4. CONTRACT PAYABLE

12 Months Ended

Aug. 31, 2014

Other Liabilities Disclosure [Abstract]

CONTRACT PAYABLE

On May 15, 2014, the Company entered into a termination and non-assertion agreement with TSRL, Inc., pursuant to which the parties agreed to terminate an exclusive software licensing agreement entered into between the parties in 1997, as a result, the company obtained a perpetual right to use certain source code and data, and TSRL relinquished any rights and claims to any GastroPlus products and to any claims to royalties or other payments under that 1997 agreement. The Company agreed to pay TSRL total consideration of $6.0 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 termination and non-assertion agreement, which are 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