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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

May 31, 2022

The components of disaggregation of revenue for the three and nine months ended May 31, 2022 and 2021 were as follows:


(in thousands)	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Software licenses:
Point in time	$	9,380	$	8,098	$	25,980	$	21,570
Over time	267		200		787		703

Consulting services:
Over time	5,312		4,479		15,405		14,352
Total revenue	$	14,959	$	12,777	$	42,172	$	36,625

Property and Equipment Estimated Useful Lives

Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives as follows:


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

Lease, Cost

Supplemental information related to operating leases was as follows as of May 31, 2022:


(in thousands)
Right-of-use assets	$	1,533
Lease liabilities, current	$	459
Lease liabilities, long-term	$	1,069
Operating lease costs	$	394
Weighted average remaining lease term	3.30 years
Weighted average discount rate	3.41		%

Schedule of Goodwill

Reconciliation of Goodwill as of May 31, 2022:


(in thousands)	Cognigen				DILIsym				Lixoft		Total
Balance, August 31, 2021	$	4,789	$	—	$	5,598	$	—	$	2,534	$	12,921
Addition	—		—		—		—		—		—
Impairments	—		—		—		—		—		—
Balance, May 31, 2022	$	4,789			$	5,598			$	2,534	$	12,921

Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis

The following table summarizes fair value measurements at May 31, 2022 and August 31, 2021 for assets and liabilities measured at fair value on a recurring basis:


May 31, 2022:

(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	42,353	$	—	$	—	$	42,353
Short-term investments	$	79,801	$	—	$	—	$	79,801
Acquisition-related contingent consideration obligations	$	—	$	—	$	—	$	—


August 31, 2021:

(in thousands)	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	36,984	$	—	$	—	$	36,984
Short-term investments	$	86,484	$	—	$	—	$	86,484
Acquisition-related contingent consideration obligations	$	—	$	—	$	3,217	$	3,217

Reconciliation of Contingent Consideration

The following is a reconciliation of contingent consideration value:


(in thousands)
Value at August 31, 2021	$	3,217
Contingent consideration payments - cash	(2,334)
Contingent consideration payments - stock	(1,166)
Change in value of contingent consideration	283
Value at May 31, 2022	$	—

Schedule of Intellectual Property

The following table summarizes intellectual property as of May 31, 2022:


(in thousands)	Amortization Period	Acquisition Value		Accumulated Amortization		Net Book Value
Royalty Agreement buy out-Enslein Research	Straight line 10 years	$	75	$	75	$	—
Termination/nonassertion agreement-TSRL Inc.	Straight line 10 years	6,000		4,825		1,175
Developed technologies–DILIsym acquisition	Straight line 9 years	2,850		1,583		1,267
Intellectual rights of Entelos Holding Corp.	Straight line 10 years	50		19		31
Developed technologies–Lixoft acquisition	Straight line 16 years	8,010		1,083		6,927
		$	16,985	$	7,585	$	9,400

The following table summarizes intellectual property as of August 31, 2021:


(in thousands)	Amortization Period	Acquisition Value				Accumulated Amortization		Net Book Value
Royalty Agreement buy out-Enslein Research	Straight line 10 years	$	75	$	—	$	71	$	4
Termination/nonassertion agreement-TSRL Inc.	Straight line 10 years	6,000		—		4,375		1,625
Developed technologies–DILIsym acquisition	Straight line 9 years	2,850		—		1,346		1,504
Intellectual rights of Entelos Holding Corp.	Straight line 10 years	50		—		15		35
Developed technologies–Lixoft acquisition	Straight line 16 years	8,010		—		709		7,301
		$	16,985			$	6,516	$	10,469

Schedule of Other Intangible Assets

The following table summarizes our other intangible assets as of May 31, 2022:


(in thousands)	Amortization Period	Acquisition Value		Accumulated Amortization		Net Book Value
Simulations Plus
ERP	Straight line 15 years	$	1,702	$	52	$	1,650
Cognigen
Customer relationships	Straight line 8 years	1,100		1,065		35
Trade name	None	500		—		500
Covenants not to compete	Straight line 5 years	50		50		—
DILIsym
Customer relationships	Straight line 10 years	1,900		951		949
Trade name	None	860		—		860
Covenants not to compete	Straight line 4 years	80		80		—
Lixoft
Customer relationships	Straight line 14 years	2,550		394		2,156
Trade name	None	1,550		—		1,550
Covenants not to compete	Straight line 3 years	60		43		17
		$	10,352	$	2,635	$	7,717

The following table summarizes our other intangible assets as of August 31, 2021:


(in thousands)	Amortization Period	Acquisition Value		Accumulated Amortization		Net Book Value
Cognigen
Customer relationships	Straight line 8 years	$	1,100	$	963	$	137
Trade name	None	500		—		500
Covenants not to compete	Straight line 5 years	50		50		—
DILIsym
Customer relationships	Straight line 10 years	1,900		807		1,093
Trade name	None	860		—		860
Covenants not to compete	Straight line 4 years	80		80		—
Lixoft
Customer relationships	Straight line 14 years	2,550		258		2,292
Trade name	None	1,550		—		1,550
Covenants not to compete	Straight line 3 years	60		28		32
		$	8,650	$	2,186	$	6,464

Schedule of Earnings Per Share, Basic and Diluted

The components of basic and diluted earnings per share for the three and nine months ended May 31, 2022 and 2021 were as follows:


(in thousands)	Three Months Ended May 31,				Nine Months Ended May 31,
	2022		2021		2022		2021
Numerator:
Net income attributable to common shareholders	$	4,087	$	3,787	$	11,522	$	9,477

Denominator:
Weighted-average number of common shares outstanding during the period	20,212		20,105		20,180		20,014
Dilutive effect of stock options	556		697		551		736
Common stock and common stock equivalents used for diluted earnings per share	20,768		20,802		20,731		20,750