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8. CONCENTRATIONS AND UNCERTAINTIES
12 Months Ended
Aug. 31, 2015
Risks and Uncertainties [Abstract]  
CONCENTRATIONS AND UNCERTAINTIES

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents and trade accounts receivable. The Company holds cash and cash equivalents at banks located in California, with balances that often exceed FDIC insured limits. Historically, the Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash and cash equivalents. However, considering the current banking environment, the Company is investigating alternative ways to minimize its exposure to such risks. 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.

 

Revenue concentration shows that international sales accounted for 37% and 51% of net sales for fiscal years 2015 and 2014, respectively. Three customers, respectively, accounted for 10% (actually a dealer account in Japan representing various customers), 8% and 6% of net sales for fiscal years 2015. Two customers accounted for 14% (actually a dealer account in Japan representing various customers), and 8% of net sales for fiscal year 2014.

 

Accounts receivable concentration shows that three customers comprised 12% (a dealer account in Asia representing various customer), 11% (actually a dealer account in Japan representing various customers), and 11% of accounts receivable at August 31, 2015, and two customers comprised 30% (actually a dealer account in Japan representing various customers), and 17% of accounts receivable at August 31, 2014.

 

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. Although we have not seen any significant reduction in total revenues to date, our growth rate could be effected by consolidation and downsizing in the pharmaceutical industry.