2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Aug. 31, 2017

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

	Cognigen		DILIsym		Total
Balance, August 31, 2014		–		–		–
Addition		4,789,248		–		4,789,248
Impairments		–		–		–
Balance, August 31, 2015		4,789,248		–		4,789,248
Addition		–		–		–
Impairments		–		–		–
Balance, August 31, 2016		4,789,248		–		4,789,248
Addition		–		5,597,950		5,597,950
Impairments		–		–		–
Balance, August 31, 2017		4,789,248		5,597,950		10,387,198

Schedule of intangible assets

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships-Cognigen	Straight line 8 years	$	1,100,000	$	412,500	$	687,500
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete-Cognigen	Straight line 5 years		50,000		30,000		20,000
Covenants not to compete-DILIsym	Straight line 4 years		80,000		5,000		75,000
Trade Name-DILIsym	None		860,000		0		850,000
Customer relationships-DILIsym	Straight line 8 years		1,900,000		47,500		1,852,000
		$	4,490,000	$	495,000	$	3,995,000

Summarizes fair value measurements

August 31, 2017:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	6,215,718	$	–	$	–	$	6,215,718
Acquisition-related contingent consideration obligations	$	–	$	–	$	4,738,188	$	4,738,188

August 31, 2016:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	8,030,284	$	–	$	–	$	8,030,284

Reconciliation of contingent consideration value

Value at August 31, 2016	$	0
Purchase price contingent consideration		4,700,000
Contingent consideration payments		–
Change in value of contingent consideration		38,188
Value at August 31, 2017	$	4,738,188

Schedule of future amortization

Years ending August 31,	TSRL	Enslein	DILI-Acquired Developed Technologies	Total
2018	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2019	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2020	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2021	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2022	$ 600,000	$ 3,750	$ 316,667	$ 920,417

Earnings per share

	2017		2016		2015
Numerator
Net income attributable to common shareholders	$	5,787,897	$	4,950,136	$	3,842,961
Denominator
Weighted-average number of common shares outstanding during the year		17,239,490		17,028,566		16,864,670
Dilutive effect of stock options		276,427		180,940		167,488
Common stock and common stock equivalents used for diluted earnings per share		17,515,917		17,209,506		17,032,158

Other Intangible Assets

Schedule of intangible assets

Year ending August 31,	Amount
2018	405,000
2019	405,000
2020	395,000
2021	390,000
2022	375,000

Intellectual Property [Member]

Schedule of intangible assets

Years ending August 31,	TSRL	Enslein	DILI-Acquired Developed Technologies	Total
2018	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2019	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2020	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2021	$ 600,000	$ 7,500	$ 316,667	$ 924,167
2022	$ 600,000	$ 3,750	$ 316,667	$ 920,417