INCOME TAXES (Tables)

12 Months Ended

Aug. 31, 2023

Schedule of Components of Income Tax Expense (Benefit)

The components of the income tax provision for the years ended August 31, 2023, 2022, and 2021 were as follows:


(in thousands)	2023		2022		2021
Current
Federal	$	2,990	$	2,518	$	1,315
State	696		611		450
Foreign	144		(228)		166
Total current tax expense	3,830		2,901		1,931
Deferred
Federal	(1,818)		(4)		(379)
State	(278)		(265)		(249)
Total deferred federal and state	(2,096)		(269)		(628)

Total	$	1,734	$	2,632	$	1,303

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the expected income tax computed using the federal statutory income tax rate to the Company's effective income tax rate is as follows for the years ended August 31, 2023, 2022, and 2021:


	2023		2022		2021
Income tax computed at federal statutory tax rate	21.0	%	21.0	%	21.0	%
State taxes, net of federal benefit	4.7		3.2		2.0
Meals & entertainment	0.1		—		—
Stock-based compensation	2.1		0.6		(6.8)
Other permanent differences	3.3		0.4		(0.3)
Research and development credit	(2.2)		(2.2)		(1.6)
Foreign-tax-related differences	(8.2)		(3.2)		(2.6)
Research & credit adjustments to expense	—		—		0.2
Change in prior year estimated taxes	(6.0)		(2.4)		(0.1)
Total	14.8	%	17.4	%	11.8	%

Schedule of Deferred Tax Assets and Liabilities

Significant components of the Company's deferred tax assets and liabilities for income taxes for the years ended August 31, 2023, and 2022 are as follows:


(in thousands)	2023		2022
Deferred tax assets:
Accrued compensation	$	865	$	563
Deferred revenue	103		241
Capitalized merger costs	696		703
Operating lease liability	285		—
Intellectual property	—		7
Research and development credits	274		347
Foreign tax credits	—		101
State taxes	(19)		128
Allowance for doubtful accounts	11		3
State tax deferred	—		28
Capitalized Research & Development	1,079		—
Share-Based Compensation	1,104		—
Net Operating Loss Carryforward	2,142		—
Total deferred tax assets	6,540		2,121
Less: Valuation allowance	—		—
Deferred tax asset	6,540		2,121
Deferred tax liabilities:
Property and equipment	(90)		(109)
Operating lease right-of-use assets	(295)		—
Unrealized Gain/(Loss)	(122)		—
State tax deferred	—		(30)
Intellectual property	(2,353)		(1,139)
Capitalized computer software development costs	(2,242)		(2,299)
Total deferred tax liabilities	(5,102)		(3,577)

Net deferred tax assets (liabilities)	$	1,438	$	(1,456)

Summary of Operating Loss Carryforwards

Net Operating Loss is summarized as follows:


(in thousands)	Amount
Federal NOL as of August 31, 2023	$	17,775
Subject to expiration	14,440
Carried forward indefinitely	3,335
Amount to expire before Section 382 limitation lifts	9,333

Pennsylvania NOL as of August 31, 2023	16,054
Subject to expiration	16,054
Carried forward indefinitely	—
Amount to expire before Section 382 limitation lifts	10,935