7. INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2015

Income Tax Disclosure [Abstract]

Components of the income tax provision

	2015			2014
Current
Federal	$	1,557,897		$	186,052
State		236,152			2,858
		1,794,049			188,910
Deferred
Federal		(15,036	)		1,180,655
State		70,955			118,241
		55,919			1,298,896
Total	$	1,849,968		$	1,487,806

Effective income tax rate

	2015			2014
Income tax computed at federal statutory tax rate		34.0%			34.0%
State taxes, net of federal benefit		5.0			5.1
Meals & Entertainment		0.1			0.1
Other permanent differences		(0.2	)		2.6
Research and development credit		(6.9	)		(9.6	)
Change in prior year estimated taxes		0.5			0.8
Total		32.5%			33.0%

Components of the Company deferred tax assets and liabilities

	2015			2014
Deferred tax assets
Accrued payroll and other expenses	$	97,625		$	88,573
Deferred revenue		43,703			12,473
Capitalized merger costs		299,965			93,306
Intellectual property		24,221			19,442
Research and development credit		90,365			216,917
State taxes		78,089			272
State Tax Deferred		175,044			120,575
Total deferred tax assets		809,012			551,558
Less: Valuation allowance		–			–
		809,012			551,558
Deferred tax liabilities
Property and equipment		(159,980	)		(27,178	)
State Tax Deferred		(8,445	)		(5,914	)
Intellectual Property		(2,053,219	)		(1,361,535	)
Capitalized computer software development costs		(1,566,815	)		(1,417,959	)
Total deferred tax liabilities		(3,788,460	)		(2,812,586	)
Net deferred tax liabilities	$	(2,979,447	)	$	(2,261,028	)