Cover
Cover - shares | 3 Months Ended | |
Nov. 30, 2020 | Jan. 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Nov. 30, 2020 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --08-31 | |
Entity File Number | 001-32046 | |
Entity Registrant Name | Simulations Plus, Inc. | |
Entity Central Index Key | 0001023459 | |
Entity Tax Identification Number | 95-4595609 | |
Entity Incorporation, State or Country Code | CA | |
Entity Address, Address Line One | 42505 10th Street West | |
Entity Address, City or Town | Lancaster | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 93534-7059 | |
City Area Code | (661) | |
Local Phone Number | 723-7723 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | SLP | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 19,964,659 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 27,651 | $ 49,207 |
Accounts receivable, net of allowance for doubtful accounts of $50 and $50 | 7,331 | 7,422 |
Revenues in excess of billings | 2,837 | 3,093 |
Prepaid income taxes | 560 | 970 |
Prepaid expenses and other current assets | 1,738 | 1,596 |
Short-term investments | 91,115 | 66,804 |
Total current assets | 131,232 | 129,092 |
Long-term assets | ||
Capitalized computer software development costs, net of accumulated amortization of $13,906 and $13,582 | 6,490 | 6,087 |
Property and equipment, net | 596 | 438 |
Operating lease right of use assets | 768 | 927 |
Intellectual property, net of accumulated amortization of $5,444 and $5,087 | 11,541 | 11,898 |
Other intangible assets, net of accumulated amortization of $1,779 and $1,642 | 6,871 | 7,008 |
Goodwill | 12,921 | 12,921 |
Other assets | 51 | 51 |
Total assets | 170,470 | 168,422 |
Current liabilities | ||
Accounts payable | 332 | 351 |
Accrued payroll and other expenses | 2,300 | 2,251 |
Current portion - contracts payable | 2,000 | 2,000 |
Billings in excess of revenues | 206 | 141 |
Operating lease liability, current portion | 395 | 463 |
Deferred revenue | 244 | 300 |
Total current liabilities | 5,477 | 5,506 |
Long-term liabilities | ||
Deferred income taxes, net | 2,401 | 2,354 |
Operating lease liability | 376 | 463 |
Payments due under contracts payable | 4,185 | 4,064 |
Total liabilities | 12,439 | 12,387 |
Shareholders' equity | ||
Preferred stock, $0.001 par value 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value and additional paid in capital –50,000,000 shares authorized, 19,958,760 and 19,923,277 shares issued and outstanding | 129,253 | 128,541 |
Retained earnings | 28,720 | 27,436 |
Accumulated other comprehensive income | 58 | 58 |
Total shareholders' equity | 158,031 | 156,035 |
Total liabilities and shareholders' equity | $ 170,470 | $ 168,422 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Allowance for doubtful accounts | $ 50 | $ 50 |
Accumulated amortization of computer software development costs | $ 13,906 | $ 13,582 |
Preferred stock par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value | $ 0.001 | $ 0.001 |
Common stock shares authorized | 50,000,000 | 50,000,000 |
Common stock shares issued | 19,958,760 | 19,923,277 |
Common stock shares outstanding | 19,958,760 | 19,923,277 |
Intellectual Property [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization on intangible assets | $ 5,444 | $ 5,087 |
Other Intangible Assets [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization on intangible assets | $ 1,779 | $ 1,642 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Income Statement [Abstract] | ||
Revenues | $ 10,701 | $ 9,401 |
Cost of revenues | 2,433 | 2,643 |
Gross margin | 8,268 | 6,758 |
Operating expenses | ||
Selling, general, and administrative | 4,408 | 3,514 |
Research and development | 809 | 526 |
Total operating expenses | 5,217 | 4,040 |
Income from operations | 3,051 | 2,718 |
Other income (expense) | ||
Interest income | 61 | 11 |
Change in valuation of contingent consideration | (121) | 0 |
Income on currency exchange | 5 | 4 |
Total other income (expense) | (55) | 15 |
Income before provision for income taxes | 2,996 | 2,733 |
Provision for income taxes | (517) | (675) |
Net Income | $ 2,479 | $ 2,058 |
Earnings per share | ||
Basic | $ 0.12 | $ 0.12 |
Diluted | $ 0.12 | $ 0.11 |
Weighted-average common shares outstanding | ||
Basic | 19,930 | 17,609 |
Diluted | 20,799 | 18,307 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Common Stock And Additional Paid In Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance, beginning of period at Aug. 31, 2019 | $ 15,327 | $ 22,355 | ||
Exercise of stock options | 136 | |||
Stock-based compensation | 295 | |||
Shares issued to Directors for services | 72 | |||
Declaration of dividend | (1,056) | |||
Net income | 2,058 | $ 2,058 | ||
Other comprehensive income | ||||
Balance, end of period at Nov. 30, 2019 | 15,830 | 23,357 | $ 39,187 | |
Common dividends declared per common share | $ 0.06 | |||
Balance, beginning of period at Aug. 31, 2019 | 15,327 | 22,355 | ||
Balance, end of period at Aug. 31, 2020 | 128,541 | 27,436 | 58 | $ 156,035 |
Exercise of stock options | 180 | |||
Stock-based compensation | 449 | |||
Shares issued to Directors for services | 83 | |||
Declaration of dividend | (1,195) | |||
Net income | 2,479 | 2,479 | ||
Other comprehensive income | ||||
Balance, end of period at Nov. 30, 2020 | $ 129,253 | $ 28,720 | $ 58 | $ 158,031 |
Common dividends declared per common share | $ 0.06 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 2,479 | $ 2,058 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 865 | 671 |
Change in value of contingent consideration | 121 | 0 |
Amortization of note premiums | 630 | 0 |
Stock-based compensation | 532 | 367 |
Deferred income taxes | 47 | (28) |
Increase (decrease) in | ||
Accounts receivable | 91 | (1,327) |
Revenues in excess of billings | 256 | (247) |
Prepaid income taxes | 410 | 678 |
Prepaid expenses and other assets | (141) | 143 |
Accounts payable | (15) | 381 |
Accrued payroll and other expenses | 49 | (44) |
Billings in excess of revenues | 65 | 91 |
Deferred revenue | (56) | (109) |
Net cash provided by operating activities | 5,333 | 2,634 |
Cash flows used in investing activities | ||
Purchases of property and equipment | (205) | (32) |
Purchases of short-term investments | (30,959) | 0 |
Proceeds from sale of short-term investments | 6,018 | 0 |
Capitalized computer software development costs | (728) | (507) |
Net cash used in investing activities | (25,874) | (539) |
Cash flows used in financing activities | ||
Payment of dividends | (1,195) | (1,056) |
Proceeds from the exercise of stock options | 180 | 136 |
Net cash used in financing activities | (1,015) | (920) |
Net increase (decrease) in cash and cash equivalents | (21,556) | 1,175 |
Cash and cash equivalents, beginning of year | 49,207 | 11,435 |
Cash and cash equivalents, end of period | 27,651 | 12,610 |
Supplemental disclosures of cash flow information | ||
Income taxes paid | 57 | 25 |
Non-Cash Investing and Financing Activities | ||
Right of use assets capitalized | $ 0 | $ 903 |
GENERAL
GENERAL | 3 Months Ended |
Nov. 30, 2020 | |
General | |
GENERAL | NOTE 1: GENERAL This report on Form 10-Q for the quarter ended November 30, 2020, should be read in conjunction with the Company's annual report on Form 10-K for the year ended August 31, 2020, filed with the Securities and Exchange Commission (“SEC”) on November 16, 2020. As contemplated by the SEC under Article 8 of Regulation S-X, the accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. The interim financial data are unaudited; however, in the opinion of Simulations Plus, Inc. ("we", "our", "us"), the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full year. Organization Simulations Plus, Inc. (“Simulations Plus”, “Lancaster”) was incorporated on July 17, 1996. In September 2014, Simulations Plus acquired all of the outstanding equity interests of Cognigen Corporation (“Cognigen”, “Buffalo”) and Cognigen became a wholly owned subsidiary of Simulations Plus, Inc. In June 2017, Simulations Plus acquired DILIsym Services, Inc. (DILIsym) as a wholly owned subsidiary. In April 2020, Simulations Plus, Inc. acquired Lixoft, a French société par actions simplifiée (“Lixoft”, “Paris”) as a wholly owned subsidiary pursuant to a stock purchase and contribution agreement. (Collectively, “Company”, “we”, “us”, “our”). Lines of Business The Company designs and develops pharmaceutical simulation software to promote cost-effective solutions to a number of problems in pharmaceutical research and in the education of pharmacy and medical students, and it provides consulting services to the pharmaceutical and chemical industries. Recently, the Company has begun to explore developing software applications for health care outside of the pharmaceutical industry. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The accompanying consolidated financial statements include the accounts of Simulations Plus, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. Use of Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Actual results could differ from those estimates. Significant accounting policies for us include revenue recognition, accounting for capitalized computer software development costs, valuation of stock options, and accounting for income taxes. Reclassifications Certain numbers in the prior year have been reclassified to conform to the current year's presentation. Revenue Recognition We generate revenue primarily from the sale of software licenses and by providing consulting services to the pharmaceutical industry for drug development. In accordance with Accounting Standards Codification Topic 606 (ASC Topic 606), “ Revenue from Contracts with Customers”, i. Identification of the contract, or contracts, with a customer ii. Identification of the performance obligations in the contract iii. Determination of the transaction price iv. Allocation of the transaction price to the performance obligations in the contract v. Recognition of revenue when, or as, the Company satisfies a performance obligation Deferred Commissions Sales commissions earned by our sales force and our commissioned sales representatives are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in sales and marketing expenses on the condensed consolidated statements of operations. We apply the practical expedient in ASC Topic 606 to expense costs as incurred for sales commissions when the period of benefit would have been one year or less. Most of our contracts are of a duration of one year or less, while few, if any of the longer-term contracts have commissions associated with them. Practical Expedients and Exemptions The Company has elected the following additional practical expedients in applying Topic 606: · Commission Expense . · Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of November 30, 2020. ASC 606 provides certain practical expedients that limit the requirement to disclose the aggregate amount of transaction price allocated to unsatisfied performance obligations. The Company applied the practical expedient to not disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Accounts Receivable We analyze the age of customer balances, historical bad-debt experience, customer creditworthiness, and changes in customer payment terms when making estimates of the collectability of the Company’s trade accounts receivable balances. If we determine that the financial conditions of any of its customers deteriorated, whether due to customer-specific or general economic issues, an increase in the allowance may be made. Accounts receivable are written off when all collection attempts have failed. Investments We may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with Financial Accounting Standards Board (FASB) ASC 320, Investments – Debt and Equity Securities. This statement requires debt securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the quarter ended November 30, 2020, all of the Company’s investments were classified as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. Capitalized Computer Software Development Costs Software development costs are capitalized in accordance with ASC 985-20, “Costs of Software to Be Sold, Leased, or Marketed” The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenues, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in our software products. Amortization of capitalized software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products (not to exceed five years). Amortization of software development costs amounted to $ 325 314 We test capitalized computer software development costs for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful lives as follows: Property and Equipment estimated useful lives Equipment 5 years Computer equipment 3 to 7 years Furniture and fixtures 5 to 7 years Leasehold improvements Shorter of life of asset or lease Internal-use Software The Company has a service contract related to the implementation of internally used software. In accordance with ASC 350-40 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” The amortization will be classified as selling, general, and administrative expenses on the condensed consolidated statement of operations and maintenance and minor upgrades are charged to expense as incurred. Gains and losses on disposals are included in the results of operations. No amortization has been expensed for the project as it is still in progress. Leases Supplemental balance sheet information related to operating leases was as follows as of November 30, 2020: Schedule of lease cost (in thousands) Right of use assets $ 768 Lease Liabilities, Current $ 395 Lease Liabilities, Long-term $ 376 Operating lease costs $ 165 Weighted Average remaining lease term 2.0 Weighted Average Discount rate 4.25 Intangible Assets and Goodwill The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and recognizes the assets acquired and liabilities assumed at their acquisition-date fair value. Acquired intangible assets include customer relationships, software, trade names, and noncompete agreements. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill is not amortized, instead it is tested for impairment annually or when events or circumstances change that would indicate that goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Goodwill is tested for impairment at the reporting unit level, which is one level below or the same as an operating segment. As of November 30, 2020, the Company determined that it has four reporting units: Simulations Plus, Cognigen, DILIsym and Lixoft. When testing goodwill for impairment, the Company first performs a qualitative assessment to determine whether it is necessary to perform step one of a two-step annual goodwill impairment test for each reporting unit. The Company is required to perform step one only if it concludes that it is more likely than not that a reporting unit's fair value is less than its carrying value. Should this be the case, the first step of the two-step process is to identify whether a potential impairment exists by comparing the estimated fair values of the Company's reporting units with their respective book values, including goodwill. If the estimated fair value of the reporting unit exceeds book value, goodwill is considered not to be impaired, and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss, if any. The amount of the impairment loss is the excess of the carrying amount of the goodwill over its implied fair value. The estimate of implied fair value of goodwill is primarily based on an estimate of the discounted cash flows expected to result from that reporting unit, but may require valuations of certain internally generated and unrecognized intangible assets such as the Company's software, technology, patents, and trademarks. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. As of November 30, 2020, the entire balance of goodwill was attributed to three of the Company's reporting units, Cognigen, DILIsym, and Lixoft. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The Company did not recognize any impairment charges during the three months ended November 30, 2020 and 2019. Reconciliation of Goodwill for the period ended November 30, 2020: Schedule of reconciliation of goodwill (in thousands) Cognigen DILIsym Lixoft Total Balance, August 31, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 Addition – – – – Impairments – – – – Balance, November 30, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the Condensed Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories, as defined by the standard are as follows: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. For certain of our financial instruments, including accounts receivable, accounts payable, accrued payroll and other expenses, accrued bonuses to officers, and accrued warranty and service costs, the amounts approximate fair value due to their short maturities. The following table summarizes fair value measurements at November 30, 2020 and August 31, 2020 for assets and liabilities measured at fair value on a recurring basis: November 30, 2020: Schedule of fair value measurements (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 27,651 $ – $ – $ 27,651 Short-term investments $ 91,115 $ – $ – 91,115 Acquisition-related contingent consideration obligations $ – $ – $ 4,852 $ 4,852 August 31, 2020: (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 49,207 $ – $ – $ 49,207 Short-term investments $ 66,804 $ – $ – $ 66,804 Acquisition-related contingent consideration obligations $ – $ – $ 4,731 $ 4,731 As of November 30, 2020 and August 31, 2020, the Company has a liability for contingent consideration related to its acquisition of Lixoft. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. Changes in the value of the contingent consideration obligations are recorded in the Company’s Consolidated Statement of Operations. The following is a reconciliation of contingent consideration value: Reconciliation of contingent consideration value (in thousands) Value at August 31, 2020 $ 4,731 Contingent consideration payments – Change in value of contingent consideration 121 Value at November 30, 2020 $ 4,852 Research and Development Costs Research and development costs are charged to expense as incurred until technological feasibility has been established. These costs include salaries, laboratory experiment, and purchased software that was developed by other companies and incorporated into, or used in the development of, our final products. Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes” Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. Intellectual property The following table summarizes intellectual property as of November 30, 2020: Schedule of Intellectual property (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 66 $ 9 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,925 2,075 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,108 1,742 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 11 39 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 334 7,676 $ 16,985 $ 5,444 $ 11,541 The following table summarizes intellectual property as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 64 $ 11 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,775 2,225 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,029 1,821 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 10 40 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 209 7,801 $ 16,985 $ 5,087 $ 11,898 Total amortization expense for intellectual property agreements for the three months ended November 30, 2020 and 2019 was $ 357 232 Other intangible assets The following table summarizes the Company’s other intangible assets as of November 30, 2020: Schedule of other intangible assets (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 859 $ 241 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 665 1,235 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 70 10 Lixoft Customer relationships Straight line 14 years 2,550 122 2,428 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 13 47 $ 8,650 $ 1,779 $ 6,871 The following table summarizes the Company’s other intangible assets as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 825 $ 275 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 618 1,282 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 65 15 Lixoft Customer relationships Straight line 14 years 2,550 76 2,474 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 8 52 $ 8,650 $ 1,642 $ 7,008 Amortization expense for each of the three months ended November 30, 2020 and 2019 was $ 137 87 Earnings per Share We report earnings per share in accordance with FASB ASC 260-10. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The components of basic and diluted earnings per share for the three months ended November 30, 2020 and 2019 were as follows: Schedule of earnings per share Three months ended November 30, (in thousands) 2020 2019 Numerator: Net income attributable to common shareholders $ 2,479 $ 2,058 Denominator: Weighted-average number of common shares outstanding during the period 19,930 17,609 Dilutive effect of stock options 869 698 Common stock and common stock equivalents used for diluted earnings per share $ 20,799 $ 18,307 Stock-Based Compensation Compensation costs related to stock options are determined in accordance with FASB ASC 718-10, “Compensation-Stock Compensation”, Impairment of Long-lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 350, “Intangibles – Goodwill and Other “Property and Equipment” Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in "Leases (Topic 840)" and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company adopted this ASU on September 1, 2019. We do not expect any other recently issued accounting pronouncements to have a material effect on our financial statements. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | NOTE 3: REVENUE RECOGNITION Contract Liabilities During the three months ended November 30, 2020 and 2019, the Company recognized $ 296 306 Disaggregation of Revenues Schedule of disaggregation of revenues (in thousands) Three months Ended November 30, Disaggregation of revenues: 2020 2019 Software licenses Point in time $ 6,001 $ 4,363 Over time 211 251 Consulting services Over time 4,489 4,787 Total Revenue $ 10,701 $ 9,401 Remaining Performance Obligations Remaining performance obligations that do not fall under the expedients require the Company to perform various consulting and software development services of approximately $ 2.7 |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 3 Months Ended |
Nov. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4: PROPERTY AND EQUIPMENT Property and equipment consisted of the following: Schedule of property and equipment (in thousands) November 30, 2020 August 31, 2020 Equipment $ 930 $ 865 Computer equipment 572 548 Furniture and fixtures 161 161 Leasehold improvements 114 114 Construction in progress 115 – Sub total 1,892 1,688 Less: accumulated depreciation (1,296 ) (1,250 ) Net book value $ 596 $ 438 |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Nov. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
INVESTMENTS | NOTE 5: INVESTMENTS The Company invests a portion of its excess cash balances in short-term debt securities. Investments at November 30, 2020 consisted of corporate bonds with maturities remaining of less than 12 months. The Company may also invest excess cash balances in certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investments in accordance with FASB ASC 320, Investments – Debt and Equity Securities. At November 30, 2020, all investments were classified as held-to-maturity securities. The following tables summarize the Company’s short-term investments as of November 30, 2020 and August 31, 2020: Schedule of short term investment November 30, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 91,115 $ – $ (48 ) $ 91,067 Total $ 91,115 $ – $ (48 ) $ 91,067 August 31, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 66,804 $ – $ (61 ) $ 66,743 Total $ 66,804 $ – $ (61 ) $ 66,743 |
CONTRACTS PAYABLE
CONTRACTS PAYABLE | 3 Months Ended |
Nov. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
CONTRACTS PAYABLE | NOTE 6: CONTRACTS PAYABLE DILIsym Acquisition Liabilities On June 1, 2017, the Company acquired DILIsym. The agreement provided for a working capital adjustment, an eighteen-month $1.0 million holdback provision against certain representations and warranties, and an earnout agreement of up to an additional $5.0 million in earnout payments based on earnings over three years following acquisition. The earnout liability has been recorded at an estimated fair value. Payments under the earnout liability started in FY 2019. In September 2018, $1.6 million was paid out under the first earnout payment, a second earnout payment was made in August 2019 in the amount of $1.7 million. The final payment of $1.8 million was paid in August 2020. In addition, no claims were made against the holdback and the $1.0 million was released eighteen months after June 1, 2017. Lixoft Acquisition Liabilities On April 1, 2020, the Company acquired Lixoft. The agreement provided for a twenty-four month $2.0 million holdback provision against certain representations and warrantees, comprised of $1.3 million of cash and the release from an escrow shares of stock valued at $667 thousand 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 earnout payments of up to $5.5 million (two-thirds cash and one-third newly issued, restricted shares of the Company’s common stock). The former shareholders of Lixoft can earn up to $2.0 million the first year and $3.5 million in year two. As of November 30, 2020 and August, 31, 2020 the following liabilities have been recorded: Schedule of Liabilities (in thousands) November 30, August 31, Holdback liability — Lixoft $ 1,333 $ 1,333 Earnout liability — Lixoft 4,852 4,731 Sub total $ 6,185 $ 6,064 Less: current portion 2,000 2,000 Long-term portion $ 4,185 $ 4,064 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7: COMMITMENTS AND CONTINGENCIES Leases We lease approximately 13,500 square feet of space in Lancaster, California. The original lease had a five-year term with two, three-year options to extend. The initial five-year term expired in February 2011, and we extended the lease to February 2, 2014. In June 2013, the lease was amended to extend the term to February 2, 2017. The amended lease also provides for an annual base rent increase of 3% per year and two, two-year options to extend. In May 2016 the Company exercised the two, two-year options extending the term of the lease through February 2, 2021 at a fixed rate of $25 thousand per month. The new extension agreement allowed the Company with 90 days’ notice to opt out of the remaining lease in the last two years of the term upon payment of a recapture payment equal to the 3% base payment increase that would have been due under the original agreement. Refer to subsequent events footnote for details of the third amendment to the lease for the property in Lancaster, CA. Our Cognigen subsidiary leases approximately 12,623 square feet of space in Buffalo, New York. The initial five-year term expired in October 2018 and was renewed for a three-year option extending it to November 2021. The new base rent is $16 thousand per month. DILIsym leases approximately 2,700 square feet of space in Research Triangle Park, North Carolina. The initial three-year term was due to expire October 2020. An amendment to the initial lease became effective April 1, 2020, which added 686 square feet and extended the term of the lease to September 30, 2023. The new base rent is approximately $8 thousand per month with an annual 3% adjustment. In Paris, France, Lixoft leases approximately 2,300 square feet of office space, which as of April 1, 2020, had minimum payments equaling $288 thousand. The lease is for a 9-year term, with an option to terminate every 3 years, and expires in November of 2024. The rent is $16 thousand per quarter and can be adjusted each December based on a consumer price index. Rent expense, including common area maintenance fees for the three months ended November 30, 2020, and 2019 was $ 185 145 Future minimum lease payments under noncancelable operating leases with remaining terms of one year or more at November 30, 2020 were as follows: Future minimum lease payments (in thousands) 2021 $ 412 2022 170 2023 155 2024 61 Future minimum lease payments $ 798 Line of Credit On March 31, 2020, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A. The Credit Agreement provides the Company with a credit facility of $ 3.5 April 15, 2022 no Employment Agreements In the normal course of business, the Company has entered into employment agreements with certain of its key management personnel that may require compensation payments upon termination. License Agreement The Company had a royalty agreement with Dassault Systèmes Americas Corp. for access to their Metabolite Database for developing our Metabolite Module within ADMET Predictor™. The module was renamed the Metabolism Module when we released ADMET Predictor version 6 on April 19, 2012. Under this agreement, we paid a royalty of 25% of revenue derived from the sale of the Metabolism/Metabolite module. This agreement was renegotiated, and the Company does not bear any royalty obligations towards Dassault Systèmes Americas Corp. effective as of June 30, 2019. In addition, the license agreement terminated on September 5, 2020. The Company is in the process of making arrangements to replace the database. Income Taxes We follow guidance issued by the FASB with regard to our accounting for uncertainty in income taxes recognized in the financial statements. Such guidance prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to income tax expense. We file income tax returns with the IRS and various state jurisdictions as well as India and France. Our federal income tax returns for fiscal year 2017 thru 2019 are open for audit, and our state tax returns for fiscal year 2016 through 2019 remain open for audit. Our review of prior year tax positions using the criteria and provisions presented in guidance issued by FASB did not result in a material impact on our financial position or results of operations. Legal Proceedings We may be subject to litigation, claims, investigations and audits arising from time to time in the ordinary course of our business; however, at this time, we are not a party to any legal proceedings and are not aware of any pending, threatened, or unasserted legal proceedings of any kind. |
SHAREHOLDERS_ EQUITY
SHAREHOLDERS’ EQUITY | 3 Months Ended |
Nov. 30, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS’ EQUITY | NOTE 8: SHAREHOLDERS’ EQUITY Dividend The Company’s Board of Directors declared cash dividends during the first quarter of fiscal year 2021 and during fiscal year 2020. The details of the dividends paid are in the following tables: Schedule of dividends declared and paid (in thousands, except dividend per share amounts) Fiscal Year 2021 Record Date Distribution Date Number of Shares Dividend per Total 10/26/2020 11/02/2020 19,924 $ 0.06 $ 1,195 Total $ 1,195 (in thousands, except dividend per share amounts) Fiscal Year 2020 Record Date Distribution Date Number of Shares Dividend per Total 10/25/2019 11/01/2019 17,606 $ 0.06 $ 1,056 1/27/2020 2/03/2020 17,646 $ 0.06 1,059 4/24/2020 5/01/2020 17,769 $ 0.06 1,066 7/27/2020 8/03/2020 17,820 $ 0.06 1,069 Total $ 4,250 Stock Option Plan On February 23, 2007, the Board of Directors adopted and the shareholders approved the 2007 Stock Option Plan under which a total of 1.0 million shares of common stock were reserved for issuance. On February 25, 2014 the shareholders approved an additional 1.0 million shares increasing the total number of shares available to be granted under the 2007 Stock Option Plan to 2.0 million. This plan terminated in February 2017 by its term. On December 23, 2016 the Board of Directors adopted, and on February 23, 2017 the shareholders approved, the 2017 Equity Incentive Plan under which a total of 1.0 On November 20, 2020, the Board of Directors adopted an amendment to the 2017 Equity Incentive Plan to increase the number of shares reserved for issuance under the plan from 1.0 million shares of common stock to 1.75 million shares of common stock. The amendment is subject to shareholder approval at the Company’s upcoming annual shareholder meeting. As of November 30, 2020, employees and directors hold Qualified Incentive Stock Options (“ISOs”) and Non-Qualified Stock Options (“NQSOs) to purchase 1.2 million shares of common stock at exercise prices ranging from $6.75 to $61.84. The following table summarizes information about stock options: Schedule of stock option activity (in thousands, except per share and weighted-average amounts) Number of Weighted- Weighted- Transactions during the three months ended November 30, 2020 Options Per Share Life Outstanding, August 31, 2020 1,224 $ 17.76 6.79 Granted 26 $ 59.91 Exercised (34 ) $ 14.04 Cancelled/Forfeited (11 ) $ 24.18 Outstanding, November 30, 2020 1,205 $ 18.73 6.62 Exercisable, November 30, 2020 583 $ 11.16 5.35 The weighted-average remaining contractual life of options outstanding issued under the Plan, both ISOs and NQSOs, was 6.62 19.1 3.18 The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. The following table summarizes the fair value of the options, including both ISOs and NQSOs, granted during the current fiscal year 2021 and fiscal year 2020: Schedule of fair value of options (in thousands except pricing) Three months ended, November 30 2020 Fiscal Year 2020 Estimated fair value of awards granted $ 560 $ 2,997 Unvested forfeiture rate 0% 0% Weighted average grant price $ 59.91 $ 39.23 Weighted average market price $ 59.91 $ 39.23 Weighted average volatility 36.35% 33.56% Weighted average risk-free rate 0.47% 1.39% Weighted average dividend yield 0.40% 0.65% Weighted average expected life 6.65 6.67 The exercise prices for the options outstanding at November 30, 2020 ranged from $6.75 to $61.84, and the information relating to these options is as follows: Schedule of options by exercise price range (in thousands except prices) Exercise Price Awards Outstanding Awards Exercisable Low High Quantity Weighted Weighted Quantity Weighted Weighted $ 6.75 $ 8.00 169 3.77 $ 6.85 169 3.77 $ 6.85 $ 8.01 $ 16.00 535 5.80 $ 9.99 337 5.74 $ 9.99 $ 16.01 $ 24.00 208 7.51 $ 20.42 49 6.19 $ 20.61 $ 24.01 $ 38.00 204 8.90 $ 33.46 28 8.70 $ 34.83 $ 38.01 $ 52.00 20 9.31 $ 38.64 – – $ – $ 52.01 $ 61.84 69 9.68 $ 61.10 – – $ – 1,205 6.62 $ 18.73 583 5.35 $ 11.16 During the three months ended November 30, 2020 the company issued 1,275 83 In August 2020, the company closed an underwritten public offering of 2,090,909 55.00 272,727 115 107700 The balance of par value common stock and additional paid in capital as of November 30, 2020 was $10 thousand and $129.2 million, respectively. |
CONCENTRATIONS AND UNCERTAINTIE
CONCENTRATIONS AND UNCERTAINTIES | 3 Months Ended |
Nov. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND UNCERTAINTIES | NOTE 9: CONCENTRATIONS AND UNCERTAINTIES Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, trade accounts receivable and short-term investments. The Company holds cash and cash equivalents at banks located in California and North Carolina with balances that often exceed FDIC-insured limits. In addition, the Company holds cash at a bank in France that is not FDIC-insured. 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. As of November 30, 2020 the Company had cash and cash equivalents exceeding insured limits by $ 13.8 Revenue concentration shows that international sales accounted for 33 30 17 7 5 13 8 6 6 Accounts receivable concentration shows that five customers comprised 21 8 8 7 6 14 8 7 7 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 |
SEGMENT AND GEOGRAPHIC REPORTIN
SEGMENT AND GEOGRAPHIC REPORTING | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT AND GEOGRAPHIC REPORTING | NOTE 10: SEGMENT AND GEOGRAPHIC REPORTING We account for segments and geographic revenues in accordance with guidance issued by the FASB. Our reportable segments are strategic business units that offer different products and services. Results for each segment and consolidated results are as follows for the three months ended November 30, 2020 and 2019: Schedule of consolidated results from reportable segments (in thousands) Three Months Ended November 30, 2020 Simulations Plus Cognigen DILIsym Lixoft* Eliminations Total Revenues $ 5,432 $ 2,668 $ 1,372 $ 1,229 $ – $ 10,701 Income from operations before income taxes $ 2,365 $ 206 $ (45 ) $ 525 $ – $ 3,051 Total assets $ 162,871 $ 12,279 $ 14,180 $ 20,628 $ (39,488 ) $ 170,470 Capital expenditures $ 139 $ 63 $ – $ 3 $ – $ 205 Capitalized software costs $ 568 $ – $ 43 $ 117 $ – $ 728 Depreciation and amortization $ 451 $ 81 $ 149 $ 184 $ – $ 865 * The Company purchased Lixoft on April 1, 2020. (in thousands ) Three Months Ended November 30, 2019 Simulations Plus Cognigen DILIsym Eliminations Total Revenues $ 4,927 $ 2,387 $ 2,087 $ – $ 9,401 Income from operations $ 1,903 $ 40 $ 775 $ – $ 2,718 Total assets $ 40,656 $ 10,660 $ 14,149 $ (17,702 ) $ 47,763 Capital expenditures $ 8 $ 17 $ 3 $ – $ 28 Capitalized software costs $ 457 $ 20 $ 30 $ – $ 507 Depreciation and amortization $ 435 $ 86 $ 150 $ – $ 671 In addition, the Company allocates revenues to geographic areas based on the locations of its customers. Geographical revenues for the three months ended November 30, 2020 and 2019 were as follows: Schedule of geographical revenues (in thousands) Three Months Ended November 30, 2020 Americas EMEA Asia Pacific Total Simulations Plus $ 2,518 $ 1,890 $ 1,024 $ 5,432 Cognigen 2,668 – – 2,668 DILIsym 1,326 21 25 1,372 Lixoft 611 567 51 1,229 Total $ 7,123 $ 2,478 $ 1,100 $ 10,701 (in thousands) Three Months Ended November 30, 2019 Americas EMEA Asia Pacific Total Simulations Plus $ 2,547 $ 1,147 $ 1,233 $ 4,927 Cognigen 2,387 – – 2,387 DILIsym 1,737 325 25 2,087 Total $ 6,671 $ 1,472 $ 1,258 $ 9,401 |
EMPLOYEE BENEFIT PLAN
EMPLOYEE BENEFIT PLAN | 3 Months Ended |
Nov. 30, 2020 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | NOTE 11: EMPLOYEE BENEFIT PLAN We maintain a 401(k) Plan for all eligible employees, and we make matching contributions equal to 100% of the employee’s elective deferral, not to exceed 4% of total employee compensation. We can also elect to make a profit-sharing contribution. Our contributions to this Plan amounted to $ 121 92 |
ACQUISITION
ACQUISITION | 3 Months Ended |
Nov. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITION | NOTE 12: ACQUISITION On March 31, 2020, the Company entered into a Stock Purchase and Contribution Agreement (the “Agreement”) with Lixoft. On April 1, 2020, the Company completed the acquisition of all outstanding equity interests of Lixoft pursuant to the terms of the Agreement, with Lixoft becoming a wholly owned subsidiary of the Company. We believe the combination of Simulations Plus and Lixoft provides substantial future potential based on the complementary strengths of each of the companies. Under the terms of the Agreement, as described below, the Company will pay the former shareholders of Lixoft total consideration of up to $16.5 million, consisting of two-thirds cash and one-third newly issued, unregistered shares of the Company’s common stock. In addition, the Company will pay $3.5 million of excess working capital based on the March 31, 2020 financial statements of Lixoft. On April 1, 2020, the Company paid the former shareholders of Lixoft a total of $10.8 million, comprised of cash in the amount of $9.5 million and the issuance of 111,682 shares of the Company’s common stock valued at $3.7 million, net of adjustments and a holdback for representations and warranties. Under the terms of the Agreement a price of approximately $32.15 dollars per share was used based upon the volume-weighted average closing price of the Company’s shares of common stock for the 30-consecutive-trading-day period ending two trading days prior to April 1, 2020. A total of 9,669 shares are held in an escrow account for potential offset for representations and warrantees. Within three business days following the two-year anniversary of March 31, 2020 (the date of the Agreement) and subject to any offsets for representations and warrantees, the Company will pay the former shareholders of Lixoft a total of $2.0 million, comprised of $1.3 million of cash and shares released from escrow valued at $666 thousand issued at the date of the Agreement. The Agreement provides for a two-year market standoff period in which the newly issued shares may not be sold by the recipients thereof. In addition, the Agreement calls for earnout payments up to an additional $5.5 million, two-thirds cash and one-third newly issued, unregistered shares of the Company’s common stock based on a revenue growth formula each year for the two years subsequent to April 1, 2020. The former shareholders can earn up to $2.0 million the first year and $3.5 million in year two. The earnout liability has been recorded at fair value. Under the acquisition method of accounting, the total purchase price reflects Lixoft’s tangible and intangible assets and liabilities based on their estimated fair values at the date of the completion of the acquisition (April 1, 2020). The following table summarizes the preliminary allocation of the purchase price for Lixoft: Allocation of purchase price (in thousands) Assets acquired, including cash of $3,799 and accounts receivable of $629 $ 5,007 Developed technologies acquired 8,010 Estimated value of intangible assets acquired (customer lists, trade name etc.) 4,160 Estimated goodwill acquired 2,534 Liabilities assumed (1,118 ) Total consideration $ 18,593 Goodwill was provided in the transaction based on estimates of future earnings of this subsidiary including anticipated synergies associated with the positioning of the combined company as a leader in Model-Based Drug Development. Consolidated supplemental Pro Forma information The following unaudited consolidated supplemental pro forma information assumes that the acquisition of Lixoft took place on September 1, 2019 for the income statement for the three-month period ended November 30, 2020. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Lixoft to reflect the same expenses in the three-month perioded ended November 30, 2019. The adjustments include costs of acquisition, and amortization of intangibles and other technologies acquired during the merger, assuming the fair value adjustments applied on September 1, 2019, together with consequential tax effects. Schedule of Pro Forma Information For the three-month period ended (in thousands) November 30, (Unaudited) (Actual) (Pro forma) 2020 2019 Net sales $ 10,701 $ 10,521 Net income $ 2,479 $ 2,516 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Nov. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13: SUBSEQUENT EVENTS On Wednesday, January 6, 2021, our Board of Directors declared a quarterly cash dividend of $ 0.06 1200 On December 28, 2020, the Company entered into a Third Amendment with Crest Development Group LLC to amend a lease of real property originally entered into on September 12, 2005 as amended in June 2013 and May 2016 for property located at 42505 10 th |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Simulations Plus, Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Actual results could differ from those estimates. Significant accounting policies for us include revenue recognition, accounting for capitalized computer software development costs, valuation of stock options, and accounting for income taxes. |
Reclassifications | Reclassifications Certain numbers in the prior year have been reclassified to conform to the current year's presentation. |
Revenue Recognition | Revenue Recognition We generate revenue primarily from the sale of software licenses and by providing consulting services to the pharmaceutical industry for drug development. In accordance with Accounting Standards Codification Topic 606 (ASC Topic 606), “ Revenue from Contracts with Customers”, i. Identification of the contract, or contracts, with a customer ii. Identification of the performance obligations in the contract iii. Determination of the transaction price iv. Allocation of the transaction price to the performance obligations in the contract v. Recognition of revenue when, or as, the Company satisfies a performance obligation Deferred Commissions Sales commissions earned by our sales force and our commissioned sales representatives are considered incremental and recoverable costs of obtaining a contract with a customer. Sales commissions for new contracts are deferred and then amortized on a straight-line basis over a period of benefit. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors. Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in sales and marketing expenses on the condensed consolidated statements of operations. We apply the practical expedient in ASC Topic 606 to expense costs as incurred for sales commissions when the period of benefit would have been one year or less. Most of our contracts are of a duration of one year or less, while few, if any of the longer-term contracts have commissions associated with them. Practical Expedients and Exemptions The Company has elected the following additional practical expedients in applying Topic 606: · Commission Expense . · Transaction Price Allocated to Future Performance Obligations ASC 606 requires that the Company disclose the aggregate amount of transaction price that is allocated to performance obligations that have not yet been satisfied as of November 30, 2020. ASC 606 provides certain practical expedients that limit the requirement to disclose the aggregate amount of transaction price allocated to unsatisfied performance obligations. The Company applied the practical expedient to not disclose the amount of transaction price allocated to unsatisfied performance obligations when the performance obligation is part of a contract that has an original expected duration of one year or less. |
Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statements of cash flows, the Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. |
Accounts Receivable | Accounts Receivable We analyze the age of customer balances, historical bad-debt experience, customer creditworthiness, and changes in customer payment terms when making estimates of the collectability of the Company’s trade accounts receivable balances. If we determine that the financial conditions of any of its customers deteriorated, whether due to customer-specific or general economic issues, an increase in the allowance may be made. Accounts receivable are written off when all collection attempts have failed. |
Investments | Investments We may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds and/or commercial paper. The Company accounts for its investment in marketable securities in accordance with Financial Accounting Standards Board (FASB) ASC 320, Investments – Debt and Equity Securities. This statement requires debt securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are reported at amortized cost. Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value with unrealized gains or losses excluded from earnings and reported as a separate component of shareholders’ equity. The Company classifies its investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. During the quarter ended November 30, 2020, all of the Company’s investments were classified as held-to-maturity. Held-to-maturity investments are measured and recorded at amortized cost on the Company’s Consolidated Balance Sheet. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. No gains or losses on investment securities are realized until they are sold or a decline in fair value is determined to be other-than-temporary. |
Capitalized Computer Software Development Costs | Capitalized Computer Software Development Costs Software development costs are capitalized in accordance with ASC 985-20, “Costs of Software to Be Sold, Leased, or Marketed” The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenues, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in our software products. Amortization of capitalized software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products (not to exceed five years). Amortization of software development costs amounted to $ 325 314 We test capitalized computer software development costs for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost, less accumulated depreciation and amortization. Depreciation and amortization are provided using the straight-line method over the estimated useful lives as follows: Property and Equipment estimated useful lives Equipment 5 years Computer equipment 3 to 7 years Furniture and fixtures 5 to 7 years Leasehold improvements Shorter of life of asset or lease |
Internal-use Software | Internal-use Software The Company has a service contract related to the implementation of internally used software. In accordance with ASC 350-40 “Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract” The amortization will be classified as selling, general, and administrative expenses on the condensed consolidated statement of operations and maintenance and minor upgrades are charged to expense as incurred. Gains and losses on disposals are included in the results of operations. No amortization has been expensed for the project as it is still in progress. |
Leases | Leases Supplemental balance sheet information related to operating leases was as follows as of November 30, 2020: Schedule of lease cost (in thousands) Right of use assets $ 768 Lease Liabilities, Current $ 395 Lease Liabilities, Long-term $ 376 Operating lease costs $ 165 Weighted Average remaining lease term 2.0 Weighted Average Discount rate 4.25 |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The Company performs valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and recognizes the assets acquired and liabilities assumed at their acquisition-date fair value. Acquired intangible assets include customer relationships, software, trade names, and noncompete agreements. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill is not amortized, instead it is tested for impairment annually or when events or circumstances change that would indicate that goodwill might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company's use of the acquired assets or the strategy for the Company's overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Goodwill is tested for impairment at the reporting unit level, which is one level below or the same as an operating segment. As of November 30, 2020, the Company determined that it has four reporting units: Simulations Plus, Cognigen, DILIsym and Lixoft. When testing goodwill for impairment, the Company first performs a qualitative assessment to determine whether it is necessary to perform step one of a two-step annual goodwill impairment test for each reporting unit. The Company is required to perform step one only if it concludes that it is more likely than not that a reporting unit's fair value is less than its carrying value. Should this be the case, the first step of the two-step process is to identify whether a potential impairment exists by comparing the estimated fair values of the Company's reporting units with their respective book values, including goodwill. If the estimated fair value of the reporting unit exceeds book value, goodwill is considered not to be impaired, and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss, if any. The amount of the impairment loss is the excess of the carrying amount of the goodwill over its implied fair value. The estimate of implied fair value of goodwill is primarily based on an estimate of the discounted cash flows expected to result from that reporting unit, but may require valuations of certain internally generated and unrecognized intangible assets such as the Company's software, technology, patents, and trademarks. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess. As of November 30, 2020, the entire balance of goodwill was attributed to three of the Company's reporting units, Cognigen, DILIsym, and Lixoft. Intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. The Company did not recognize any impairment charges during the three months ended November 30, 2020 and 2019. Reconciliation of Goodwill for the period ended November 30, 2020: Schedule of reconciliation of goodwill (in thousands) Cognigen DILIsym Lixoft Total Balance, August 31, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 Addition – – – – Impairments – – – – Balance, November 30, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the Condensed Balance Sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories, as defined by the standard are as follows: Level Input: Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. For certain of our financial instruments, including accounts receivable, accounts payable, accrued payroll and other expenses, accrued bonuses to officers, and accrued warranty and service costs, the amounts approximate fair value due to their short maturities. The following table summarizes fair value measurements at November 30, 2020 and August 31, 2020 for assets and liabilities measured at fair value on a recurring basis: November 30, 2020: Schedule of fair value measurements (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 27,651 $ – $ – $ 27,651 Short-term investments $ 91,115 $ – $ – 91,115 Acquisition-related contingent consideration obligations $ – $ – $ 4,852 $ 4,852 August 31, 2020: (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 49,207 $ – $ – $ 49,207 Short-term investments $ 66,804 $ – $ – $ 66,804 Acquisition-related contingent consideration obligations $ – $ – $ 4,731 $ 4,731 As of November 30, 2020 and August 31, 2020, the Company has a liability for contingent consideration related to its acquisition of Lixoft. The fair value measurement of the contingent consideration obligations is determined using Level 3 inputs. The fair value of contingent consideration obligations is based on a discounted cash flow model using a probability-weighted income approach. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense the Company records in any given period. Changes in the value of the contingent consideration obligations are recorded in the Company’s Consolidated Statement of Operations. The following is a reconciliation of contingent consideration value: Reconciliation of contingent consideration value (in thousands) Value at August 31, 2020 $ 4,731 Contingent consideration payments – Change in value of contingent consideration 121 Value at November 30, 2020 $ 4,852 |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred until technological feasibility has been established. These costs include salaries, laboratory experiment, and purchased software that was developed by other companies and incorporated into, or used in the development of, our final products. |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with ASC 740-10, “Income Taxes” Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. |
Intellectual property | Intellectual property The following table summarizes intellectual property as of November 30, 2020: Schedule of Intellectual property (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 66 $ 9 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,925 2,075 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,108 1,742 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 11 39 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 334 7,676 $ 16,985 $ 5,444 $ 11,541 The following table summarizes intellectual property as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 64 $ 11 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,775 2,225 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,029 1,821 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 10 40 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 209 7,801 $ 16,985 $ 5,087 $ 11,898 Total amortization expense for intellectual property agreements for the three months ended November 30, 2020 and 2019 was $ 357 232 |
Other intangible assets | Other intangible assets The following table summarizes the Company’s other intangible assets as of November 30, 2020: Schedule of other intangible assets (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 859 $ 241 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 665 1,235 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 70 10 Lixoft Customer relationships Straight line 14 years 2,550 122 2,428 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 13 47 $ 8,650 $ 1,779 $ 6,871 The following table summarizes the Company’s other intangible assets as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 825 $ 275 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 618 1,282 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 65 15 Lixoft Customer relationships Straight line 14 years 2,550 76 2,474 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 8 52 $ 8,650 $ 1,642 $ 7,008 Amortization expense for each of the three months ended November 30, 2020 and 2019 was $ 137 87 |
Earnings per Share | Earnings per Share We report earnings per share in accordance with FASB ASC 260-10. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares available. Diluted earnings per share is computed similar to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The components of basic and diluted earnings per share for the three months ended November 30, 2020 and 2019 were as follows: Schedule of earnings per share Three months ended November 30, (in thousands) 2020 2019 Numerator: Net income attributable to common shareholders $ 2,479 $ 2,058 Denominator: Weighted-average number of common shares outstanding during the period 19,930 17,609 Dilutive effect of stock options 869 698 Common stock and common stock equivalents used for diluted earnings per share $ 20,799 $ 18,307 |
Stock-Based Compensation | Stock-Based Compensation Compensation costs related to stock options are determined in accordance with FASB ASC 718-10, “Compensation-Stock Compensation”, |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with ASC 350, “Intangibles – Goodwill and Other “Property and Equipment” |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes existing guidance on accounting for leases in "Leases (Topic 840)" and generally requires all leases to be recognized in the consolidated balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018. The Company adopted this ASU on September 1, 2019. We do not expect any other recently issued accounting pronouncements to have a material effect on our financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Accounting Policies [Abstract] | |
Property and Equipment estimated useful lives | Property and Equipment estimated useful lives Equipment 5 years Computer equipment 3 to 7 years Furniture and fixtures 5 to 7 years Leasehold improvements Shorter of life of asset or lease |
Schedule of lease cost | Schedule of lease cost (in thousands) Right of use assets $ 768 Lease Liabilities, Current $ 395 Lease Liabilities, Long-term $ 376 Operating lease costs $ 165 Weighted Average remaining lease term 2.0 Weighted Average Discount rate 4.25 |
Schedule of reconciliation of goodwill | Schedule of reconciliation of goodwill (in thousands) Cognigen DILIsym Lixoft Total Balance, August 31, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 Addition – – – – Impairments – – – – Balance, November 30, 2020 $ 4,789 $ 5,598 $ 2,534 $ 12,921 |
Schedule of fair value measurements | Schedule of fair value measurements (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 27,651 $ – $ – $ 27,651 Short-term investments $ 91,115 $ – $ – 91,115 Acquisition-related contingent consideration obligations $ – $ – $ 4,852 $ 4,852 August 31, 2020: (in thousands) Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 49,207 $ – $ – $ 49,207 Short-term investments $ 66,804 $ – $ – $ 66,804 Acquisition-related contingent consideration obligations $ – $ – $ 4,731 $ 4,731 |
Reconciliation of contingent consideration value | Reconciliation of contingent consideration value (in thousands) Value at August 31, 2020 $ 4,731 Contingent consideration payments – Change in value of contingent consideration 121 Value at November 30, 2020 $ 4,852 |
Schedule of Intellectual property | Schedule of Intellectual property (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 66 $ 9 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,925 2,075 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,108 1,742 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 11 39 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 334 7,676 $ 16,985 $ 5,444 $ 11,541 The following table summarizes intellectual property as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Royalty Agreement buy out-Enslein Research Straight line 10 years $ 75 $ 64 $ 11 Termination/nonassertion agreement-TSRL Inc. Straight line 10 years 6,000 3,775 2,225 Developed technologies–DILIsym acquisition Straight line 9 years 2,850 1,029 1,821 Intellectual rights of Entelos Holding Corp. Straight line 10 years 50 10 40 Developed technologies–Lixoft acquisition Straight line 16 years 8,010 209 7,801 $ 16,985 $ 5,087 $ 11,898 |
Schedule of other intangible assets | Schedule of other intangible assets (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 859 $ 241 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 665 1,235 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 70 10 Lixoft Customer relationships Straight line 14 years 2,550 122 2,428 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 13 47 $ 8,650 $ 1,779 $ 6,871 The following table summarizes the Company’s other intangible assets as of August 31, 2020: (in thousands) Amortization Acquisition Accumulated Net book Cognigen Customer relationships Straight line 8 years $ 1,100 $ 825 $ 275 Trade name None 500 – 500 Covenants not to compete Straight line 5 years 50 50 – DILIsym Customer relationships Straight line 10 years 1,900 618 1,282 Trade name None 860 – 860 Covenants to compete Straight line 4 years 80 65 15 Lixoft Customer relationships Straight line 14 years 2,550 76 2,474 Trade name None 1,550 – 1,550 Covenants to compete Straight line 3 years 60 8 52 $ 8,650 $ 1,642 $ 7,008 |
Schedule of earnings per share | Schedule of earnings per share Three months ended November 30, (in thousands) 2020 2019 Numerator: Net income attributable to common shareholders $ 2,479 $ 2,058 Denominator: Weighted-average number of common shares outstanding during the period 19,930 17,609 Dilutive effect of stock options 869 698 Common stock and common stock equivalents used for diluted earnings per share $ 20,799 $ 18,307 |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregation of revenues | Schedule of disaggregation of revenues (in thousands) Three months Ended November 30, Disaggregation of revenues: 2020 2019 Software licenses Point in time $ 6,001 $ 4,363 Over time 211 251 Consulting services Over time 4,489 4,787 Total Revenue $ 10,701 $ 9,401 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Schedule of property and equipment (in thousands) November 30, 2020 August 31, 2020 Equipment $ 930 $ 865 Computer equipment 572 548 Furniture and fixtures 161 161 Leasehold improvements 114 114 Construction in progress 115 – Sub total 1,892 1,688 Less: accumulated depreciation (1,296 ) (1,250 ) Net book value $ 596 $ 438 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Investments, All Other Investments [Abstract] | |
Schedule of short term investment | Schedule of short term investment November 30, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 91,115 $ – $ (48 ) $ 91,067 Total $ 91,115 $ – $ (48 ) $ 91,067 August 31, 2020 (in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Commercial notes (due within one year) $ 66,804 $ – $ (61 ) $ 66,743 Total $ 66,804 $ – $ (61 ) $ 66,743 |
CONTRACTS PAYABLE (Tables)
CONTRACTS PAYABLE (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Liabilities | Schedule of Liabilities (in thousands) November 30, August 31, Holdback liability — Lixoft $ 1,333 $ 1,333 Earnout liability — Lixoft 4,852 4,731 Sub total $ 6,185 $ 6,064 Less: current portion 2,000 2,000 Long-term portion $ 4,185 $ 4,064 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | Future minimum lease payments (in thousands) 2021 $ 412 2022 170 2023 155 2024 61 Future minimum lease payments $ 798 |
SHAREHOLDERS_ EQUITY (Tables)
SHAREHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Equity [Abstract] | |
Schedule of dividends declared and paid | Schedule of dividends declared and paid (in thousands, except dividend per share amounts) Fiscal Year 2021 Record Date Distribution Date Number of Shares Dividend per Total 10/26/2020 11/02/2020 19,924 $ 0.06 $ 1,195 Total $ 1,195 (in thousands, except dividend per share amounts) Fiscal Year 2020 Record Date Distribution Date Number of Shares Dividend per Total 10/25/2019 11/01/2019 17,606 $ 0.06 $ 1,056 1/27/2020 2/03/2020 17,646 $ 0.06 1,059 4/24/2020 5/01/2020 17,769 $ 0.06 1,066 7/27/2020 8/03/2020 17,820 $ 0.06 1,069 Total $ 4,250 |
Schedule of stock option activity | Schedule of stock option activity (in thousands, except per share and weighted-average amounts) Number of Weighted- Weighted- Transactions during the three months ended November 30, 2020 Options Per Share Life Outstanding, August 31, 2020 1,224 $ 17.76 6.79 Granted 26 $ 59.91 Exercised (34 ) $ 14.04 Cancelled/Forfeited (11 ) $ 24.18 Outstanding, November 30, 2020 1,205 $ 18.73 6.62 Exercisable, November 30, 2020 583 $ 11.16 5.35 |
Schedule of fair value of options | Schedule of fair value of options (in thousands except pricing) Three months ended, November 30 2020 Fiscal Year 2020 Estimated fair value of awards granted $ 560 $ 2,997 Unvested forfeiture rate 0% 0% Weighted average grant price $ 59.91 $ 39.23 Weighted average market price $ 59.91 $ 39.23 Weighted average volatility 36.35% 33.56% Weighted average risk-free rate 0.47% 1.39% Weighted average dividend yield 0.40% 0.65% Weighted average expected life 6.65 6.67 |
Schedule of options by exercise price range | Schedule of options by exercise price range (in thousands except prices) Exercise Price Awards Outstanding Awards Exercisable Low High Quantity Weighted Weighted Quantity Weighted Weighted $ 6.75 $ 8.00 169 3.77 $ 6.85 169 3.77 $ 6.85 $ 8.01 $ 16.00 535 5.80 $ 9.99 337 5.74 $ 9.99 $ 16.01 $ 24.00 208 7.51 $ 20.42 49 6.19 $ 20.61 $ 24.01 $ 38.00 204 8.90 $ 33.46 28 8.70 $ 34.83 $ 38.01 $ 52.00 20 9.31 $ 38.64 – – $ – $ 52.01 $ 61.84 69 9.68 $ 61.10 – – $ – 1,205 6.62 $ 18.73 583 5.35 $ 11.16 During the three months ended November 30, 2020 the company issued 1,275 83 In August 2020, the company closed an underwritten public offering of 2,090,909 55.00 272,727 115 107700 The balance of par value common stock and additional paid in capital as of November 30, 2020 was $10 thousand and $129.2 million, respectively. |
SEGMENT AND GEOGRAPHIC REPORT_2
SEGMENT AND GEOGRAPHIC REPORTING (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of consolidated results from reportable segments | Schedule of consolidated results from reportable segments (in thousands) Three Months Ended November 30, 2020 Simulations Plus Cognigen DILIsym Lixoft* Eliminations Total Revenues $ 5,432 $ 2,668 $ 1,372 $ 1,229 $ – $ 10,701 Income from operations before income taxes $ 2,365 $ 206 $ (45 ) $ 525 $ – $ 3,051 Total assets $ 162,871 $ 12,279 $ 14,180 $ 20,628 $ (39,488 ) $ 170,470 Capital expenditures $ 139 $ 63 $ – $ 3 $ – $ 205 Capitalized software costs $ 568 $ – $ 43 $ 117 $ – $ 728 Depreciation and amortization $ 451 $ 81 $ 149 $ 184 $ – $ 865 * The Company purchased Lixoft on April 1, 2020. (in thousands ) Three Months Ended November 30, 2019 Simulations Plus Cognigen DILIsym Eliminations Total Revenues $ 4,927 $ 2,387 $ 2,087 $ – $ 9,401 Income from operations $ 1,903 $ 40 $ 775 $ – $ 2,718 Total assets $ 40,656 $ 10,660 $ 14,149 $ (17,702 ) $ 47,763 Capital expenditures $ 8 $ 17 $ 3 $ – $ 28 Capitalized software costs $ 457 $ 20 $ 30 $ – $ 507 Depreciation and amortization $ 435 $ 86 $ 150 $ – $ 671 |
Schedule of geographical revenues | Schedule of geographical revenues (in thousands) Three Months Ended November 30, 2020 Americas EMEA Asia Pacific Total Simulations Plus $ 2,518 $ 1,890 $ 1,024 $ 5,432 Cognigen 2,668 – – 2,668 DILIsym 1,326 21 25 1,372 Lixoft 611 567 51 1,229 Total $ 7,123 $ 2,478 $ 1,100 $ 10,701 (in thousands) Three Months Ended November 30, 2019 Americas EMEA Asia Pacific Total Simulations Plus $ 2,547 $ 1,147 $ 1,233 $ 4,927 Cognigen 2,387 – – 2,387 DILIsym 1,737 325 25 2,087 Total $ 6,671 $ 1,472 $ 1,258 $ 9,401 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Nov. 30, 2020 | |
Business Combinations [Abstract] | |
Allocation of purchase price | Allocation of purchase price (in thousands) Assets acquired, including cash of $3,799 and accounts receivable of $629 $ 5,007 Developed technologies acquired 8,010 Estimated value of intangible assets acquired (customer lists, trade name etc.) 4,160 Estimated goodwill acquired 2,534 Liabilities assumed (1,118 ) Total consideration $ 18,593 |
Schedule of Pro Forma Information | Schedule of Pro Forma Information For the three-month period ended (in thousands) November 30, (Unaudited) (Actual) (Pro forma) 2020 2019 Net sales $ 10,701 $ 10,521 Net income $ 2,479 $ 2,516 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES (Details - Useful lives) | 3 Months Ended |
Nov. 30, 2020 | |
Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 3 to 7 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | 5 to 7 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant and Equipment, Estimated Useful Lives | Shorter of life of asset or lease |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES (Details - Lease cost) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2020 | |
Lease, Cost [Abstract] | ||
Right of use assets | $ 768 | $ 927 |
Lease Liabilities, Current | 395 | 463 |
Lease Liabilities, Long-term | 376 | $ 463 |
Operating lease costs | $ 165 | |
Weighted average remaining lease term | 2 years | |
Weighted average discount rate | 4.25% |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES (Details - Goodwill) $ in Thousands | 3 Months Ended |
Nov. 30, 2020USD ($) | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | $ 12,921 |
Addition | 0 |
Impairments | 0 |
Goodwill, ending balance | 12,921 |
Cognigen [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | 4,789 |
Addition | 0 |
Impairments | 0 |
Goodwill, ending balance | 4,789 |
DILIsym [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | 5,598 |
Addition | 0 |
Impairments | 0 |
Goodwill, ending balance | 5,598 |
Lixoft [Member] | |
Acquired Indefinite-lived Intangible Assets [Line Items] | |
Goodwill, beginning balance | 2,534 |
Addition | 0 |
Impairments | 0 |
Goodwill, ending balance | $ 2,534 |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES (Details - Fair value measurements) - Fair Value, Recurring [Member] - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Cash and Cash Equivalents [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | $ 27,651 | $ 49,207 |
Short-term Investments [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 91,115 | 66,804 |
Aquisition Related Contingent Consideration Obligations [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value liabilities | 4,852 | 4,731 |
Fair Value, Inputs, Level 1 [Member] | Cash and Cash Equivalents [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 27,651 | 49,207 |
Fair Value, Inputs, Level 1 [Member] | Short-term Investments [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 91,115 | 66,804 |
Fair Value, Inputs, Level 1 [Member] | Aquisition Related Contingent Consideration Obligations [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Cash and Cash Equivalents [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Short-term Investments [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | Aquisition Related Contingent Consideration Obligations [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value liabilities | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Cash and Cash Equivalents [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Short-term Investments [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value assets | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | Aquisition Related Contingent Consideration Obligations [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Fair value liabilities | $ 4,852 | $ 4,731 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES (Details - Reconciliation of contingent consideration) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Significant Accounting Policies | ||
Contingent consideration, beginning balance | $ 4,731 | |
Contingent consideration payments | 0 | |
Change in value of contingent consideration | 121 | $ 0 |
Contingent consideration, ending balance | $ 4,852 |
SIGNIFICANT ACCOUNTING POLICI_9
SIGNIFICANT ACCOUNTING POLICIES (Details - Intellectual property) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net book value | $ 6,871 | $ 7,008 |
Intellectual Property [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquisition value | 16,985 | 16,985 |
Accumulated amortization | 5,444 | 5,087 |
Net book value | $ 11,541 | $ 11,898 |
Intellectual Property [Member] | Enslien [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 10 years | Straight line 10 years |
Acquisition value | $ 75 | $ 75 |
Accumulated amortization | 66 | 64 |
Net book value | $ 9 | $ 11 |
Intellectual Property [Member] | TSRL [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 10 years | Straight line 10 years |
Acquisition value | $ 6,000 | $ 6,000 |
Accumulated amortization | 3,925 | 3,775 |
Net book value | $ 2,075 | $ 2,225 |
Intellectual Property [Member] | DILIsym [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 9 years | Straight line 9 years |
Acquisition value | $ 2,850 | $ 2,850 |
Accumulated amortization | 1,108 | 1,029 |
Net book value | $ 1,742 | $ 1,821 |
Intellectual Property [Member] | Entelos [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 10 years | Straight line 10 years |
Acquisition value | $ 50 | $ 50 |
Accumulated amortization | 11 | 10 |
Net book value | $ 39 | $ 40 |
Intellectual Property [Member] | Lixoft [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 16 years | Straight line 16 years |
Acquisition value | $ 8,010 | $ 8,010 |
Accumulated amortization | 334 | 209 |
Net book value | $ 7,676 | $ 7,801 |
SIGNIFICANT ACCOUNTING POLIC_10
SIGNIFICANT ACCOUNTING POLICIES (Details - Other Intangible Assets) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Net book value | $ 6,871 | $ 7,008 |
Customer Relationships [Member] | Cognigen [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 8 years | Straight line 8 years |
Acquisition value | $ 1,100 | $ 1,100 |
Accumulated amortization | 859 | 825 |
Net book value | $ 241 | $ 275 |
Customer Relationships [Member] | DILIsym [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 10 years | Straight line 10 years |
Acquisition value | $ 1,900 | $ 1,900 |
Accumulated amortization | 665 | 618 |
Net book value | $ 1,235 | $ 1,282 |
Customer Relationships [Member] | Lixoft [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 14 years | Straight line 14 years |
Acquisition value | $ 2,550 | $ 2,550 |
Accumulated amortization | 122 | 76 |
Net book value | $ 2,428 | $ 2,474 |
Trade Names [Member] | Cognigen [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | None | None |
Acquisition value | $ 500 | $ 500 |
Accumulated amortization | 0 | 0 |
Net book value | $ 500 | $ 500 |
Trade Names [Member] | DILIsym [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | None | None |
Acquisition value | $ 860 | $ 860 |
Accumulated amortization | 0 | 0 |
Net book value | $ 860 | $ 860 |
Trade Names [Member] | Lixoft [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | None | None |
Acquisition value | $ 1,550 | $ 1,550 |
Accumulated amortization | 0 | 0 |
Net book value | $ 1,550 | $ 1,550 |
Noncompete Agreements [Member] | Cognigen [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 5 years | Straight line 5 years |
Acquisition value | $ 50 | $ 50 |
Accumulated amortization | 50 | 50 |
Net book value | $ 0 | $ 0 |
Noncompete Agreements [Member] | DILIsym [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 4 years | Straight line 4 years |
Acquisition value | $ 80 | $ 80 |
Accumulated amortization | 70 | 65 |
Net book value | $ 10 | $ 15 |
Noncompete Agreements [Member] | Lixoft [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization period | Straight line 3 years | Straight line 3 years |
Acquisition value | $ 60 | $ 60 |
Accumulated amortization | 13 | 8 |
Net book value | 47 | 52 |
Other Intangible Assets [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquisition value | 8,650 | 8,650 |
Accumulated amortization | 1,779 | 1,642 |
Net book value | $ 6,871 | $ 7,008 |
SIGNIFICANT ACCOUNTING POLIC_11
SIGNIFICANT ACCOUNTING POLICIES (Details - Earnings per share) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Numerator: | ||
Net income attributable to common shareholders | $ 2,479 | $ 2,058 |
Denominator: | ||
Weighted-average number of common shares outstanding during the period | 19,930 | 17,609 |
Dilutive effect of stock options | 869 | 698 |
Common stock and common stock equivalents used for diluted earnings per share | 20,799 | 18,307 |
SIGNIFICANT ACCOUNTING POLIC_12
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of software development | $ 325 | $ 314 |
Intellectual Property [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | 357 | 232 |
Other Intangible Assets [Member] | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets | $ 137 | $ 87 |
REVENUE RECOGNITION (Details -
REVENUE RECOGNITION (Details - Disaggregation) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 10,701 | $ 9,401 |
Software Licenses [Member] | Transferred at Point in Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 6,001 | 4,363 |
Software Licenses [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 211 | 251 |
Consulting Services [Member] | Transferred over Time [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 4,489 | $ 4,787 |
REVENUE RECOGNITION (Details Na
REVENUE RECOGNITION (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Revenues included in contract liabilities | $ 296 | $ 306 |
Remaining performance obligations | $ 2,700 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1,892 | $ 1,688 |
Less accumulated depreciation and amortization | (1,296) | (1,250) |
Net Book Value | 596 | 438 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 930 | 865 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 572 | 548 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 161 | 161 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 114 | 114 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 115 | $ 0 |
INVESTMENTS (Details)
INVESTMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Aug. 31, 2020 | |
Investment Income [Table] | ||
Short term investment, amortized cost | $ 91,115 | $ 66,804 |
Gross unrealized gains | 0 | 0 |
Gross unrealized loss | (48) | (61) |
Short term investment, fair value | 91,067 | 66,743 |
Commercial Paper [Member] | ||
Investment Income [Table] | ||
Short term investment, amortized cost | 91,115 | 66,804 |
Gross unrealized gains | 0 | 0 |
Gross unrealized loss | (48) | (61) |
Short term investment, fair value | $ 91,067 | $ 66,743 |
CONTRACTS PAYABLE (Details)
CONTRACTS PAYABLE (Details) - USD ($) $ in Thousands | Nov. 30, 2020 | Aug. 31, 2020 |
ContractsPayable [Line Items] | ||
Total contract with customer | $ 6,185 | $ 6,064 |
Less: Current Portion | 2,000 | 2,000 |
Long-Term | 4,185 | 4,064 |
Holdback Liability Lixoft [Member] | ||
ContractsPayable [Line Items] | ||
Total contract with customer | 1,333 | 1,333 |
Earnout Liability Lixoft [Member] | ||
ContractsPayable [Line Items] | ||
Total contract with customer | $ 4,852 | $ 4,731 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 7 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | Mar. 31, 2020 | |
Commitments [Line Items] | |||
Rent expense | $ 185 | $ 145 | |
Wells Fargo [Member] | |||
Commitments [Line Items] | |||
Line of credit maximum amount | $ 3,500 | ||
Line of credit expiration date | Apr. 15, 2022 | ||
Line of credit amount outstanding | $ 0 |
COMMITMENTS AND CONTINGENCIES_3
COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands | Nov. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2021 | $ 412 |
2022 | 170 |
2023 | 155 |
2024 | 61 |
Future minimum lease payments | $ 798 |
SHAREHOLDERS EQUITY (Details -
SHAREHOLDERS EQUITY (Details - Dividends) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Dividends Payable [Line Items] | |||
Dividend per Share | $ 0.06 | $ 0.06 | |
Total Amount | $ 1,195 | $ 1,056 | $ 4,250 |
FY 2021 1st Qtr [Member] | |||
Dividends Payable [Line Items] | |||
Record Date | Oct. 26, 2020 | ||
Distribution Date | Nov. 2, 2020 | ||
Number of Shares Outstanding on Record Date | 19,924,000 | ||
Dividend per Share | $ 0.06 | ||
Total Amount | $ 1,195 | ||
FY 2020 1st Qtr [Member] | |||
Dividends Payable [Line Items] | |||
Record Date | Oct. 25, 2019 | ||
Distribution Date | Nov. 1, 2019 | ||
Number of Shares Outstanding on Record Date | 17,606,000 | ||
Dividend per Share | $ 0.06 | ||
Total Amount | $ 1,056 | ||
FY 2020 2nd Qtr [Member] | |||
Dividends Payable [Line Items] | |||
Record Date | Jan. 27, 2020 | ||
Distribution Date | Feb. 3, 2020 | ||
Number of Shares Outstanding on Record Date | 17,646,000 | ||
Dividend per Share | $ 0.06 | ||
Total Amount | $ 1,059 | ||
FY 2020 3rd Qtr [Member] | |||
Dividends Payable [Line Items] | |||
Record Date | Apr. 24, 2020 | ||
Distribution Date | May 1, 2020 | ||
Number of Shares Outstanding on Record Date | 17,769,000 | ||
Dividend per Share | $ 0.06 | ||
Total Amount | $ 1,066 | ||
FY 2020 4th Qtr [Member] | |||
Dividends Payable [Line Items] | |||
Record Date | Jul. 27, 2020 | ||
Distribution Date | Aug. 3, 2020 | ||
Number of Shares Outstanding on Record Date | 17,820,000 | ||
Dividend per Share | $ 0.06 | ||
Total Amount | $ 1,069 |
SHAREHOLDERS EQUITY (Details _2
SHAREHOLDERS EQUITY (Details - Option activity) - $ / shares | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Granted | $ 59.91 | $ 39.23 |
Equity Option [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Option outstanding, beginning balance | 1,224,000 | |
Outstanding | $ 17.76 | |
Outstanding, end of period | 6 years 7 months 13 days | 6 years 9 months 14 days |
Granted | 26,000 | |
Granted | $ 59.91 | |
Exercised | (34,000) | |
Exercised | $ 14.04 | |
Canceled/Forfeited | (11,000) | |
Canceled/Forfeited | $ 24.18 | |
Awards Outstanding, ending balance | 1,205,000 | 1,224,000 |
Outstanding | $ 18.73 | $ 17.76 |
Options exercisable | 583,000 | |
Options exercisable | $ 11.16 | |
Options exercisable - weighted average life | 5 years 4 months 6 days |
SHAREHOLDERS EQUITY (Details _3
SHAREHOLDERS EQUITY (Details - Fair value of options) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Equity [Abstract] | ||
Estimated fair value of awards granted | $ 560 | $ 2,997 |
Unvested forfeiture rate | 0.00% | 0.00% |
Weighted average grant price | $ 59.91 | $ 39.23 |
Weighted average market price | $ 59.91 | $ 39.23 |
Weighted average volatility | 36.35% | 33.56% |
Weighted average risk-free rate | 0.47% | 1.39% |
Weighted average dividend yield | 0.40% | 0.65% |
Weighted average expected life | 6 years 7 months 24 days | 6 years 8 months 1 day |
SHAREHOLDERS EQUITY (Details _4
SHAREHOLDERS EQUITY (Details - Options outstanding and exercisable) - Equity Option [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Nov. 30, 2020 | Aug. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards outstanding | 1,205,000 | 1,224,000 |
Awards outstanding weighted average remaining contractual life | 6 years 7 months 13 days | 6 years 9 months 14 days |
Awards outstanding weighted average exercise price | $ 18.73 | $ 17.76 |
Awards exercisable | 583,000 | |
Awards exercisable weighted average remaining contractual life | 5 years 4 months 6 days | |
Awards exercisable weighted average exercise price | $ 11.16 | |
$6.75 to $8.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 6.75 | |
Exercise price high | $ 8 | |
Awards outstanding | 169,000 | |
Awards outstanding weighted average remaining contractual life | 3 years 9 months 7 days | |
Awards outstanding weighted average exercise price | $ 6.85 | |
Awards exercisable | 169,000 | |
Awards exercisable weighted average remaining contractual life | 3 years 9 months 7 days | |
Awards exercisable weighted average exercise price | $ 6.85 | |
$8.01 to $16.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 8.01 | |
Exercise price high | $ 16 | |
Awards outstanding | 535,000 | |
Awards outstanding weighted average remaining contractual life | 5 years 9 months 18 days | |
Awards outstanding weighted average exercise price | $ 9.99 | |
Awards exercisable | 337,000 | |
Awards exercisable weighted average remaining contractual life | 5 years 8 months 26 days | |
Awards exercisable weighted average exercise price | $ 9.99 | |
$16.01 to $24.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 16.01 | |
Exercise price high | $ 24 | |
Awards outstanding | 208,000 | |
Awards outstanding weighted average remaining contractual life | 7 years 6 months 3 days | |
Awards outstanding weighted average exercise price | $ 20.42 | |
Awards exercisable | 49,000 | |
Awards exercisable weighted average remaining contractual life | 6 years 2 months 8 days | |
Awards exercisable weighted average exercise price | $ 20.61 | |
$24.01 to $38.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 24.01 | |
Exercise price high | $ 38 | |
Awards outstanding | 204,000 | |
Awards outstanding weighted average remaining contractual life | 8 years 10 months 24 days | |
Awards outstanding weighted average exercise price | $ 33.46 | |
Awards exercisable | 28,000 | |
Awards exercisable weighted average remaining contractual life | 8 years 8 months 12 days | |
Awards exercisable weighted average exercise price | $ 34.83 | |
$38.01 to $52.00 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 38.01 | |
Exercise price high | $ 52 | |
Awards outstanding | 20,000 | |
Awards outstanding weighted average remaining contractual life | 9 years 3 months 21 days | |
Awards outstanding weighted average exercise price | $ 38.64 | |
Awards exercisable | 0 | |
Awards exercisable weighted average exercise price | $ 0 | |
$52.01 to $61.84 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Exercise price low | 52.01 | |
Exercise price high | $ 61.84 | |
Awards outstanding | 69,000 | |
Awards outstanding weighted average remaining contractual life | 9 years 8 months 4 days | |
Awards outstanding weighted average exercise price | $ 61.10 | |
Awards exercisable | 0 | |
Awards exercisable weighted average exercise price | $ 0 |
SHAREHOLDERS_ EQUITY (Details N
SHAREHOLDERS’ EQUITY (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Aug. 30, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | |
Public Offering [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued new, shares | 2,090,909 | ||
Stock price | $ 55 | ||
Gross proceeds from public offering | $ 115,000 | ||
Net proceeds from sale of stock | $ 107,700 | ||
Public Offering [Member] | Underwriters [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock issued new, shares | 272,727 | ||
Nonmanagement Directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares issued to Directors for services, shares | 1,275,000 | ||
Shares issued to Directors for services | $ 83 | ||
Equity Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average remaining contractual life | 6 years 7 months 13 days | ||
Fair value of non-vested options | $ 19,100 | ||
Fair value amortization period | 3 years 2 months 4 days | ||
Equity 2017 Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for issuance under the plan | 1,000,000 |
CONCENTRATIONS AND UNCERTAINT_2
CONCENTRATIONS AND UNCERTAINTIES (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Concentration Risk [Line Items] | ||
Cash and cash equivalents exceeding insured limits | $ 13,800 | |
Sales [Member] | International Sales [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 33.00% | 30.00% |
Sales [Member] | Customer 1 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 17.00% | 13.00% |
Sales [Member] | Customer 2 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 7.00% | 8.00% |
Sales [Member] | Customer 3 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 5.00% | 6.00% |
Sales [Member] | Customer 4 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 6.00% | |
Accounts Receivable [Member] | Customer 1 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 21.00% | 14.00% |
Accounts Receivable [Member] | Customer 2 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 8.00% | 8.00% |
Accounts Receivable [Member] | Customer 3 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 8.00% | 7.00% |
Accounts Receivable [Member] | Customer 4 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 7.00% | 7.00% |
Accounts Receivable [Member] | Customer 5 [Member] | ||
Concentration Risk [Line Items] | ||
Net sales concentration percentage | 6.00% |
SEGMENT AND GEOGRAPHIC REPORT_3
SEGMENT AND GEOGRAPHIC REPORTING (Details - Segment reporting) - USD ($) $ in Thousands | 3 Months Ended | ||
Nov. 30, 2020 | Nov. 30, 2019 | Aug. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net Revenues | $ 10,701 | $ 9,401 | |
Income (loss) from operations before income taxes | 3,051 | 2,718 | |
Total assets | 170,470 | $ 168,422 | |
Consolidation, Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Total assets | (39,488) | (17,702) | |
Capitalized software costs | 0 | 0 | |
Simulations Plus, Inc. [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 5,432 | 4,927 | |
Income (loss) from operations before income taxes | 2,365 | 1,903 | |
Total assets | 162,871 | 40,656 | |
Capital expenditures | 139 | 8 | |
Capitalized software costs | 568 | 457 | |
Depreciation and Amortization | 451 | 435 | |
Cognigen [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 2,668 | 2,387 | |
Income (loss) from operations before income taxes | 206 | 40 | |
Total assets | 12,279 | 10,660 | |
Capital expenditures | 63 | 17 | |
Capitalized software costs | 0 | 20 | |
Depreciation and Amortization | 81 | 86 | |
DILIsym [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 1,372 | 2,087 | |
Income (loss) from operations before income taxes | (45) | 775 | |
Total assets | 14,180 | 14,149 | |
Capital expenditures | 0 | 3 | |
Capitalized software costs | 43 | 30 | |
Depreciation and Amortization | 149 | 150 | |
Lixoft [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 1,229 | ||
Income (loss) from operations before income taxes | 525 | ||
Total assets | 20,628 | ||
Capital expenditures | 3 | ||
Capitalized software costs | 117 | ||
Depreciation and Amortization | 184 | ||
Consolidation, Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 0 | 0 | |
Income (loss) from operations before income taxes | 0 | 0 | |
Capital expenditures | 0 | 0 | |
Depreciation and Amortization | 0 | 0 | |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Revenues | 10,701 | 9,401 | |
Income (loss) from operations before income taxes | 3,051 | 2,718 | |
Total assets | 170,470 | 47,763 | |
Capital expenditures | 205 | 28 | |
Capitalized software costs | 728 | 507 | |
Depreciation and Amortization | $ 865 | $ 671 |
SEGMENT AND GEOGRAPHIC REPORT_4
SEGMENT AND GEOGRAPHIC REPORTING (Details - geographic) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 10,701 | $ 9,401 |
Simulations Plus, Inc. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 5,432 | 4,927 |
Cognigen [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,668 | 2,387 |
DILIsym [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,372 | 2,087 |
Lixoft [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,229 | |
Americas [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 7,123 | 6,671 |
Americas [Member] | Simulations Plus, Inc. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,518 | 2,547 |
Americas [Member] | Cognigen [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,668 | 2,387 |
Americas [Member] | DILIsym [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,326 | 1,737 |
Americas [Member] | Lixoft [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 611 | |
EMEA [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 2,478 | 1,472 |
EMEA [Member] | Simulations Plus, Inc. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,890 | 1,147 |
EMEA [Member] | Cognigen [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 0 | 0 |
EMEA [Member] | DILIsym [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 21 | 325 |
EMEA [Member] | Lixoft [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 567 | |
Asia Pacific [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,100 | 1,258 |
Asia Pacific [Member] | Simulations Plus, Inc. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 1,024 | 1,233 |
Asia Pacific [Member] | Cognigen [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 0 | 0 |
Asia Pacific [Member] | DILIsym [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | 25 | $ 25 |
Asia Pacific [Member] | Lixoft [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Revenues | $ 51 |
EMPLOYEE BENEFIT PLAN (Details
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Retirement Benefits [Abstract] | ||
Contribution by employer in benefit plan | $ 121 | $ 92 |
ACQUISITION_MERGER WITH SUBSIDI
ACQUISITION/MERGER WITH SUBSIDIARIES (Details - purchase price allocation) - USD ($) $ in Thousands | 7 Months Ended | ||
Apr. 02, 2020 | Nov. 30, 2020 | Aug. 31, 2020 | |
Business Acquisition [Line Items] | |||
Estimated goodwill acquired | $ 12,921 | $ 12,921 | |
Lixoft [Member] | |||
Business Acquisition [Line Items] | |||
Assets acquired, including cash of $3,799 and accounts receivable of $629 | $ 5,007 | ||
Developed technologies acquired | 8,010 | ||
Estimated value of intangible assets acquired (customer lists, trade name etc.) | 4,160 | ||
Estimated goodwill acquired | 2,534 | $ 2,534 | $ 2,534 |
Liabilities assumed | (1,118) | ||
Total consideration | $ 18,593 |
ACQUISITION_MERGER WITH SUBSI_2
ACQUISITION/MERGER WITH SUBSIDIARIES (Details - Proforma Information) - USD ($) $ in Thousands | 3 Months Ended | |
Nov. 30, 2020 | Nov. 30, 2019 | |
Business Combinations [Abstract] | ||
Net sales | $ 10,701 | $ 10,521 |
Net income | $ 2,479 | $ 2,516 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 06, 2021 | Nov. 30, 2020 | Nov. 30, 2019 | |
Subsequent Event [Line Items] | |||
Dividend declared per share | $ 0.06 | $ 0.06 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Dividend declared per share | $ 0.06 | ||
Dividend declared amount to be distributed | $ 1,200 |