SECURITIES & EXCHANGE COMMISSION EDGAR FILINGfilings.irdirect.net/data/1023459/000168316817002188/simulations_… · On June 21, 2017, Simulations Plus, Inc., a California corporation

SECURITIES & EXCHANGE COMMISSION EDGAR FILING

SIMULATIONS PLUS INC

Form: 8-K/A

Date Filed: 2017-08-21

Corporate Issuer CIK: 1023459

© Copyright 2017, Issuer Direct Corporation. All Right Reserved. Distribution of this document is strictly prohibited, subject to the terms of use.

UNITED STATESSECURITIES AND EXCHANGE

COMMISSIONWashington, DC 20549

FORM 8-K/A

CURRENT REPORTPursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

June 1, 2017

Simulations Plus, Inc.(Exact name of registrant as specified in its charter)

California 001-32046 95-4595609

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS EmployerIdentification No.)

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

(Address of principal executive offices, including zip code)

661-723-7723(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the followingprovisions (see General Instruction A.2. below): ☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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

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

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

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

EDGAR Stream is a copyright of Issuer Direct Corporation, all rights reserved.

On June 21, 2017, Simulations Plus, Inc., a California corporation (the “Company”), filed a Current Report on Form 8-K (the “Original 8-K”) with the Securitiesand Exchange Commission (the “Commission”) regarding the consummation of the acquisition of all capital stock of DILIsym Services, Inc. This filing amendsthe Original 8-K to file the financial statements and pro forma financial information required by Item 9.01(a) and (b). This filing reports no other updates oramendments to the Original 8-K. Item 9.01 Financial Statements and Exhibits. (a) Financial Statements of Business Acquired.

(i) The audited financial statements of DILIsym Services, Inc., as of December 31, 2016 are filed as Exhibit 99.1 hereto.

(ii) The unaudited balance sheet of DILIsym Services, Inc. as of May 31, 2017 and the unaudited statements of operations for the five monthsended May 31, 2017 and 2016 are filed as Exhibit 99.2 hereto.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet of the Company as of May 31, 2017, which gives effect to the acquisition of DILIsymServices, Inc., and the unaudited pro forma condensed combined statements of operations for the nine months ended May 31, 2017 and the year endedAugust 31, 2016, which give effect to such acquisition, are attached hereto as Exhibit 99.3 hereto.

(d) Exhibits

23.1 Consent of Dixon Hughes Goodman LLP. 99.1 The audited financial statements of DILIsym Services, Inc., as of December 31, 2016. 99.2 The unaudited balance sheet of DILIsym Services, Inc. as of May 31, 2017 and the unaudited statements of operations for the five months

ended May 31, 2017 and 2016. 99.3 The unaudited pro forma condensed combined balance sheet as of May 31, 2017 and the unaudited pro forma condensed combined statements

of operations for the nine months ended May 31, 2017 and the year ended August 31, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersignedhereunto duly authorized. SIMULATIONS PLUS, INC. By: /s/ John R. Kneisel John R. Kneisel

Chief Financial Officer Date: August 21, 2017


simulations_8ka-ex2301.htm




Exhibit 23.1

CONSENT OF INDEPENDENT AUDITOR

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-142882, 333-197681 and 333-219446) ofSimulations Plus, Inc. and inclusion in this Current Report on Form 8-K/A to be filed on August 21, 2017 by Simulations Plus, Inc. of our report dated April 26,2017 with respect to the financial statements of DILIsym Services, Inc. as of and for the year ended December 31, 2016. /s/ Dixon Hughes Goodman LLP Dixon Hughes Goodman LLP Raleigh, North Carolina August 21, 2017


Exhibit 99.1

DILIsym Services, Inc.

Financial Statements

Year Ended December 31, 2016



Table of Contents Independent Auditors’ Report 1 Financial Statements: Balance Sheet 2 Statement of Income 3 Statement of Changes in Stockholders’ Equity 4 Statement of Cash Flows 5 Notes to Financial Statements 6


Independent Auditors’ Report Board of Directors and StockholdersDILIsym Services, Inc.Research Triangle Park, North Carolina We have audited the accompanying financial statements of DILIsym Services, Inc., which comprise the balance sheet as of December 31, 2016, and the relatedstatements of income, stockholders’ equity, and cash flows for the year then ended, and the related notes to the financial statements. Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted inthe United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation offinancial statements that are free from material misstatement, whether due to fraud or error. Auditors’ ResponsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standardsgenerally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selecteddepend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Inmaking those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in orderto design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofsignificant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. OpinionIn our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of DILIsym Services, Inc., as of December31, 2016, and the results of its operations and its cash flows for the year then ended in accordance with accounting principles generally accepted in the UnitedStates of America.

Raleigh, North CarolinaApril 26, 2017 1


DILIsym Services, Inc.Balance SheetDecember 31, 2016

ASSETS Current assets:

Cash and cash equivalents $ 812,949 Accounts receivable 267,823 Prepaid expenses 39,424

Total current assets 1,120,196

Property and equipment, net 6,241 Capitalized software costs, net 46,372 Intangible assets, net 149,828 Noncurrent deferred tax asset 3,491

Total assets $ 1,326,128

LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities:

Accounts payable $ 55,839 Accrued expenses 57,971 Deferred revenue 356,468 Income tax payable 201,009

Total current liabilities 671,287

Total liabilities 671,287

Stockholders' equity:

Common stock, $0.0001 par value; 1,000,000 shares authorized 766,027 shares issued and outstanding 766 Additional paid-in capital 1,439 Retained earnings 952,636 Less: treasury stock, 223,973 shares at $1.34 per share (300,000)

Total stockholders' equity 654,841

Total liabilities and stockholders' equity $ 1,326,128

See accompanying notes to the financial statements. 2


DILIsym Services, Inc.Statement of IncomeYear Ended December 31, 2016

Revenue $ 3,042,953

Operating expenses:

Research and development 1,426,566 General and administrative 557,644

Total operating expenses 1,984,210

Income from operations 1,058,743

Other income (loss):

Interest income 106 Interest expense (721)Other expenses (1,770)

Total other income (loss) (2,385)

Income before income taxes 1,056,358

Income tax expense 335,965

Net income $ 720,393



DILIsym Services, Inc.Statement of Stockholders' EquityYear Ended December 31, 2016

Additional Total Common Stock Paid-in Retained Treasury Stock Stockholders'

Shares Amount Capital Earnings Shares Amount Equity Balance, December 31, 2015 766,027 $ 766 $ – $ 232,243 – $ – $ 233,009

Repurchase treasury stock – – – – 545,000 (730,000) (730,000) Issuance of treasury stock – – – – (321,027) 430,000 430,000

Share-based compensation – – 1,439 – – – 1,439

Net Income – – – 720,393 – – 720,393

Balance, December 31, 2016 766,027 $ 766 $ 1,439 $ 952,636 223,973 $ (300,000) $ 654,841



DILIsym Services, Inc.Statement of Cash FlowsYear Ended December 31, 2016

Cash flows from operating activities:

Net income $ 720,393 Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 62,520 Share-based compensation 1,439 Deferred income tax expense 9,121 Changes in assets and liabilities:

Accounts receivable 57,964 Prepaid expenses (18,657)Accounts payable 40,819 Deferred revenue 88,033 Accrued expenses 17,502 Income taxes payable 94,333

Net cash provided by operating activities 1,073,467

Cash flows from investing activities:

Purchases of property and equipment (5,147)Capitalized software costs (92,744)

Net cash used by investing activities (97,891)

Cash flows from financing activities:

Borrowings on loan with shareholder 150,000 Repayments on loan with shareholder (150,000)Purchase of treasury stock (730,000)Proceeds from treasury stock issuance 430,000

Net cash used by financing activities (300,000)

Net increase in cash equivalents 675,576

Cash and cash equivalents at beginning of year 137,373

Cash and cash equivalents at end of year $ 812,949

Supplemental disclosure of cash flow information:

Cash paid for income taxes $ 234,159

Conversion of account receivable to trademark $ 163,070



DILIsym Services, Inc.Notes to Financial Statements

Notes to Financial Statements 1. Organization and Description of Business Business Activity DILIsym Services, Inc. (the “Company”) was incorporated on January 29, 2014 (inception), under the laws of Delaware. The DILI-sim Initiative is a consortium ofpharmaceutical and other life science companies centered around and led by the Company. The DILI-sim Initiative sponsors the development and application ofDILIsym® software, a mechanistic model of drug induced liver injury (DILI). The goals of the DILI-sim Initiative include developing the DILIsym® software andadvancing the knowledge of DILI for the benefit of the scientific community and the public at-large. DILIsym® will be used during drug development, to provideenhanced understanding of potential DILI hazards posed by individual molecules, and to provide deeper insight into the mechanisms responsible for observedDILI responses at various stages of the development process. The development plans for DILIsym® are shaped by the DILI-sim Initiative members at regularlyheld meetings. Research topics are discussed, along with desired model additions and improvements. DILI-sim engages with the Food and Drug Administration(FDA) and other academic and non-profit groups to ensure that the model includes the most recent advances related to DILI. Experiments are also undertaken atthe IDSS and with collaborators as key unanswered questions related to DILI arise throughout the modeling process. The Company spun out from the dissolution of The Hamner Institutes for Health Sciences (the “Hamner”) and began operations on July 1, 2015, although theseservices were provided under the Hamner since January 2011. 2. Summary of Significant Accounting Policies Basis of Presentation The Company has prepared the accompanying financial statements in conformity with accounting principles generally accepted in the United States of America(“U.S GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amountsreported in the financial statements and the accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less at the date of purchase to be cash equivalents. Concentration of Credit Risk The Company's financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable.The Company maintains its cash and cash equivalents with a high credit quality financial institution. 6



With respect to accounts receivable, the Company performs ongoing credit evaluations of its customers and generally does not require collateral. At December31, 2016, two customers accounted for 64% and 35% of accounts receivables, respectively. For the year ended December 31, 2016, three customersaccounted for 18%, 13%, and 11% of total revenue, respectively. Accounts Receivable Receivables are typically due within 30 days. Accounts outstanding for longer than the payment terms are considered past due. At each balance sheet date, theCompany assesses its need for an allowance for potential losses in the collection of its receivables. The Company had no allowance for doubtful accounts as ofDecember 31, 2016. Property and Equipment Property and equipment consists of computer equipment. Property and equipment are recorded at cost and depreciated using the straight-line method. Computerequipment has useful lives of three years. Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or lossis credited or charged to income. Repairs and maintenance costs are expensed as incurred. The carrying values of long-lived assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicatethat the recorded value cannot be recovered from the estimated undiscounted future cash flows expected to result from its use and eventual disposition. Whenthe book value of an asset exceeds the associated undiscounted expected future cash flows, it is considered to be impaired and is written down to fair value,which is determined based on either discounted future cash flows or appraised values. The factors considered by management in performing this assessmentinclude current operating results, trends and prospects, the manner in which the property is used, and the effects of obsolescence, demand, competition, andother economic factors. Based on this assessment, there was no impairment at December 31, 2016. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenuesand expenses during the reporting period. Actual results could differ from those estimates. Research and Development Research and development costs are expensed as incurred and include all direct costs related to the development of the Company's technology, includingsalaries and related benefits of personnel, fees paid to consultants, share-based compensation and license fees. Research and development costs during theyear ended December 31, 2016 were $1,426,566. Capitalized Software Development Costs Software development costs are capitalized in accordance with ASC 985-20, “Costs of Software to Be Sold, Leased, or Marketed” . Capitalization of softwaredevelopment costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. 7



The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized software development costs require considerablejudgment 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 anddirect payroll-related costs and the purchase of existing software to be used in our software products. Once a product's technological feasibility has been established, the software development costs are then capitalized until the associated product is available forgeneral release. Once the product is available for general release to customers, these capitalized software development costs are amortized on a straight-linebasis over the estimated life of the product or enhancement. For the year ended December 31, 2016, capitalized software development costs were $92,744. Amortization of capitalized software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic lifeof the products (not to exceed one year). Amortization of software development costs amounted to $46,372 for the year ended December 31, 2016. Theunamortized portion of $46,372 will be recognized over the first six months of the subsequent year. We expect future amortization expense to vary due toincreases in capitalized computer software development costs. Revenue Recognition We recognize revenues related to software licenses and software maintenance in accordance with Financial Accounting Standard Board (“FASB”) AccountingStandard Codification (“ASC”) 985-605, “Software - Revenue Recognition”. Software product revenue is recorded when the following conditions are met: 1)evidence of arrangement exists, 2) delivery has been made, 3) the amount is fixed, and 4) collectability is probable. Post-contract customer support ("PCS")obligations are insignificant; therefore, revenue for PCS is recognized at the same time as the licensing fee, and the costs of providing such support services areaccrued and amortized over the obligation period. The Company earns revenue from software subscriptions, post-contract customer support and professional services. The Company's deliverables typicallyconsist of the sale of a 3-year subscription commitment (typically invoiced yearly) and 12-month service agreements. Revenues are recognized for the identifiedseparate accounting units based on achievement of vendor specific objective evidence of fair value of the delivered element (the service agreement). Deferredrevenue is recorded at the time of sale for subscriptions and service agreements and are amortized over the term of the service agreement. The Companyallocates the total professional service agreement fee among each deliverable based on the relative fair value of each of the deliverables, determined based onvendor specific objective evidence of fair value. As of December 31, 2016, the Company reported zero instances where a consortium member ended their subscription commitment early. Share-based Compensation Employees Measurement and recognition of compensation expense for all share-based payment awards made to employees are based on estimated grant-date fair values.The expense associated with share-based compensation is recognized on a straight-line basis over the service period of each award, which is generally fouryears. Non-employees Share-based compensation granted to non-employees requires compensation be recorded each reporting period for changes in the fair value of the Company'sstock until the measurement date. The measurement date is generally considered to be the date that options are fully vested based on the arrangement. 8



The Company recorded employee share-based compensation of $720, for the year ended December 31, 2016. The Company recorded non-employee share-based compensation of $719 for the year ended December 31, 2016. These amounts are recorded in various components of operating expenses in theaccompanying statement of income. Determining the appropriate fair value model and the related assumptions requires judgment. The fair value of each option grant is estimated using a Black-Scholes option-pricing model on the date of grant for the period from January 1, 2016 to December 31, 2016: Estimated dividend yield 0% Expected stock price volatility range 42.6% Weighted-average risk-free interest rate 1.15-1.42% Expected life of options (in years) 6.25 The dividend yield rate is zero because the Company neither currently pays dividends nor intends to do so during the expected option term. The expected stockprice volatility is estimated based on the actual volatility of comparable public companies over the expected term. The risk-free rate is based on the U.S.Treasury yield curve during the expected life of the option. The expected life represents the average time the options that vest are expected to be outstanding.The expected life of employee stock options is based on the mid-point between the vesting date and the contractual term and the expected term for share-basedcompensation granted to non-employees is the contractual life. Income Taxes Deferred income tax assets and liabilities are computed annually for differences between the financial statement and tax bases of assets and liabilities that willresult in taxable or deductible amounts in the future based on enacted tax laws and rates applicable to the periods in which the differences are expected to affecttaxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expenseis the tax payable or refundable for the period plus or minus the change during the period in deferred tax assets and liabilities. The Company follows the uncertain tax position provisions of U.S. GAAP, which addresses the determination of whether tax benefits claimed or expected to beclaimed on a tax return should be recorded in the financial statements. The Company recognizes the tax benefit from an uncertain tax position only if it is morelikely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefitsrecognized from such a position are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimatesettlement. U.S. GAAP also provides guidance on de-recognition, classification, interest and penalties on income taxes. Recently Issued Accounting Pronouncements In May 2014, FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The standard will eliminate thetransaction- and industry-specific revenue recognition guidance under current U.S. GAAP and replace it with a principles-based approach for determiningrevenue recognition. ASU 2014-09 is effective for annual and interim periods beginning after December 15, 2017. Early adoption is permitted for years beginningafter December 15, 2016. The revenue recognition standard is required to be applied retrospectively, including any combination of practical expedients asallowed in the standard. We are evaluating the impact, if any, of the adoption of ASU 2014-09 to our financial statements and related disclosures. The Companyhas not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. 9



In November 2015, the FASB issued ASU No 2015-17, Income Taxes (Topic 740). The amendments in ASU 2015-17 change the requirements for theclassification of deferred taxes on the balance sheet. Currently, GAAP requires an entity to separate deferred income tax liabilities and assets into current andnoncurrent amounts in a classified statement of financial position. To simplify the presentation of deferred income taxes, the amendments in this ASU requirethat deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. The pronouncement is effective for fiscal yearsand interim periods within those fiscal years beginning after December 15, 2016. Earlier application is permitted for all entities as of the beginning of an interimor annual reporting period. The Company early adopted ASU No. 2015-17 because it reduced complexity while maintaining the usefulness of the information. 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 balance sheet. ASU 2016-02 is effective for annual and interim reporting periods beginning afterDecember 15, 2018; early adoption is permitted. The provisions of ASU 2016-02 are to be applied using a modified retrospective approach. The Company iscurrently evaluating the impact of the adoption of this standard on its financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. This ASU affects entities that issue share-basedpayment awards to their employees. The ASU is designed to simplify several aspects of accounting for share-based payment award transactions that include -the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows, and forfeiture rate calculations.ASU 2016-09 will become effective for the Company in the first quarter of fiscal 2019. Early adoption is permitted in any interim or annual period. The Companyearly adopted ASU No. 2016-09. The adoption had no material impact on the Company’s financial statements. 3. Property and Equipment Property and equipment consisted of the following at December 31, 2016: Computer equipment $ 9,147 Accumulated depreciation (2,906)

Total property and equipment, net $ 6,241

Depreciation expense was $2,906 for the year ended December 31, 2016. 4. Intangible Assets On March 9, 2016 the Company purchased from the Hamner Institute the DILI software and trademark in exchange for a December 31, 2015 outstandingaccounts receivable of $163,070. This transfer of assignment includes the rights, title, and interest in the software, including its source code and object code andall databases, files, application programming interfaces, and other components of and works embodied in the trademark and software (including any audio orvisual content or screen displays in the user interface), along with all operating, installation, administrator, and user manuals and training materials. TheCompany amortizes the software license and trademark costs over 10 years. Total amortization expense related to these intangible assets was $13,242 for theyear ended December 31, 2016. Net value of the software and trademarks was $149,828 at December 31, 2016. 10



The following schedule shows estimated annual amortization of trademark cost over the next five years and thereafter: For the year ended December 31 Amount 2017 $ 15,890 2018 15,890 2019 15,890 2020 15,890 2021 15,890 Thereafter 70,378 Total $ 149,828

5. Stockholders' Equity The Company is authorized to issue 1,000,000 shares of capital stock, $0.0001 par value per share, of which 1,000,000 is Common Stock. At December 31,2016 the Company has not issued preferred stock. Common Stock As of December 31, 2016, 233,973 shares of common stock are available for future issuance. Of that amount, 150,000 shares are reserved for share-basedcompensation. Treasury Stock On April 12, 2016, the Company purchased 545,000 common stock shares from the Hamner for $730,000 at $1.34 per share. This purchase represented 100%of the common shares the Hamner owned of company common stock. On April 15, 2016, the Company reissued 321,027 common shares from treasury to oneshareholder for $1.34 per a share, for total proceeds of $430,000. 6. Stock Options During 2016, the Company adopted the DILIsym Services, Inc. Equity Incentive Plan (the “Plan”). A total of 150,000 shares of common stock have beenreserved for issuance under the Plan. Eligible Plan participants include employees, directors and consultants. The Board of Directors shall determine theexercise price, term and vesting provisions of all options at their grant date. The following summarizes the stock option activity for the period at December 31, 2016:

AvailableOptions

GrantedOptions

Weighted AverageExercise Price

Shares available for grant at January 1, 2016 150,000 – $ – Granted (10,000) 10,000 1.34 Shares available for grant at December 31, 2016 140,000 10,000 $ 1.34

11



The following summarizes certain information about stock options outstanding and exercisable as of December 31, 2016:

Number of

Options

WeightedAverage

RemainingContractual Life

(In Years) Weighted Average

Exercise Price Outstanding 10,000 9.45 $ 1.34 Exercisable 2,500 9.45 $ 1.34 The following summarizes unvested stock option activity:

Number of

Options Weighted AverageGrant Date Value

Unvested at December 31, 2015 – $ – Granted 10,000 1.34 Vested (2,500) 1.34 Unvested at December 31, 2016 7,500 $ 1.34

As of December 31, 2016, there was $4,316 total unrecognized compensation cost related to non-vested share-based compensation arrangements that isexpected to be recognized over a weighted-average period of 1.45 years. 7. Income Taxes Income tax expense for the year ended December 31, 2016 is summarized below: Current:

Federal $ 307,329 State 19,515

326,844 Deferred:

Federal 8,843 State 278

Income tax expense $ 335,965

12



The significant components of the Company’s deferred income tax balances as of December 31, 2016 are summarized below: Deferred tax assets:

Accrued expenses $ 20,476 Intangible assets 1,467

Gross deferred tax assets 21,943 Deferred tax liability:

Capitalized software 16,263 Property and equipment, net 2,189

Gross deferred tax liabilities 18,452

Net deferred tax asset $ 3,491

Income taxes are provided for the tax effects of transactions reported in the financial statements. Actual income tax benefit differs from the amounts computedby applying the statutory federal income tax rate of 34%, primarily as a result of state income taxes, permanent income tax differences, and utilized credits. As ofDecember 31, 2016, the company has no net operating loss or credit carryforwards available to offset future tax expense. Deferred income taxes are provided for estimated tax effects of differences between the financial statement carrying amounts and the tax bases of recognizedassets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not some portion or allof the deferred tax assets will not be realized. The Company's policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. As of December 31, 2016, the Companyhad no unrecognized tax benefits and accordingly, no accrued interest and penalties. 8. Commitments and Contingencies Commitments At December 31, 2016, the Company subleased on a month-to-month basis their current space in North Carolina. Rent expense for the year ended December31, 2016 was $15,047 and recorded in general and administrative expenses in the accompanying statement of income. On April 8, 2016, the Company signed a short term loan agreement with a shareholder for $150,000 at 5% annual interest rate. These funds were used asworking capital to re-purchase the common stock from the Hamner Institute. The loan was fully paid, with interest expense of $721 on May 11, 2016. Contingencies The Company is potentially subject to various legal matters in the ordinary course of business. As of the date of these financial statements, management isunaware of any outstanding legal matters that would have a material adverse effect on the financial condition or results of operations of the Company. 13



Under each software license agreement, the Company agrees to indemnify and hold the licensee harmless from any claim that the software or its open sourcesoftware components infringes against the intellectual property rights of any third party. Any successful claims could have a material adverse effect on theCompany’s financial condition, results of operations and future prospects. 9. Employee Benefit Plan Effective July 1, 2015, the Company adopted a 401(k) plan (the “Benefit Plan”) covering all qualified employees. Participants may elect a salary reduction up tothe maximum percentage allowable, not to exceed the limits established by the Internal Revenue Service. The Benefit Plan permits the Company to makediscretionary matching contributions. The Company matched up to 4.5% of the participants' contributions. For the year ended December 31, 2016, Benefit Planrelated expenses were $45,162. 10. Subsequent Events The Company signed a letter of intent to be acquired by a third party (the “Purchaser”) on October 20, 2016. The acquisition is expected to be completed by June1, 2017. The letter of intent requires the Company to reimburse the Purchaser for its reasonable out-of-pocket expenses incurred by Purchaser or on its behalf inconnection with the proposed acquisition, including but not limited to attorney’s fees and accountant’s fees, if the Company breaches specified terms included inthe agreement. The Company has evaluated subsequent events through April 26, 2017, the date the financial statements were available to be issued. No other significantsubsequent events have occurred requiring adjustments to the financial statements or disclosures.

14


Exhibit 99.2


Financial Statements

Unaudited Balance Sheet of DILIsym Services, Inc. as of May 31, 2017

and

Unaudited Statements of Operations for the Five Months ended May 31, 2017 and 2016. 1


DILIsym Services Inc.Balance sheetMay 31, 2017(Unaudited)

ASSETS Current assets

Cash and cash equivalents $ 1,726,115 Accounts receivable, net 254,976 Prepaid expenses and other current assets 23,351 Deferred income taxes 63,032

Total current assets 2,067,474 Long-term assets

Capitalized computer software development costs, net of accumulated amortization 7,729 Property and equipment, net 10,237 Intellectual property, net of accumulated amortization 143,207

Total assets $ 2,228,647

LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities

Accounts payable $ 23,744 Accrued payroll and other expenses 101,375 Deferred revenue 1,120,617

Total current liabilities 1,245,736 Commitments and contingencies Shareholders' equity

Common stock, $0.0001 par value 776 Additional paid-in capital 15,788 Treasury stock (300,000)Retained earnings 1,266,347

Total shareholders' equity 982,911

Total liabilities and shareholders' equity $ 2,228,647

2


DILIsym Services Inc.Statements of OperationsFor the five months ended May 31, 2017 and 2016(Unaudited)

2017 2016 Net revenues $ 1,849,418 $ 1,498,113 Cost of revenues 650,406 354,154 Gross profit 1,199,012 1,143,959 Operating expenses

Selling, general, and administrative 505,183 250,255 Research and development 201,557 184,879

Total operating expenses 706,740 435,134 Income from operations 492,272 708,825 Other income (expense)

Interest income 106 41 Interest expense – (720)

Total other income (expense) 106 (679) Income before income taxes 492,378 708,146 Provision for income taxes (178,668) (269,095)Net Income $ 313,710 $ 439,051

3


Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The accompanying unaudited pro forma condensed combined financial statements present the pro forma consolidated balance sheet and results of operations ofthe combined company based upon the historical financial statements of Simulations Plus, Inc. (“SIMPLUS”) and DILIsym Services Inc. (“DILIsym”), after givingeffect to the acquisition of DILIsym and adjustments described in the following footnotes, and are intended to reflect the impact of this acquisition on SIMPLUSon a pro forma basis. On June 1, 2017, Simulations Plus, Inc. consummated the acquisition of all the outstanding capital stock of DILIsym Services, Inc. pursuant to a Stock PurchaseAgreement (the “Agreement”) and DILIsym became a wholly owned subsidiary of the Company (the “Acquisition”). Under the terms of the Agreement, theCompany: (1) paid to the DILIsym Shareholders Five Million Dollars ($5,000,000) payable at the closing of the Acquisition (the “Closing”) subject to certainadjustments and holdbacks as provided in the Agreement and as more fully described below; and (2) will pay to the DILIsym Shareholders certain earn-outpayments, to be measured by the earnings of DILIsym before income taxes, payable following the Closing, as more particularly described in the Agreement andas more fully described below (the “Earn-out Payments”):

On June 1, 2017, the Company paid the DILIsym Shareholders total cash consideration of $4,515,982; which such amount included $515,982 in workingcapital left in DILIsym’s accounts in excess of the amount required under the Agreement, At the holdback release date, eighteen months from the Closing and subject to any offsets, the Company will pay potentially up to $1,000,000 ofholdback consideration; and The Company may pay up to an additional $5,000,000 in Earn-out Consideration Payments over the 3 years following the Closing if and when suchEarn-out Payments become due and payable, and subject to certain offsets as provided in the Agreement, according to the Agreement.

The unaudited pro forma condensed combined balance sheet reflects the acquisition of DILIsym as if it had been consummated on May 31, 2017 and includespro forma adjustments for preliminary valuations by SIMPLUS management of certain tangible and intangible assets as of the acquisition date of June 1, 2017.These adjustments are subject to further revision upon finalization of the transaction, the related intangible asset valuations and fair value determinations. The unaudited pro forma condensed combined statement of operations for the fiscal year ended August 31, 2016 and for the nine months ended May 31, 2017combines SIMPLUS’s historical results for the fiscal year ended August 31, 2016 and the nine months ended May 31, 2017 with DILIsym’s historical results forthe same periods. The unaudited pro forma statements of operations gives effect to the acquisition as if it had been consummated on September 1, 2015 and2016, respectively. The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. They do not purport to representwhat SIMPLUS’s consolidated results of operations and financial position would have been had the transaction actually occurred as of the dates indicated, andthey do not purport to project SIMPLUS’s future consolidated results of operations or financial position. Pro Forma Adjustments Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect the amounts related to DILIsym’s tangible and intangible assets andliabilities at an amount equal to the preliminary estimate of their fair values. The historical consolidated financial information has been adjusted to give effect topro forma events that are (1) directly attributable to the acquisition and (2) factually supportable and reasonable under the circumstances. There are no eventsthat are expected to have a continuing impact and therefore, no adjustments to the pro forma condensed combined statements of operations were made in thatregard. 1


The pro forma adjustments reflecting the completion of the acquisition are based upon the acquisition method of accounting in accordance with AccountingStandards Codification, or ASC, 805 “Business Combinations” and the assumptions set forth in the notes to the unaudited pro forma condensed combinedfinancial statements. The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the preliminary allocation of the estimatedpurchase price to identifiable assets and liabilities acquired, including an amount for goodwill representing the difference between the purchase price and the fairvalue of the identifiable assets and liabilities. The pro forma adjustments are based upon available information and certain assumptions that SIMPLUS believes are reasonable under the circumstances. Afinal determination of the fair value of the assets acquired and liabilities assumed may differ materially from the preliminary estimates. This final valuation will bebased on the actual fair values of tangible and intangible assets and liabilities assumed of DILIsym that are acquired as of the date of completion of theacquisition. The final valuation may change the purchase price allocation, which could affect the fair value assigned to the assets acquired and liabilitiesassumed, and could result in a change to the unaudited pro forma condensed combined financial statements. You should read this information in conjunction with: • the accompanying notes to the unaudited pro forma condensed combined financial statements included herein; • the separate historical audited financial statements of DILIsym as of December 31, 2016 and for the year then ended included as Exhibit 99.1 to this

Current Report on Form 8-K/A (Amendment No. 1); • the separate historical unaudited financial statements of SIMPLUS as of May 31, 2017 and for the nine months then ended included in SIMPLUS’

Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on July 10, 2017; • the separate historical unaudited balance sheet of DILIsym Services, Inc. as of May 31, 2017 and separate historical unaudited statements of

operations for the five months ended May 31, 2017 and 2016 included as Exhibit 99.2 hereto. • the separate historical audited financial statements of SIMPLUS as of August 31, 2016 and 2015 and for the years then ended included in

SIMPLUS’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 14, 2016; • the Stock Purchase Agreement attached to the SIMPLUS Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on

July 10, 2017; and • SIMPLUS’s Current Reports on Form 8-K related to its acquisition of DILIsym filed with the Securities and Exchange Commission on May 1, 2017

and June 21, 2017.

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SIMULATIONS PLUS, INC.PRO FORMA CONDENSED COMBINED BALANCE SHEETS

As of May 31, 2017

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Simulations Plus,

Inc. DILIsym Services

Inc. Adjustments

(NOTE D) Pro-FormaCombined

ASSETS Current assets

Cash and cash equivalents $ 8,248,197 $ 1,726,115 $ (4,909,982) $ 5,064,330 Prepaid income taxes 241,540 – – $ 241,540 Accounts receivable, net 5,010,589 254,976 – $ 5,265,565 Prepaid expenses and other current assets 304,408 23,351 – $ 327,759 Revenues in excess of billings 1,130,154 – – $ 1,130,154 Deferred income taxes – 63,032 – $ 63,032

Total current assets 14,934,888 2,067,474 (4,909,982) 12,092,380 Long-term assets

Capitalized computer software development costs, net ofaccumulated amortization 4,077,144 7,729 – 4,084,873

Property and equipment, net 257,552 10,237 – 267,789 Intellectual property, net of accumulated amortization 4,210,625 143,207 2,706,793 7,060,625 Other Intangible assets 1,244,375 – 2,840,000 4,084,375 Goodwill 4,789,248 – 5,258,278 10,047,526 Other assets 34,082 – – 34,082

Total assets $ 29,547,914 $ 2,228,647 $ 5,895,089 $ 37,671,650

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities Accounts payable $ 211,645 $ 23,744 $ – $ 235,389 Consideration Payable – – $ 2,000,000 $ 2,000,000 Accrued payroll and other expenses 647,203 101,375 – 748,578 Accrued bonuses to officers 45,750 – – 45,750 Billings in excess of revenues 313,399 – – 313,399 Deferred revenue 48,964 1,120,617 (428,000) 741,581

Total current liabilities 1,266,961 1,245,736 1,572,000 4,084,697 Long-term liabilities

Deferred income taxes 3,055,465 – 1,900,000 4,955,465 Consideration Payable – – 2,700,000 2,700,000 Holdback Liability Due Sellers – – 1,000,000 1,000,000 Other long-term liabilities – – – –

Total liabilities 4,322,426 1,245,736 7,172,000 12,740,162 Commitments and contingencies Shareholders' equity

Preferred stock – – – – Common stock 7,244 776 (776) 7,244 Additional paid-in capital 11,816,573 15,788 (15,788) 11,816,573 Treasury Stock – (300,000) 300,000 – Retained earnings 13,401,671 1,266,347 (1,560,347) 13,107,671

Total shareholders' equity 25,225,488 982,911 (1,276,911) 24,931,488

Total liabilities and shareholders' equity $ 29,547,914 $ 2,228,647 $ 5,895,089 $ 37,671,650

See selected notes to Proforma financial statements.

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SIMULATIONS PLUS, INC.PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

For the nine months ended May 31, 2017

(Unaudited) (Unaudited) (Unaudited) (Unaudited)

Simulations Plus,

Inc. DILIsym Services

Inc. Adjustments Note Pro-FormaCombined

Net revenue $ 17,872,044 $ 2,874,887 $ – $ 20,746,931 Cost of revenues 4,334,699 573,989 225,000 A 5,133,688 Gross profit 13,537,345 2,300,898 (225,000) 15,613,243 Operating expenses

Selling, general, and administrative 5,766,563 586,875 (220,397) B 6,133,041 Research and development 952,635 420,107 – 1,372,742

Total operating expenses 6,719,198 1,006,982 (220,397) 7,505,783 Income from operations 6,818,147 1,293,916 (4,603) 8,107,460 Other income (expense)

Interest income 13,548 92 – 13,640 Gain on currency exchange 5,573 – – 5,573 Interest expense – (720) – (720)

Total other income (expense) 19,121 (628) – 18,493 Income before income taxes 6,837,268 1,293,288 (4,603) 8,125,953 Provision for income taxes (2,199,914) (465,583) 1,749 C (2,663,748)Net Income $ 4,637,354 $ 827,705 $ (2,854) $ 5,462,205

` Earnings per share:

Basic $ 0.27 $ 0.32 Diluted $ 0.27 $ 0.31

Weighted-average common shares outstanding

Basic 17,233,470 – – 17,233,470 Diluted 17,454,864 – – 17,454,864


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SIMULATIONS PLUS, INC.PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

For the year ended August 31, 2016

(Audited) (Unaudited) (Unaudited) (Unaudited)

Simulations Plus,

Inc. DILIsym Service

Inc. Adjustments Note Pro-FormaCombined

Net revenues $ 19,972,079 $ 2,693,267 $ – $ 22,665,346 Cost of revenues 4,601,513 1,020,702 300,000 A 5,922,215 Gross profit 15,370,566 1,672,565 (300,000) 16,743,131 Operating expenses

Selling, general, and administrative 6,693,691 827,638 210,000 B 7,731,329 Research and development 1,445,069 364,974 – 1,810,043

Total operating expenses 8,138,760 1,192,612 210,000 9,541,372 Income from operations 7,231,806 479,953 (510,000) 7,201,759 Other income (expense)

Interest income 18,014 144 – 18,158 Gain (Loss) on currency exchange (13,428) – – (13,428)Interest expense – – – –

Total other income (expense) 4,586 144 – 4,730 Income before income taxes 7,236,392 480,097 (510,000) 7,206,489 Provision for income taxes (2,286,256) (172,834) 193,800 C (2,265,290)Net Income $ 4,950,136 $ 307,263 $ (316,200) $ 4,941,199

Earnings per share:

Basic $ 0.29 $ 0.29 Diluted $ 0.29 $ 0.29

Weighted-average common shares outstanding

Basic 17,028,566 – – 17,028,566 Diluted 17,209,506 – – 17,209,506


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SIMULATIONS PLUS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation The unaudited pro forma condensed combined financial statements included herein have been prepared pursuant to the rules and regulations of the Securitiesand Exchange Commission. Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with generallyaccepted accounting principles in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however,management believes that the disclosures are adequate to make the information presented not misleading. The acquisition method of accounting under U.S. GAAP requires, among other things, that most assets acquired and liabilities assumed be recognized at theirfair values at the acquisition date. Fair value is defined under U.S. GAAP as “the price that would be received to sell an asset or paid to transfer a liability in anorderly transaction between market participants at the measurement date.” Market participants are assumed to be buyers and sellers in the principal (or mostadvantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. Fair valuemeasurements can be highly subjective and it is possible that other professionals, applying reasonable judgment to the same facts and circumstances, coulddevelop and support a range of alternative estimated amounts. Accordingly, the assets acquired and liabilities assumed were recorded at their respective fairvalues and added to those of SIMPLUS. 2. Acquisition of DILIsym On June 1, 2017, DILIsym, a private company provider of mechanistic modeling and simulation services and software to evaluate Drug Induced Liver Injury (DILI)and hepatotoxic risk for compounds for the pharmaceutical and biotechnology industries, became a wholly owned subsidiary of SIMPLUS pursuant to the termsof a Stock Purchase Agreement, dated May 1, 2017 (the “Agreement”), by and among SIMPLUS, DILIsym Services, Inc., a North Carolina corporation(“DILIsym”), the shareholders of DILIsym (the “DILIsym Shareholders”) and Brett A. Howell, the representative of the DILIsym Shareholders (the “DILIsymShareholders Representative”), each, a “Party,” and collectively, the “Parties.” The merger is accounted for under the acquisition method of accounting. On June 1, 2017, the Company consummated the acquisition of all outstanding capital stock of DILIsym pursuant to the terms of the Agreement and DILIsymbecame a wholly owned subsidiary of the Company (the “Acquisition”). Under the terms of the Agreement, the Company: (1) paid to the DILIsym ShareholdersFive Million Dollars ($5,000,000) payable at the closing of the Acquisition (the “Closing”) subject to certain adjustments and holdbacks as provided in theAgreement and as more fully described below; and (2) will pay to the DILIsym Shareholders certain earn-out payments, to be measured by the earnings ofDILIsym before income taxes, payable following the Closing, as more particularly described in the Agreement and as more fully described below (the “Earn-outPayments”): (i) On June 1, 2017, the Company paid the DILIsym Shareholders total cash consideration of $4,515,982; which such amount included $515,982 in working

capital left in DILIsym’s accounts in excess of the amount required under the Agreement, and (ii) The company held back $1,000,000 at the Closing from the initial consideration as for potential offset for representations and warrantees. These funds

will be held for a period of eighteen months (iii) In addition, the Company may pay up to an additional $5,000,000 in Earn-out Consideration Payments over the 3 years following the Closing if and

when such Earn-out Payments become due and payable, and subject to certain offsets as provided in the Agreement, according to the Agreement. Under the acquisition method of accounting, the total estimated purchase price is allocated to DILIsym’s tangible and intangible assets and liabilities based ontheir estimated fair values at the date of the completion of the acquisition (June 1, 2017). The following table summarizes the preliminary allocation of thepurchase price for DILIsym: Assets acquired $ 2,228,647 Estimated value of technologies acquired over book value 2,706,793 Estimated value of Intangibles acquired 2,840,000 Liabilities assumed (817,737)Deferred taxes (2,000,000)Goodwill 5,258,278 Total Purchase Consideration $ 10,215,981

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3. Pro Forma Condensed Combined Financial Statements The accompanying unaudited pro forma condensed combined financial statements present the pro forma consolidated financial position and results of operationsof the combined company based upon the historical financial statements of SIMPLUS and DILIsym, after giving effect to the DILIsym acquisition and adjustmentsdescribed in the following footnotes, and are intended to reflect the impact of this acquisition on SIMPLUS on a pro forma basis. The unaudited pro forma condensed combined balance sheet reflects the acquisition of DILIsym as if it had been consummated on May 31, 2017 and includespro forma adjustments for preliminary valuations by SIMPLUS management of certain tangible and intangible assets as of the acquisition date of June 1, 2017.These adjustments are subject to further revision upon finalization of the fair value determinations. The unaudited pro forma condensed combined statements of operations for the fiscal year ended August 31, 2016 and the nine months ended May 31, 2017combines SIMPLUS’s historical results for the fiscal year ended August 31, 2016 and the nine months ended May 31, 2016 with DILIsym historical results forthe same periods. The unaudited pro forma statement of operations gives effect to the acquisition as if it had taken place on September 1, 2015 and 2016,respectively. The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. 4. Pro Forma Adjustments Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect amounts related to DILIsym’s net tangible and intangible assets andliabilities at an amount equal to the preliminary estimate of their fair values. The intangible assets identified were customer lists, non-compete agreements, andthe trade name valued at $1,900,000, $80,000 and $860,000, respectively. The trade name is capitalized on the balance sheet until it is either abandoned orwritten off. There were no significant intercompany balances or transactions between SIMPLUS and DILIsym at the dates and for the period of these pro forma condensedcombined financial statements. The unaudited pro forma condensed combined financial statements do not include any adjustments for liabilities that will result from integration activities relatedto the DILIsym acquisition. Additional assets or liabilities may be recorded that could affect amounts in the unaudited pro forma condensed combined financialstatements. During the measurement period, any such adjustments to provisional amounts would increase or decrease goodwill. Adjustments that occur afterthe end of the measurement period will be recognized in the post-combination current period operations. 7


The pro forma adjustments included in the unaudited pro forma condensed combined financial statements are as follows:

Note Adjustments to Operating Expenses

Nine MonthsEnded May 31,

2017

Fiscal YearEnded August

31, 2016

A Adjustments to Cost of Sales: Amortization of Value of Acquired Technologies $ (225,000) $ (300,000)

Acquisition transaction costs posted by Simulations Plus and DILIsym Services, Inc. during the period 377,889 0 Amortization of Intangible assets acquired (157,491) (210,000)B Adjustments to Selling, General and Admin Expenses $ 220,397 $ (210,000) C Income tax effect of pro forma adjustments $ 1,749 $ 193,800 Note Pro forma balance sheet adjustments May 31, 2017

D Cash paid at Closing $ (4,515,982)

Estimated Value of Acquired Technologies in excess of carrying costs 2,706,793 Estimated value of Intangibles assets acquired 2,840,000 Estimated Deferred income taxes (1,900,000) Estimated amount of Holdback liabilities due 2 years from purchase (1,000,000) Estimated Fair Value of Earn-out payments payable over 3 years (4,700,000) Deferred Revenue adjustment (428,000) Net value of Operating assets, net of liabilities as of May 31, 2017 982,911 Cash to be paid for acquisition expenses post-closing (394,000) Retained earnings effect of post-closing acquisition expenses 294,000 Estimated Goodwill acquired $ 5,258,278

5. Pro Forma Earnings per Share Shares used to calculate unaudited pro forma combined basic and diluted net loss per share are based on the number of SIMPLUS weighted-average sharesused in computing historical net loss per share, basic and diluted. No shares were issued to consummate this acquisition. 6. Transaction Costs For the nine months ended May 31, 2017, transaction costs incurred related to the acquisition of DILIsym totaled $377,889; SIMPLUS and DILIsym eachincurred transaction costs of $260,837 and $117,052, respectively. These costs have been recorded as a pro forma adjustment to reduce general andadministrative expenses in the statement of operations for the nine months ended May 31, 2017. $374,000 of transaction costs were incurred in the periodbetween June 1, 2017 and July 31, 2017, all of which were SIMPLUS expenses. The combined company expects to incur approximately $800,000 in directtransaction costs in connection with the acquisition. The remaining $20,000 will be incurred and expensed in the fiscal year ending August 31, 2018. The combined company may incur additional one-time charges to operations that SIMPLUS cannot reasonably estimate, in the quarter in which the acquisition iscompleted or the following quarters, to reflect costs associated with integrating the two businesses. In addition, the combined company may incur additionalcharges relating to the transaction in subsequent periods, which could have a material impact on the combined company’s financial position or results ofoperations. 8


Documents

SECURITIES & EXCHANGE COMMISSION EDGAR FILINGfilings.irdirect.net/data/1023459/000168316817002188/simulations_… · On June 21, 2017, Simulations Plus, Inc., a California corporation