3. REVENUE RECOGNITION (Tables)

3 Months Ended

Nov. 30, 2018

Revenue Recognition [Abstract]

Disaggregation of revenues

Disaggregation of Revenues:	Three Months Ended November 30, 2018
Software licenses
Point in time	$	3,757,330
Over time		364,058
Consulting services
Over time		3,414,515
Total Revenue	$	7,535,903

Adjustments resulting from Topic 606

The following table summarizes the adjustments made to accounts on the condensed consolidated balance sheet as of September 1, 2018 as a result of applying the modified retrospective method to adopt ASC Topic 606:  

	As Reported August 31, 2018		Adjustments to reflect the adoption of ASC Topic 606			As Adjusted September 1, 2018
Capitalized Software, net	$	5,152,594	$	(629,100	)	$	4,523,494
Deferred revenue		381,928		294,825			676,753
Deferred income taxes, net		3,195,139		(230,981	)		2,964,158
Retained Earnings	$	18,461,540	$	(692,944	)	$	17,768,596

The following tables present the amount by which each condensed consolidated financial statement line item is affected as of and for the three months ended November 30, 2018 by ASC Topic 606:

	Three Months Ended November 30, 2018
	As Reported			Balances Without the adoption of ASC Topic 606			Effect of Change
Revenues	$	7,535,903		$	7,479,081		$	56,822
Cost of revenues		2,200,371			2,145,266			55,105
Gross profit		5,335,532			5,333,815			1,717
Income from operations		2,086,745			2,085,028			1,717
Income before provision for income taxes		2,021,618			2,019,901			1,717
Provision for income taxes		(485,671	)		(471,466	)		(14,205	)
Net Income	$	1,535,947			1,548,435		$	(12,488	)
Earnings per share-Diluted	$	0.09		$	0.09		$	0.00
Weighted-average common shares outstanding	$	17,997,735		$	17,997,735		$	–

		Three Months Ended November 30, 2018
		As Reported			Balances Without the adoption of ASC Topic 606			Effect of Change
Cash Flows From Operating Activities:
Net loss	$	1,535,947		$	1,548,435		$	(12,488	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		694,789			729,824			(35,035	)
Changes in operating assets and liabilities:
Deferred revenue		(222,769	)		(279,591	)		56,822
Net cash provided by operating activities		2,611,721			2,553,182			58,539
Cash flows used in investing activities
Capitalized computer software development costs	$	(364,664	)	$	(454,804	)	$	90,140