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CONCENTRATIONS AND UNCERTAINTIES | 9 Months Ended
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May 31, 2021
Risks and Uncertainties [Abstract] |
CONCENTRATIONS AND UNCERTAINTIES | NOTE 9: CONCENTRATIONS AND UNCERTAINTIES Financial instruments that potentially subject us to concentration of credit risk consist principally of cash, cash equivalents, trade accounts receivable, and short-term investments. We hold cash and cash equivalents at banks located in California and with balances that often exceed FDIC-insured limits. In addition, we hold cash at a bank in France that is not FDIC-insured. Historically, we have not experienced any losses in such accounts. However, we are investigating alternative ways to minimize our exposure to such risks. While we may be exposed to credit losses due to the nonperformance of our counterparties, we do not expect the settlement of these transactions to have a material effect on our results of operations, cash flows, or financial condition. We maintain cash at financial institutions that may, at times, exceed federally insured limits. Revenue concentration shows that international sales accounted for 31% and 32% of net sales for the nine months ended May 31, 2021 and 2020, respectively. Three customers accounted for 12%, 4% and 4% of net sales during the nine months ended May 31, 2021. Three customers accounted for 8%, 7% (a distributor in Japan representing various customers), and 7% of net sales during the nine months ended May 31, 2020. Accounts receivable concentration shows that four customers each comprised between 7% and 10% of accounts receivable at May 31, 2021, compared to seven customers each comprising between 5% and 10% of accounts receivable at May 31, 2020. 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.

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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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