding during the period, plus the dilutive effect of outstanding common share equivalents. This method requires that the dilutive effect of outstanding options and warrants issued be calculated using the treasury stock method. Under the treasury stock method, all common share equivalents have been exercised at the beginning of the period (or at the time of issuance, if later), and that the funds obtained thereby were used to purchase common shares of the Company at the average trading price of common shares during the period, but only if dilutive. For the three and six-month periods ended February 28, 2022 and 2021 the outstanding options, in the amount of 871,000 (August 31, 2021: 410,000), were anti-dilutive and have been excluded from the calculation of diluted income (loss) per share.