CONTRACTS PAYABLE

12 Months Ended

Aug. 31, 2021

Other Liabilities Disclosure [Abstract]

CONTRACTS PAYABLE

NOTE 6 – CONTRACTS PAYABLE

DILIsym Acquisition Liabilities:

On June 1, 2017, we acquired DILIsym. The agreement provided for a working capital adjustment, an eighteen-month $1.0 million holdback provision against certain representations and warranties, and an earnout agreement of up to an additional $5.0 million in earnout payments based on earnings over three years following acquisition. The earnout liability has been recorded at an estimated fair value. Payments under the earnout liability started in fiscal year 2019. In September 2018, $1.6 million was paid out under the first earnout payment, a second earnout payment was made in August 2019 in the amount of $1.7 million. The final payment of $1.8 million was paid in August 2020. In addition, no claims were made against the holdback and the $1.0 million holdback provision was released eighteen months after June 1, 2017. 

Lixoft Acquisition Liabilities:

On April 1, 2020, the Company acquired Lixoft. The agreement provided for a 24-month $2.0 million holdback provision against certain representations and warrantees, comprised of $1.3 million of cash and shares of stock valued at $666 thousand issued at the date of the Agreement. In addition, based on a revenue growth formula for the two years subsequent to April 1, 2020, the agreement calls for earnout payments up to $5.5 million (two thirds cash and one-third newly issued, unregistered shares of the Company’s common stock). The former shareholders can earn up to $2.0 million the first year and $3.5 million in year two. In June 2021, $2.0 million was paid to former Lixoft shareholder under the first earnout payment, which was comprised of $1.3 million of cash and $666 thousand worth of common stock.

As of August 31, 2021, and 2020 the following liabilities have been recorded:

(in thousands)	August 31, 2021		August 31, 2020
Holdback Liability	$	1,333	$	1,333
Earnout Liability		3,217		4,731
Subtotal	$	4,550	$	6,064
Less: Current Portion		4,550		2,000
Long-Term	$	–	$	4,064