2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

May 31, 2020

Accounting Policies [Abstract]

Property and Equipment estimated useful lives

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

Right to use asset

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 May 31, 2020:

Right of use asset	$	1,019,408
Lease Liabilities, Current	$	525,454
Lease Liabilities, Long-term	$	489,463
Operating lease costs	$	438,269
Weighted Average remaining lease term		2.31 years
Weighted Average Discount rate		4.28%

Reconciliation of goodwill

	Cognigen		DILIsym		Lixoft		Total
Balance, August 31, 2019	$	4,789,248	$	5,597,950	$	–	$	10,387,198
Addition		–		–		2,404,973		2,404,973
Impairments		–		–		–		–
Balance, May 31, 2020	$	4,789,248	$	5,597,950	$	2,404,973	$	12,792,171

Fair value measurements

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

May 31, 2020:

	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	7,354,496	$	–	$	–	$	7,354,496
Acquisition-related contingent consideration obligations	$	–	$	–	$	6,370,028	$	6,370,028

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 for Lixoft		4,609,000
Value at May 31, 2020	$	6,370,028

Schedule of intangible assets

	Amortization Period	Acquisition Value		Accumulated Amortization		Net book value
Customer relationships-Cognigen	Straight line 8 years	$	1,100,000	$	790,625	$	309,375
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		60,000		20,000
Trade Name-DILIsym	None		860,000		0		860,000
Customer relationships-DILIsym	Straight line 10 years		1,900,000		570,000		1,330,000
Customer relationships-Lixoft	Straight line 14 years		2,550,000		30,356		2,519,644
Trade Name-Lixoft	None		1,550,000		0		1,550,000
Covenants not to compete-Lixoft	Straight line 4 years		60,000		2,500		57,500
		$	8,650,000	$	1,503,481	$	7,146,519

Earnings per share

	Three months ended				Nine months ended
	5/31/2020		5/31/2019		5/31/2020		5/31/2019
Numerator:
Net income attributable to common shareholders	$	2,935,569	$	2,888,706	$	7,143,925	$	6,524,102
Denominator:
Weighted-average number of common shares outstanding during the period		17,735,354		17,519,849		17,661,189		17,472,922
Dilutive effect of stock options		691,518		576,346		672,407		535,414
Common stock and common stock equivalents used for diluted earnings per share		18,426,872		18,096,195		18,333,596		18,008,336