8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

July 12, 2021

(Date of the earliest event reported)

Simulations Plus, Inc.

(Exact name of registrant as specified in its charter)

California	001-32046	95-4595609
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

42505 10^th Street West, Lancaster, California 93534-7059

(Address of principal executive offices) (Zip Code)

(661)-723-7723

Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14z-12 under Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SLP	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging Growth Company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Item 2.02 Results of Operations and Financial Condition

On July 12, 2021, Simulations Plus, Inc., a California corporation (the “Company”), issued a press release announcing financial results for its third quarter of fiscal year 2021 ended May 31, 2021. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).

Item 7.01 Regulation FD Disclosure

On July 12, 2021, as part of the press release referenced above, the Company announced that its board of directors has declared a quarterly cash dividend of $0.06 per share of common stock, payable on August 2, 2021 to shareholders of record as of July 26, 2021.

In addition, on July 12, 2021, the Company held an investor conference call reporting its financial results for its third quarter of fiscal year 2021 ended May 31, 2021. The PowerPoint presentation, which was used for this investor conference call, is attached as Exhibit 99.2 to this Report.

In accordance with General Instructions B.2 of Form 8-K, the information in this Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such filing to this Report.

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

This Report, including the disclosures set forth herein and Exhibits 99.1 and 99.2 attached hereto, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms "anticipates," "expects," "estimates," "believes" and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.

Forward-looking statements in this Report or reports hereafter furnished, including in other publicly available documents filed with the Securities and Exchange Commission (the "Commission"), to the Company’s stockholders and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management's best estimates based upon current conditions and the most recent results of operations. These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of which could adversely affect our business and the accuracy of the forward-looking statements contained herein. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.

Item 9.01 Financial Statements and Exhibits

(d)       Exhibits

99.1 Press release issued on July 12, 2021.

99.2 PowerPoint presentation used at the Investor Conference Call on July 12, 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIMULATIONS PLUS, INC.
Dated: July 12, 2021	By: /s/ Will Frederick
	Will Frederick
	Chief Financial Officer

EX-99.1

Exhibit 99.1

For Further Information:

Simulations Plus, Inc.

42505 10^th Street West

Lancaster, CA 93534-7059

CONTACT:

Simulations Plus Investor Relations	Hayden IR
Ms. Renee Bouche	Mr. Brian Siegel
661-723-7723	346-396-8696
renee@simulations-plus.com	brian@haydenir.com

For Immediate Release:

July 12, 2021

Simulations Plus Reports Third Quarter Fiscal 2021 Financial Results

Third quarter total revenue increased 4% to $12.8 million, with software revenue up 21%;

Board of Directors announces quarterly dividend of $0.06 per share

LANCASTER, CA, July 12, 2021 – Simulations Plus, Inc. (Nasdaq: SLP), a leading provider of modeling and simulation solutions for the pharmaceutical, biotechnology, chemical, and consumer goods industries, today reported financial results for its third quarter of fiscal 2021, ended May 31, 2021.

Third Quarter Fiscal 2021 Financial highlights (compared with the corresponding period last fiscal year):

· Total revenue increased 4% to $12.8 million;

· Software revenue increased 21% to $8.3 million;

· Services revenue declined 18% to $4.5 million;

· Gross profit increased 7% to $10.3 million;

· Gross margin increased from 78% to 81%;

· Net income increased 29% to $3.8 million;

· Diluted earnings per share increased 13% to $0.18 per share.

YTD Financial highlights (compared with the corresponding period last fiscal year):

· Total revenue increased 14% to $36.6 million;

· Software revenue increased 32% to $22.3 million;

· Services revenue declined 6% to $14.3 million;

· Gross profit increased 20% to $28.8 million;

· Gross margin increased from 75% to 79%;

· Net income increased 33% to $9.5 million;

· Diluted earnings per share increased 18% to $0.46 per share.

Shawn O’Connor, chief executive officer of Simulations Plus, said: “Our software business continued its strong performance during the quarter, with revenues increasing by 21% versus last year as product updates and cross-selling initiatives led to an acceleration in growth rates. However, our overall growth rate was moderated due to a higher than normal number of late quarter project delays and drug development program cancellations in our services business, which has historically had periods of volatility. Despite these delays and cancellations, our services pipeline continued to expand, and backlog grew in the quarter. While these trends are encouraging and support our long-term outlook, the delays in services projects will impact the growth rates for the remainder of our fiscal year, and we now expect full-year revenue growth of 5 to 10%.”

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Mr. O’Connor concluded, “The accelerating growth of software revenue and leverage in our business model continues to support strong and increasing profitability as demonstrated by our net income for the first nine months of fiscal 2021 already exceeding full-year fiscal 2020 net income. With a strong balance sheet, growing industry adoption of artificial intelligence-based simulation software and outsourced services, and an acceleration in software sales, we believe we are well-positioned for success and continue to target annual revenue growth rates above 15% over the next several years following fiscal 2021.”

Quarterly Dividend Declared

The Company’s Board of Directors has declared a cash dividend of $0.06 per share of the Company’s common stock, payable on August 2, 2021, to shareholders of record as of July 26, 2021. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements, and other factors.

Investor Conference Call

The Company will host a conference call on July 12, 2021, at 4:15 p.m. Eastern Time. All interested parties are invited to join the call by registering here or by calling 1-201-389-0879. Please join 5 to 10 minutes before the scheduled start time. The call will be webcast live and will be available on the Investors page of the Simulations Plus website at https://www.simulations-plus.com/investorscorporate-profile/corporate-profile/. A replay of the webcast will be available on the website approximately one hour following the call.

About Simulations Plus, Inc.

Serving clients worldwide for 25 years, Simulations Plus, Inc., is a leading provider of modeling and simulation software and consulting services supporting drug discovery, development research, and regulatory submissions. With our subsidiaries Cognigen, DILIsym Services, and Lixoft, we offer solutions that bridge machine learning, physiologically based pharmacokinetics, quantitative systems pharmacology/toxicology, and population PK/PD modeling approaches. Our technology is licensed and applied by major pharmaceutical, biotechnology, chemical, consumer goods companies, and regulatory agencies worldwide. For more information, visit our website at www.simulations-plus.com. Follow us on Twitter | Read our Environmental, Social, and Governance (ESG) Report.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – Except for historical information, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties. Words like “believe,” “expect,” and “anticipate” mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports and filed with the U.S. Securities and Exchange Commission.

--Tables follow--

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)		(Audited)
(in thousands, except share and per share amounts)	May 31,		August 31,
ASSETS
	2021		2020
Current assets
Cash and cash equivalents	$	58,811	$	49,207
Accounts receivable, net of allowance for doubtful accounts of $100 and $50		12,962		7,422
Revenues in excess of billings		3,883		3,093
Prepaid income taxes		492		970
Prepaid expenses and other current assets		1,602		1,596
Short-term investments		60,948		66,804
Total current assets		138,698		129,092
Long-term assets
Capitalized computer software development costs,
net of accumulated amortization of  $14,616 and $13,582		7,326		6,087
Property and equipment, net		1,260		438
Operating lease right-of-use assets		1,405		927
Intellectual property, net of accumulated amortization of  $6,159 and $5,087		10,826		11,898
Other intangible assets, net of accumulated amortization of $2,054 and $1,642		6,596		7,008
Goodwill		12,921		12,921
Other assets		51		51
Total assets	$	179,083	$	168,422
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	298	$	351
Accrued payroll and other expenses		2,598		2,251
Income taxes payable		16		–
Current portion -  contracts payable		3,333		2,000
Billings in excess of revenues		127		141
Operating lease liability, current portion		426		463
Deferred revenue		542		300
Total current liabilities		7,340		5,506
Long-term liabilities
Deferred income taxes, net		2,270		2,354
Operating lease liability		980		463
Payments due under contracts payable		3,095		4,064
Total liabilities		13,685		12,387
Commitments and contingencies
Shareholders' equity
Preferred stock, $0.001 par value 10,000,000 shares authorized,
no shares issued and outstanding		–		–
Common stock, $0.001 par value and additional paid in capital — 50,000,000
shares authorized, 20,121,040 and 19,923,277 shares issued and outstanding		131,994		128,541
Retained earnings		33,310		27,436
Accumulated other comprehensive income		94		58
Total shareholders' equity		165,398		156,035
Total liabilities and shareholders' equity	$	179,083	$	168,422

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

For the three and nine months ended May 31, 2021 and 2020

	Three months ended						Nine months ended
	(Unaudited)						(Unaudited)
(in thousands, except per common share amounts)	2021			2020			2021			2020
Revenues	$	12,777		$	12,298		$	36,625		$	32,049
Cost of revenues		2,471			2,666			7,815			7,975
Gross margin		10,306			9,632			28,810			24,074
Operating expenses
Selling, general, and administrative		5,094			5,023			14,960			12,646
Research and development		670			752			2,771			2,026
Total operating expenses		5,764			5,775			17,731			14,672
Income from operations		4,542			3,857			11,079			9,402
Other income (expense)
Interest income		37			5			156			27
Interest expense		–			–			(22	)		–
Change in value of contingent consideration		(121	)		(81	)		(364	)		(81	)
Income/(Loss) on currency exchange		33			(1	)		61			1
Total other income (expense), net		(51	)		(77	)		(169	)		(53	)
Income before provision for income taxes		4,491			3,780			10,910			9,349
Provision for income taxes		(704	)		(844	)		(1,433	)		(2,205	)
Net income	$	3,787		$	2,936		$	9,477		$	7,144
Earnings per share
Basic	$	0.19		$	0.17		$	0.47		$	0.40
Diluted	$	0.18		$	0.16		$	0.46		$	0.39
Weighted-average common shares outstanding
Basic		20,105			17,735			20,014			17,661
Diluted		20,802			18,427			20,750			18,334
Other Comprehensive Income, net of tax
Foreign currency translation adjustments		40			30			36			30
Comprehensive Income	$	3,827		$	2,966		$	9,513		$	7,174

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EX-99.2

Exhibit 99.2

1 | NASDAQ: SLP Earnings Call – Q3 FY21 July 12, 2021

2 | NASDAQ: SLP With the exception of historical information, the matters discussed in this presentation are forward - looking statements that involve a number of risks and uncertainties . The actual results of the Company could differ significantly from those statements . Factors that could cause or contribute to such differences include, but are not limited to : continuing demand for the Company’s products, competitive factors, the Company’s ability to finance future growth, the Company’s ability to produce and market new products in a timely fashion, the general economics of the pharmaceutical industry, the Company’s ability to continue to attract and retain skilled personnel, and the Company’s ability to sustain or improve current levels of productivity . Further information on the Company’s risk factors is contained in the Company’s quarterly and annual reports and filed with the Securities and Exchange Commission . Safe Harbor Statement

3 | NASDAQ: SLP » Strong Software Performance ▪ Greater than historical growth rates - contributed to improved margins/profitability ▪ Delivery of new technology ▪ Business development investment driving cross - selling » Challenging Service Performance ▪ Bookings were good; backlog grew ▪ Mixture of project delays, holds and drug development program cancellations ▪ Reflective of Covid impacted bookings late last year (lower backlog level) and churn in terms of client projects – faster cancelation decisions on drug development programs » Profitability Improved ▪ Favorable revenue mix ▪ YTD F21 > Full - year FY20 3 rd Quarter Highlights

4 | NASDAQ: SLP GastroPlus® » Several new licenses to biologics development companies » New DDI functionality » Cross - selling success Q3 Software Highlights +64% Monolix® YOY Growth +114% DDI Module YOY Growth +58% HTPK Simulation Module YOY Growth 5 New $100k+ customers 23 Upsells MonolixSuite TM » Growth included some early renewals » Better than expected performance YTD » Completed training of new China distributor ADMET Predictor® » Released new ADMET Predictor modules » New HTPK functionality

5 | NASDAQ: SLP Q3 Services Highlights PKPD » 9 projects impacted by delays, holds or drug development cancellations in 2H of Q3 » Covid delays from prior quarters and events in Middle East drove delays/holds » Timing for re - engagement uncertain » Late quarter/low backlog timing made reallocation of resources difficult QSP/QST » Large projects drove revenue in FY20 » Liver model - consulting slowdown » Projects mostly driven in response to FDA requirements » Added one new member to liver model consortium in Q3 » Covid related slowdown in clinical trials results » Large Project opportunities in pipeline PBPK » Good performance Other » Regulatory services operating at capacity +5% Backlog YOY Growth 5 New PKPD Clients (4)% Projects YOY Growth

6 | NASDAQ: SLP Updated FY21 Outlook Growth Targets: 5 to 10% Total Revenue Growth 20 to 25% Software Revenue Growth (7 - 12)% Service Revenue Growth Q4 Commentary: » Anticipate continued software performance in historically seasonally lower software revenue quarter » Monolix likely flat due to early renewals » Service project delays, holds and drug development program cancellations will impact quarter

7 | NASDAQ: SLP Financial Results

8 | NASDAQ: SLP Q3 Revenue (in millions) +4% Total Revenue $5.8 $6.8 $8.3 $4.1 $5.5 $4.5 $9.9 $12.3 $12.8 3Q19 3Q20 3Q21 Software Services 56% 44% 3Q20 Mix Software Services 65% 35% 3Q21 Mix Software Services +21% Software Revenue (18)% Services Revenue

9 | NASDAQ: SLP YTD Revenue (in millions) $14.6 $16.8 $22.3 $11.3 $15.3 $14.3 $25.9 $32.1 $36.6 FY19 FY20 FY21 Software Services +14% Total Revenue +32% Software Revenue (6)% Services Revenue 53% 47% YTD FY20 Mix Software Services 61% 39% YTD FY21 Mix Software Services

10 | NASDAQ: SLP Gross Margin Trend – Q3 86% 90% 90% 63% 63% 63% 77% 78% 81% 3Q19 3Q20 3Q21 Software Services Total

11 | NASDAQ: SLP Gross Margin Trend – YTD 83% 86% 89% 62% 63% 63% 74% 75% 79% FY19 FY20 FY21 Software Services Total

12 | NASDAQ: SLP Software Revenue by Product 65% 18% 11% 6% GastroPlus ADMET Predictor Monolix Suite Other Software Q3 FY21 Software Product as % of Software Revenue 60% 17% 16% 7% GastroPlus ADMET Predictor Monolix Suite Other Software YTD FY21

13 | NASDAQ: SLP Software Performance Metrics – Q3 Avg. Revenue per Customer (in thousands) $57 $66 $71 $79 $89 $98 FY19 FY20 FY21 All Companies Commercial Companies Renewal Rates 93% 93% 91% 85% 89% 83% FY19 FY20 FY21 Fees Accounts

14 | NASDAQ: SLP Software Performance Metrics – YTD Avg. Revenue per Customer (in thousands) $57 $63 $81 $77 $85 $112 FY19 FY20 FY21 All Companies Commercial Companies Renewal Rates 93% 94% 91% 85% 87% 84% FY19 FY20 FY21 Fees Accounts

15 | NASDAQ: SLP Services Revenue by Type 13% 17% 27% 43% Other PBPK QSP/QST PKPD Q3 FY21 Services Types as % of Service Revenue 14% 14% 29% 43% Other PBPK QSP/QST PKPD YTD FY21

16 | NASDAQ: SLP Services Performance Metrics $11.8 $12.4 3Q20 3Q21 Backlog (in millions) 50 64 45 17 18 18 41 54 33 35 108 136 131 3Q19 3Q20 3Q21 Total Projects During Qtr. PKPD QSP/QST PBPK Other Backlog

17 | NASDAQ: SLP Income Statement Summary – Q3 (in millions) FY21 % of Rev FY20 % of Rev Revenues $ 12.8 100% $ 12.3 100% Revenue Growth 4% 24% Gross profit 10.3 81% $ 9.6 78% SG&A $ 5.1 40% $ 5.0 41% R&D 0.7 5% 0.8 6% Total operating exp 5.8 45% 5.8 47% Income from operations 4.5 36% 3.9 31% Other income (expense) (0.1) (0)% (0.1) (1)% Income before income taxes 4.5 35% 3.8 31% Income taxes 0.7 6% 0.8 7% Effective tax rate 16% 22% Net income 3.8 30% 2.9 24% Diluted earnings per share (in dollars) $ 0.18 $ 0.16 EBITDA $ 5.3 42% $ 4.6 37%

18 | NASDAQ: SLP Income Statement Summary – YTD (in millions) FY21 % of Rev FY20 % of Rev Revenues $ 36.6 100% $ 32.0 100% Revenue Growth 14% 24% Gross profit 28.8 79% 24.1 75% SG&A $ 15.0 41% 12.6 39% R&D 2.8 8% 2.0 6% Total operating exp 17.7 48% 14.7 46% Income from operations 11.1 30% 9.4 29% Other income (expense) (0.2) (0)% (0.1) (0)% Income before income taxes 10.9 30% 9.3 29% Income taxes 1.4 4% 2.3 7% Effective tax rate 13% 24% Net income $ 9.5 26% $ 7.1 22% Diluted earnings per share (in dollars) $ 0.46 $ 0.39 EBITDA $ 13.4 37% $ 11.5 36%

19 | NASDAQ: SLP Balance Sheet Summary (in millions, except where indicated) May 31, 2021 Aug. 31, 2020 Cash and short - term investments $119.8 $116.0 Total current assets 138.7 129.1 Total assets 179.1 168.4 Current liabilities 7.3 5.5 Long - term liabilities 6.3 6.9 Total liabilities 13.7 12.4 Shareholders’ equity 165.4 156.0 Total liabilities and shareholders’ equity 179.1 168.4

20 | NASDAQ: SLP » Higher software growth rates and richer mix of software revenue are enhancing profitability metrics » Near - term service project delays, holds or drug development program cancellations will reduce FY21 growth » Reinforcing our biosimulation leadership ▪ Good market momentum with the close of new business, renewal and growth of existing relationships, key collaborations and grants ▪ Successful conference sponsorship Conclusion Mid to long - term outloo k remains unchanged