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.

During the three and nine months ended May 31, 2025, the Company did not issue any common stock (May 31, 2024 - Nil for both). During the three and nine months ended May 31, 2025, the Company did not repurchase and cancel any common shares (May 31, 2024 - 149,900 and 459,200 common shares for $163,591 and $470,271 respectively).

[b] Stock option plans

Pursuant to the Company's 2015 Stock Option Plan (the "2015 Plan"), 530,000 shares of common stock have been reserved for issuance. A total of 481,870 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") (together with the 2015 Plan, the "Plans"), whereby 1,000,000 common shares are reserved for issuance. As of May 31, 2025, 371,500 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 vest over 24 months. Any options that do not vest as the result of a grantee leaving the Company are forfeited and the underlying common shares 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 May 31, 2025, and changes during the period were the following:

		Number of Options			Weighted Average Exercise Price			Weighted Average Contractual Term (Years)			Aggregate Intrinsic Value
Outstanding at August 31, 2023		749,000		$	1.30			3.37		$	-
Granted		20,000		$	1.15			4.61		$	-
Forfeited		(46,122	)	$	1.14			3.14		$	957
Expired		(7,168	)	$	1.01			3.47		$	200
Outstanding at August 31, 2024		715,710		$	1.31			2.37		$	6,908
Forfeited		(15,207	)	$	0.85			3.15		$	-
Expired		(154,503	)	$	1.33			0.77		$	-
Outstanding at May 31, 2025		546,000		$	1.32			1.96		$	-
Exercisable at May 31, 2025		531,719		$	1.33			1.92		$	-

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 as of May 31, 2025. As of May 31, 2025, the aggregate intrinsic value of outstanding and exercisable options were both nil, respectively (May 31, 2024 - $10,200 and $4,511, respectively).

As of May 31, 2025, there was $7,423 (May 31, 2024 - $59,082) 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 0.46 years (May 31, 2024 - 0.77 years).

During the three and nine months ended May 31, 2025, the Company recorded $8,929 and $27,832 in non-cash stock-based compensation, respectively (May 31, 2024 - $11,359 and $35,819, respectively).

[c] Employee Stock Purchase Plan

The Company's 2011 Employee Stock Purchase Plan (the "ESPP") became effective on February 22, 2011. Under the ESPP, employees of the Company can contribute up to 5% of their annual salary into a pool which is matched equally by the Company in order to purchase the Company's common shares under certain terms. Directors can 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 TSX-V by a third-party plan agent. The third-party plan agent is also responsible for the administration of the ESPP on behalf of the Company and the participants.

During the three and nine months ended May 31, 2025, the Company recognized compensation expense of $19,960 and $52,170, respectively (May 31, 2024 - $17,734 and $51,664, respectively) in salaries and wages on the condensed consolidated statement of comprehensive income (loss) in respect of the ESPP, representing the Company's employee matching of cash contributions to the ESPP. The shares were purchased on the open market at an average price of $0.67 over a nine-month period (May 31, 2024 - $1.02). The shares are held in trust by the Company for a period of one year from the date of purchase. As of May 31, 2025, 680,610 shares were held in trust by the Company (May 31, 2024 - 139,293 shares).

[d] Earnings Per Share

Net income (loss) per common share (basic) is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Net income (loss) per common share (diluted) is calculated by dividing net income (loss) 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. The following table shows the computation of basic and diluted earnings per share for the three and nine months ended May 31, 2025, and 2024:

		Three Months Ended						Nine Months Ended
		May 31, 2025			May 31, 2024			May 31, 2025			May 31, 2024
Numerator:
Net income (loss)	$	(72,288	)	$	134,476		$	(256,242	)	$	253,980
Denominator:
Weighted-average basic shares outstanding		9,637,410			9,689,303			9,637,410			9,846,942
Effect of dilutive stock-based awards		-			32,732			-			41,499
Weighted-average diluted shares		9,637,410			9,722,035			9,637,410			9,888,441
Basic and diluted earnings (loss) per share	$	(0.01	)	$	0.01		$	(0.03	)	$	0.03

531,719 stock options were excluded from the computation of diluted earnings per share for the three and nine months ended May 31, 2025, because their effect would have been antidilutive.