2. SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Feb. 28, 2015

Accounting Policies [Abstract]

Property and Equipment estimated useful lives

Equipment	5 years
Computer equipment	3 to 7 years
Furniture and fixtures	5 to 7 years
Leasehold improvements	Shorter of life of asset or lease

Reconcilation of goodwill

Balance, August 31, 2014	$	–
Addition		4,789,248
Impairments		–
Balance, February 28, 2015	$	4,789,248

Other intangible asset summary

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships	Straight line 8 years	$	1,100,000	$	68,750	$	1,031,250
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete	Straight line 5 years		50,000		5,000		45,000
		$	1,650,000	$	73,750	$	1,576,250

Fair value of assets and liabilities

	Level I		Level II		Level III		Total
Cash and cash equivalents	$	6,103,042	$	–	$	–	$	6,103,042
Total	$	6,103,042	$	–	$	–	$	6,103,042

Components of basic and diluted earnings per share

	Three month ended				Six month ended
	02/28/2015		02/28/2014		02/28/2015		02/28/2014
Numerator:
Net income attributable to common shareholders	$	970,233	$	809,864	$	1,499,136	$	1,495,019
Denominator:
Weighted-average number of common shares outstanding during the period		16,848,983		16,107,327		16,839,599		16,078,173
Dilutive effect of stock options		256,429		249,217		256,758		241,729
Common stock and common stock equivalents used for diluted earnings per share		17,105,412		16,356,544		17,096,357		16,319,902