5. CONTRACTS PAYABLE

3 Months Ended

Nov. 30, 2018

Other Liabilities Disclosure [Abstract]

CONTRACTS PAYABLE

NOTE 5: 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 warranties, and an Earn-out agreement of up to an additional $5,000,000 in Earn-out payments based on earnings over three years. The Earn-out liability has been recorded at an estimated fair value. Payments under the Earn-out liability started in FY 2019. The first payment of $1,566,644 was made in September 2018, the holdback payment was made in December 2018. It is estimated that approximately 40% of the original Earn-out liability will be paid in the second year and the remainder of the Earn-out will be paid in the following year.

As of November 30, 2018 and August, 31, 2018 the following liabilities have been recorded:

	November 30, 2018		August 31, 2018
Working Capital Liability	$	–	$	–
Holdback Liability		1,000,000		1,000,000
Earn-out Liability		3,372,484		4,890,940
Sub Total	$	4,372,484	$	5,890,940
Less: Current Portion		2,750,000		2,556,644
Long-Term	$	1,622,484	$	3,334,296