REVENUE RECOGNITION

12 Months Ended

Aug. 31, 2021

Revenue from Contract with Customer [Abstract]

REVENUE RECOGNITION

NOTE 3 – REVENUE RECOGNITION

We generate revenue primarily from the sale of software licenses and providing consulting services to the pharmaceutical industry for drug development.

The Company determines revenue recognition through the following steps:

i.	Identification of the contract, or contracts, with a customer
ii.	Identification of the performance obligations in the contract
iii.	Determination of the transaction price
iv.	Allocation of the transaction price to the performance obligations in the contract
v.	Recognition of revenue when, or as, the Company satisfies a performance obligation

Components of Revenue

The following is a description of principal activities from which the Company generates revenue. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price for each performance obligation identified in the contract. Stand-alone selling prices are determined based on the prices at which the Company separately sells its services or goods.

Revenue Components	Typical Payment Terms
Software Revenues:
Software revenues are generated primarily from sales of software licenses at the time the software is unlocked and the term commences. The license period typically is one year or less. Along with the license a di minimis amount of customer support is provided to assist the customer with the software. Should the customer need more than a di minimis amount of support they can choose to enter into a separate contract for additional training. Most software is installed on our customers’ servers and the Company has no control of the software once the sale is made. For certain software arrangements the Company hosts the licenses on servers maintained by the Company, Revenue for those arrangements are accounted as Software as a Service over the life of the contract. These arrangements are a small portion of software revenues of the Company.	Payments are generally due upon invoicing on a net 30 basis unless other payment terms are negotiated with the customer based on customer history. Typical industry standards apply.
Consulting Contracts:
Consulting services provided to our customers are generally recognized over time as the contracts are performed and the services are rendered. The company measures its consulting revenue based on time expended compared to total estimated hours to complete a project. The Company believes the methods chosen for its contract revenue best depicts the transfer of benefits to the customer under the contracts.	Payment terms vary, depending on the size of the contract, credit history and history with the client and deliverables within the contract.

Consortium Member Based Services:
The performance obligation is recognized on a time elapsed basis, by month, for which the services are provided, as the Company transfers control evenly over the contractual period.	Payment is due at the beginning of the period, generally on a net 30 or 60 basis.

Remaining performance obligations that do not fall under the expedients, require the Company to perform various consulting and software development services and consortium memberships of approximately $6.2 million. It is anticipated these revenues will be recognized within the next year.

Contract Liabilities

During the year ended August 31, 2021, the Company recognized $430 thousand of revenue that was included in contract liabilities as of August 31, 2020.

Disaggregation of Revenues

The components of disaggregation of revenue for the years ended August 31, 2021, 2020 and 2019 were as follows: 

	Year ended August 31,
(in thousands)	2021		2020		2019
Software licenses
Point in time	$	26,725	$	20,668	$	17,425
Over time		945		919		1,054
Consulting services
Over time		18,796		20,002		15,491
Total revenue	$	46,466	$	41,589	$	33,970

Contracts in Progress

Contracts in progress are included in the accompanying balance sheets under the following captions: 

	Year ended August 31,
(in thousands)	2021			2020			2019
Revenues in excess of billings	$	3,150		$	3,093		$	3,234
Billings in excess of revenues		(117	)		(141	)		(799	)
Revenues over billings on uncompleted contracts	$	3,033		$	2,952		$	2,435

Cost, estimated earnings, and billings on uncompleted contracts are summarized as follows as of August 31, 2021, 2020 and 2019:

	August 31,
(in thousands)	2021			2020			2019
Revenues earned to date on uncompleted contracts	$	15,184		$	20,235		$	19,255
Billings to date on uncompleted contracts		(12,151	)		(17,283	)		(16,820	)
Revenues over billings on uncompleted contracts	$	3,033		$	2,952		$	2,435

Balance increases and decreases in these accounts are due to the timing of amounts billed, payments received, and revenue recognized.