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8. CONCENTRATIONS AND UNCERTAINTIES | 9 Months Ended
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May 31, 2020
Risks and Uncertainties [Abstract] |
CONCENTRATIONS AND UNCERTAINTIES | NOTE 8: 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 and North Carolina 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. The Company maintains cash at financial institutions that may, at times, exceed federally insured limits. At May 31, 2020 the Company had cash and cash equivalents exceeding insured limits by approximately $6,300,000. Revenue concentration shows that international sales accounted for 32% and 36% of net sales for the nine months ended May 31, 2020 and 2019, respectively. Three customers accounted for 8%, 7% (a dealer account in Japan representing various customers), and 7% of net sales during the nine months ended May 31, 2020. Three customers accounted for 9%, 8% (a dealer account in Japan representing various customers), and 7% of net sales during the nine months ended May 31, 2019. Accounts receivable concentration shows that seven customers comprised 10% (a dealer account in Japan representing various customers), 7%, 7%, 7%, 5%, 5% and 5% of accounts receivable at May 31, 2020, compared to five customers comprised 10% (a dealer account in Japan representing various customers), 9%, 8%, 5% and 5% of accounts receivable at May 31, 2019 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. Consolidation and downsizing in the pharmaceutical industry could have an impact on our revenues and earnings going forward.

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- Definition The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -URI http://asc.fasb.org/topic&trid=2134479 + Details
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