2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Aug. 31, 2016

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

Reconciliation of Goodwill

Balance,  August 31, 2014	$	–
Addition		4,789,248
Impairments		–
Balance,  August 31, 2015	$	4,789,248
Addition		–
Impairments		–
Balance,  August 31, 2016	$	4,789,248

Schedule of intangible assets

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships	Straight line 8 years	$	1,100,000	$	275,000	$	825,000
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete	Straight line 5 years		50,000		20,000		30,000
		$	1,650,000	$	295,000	$	1,355,000

Schedule of future amortization

Year ending August 31,	Amount
2017	147,500
2018	147,500
2019	147,500
2020	137,500
2021	137,500

Earnings per share

	2016		2015
Numerator
Net income attributable to common shareholders	$	4,950,136	$	3,842,961
Denominator
Weighted-average number of common shares outstanding during the year		17,028,566		16,864,670
Dilutive effect of stock options		180,940		167,488
Common stock and common stock equivalents used for diluted earnings per share		17,209,506		17,032,158

Other Intangible Assets

Schedule of intangible assets

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships	Straight line 8 years	$	1,100,000	$	275,000	$	825,000
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete	Straight line 5 years		50,000		20,000		30,000
		$	1,650,000	$	295,000	$	1,355,000

Intellectual Property [Member]

Schedule of intangible assets

Year ending August 31,	TSRL	Enslien	Total
2017	$ 600,000	$ 7,500	$ 607,500
2018	$ 600,000	$ 7,500	$ 607,500
2019	$ 600,000	$ 7,500	$ 607,500
2020	$ 600,000	$ 7,500	$ 607,500
2021	$ 600,000	$ 7,500	$ 607,500