4. CONTRACTS PAYABLE

3 Months Ended

Nov. 30, 2017

Other Liabilities Disclosure [Abstract]

CONTRACTS PAYABLE

DILIsym Acquisition Liabilities:

On June 1, 2017, the Company acquired DILIsym Services, Inc. The agreement provided for a working capital adjustment, an eighteen-month $1,000,000 holdback provision against certain representations and warrantees, and an Earn-out agreement of up to an additional $5,000,000 in Earn-out payments based on earnings over the next three years. The Earn-out liability has been recorded at an estimated fair value. Payments under the Earn-out liability will be due starting in FY 2019, it is estimated that approximately 43% of the Earn-out liability and well as the holdback will be paid in 2019 and the majority of the remaining Earn-out will be paid in the following year.

As of November 30, 2017 and August, 31, 2017 the following liabilities have been recorded:

	November 30, 2017		August 31, 2017
Working Capital Liability	$	–	$	247,328
Holdback Liability		1,000,000		1,000,000
Earn-out Liability		4,776,376		4,738,188
Sub Total	$	5,776,376	$	5,985,516
Less: Current Portion		3,150,000		247,328
Long-Term	$	2,626,376	$	5,738,188