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CONCENTRATIONS AND UNCERTAINTIES
12 Months Ended
Aug. 31, 2021
Risks and Uncertainties [Abstract]  
CONCENTRATIONS AND UNCERTAINTIES

NOTE 10 – CONCENTRATIONS AND UNCERTAINTIES

 

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, trade accounts receivable and short-term investments. The Company holds cash and cash equivalents at banks located in California, with balances that often exceed FDIC insured limits. In addition, we hold cash at a bank in France that is not FDIC-insured. Historically, the Company has not experienced any losses in such accounts. However, we are investigating alternative way to minimize our exposure to such risk. While the Company may be exposed to credit losses due to the nonperformance of its counterparties, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows or financial condition. The Company maintains cash at financial institutions that may, at times, exceed federally insured limits.

 

Revenue concentration shows that international sales accounted for 31%, 29% and 34% of revenue for the years ended August 31, 2021, 2020 and 2019, respectively. Three customers accounted for 11%, 4% and 3% of revenue for fiscal year 2021. Three customers accounted for 9%, 7% (a dealer account in Japan representing various customers), and 7% of revenue for fiscal year 2020. Three customers accounted for 8%, 8% (a dealer account in Japan representing various customers), and 7% of revenue for fiscal year 2019.

 

Accounts receivable concentrations show that three customers each comprised between 5% and 16% of accounts receivable as of August 31, 2021, respectively; two customers comprised 13% and 10% of accounts receivable as of August 31, 2020, respectively.

 

We operate in the computer software industry, which is highly competitive and changes rapidly. Our operating results could be significantly affected by our ability to develop new products and find new distribution channels for new and existing products.

 

The majority of our customers are in the pharmaceutical industry. During economic downturns, we have seen consolidations in the pharmaceutical industry. The extent to which the COVID-19 pandemic impacts our business going forward will depend on numerous factors we cannot reliably predict, including the duration and scope of the pandemic; businesses and individuals' actions in response to the pandemic; and the impact on economic activity including the possibility of recession or financial market instability. These factors may adversely impact consumer, business, and government spending as well as customers' ability to pay for our products and services on an ongoing basis. As a result, our growth rate could be affected by consolidation and downsizing in the pharmaceutical industry.