4. CONTRACTS PAYABLE

3 Months Ended

Nov. 30, 2015

Other Liabilities Disclosure [Abstract]

CONTRACTS PAYABLE

TSRL

Pursuant to the termination and non-assertion agreement with TSRL, 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(See note 2). According to the contract, the Company paid $750,000 to TSRL in April 2015 and will pay TSRL an additional $1,750,000 within the next two-year period. The remaining payments scheduled, by year, are below.

Cognigen Acquisition Liability-Related Party

On September 2, 2014, the Company acquired Cognigen Corporation. As part of the above-discussed consideration payable to the former shareholders of Cognigen, the Company agreed that within three business days following the two-year anniversary of July 23, 2014 (the date of the Merger Agreement) and subject to any offsets, the Company will pay the former shareholders of Cognigen a total of $1,854,404, comprised of $720,000 of cash and the issuance of 170,014 shares of the Company’s stock. The former shareholders of Cognigen are currently employed by the consolidated Company, one of whom serves as the President.

Future payments under the Agreements, which are non-interest-bearing, are due as follows:

Twelve-month Period ending November 30	TSRL			Cognigen Acquisition Liability			Total
2016	$	750,000		$	1,854,404		$	2,604,404
2017		1,000,000			0			1,000,000
Total	$	1,750,000		$	1,854,404		$	3,604,404
Less current portion		(750,000	)		(1,854,404	)		(2,604,404	)
contracts payable, net of current portion	$	1,000,000		$	0		$	1,000,000