5. CONTRACTS PAYABLE

6 Months Ended

Feb. 29, 2020

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 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 started in FY 2018. In September 2018, $1,556,644 was paid out under the first earn-out payment, a second earn-out payment was made in August 2019 in the amount of $1,682,329. It is estimated that a final payment of approximately $1,761,028 will be paid in August 2020.

As of February 29, 2020 and August 31, 2019 the following liabilities have been recorded:

	February 29, 2020		August 31, 2019
Working Capital Liability	$	–	$	–
Holdback Liability		–		–
Earn-out Liability		1,761,028		1,761,028
Sub Total	$	1,761,028	$	1,761,028
Less: Current Portion		1,761,028		1,761,028
Long-Term	$	–	$	–