4. CONTRACT PAYABLE

9 Months Ended

May 31, 2014

Contract Payable

Note 4. CONTRACT PAYABLE

On May 15, 2014 the Company entered into an agreement (the “Agreement”) with TSRL, Inc., a Michigan corporation (“TSRL”). Under the terms of the Agreement, the Company and TSRL agreed to transfer the rights of the intellectual property under the Exclusive Software Licensing Agreement dated June 30, 1997 (the “License Agreement”), under which TSRL licensed to the Company certain Software Technology and Databases (as defined in the License Agreement), and pursuant to which the Company paid royalties to TSRL to the Company.

The Agreement calls for the Company to pay TSRL total consideration of $6 million. The Company paid $3.5 million on May 20, 2014, comprised of cash in the amount of $2.5 million and the issuance of $1 million worth of the Company’s common stock-- 164,745 shares of the Company’s common stock based upon the April 25, 2014 closing price per share of $6.07. Future payments under the Agreement, which is non-interest- bearing, are due as follows:

April 25, 2015	$	750,000
April 25, 2016		750,000
April 25, 2017		1,000,000
Total	$	2,500,000
Less Current portion		(750,000	)
Contract payable, net of current portion	$	1,750,000