Shareholders' Equity

12 Months Ended

Aug. 31, 2016

Equity [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Note 5. Shareholders’ Equity

Earnings Per Common Share (“EPS”)

The following is a reconciliation of the numerators and denominators used in the basic and diluted computations of earnings per common share:

	Year Ended August 31,
(In thousands, except per share information)	2016		2015
EPS– basic and diluted:
Net income	$	4,095	$	3,741
Less: undeclared cumulative preferred stock dividends		(76)		(76)
Net income available to common shareholders for basic and diluted EPS computation		4,019		3,665
Weighted average common shares outstanding for basic and diluted EPS computation		4,861,590		4,861,590
Earnings per common share – basic and diluted	$	0.83	$	0.75

For the year ended August 31, 2016 and 2015, 40,000 potential common shares (issuable upon conversion of 36,000 shares of the Company’s Series A Cumulative Convertible Preferred Stock) have been excluded from the computation of diluted earnings per share because their inclusion would be anti-dilutive since the conversion price was greater than the average market price of the common stock.

Preferred Stock

The Company’s Board of Directors is authorized to establish the various rights and preferences for the Company's preferred stock, including voting, conversion, dividend and liquidation rights and preferences, at the time shares of preferred stock are issued. In September 2004, the Company sold 36,000 shares of its Series A cumulative convertible preferred stock (the “Preferred Stock”) to the Company’s CEO, with an 8.5% dividend rate at a price of $25 per share for a total cash purchase price of $900,000.  Holders of the Preferred Stock have the right at any time to convert the Preferred Stock and accrued but unpaid dividends into shares of the Company’s common stock at the conversion price of $22.50 per share.  In the event of a liquidation or dissolution of the Company, holders of the Preferred Stock are entitled to be paid out of the assets of the Company available for distribution to shareholders at $25.00 per share plus all unpaid dividends before any payments are made to the holders of common stock.