2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Aug. 31, 2018

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, 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
Addition		–		–		–
Impairments		–		–		–
Balance, August 31, 2018	$	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	$	550,000	$	550,000
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete-Cognigen	Straight line 5 years		50,000		40,000		10,000
Covenants not to compete-DILIsym	Straight line 4 years		80,000		25,000		55,000
Trade Name-DILIsym	None		860,000		0		860,000
Customer relationships-DILIsym	Straight line 8 years		1,900,000		237,500		1,662,500
		$	4,490,000	$	852,500	$	3,637,500

Summarizes fair value measurements

August 31, 2018:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	9,400,701	$	–	$	–	$	9,400,701
Acquisition-related contingent consideration obligations	$	–	$	–	$	4,890,940	$	4,890,940

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

Reconciliation of contingent consideration value

Value at August 31, 2017	$	4,738,188
Purchase price contingent consideration		–
Contingent consideration payments		–
Change in value of contingent consideration		152,752
Value at August 31, 2018	$	4,890,940

Earnings per share

	2018		2017		2016
Numerator
Net income attributable to common shareholders	$	8,934,812	$	5,787,897	$	4,950,136
Denominator
Weighted-average number of common shares outstanding during the year		17,328,707		17,239,490		17,028,566
Dilutive effect of stock options		531,685		276,427		180,940
Common stock and common stock equivalents used for diluted earnings per share		17,860,392		17,515,917		17,209,506

Other Intangible Assets

Schedule of future amortization

Year ending August 31,		Amount
	2019	$	405,000
	2020		395,000
	2021		390,000
	2022		375,000
	2023	$	237,500

Intellectual Property [Member]

Schedule of future amortization

Years ending August 31,		TSRL		Enslein		DILI-Acquired Developed Technologies		Total
	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
	2023	$	600,000		–	$	316,667	$	916,667