2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Aug. 31, 2019

Property and Equipment estimated useful lives

Depreciation and amortization are provided 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

Reconciliation of Goodwill

	Cognigen		DILIsym		Total
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
Addition		–		–		–
Impairments		–		–		–
Balance, August 31, 2019	$	4,789,248	$	5,597,950	$	10,387,198

Schedule of intangible assets

The following table summarizes other intangible assets as of August 31, 2019:

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships-Cognigen	Straight line 8 years	$	1,100,000	$	687,500	$	412,500
Trade Name-Cognigen	None		500,000		0		500,000
Covenants not to compete-Cognigen	Straight line 5 years		50,000		50,000		0
Covenants not to compete-DILIsym	Straight line 4 years		80,000		45,000		35,000
Trade Name-DILIsym	None		860,000		0		860,000
Customer relationships-DILIsym	Straight line 8 years		1,900,000		427,500		1,472,500
		$	4,490,000	$	1,210,500	$	3,280,000

Summarizes fair value measurements

The following table summarizes fair value measurements at August 31, 2019 and August 31, 2018 for assets and liabilities measured at fair value on a recurring basis:

August 31, 2019:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	11,435,499	$	–	$	–	$	11,435,499
Acquisition-related contingent consideration obligations	$	–	$	–	$	1,761,028	$	1,761,028

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

Reconciliation of contingent consideration value

The following is a reconciliation of contingent consideration value.

Value at August 31, 2018	$	4,890,940
Purchase price contingent consideration		–
Contingent consideration payments		(3,238,972	)
Change in value of contingent consideration		109,060
Value at August 31, 2019	$	1,761,028

Earnings per share

The components of basic and diluted earnings per share for the years ended August 31, 2019, 2018 and 2017 were as follows:

	2019		2018		2017
Numerator
Net income attributable to common shareholders	$	8,583,329	$	8,934,812	$	5,787,897
Denominator
Weighted-average number of common shares outstanding during the year		17,492,258		17,328,707		17,239,490
Dilutive effect of stock options		565,173		531,685		276,427
Common stock and common stock equivalents used for diluted earnings per share		18,057,431		17,860,392		17,515,917

Other Intangible Assets

Schedule of future amortization

Future amortization for the next five years is as follows:

Year ending August 31,	Amount
2020	$	347,500
2021	$	342,500
2022	$	327,500
2023	$	190,000
2024	$	190,000

Intellectual Property [Member]

Schedule of future amortization

Future amortization for the next five years is as follows:

Years ending August 31,	TSRL		Enslein		DILI-Acquired Developed Technologies		Entelos		Total
2020	$	600,000	$	7,500	$	316,667	$	5,000	$	929,167
2021	$	600,000	$	7,500	$	316,667	$	5,000	$	929,167
2022	$	600,000	$	3,750	$	316,667	$	5,000	$	925,417
2023	$	600,000		–	$	316,667	$	5,000	$	921,667
2024	$	425,000		–	$	316,667	$	5,000	$	746,667