2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Feb. 29, 2020

Accounting Policies [Abstract]

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

Right to use asset

As part of the adoption of this standard we recorded the following assets and liabilities as of September 1, 2019:

Right of use assets	$	902,553
Lease Liabilities, Current	$	537,017
Lease Liabilities, Long-term	$	365,536

Supplemental balance sheet information related to operating leases was as follows as of February 29, 2020:

Right of use asset	$	637,509
Lease Liabilities, Current	$	493,257
Lease Liabilities, Long-term	$	142,343
Operating lease costs	$	282,951
Weighted Average remaining lease term		1.08 years
Weighted Average Discount rate		5%

Fair value measurements

The following table summarizes fair value measurements at February 29, 2020 and August 31, 2019 for assets and liabilities measured at fair value on a recurring basis:

February 29, 2020:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	12,248,652	$	–	$	–	$	12,248,652
Acquisition-related contingent consideration obligations	$	–	$	–	$	1,761,028	$	1,761,028

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

Reconciliation of contingent consideration value

The following is a reconciliation of contingent consideration value.

Value at August 31, 2019	$	1,761,028
Contingent consideration payments		–
Change in value of contingent consideration		–
Value at February 29, 2020	$	1,761,028

Schedule of intangible assets

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships-Cognigen	Straight line 8 years	$	1,100,000	$	756,250	$	343,750
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		55,000		25,000
Trade Name-DILIsym	None		860,000		0		860,000
Customer relationships-DILIsym	Straight line 10 years		1,900,000		522,500		1,377,500
		$	4,490,000	$	1,383,750	$	3,106,250

Earnings per share

	Three months ended				Six months ended
		2/29/2020		2/28/2019		2/29/2020		2/28/2019
Numerator:
Net income attributable to common shareholders	$	2,150,080	$	2,099,449	$	4,208,357	$	3,635,396
Denominator:
Weighted-average number of common shares outstanding during the period		17,638,406		17,476,603		17,623,699		17,449,069
Dilutive effect of stock options		677,418		526,138		681,946		535,009
Common stock and common stock equivalents used for diluted earnings per share		18,315,824		18,002,741		18,305,645		17,984,078