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5. CONTRACTS PAYABLE | 9 Months Ended
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May 31, 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 2019. 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. Lixoft Acquisition Liabilities: On April 1, 2020, the Company acquired Lixoft. The agreement provided for a twenty-four month $2,000,000 holdback provision against certain representations and warrantees, comprised of $1,333,333 of cash and the release from an escrow shares of stock valued at $666,337 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 earn-out payments up to $5,500,000 (two thirds cash and one-third newly issued, unregistered shares of the Company’s common stock). The former shareholders can earn up to $2,000,000 the first year and $3,500,000 in year two. As of May 31, 2020 and August 31, 2019 the following liabilities have been recorded:
|  | May 31, 2020 |  |  | August 31, 2019 |
Holdback Liability - Lixoft |  | $ | 1,333,333 |  |  | $ | – |
Earn-out Liability - Lixoft |  |  | 4,609,000 |  |  |  | – |
Earn-out Liability - Dilisym |  |  | 1,761,028 |  |  |  | 1,761,028 |
Sub Total |  | $ | 7,703,361 |  |  | $ | 1,761,028 |
Less: Current Portion |  |  | 3,761,028 |  |  |  | 1,761,028 |
Long-Term |  | $ | 3,942,333 |  |  | $ | – |

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- Definition The entire disclosure for other liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.20,24) -URI http://asc.fasb.org/extlink&oid=120391452&loc=d3e13212-122682 + Details
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