|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended August 31, 2010
|
|
or
|
|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from _________ to _________
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California
(State or other jurisdiction of incorporation or organization)
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95-4595609
(I.R.S. Employer Identification No.)
|
42505 Tenth Street West
Lancaster, CA 93534-7059
(Address of principal executive offices including zip code)
|
(661) 723-7723
(Registrant’s telephone number, including area code)
|
Title of Each Class
Common Stock, par value $0.001 per share
|
Name of Each Exchange on Which Registered
NASDAQ Stock Market LLC
|
o
Large accelerated filer
|
o
Accelerated filer
|
o
Non-accelerated filer (Do not check if a smaller reporting company)
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x
Smaller reporting company
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Page
|
||
PART I
|
||
Item 1
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Business
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1
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Item 1A
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Risk Factors
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11
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Item 1B
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Unresolved Staff Comments
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11
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Item 2
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Properties
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11
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Item 3
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Legal Proceedings
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11
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Item 4
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Reserved
|
12
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PART II
|
||
Item 5
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Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities
|
12
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Item 6
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Selected Financial Data
|
13
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Item 7
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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14
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Item 7A
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Quantitative and Qualitative Disclosures About Market Risk
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21
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Item 8
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Financial Statements
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22
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Item 9
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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22
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Item 9A
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Controls and Procedures
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22
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Item 9B
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Other Information
|
23
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PART III
|
||
Item 10
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Directors, Executive Officers and Corporate Governance
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23
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Item 11
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Executive Compensation
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23
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Item 12
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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23
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Item 13
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Certain Relationships and Related Transactions, and Director Independence
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24
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Item 14
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Principal Accounting Fees and Services
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24
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PART IV
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||
Item 15
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Exhibits, Financial Statement Schedules
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24
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Signatures
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25
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Low Sales Price
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High Sales Price
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|||||||
FY10:
|
||||||||
Quarter ended August 31, 2010
|
2.04 | 2.52 | ||||||
Quarter ended May 31, 2010
|
1.67 | 2.50 | ||||||
Quarter ended February 28, 2010
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1.35 | 1.72 | ||||||
Quarter ended November 30, 2009
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1.32 | 1.79 | ||||||
FY09:
|
||||||||
Quarter ended August 31, 2009
|
1.20 | 1.86 | ||||||
Quarter ended May 31, 2009
|
0.90 | 1.25 | ||||||
Quarter ended February 28, 2009
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0.87 | 1.12 | ||||||
Quarter ended November 30, 2008
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1.01 | 1.90 |
Equity Compensation Plan Information (1)
|
|||
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted-average
exercise price of
outstanding options,
warrants and rights
|
Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
|
(a)
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(b)
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(c)
|
|
Equity compensation plans approved by security holders
|
1,493,902
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$ 1.13
|
346,834
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Equity compensation plans not approved by security holders
|
0
|
0
|
0
|
Total
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1,493,902
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346,834
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(1)
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The Company is authorized to issue stock options under the following compensation arrangement:
|
|
a.
|
4,000 shares per year per person to Directors as a part of their annual stipends.
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|
b.
|
50 shares for each $1,000 of net income before taxes at the end of each fiscal year (up to a maximum of 120,000 options) to CEO over the term of the current employment agreement
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Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Program
|
Remaining Shares
Authorized for
Repurchase Under the
Share Repurchase
Plan – Phase II
|
06/01/10 to 06/30/10
|
33,665
|
$2.3670
|
33,665
|
709,258
|
07/01/10 to 07/31/10
|
18,789
|
$2.4433
|
18,789
|
690,469
|
08/01/10 to 08/31/10
|
10,878
|
$2.4283
|
10,878
|
679,591
|
Total
|
63,332
|
$2.4001
|
63,332
|
FY10
|
FY09
|
|||||||||||||||
Net sales
|
$ | 10,712 | 100.0 | % | $ | 9,143 | 100.0 | % | ||||||||
Cost of sales
|
2,546 | 23.8 | 2,321 | 25.4 | ||||||||||||
Gross profit
|
8,166 | 76.2 | 6,822 | 74.6 | ||||||||||||
Selling, general, and administrative
|
4,325 | 40.4 | 3,896 | 42.6 | ||||||||||||
Research and development
|
970 | 9.1 | 1,114 | 12.2 | ||||||||||||
Total operating expenses
|
5,295 | 49.5 | 5,010 | 54.8 | ||||||||||||
Income from operations
|
2,871 | 26.7 | 1,812 | 19.9 | ||||||||||||
Interest income
|
101 | 0.9 | 94 | 1.0 | ||||||||||||
Interest expense
|
(1 | ) | (0.0 | ) | - | - | ||||||||||
Miscellaneous Income
|
1 | 0.0 | 1 | 0.0 | ||||||||||||
Gain on sale of assets
|
2 | 0.0 | - | - | ||||||||||||
Gain on currency exchange
|
130 | 1.2 | 120 | 1.3 | ||||||||||||
Total other income
|
233 | 2.1 | 215 | 2.4 | ||||||||||||
Net income before taxes
|
3,104 | 28.8 | 2,027 | 22.2 | ||||||||||||
Provision for income taxes
|
(948 | ) | (8.8 | ) | (615 | ) | (6.7 | ) | ||||||||
Net income
|
2,156 | 20.0 | % | 1,412 | 15.4 | % |
EXHIBIT
|
|
NUMBER
|
DESCRIPTION
|
3.1
|
Articles of Incorporation of Simulations Plus, Inc. (7)
|
3.2
|
Amended and Restated Bylaws of Simulations Plus, Inc. (7)
|
4.1
|
Articles of Incorporation of Simulations Plus, Inc. (incorporated by reference to Exhibit 3.1 hereof) and Bylaws of Simulations Plus, Inc. (incorporated by reference to Exhibit 3.2 hereof)
|
4.2
|
Form of Common Stock Certificate (1)
|
4.3
|
Share Exchange Agreement (1)
|
10.1
|
Simulations Plus, Inc. 1996 Stock Option Plan (the “Option Plan”) and forms of agreements relating thereto (1)
(†)
|
10.24
|
Exclusive Software License Agreement by and between Simulations Plus, Inc. and Therapeutic Systems Research Laboratories dated June 30, 1997. (2)
|
10.34
|
OEM/Remarketing Agreement between Words+, Inc. and Eloquent Technology, Inc. (6)
|
10.41
|
Technology Transfer Agreement between Sam Communications, LLC. (6)
|
10.43
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Lease Agreement by and between Simulations Plus, Inc. and Venture Freeway, LLC. (3)
|
10.45
|
Employment Agreement by and between the Company and Walter S. Woltosz (4)
(†)
|
10.46
|
Simulations Plus, Inc. 2007 Stock Option Plan (the “2007 Option Plan”) (5
(†)
|
10.47
|
Lease extension agreement by and between Simulations Plus, Inc. and Crest Development (7)
|
21.1
|
List of Subsidiaries (7)
|
23.1
|
Consent of Rose, Snyder and Jacobs (7)
|
31.1
|
Rule 13a-14(a)/15d-14(a) – Certification of Chief Executive Officer (CEO). (7)
|
31.2
|
Rule 13a-14(a)/15d-14(a) – Certification of Chief Financial Officer (CFO). (7)
|
32
|
Section 1350 – Certification of CEO and CFO. (7)
|
|
(1)
|
Incorporated by reference to the Company’s Registration Statement on Form SB-2 (Registration No. 333-6680) filed on March 25, 1997.
|
|
(2)
|
Incorporated by reference to the Company’s Form 10-KSB filed December 15, 1997 (Commission file No. 333-05400-LA).
|
|
(3)
|
Incorporated by reference to the Company’s Form 10-KSB filed December 15, 1997 (Commission file No. 333-05400-LA).
|
|
(4)
|
Incorporated by reference to the Company’s Form 10-K filed November 30, 2010 (Commission file No. 001-32046).
|
|
(5)
|
Incorporated by reference to the Company’s Form 10-Q filed January 13, 2010 (Commission No. 001-32046)
|
|
(6)
|
Incorporated by reference to the Company’s Form 10-K/A filed on March 1, 2010 (Commission file No. 001-32046).
|
|
(7)
|
Filed herewith.
|
SIMULATIONS PLUS, INC.
|
|
By
/s
/
Momoko A. Beran
|
|
Momoko A. Beran
|
|
Chief Financial Officer
|
Signature
|
Title
|
/s/
Walter S. Woltosz
|
Chairman of the Board of Directors
|
Walter S. Woltosz
|
and Chief Executive Officer (Principal executive officer)
|
/s/
V
irginia E. Woltosz
|
|
Virginia E. Woltosz |
Secretary and Director of the Company
|
/s/
Dr. David Z. D’Argenio
|
|
Dr. David Z. D’Argenio
|
Director
|
/s/
Dr. Richard R. Weiss
|
|
Dr. Richard R. Weiss
|
Director
|
/s/
Harold W. Rosenberger
|
|
Harold W. Rosenberger
|
Director
|
/s/
Momoko A. Beran
|
|
Momoko A. Beran
|
Chief Financial Officer of the Company(Principal financial officer and principal accounting officer)
|
Page
|
||
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
F2
|
|
CONSOLIDATED FINANCIAL STATEMENTS
|
||
Consolidated Balance Sheets
|
F3
|
|
Consolidated Statements of Operations
|
F4
|
|
Consolidated Statements of Shareholders’ Equity
|
F5
|
|
Consolidated Statements of Cash Flows
|
F6
|
|
Notes to Consolidated Financial Statements
|
F7 – F23
|
August 31,
|
||||||||
2010
|
2009
|
|||||||
Net sales
|
$ | 10,711,829 | $ | 9,143,271 | ||||
Cost of sales
|
2,545,709 | 2,321,592 | ||||||
Gross profit
|
8,166,120 | 6,821,679 | ||||||
Operating expenses
|
||||||||
Selling, general, and administrative
|
4,325,621 | 3,895,995 | ||||||
Research and development
|
969,871 | 1,113,855 | ||||||
Total operating expenses
|
5,295,492 | 5,009,850 | ||||||
Income from operations
|
2,870,628 | 1,811,829 | ||||||
Other income (expense)
|
||||||||
Interest income
|
101,545 | 93,874 | ||||||
Miscellaneous income
|
1,231 | 607 | ||||||
Gain on currency exchange
|
130,150 | 120,350 | ||||||
Gain on sale of assets
|
1,993 | - | ||||||
Interest expense
|
(1,045 | ) | - | |||||
Total other income (expense)
|
233,874 | 214,831 | ||||||
Income before income taxes
|
3,104,502 | 2,026,660 | ||||||
Provision for income taxes
|
||||||||
Deferred income taxes
|
(289,829 | ) | (32,628 | ) | ||||
Current Income taxes
|
(658,600 | ) | (581,948 | ) | ||||
Net income
|
$ | 2,156,073 | $ | 1,412,084 | ||||
Basic earnings per share
|
$ | 0.14 | $ | 0.09 | ||||
Diluted earnings per share
|
$ | 0.13 | $ | 0.08 | ||||
Weighted-average common
|
||||||||
shares outstanding
|
||||||||
Basic
|
15,831,294 | 16,126,471 | ||||||
Diluted
|
16,513,018 | 17,187,547 |
Additional
|
||||||||||||||||||||
Common Stock
|
Paid-In
|
|||||||||||||||||||
Shares
|
Amount
|
Capital
|
Retained Earnings
|
Total
|
||||||||||||||||
Balance, August 31, 2008 | 16,297,400 | 4,769 | 6,328,185 | 3,582,124 | 9,915,078 | |||||||||||||||
Exercise of stock options | 249,824 | 250 | 124,514 | 124,764 | ||||||||||||||||
Stock-based Compensation
|
183,294 | 183,294 | ||||||||||||||||||
Stock Repurchases
|
(846,842 | ) | (847 | ) | (1,063,582 | ) | (1,064,429 | ) | ||||||||||||
Net income
|
1,412,084 | 1,412,084 | ||||||||||||||||||
Balance, August 31, 2009 | 15,700,382 | $ | 4,172 | $ | 5,572,411 | $ | 4,994,208 | $ | 10,570,791 | |||||||||||
Exercise of stock options | 632,674 | 632 | 94,290 | 94,922 | ||||||||||||||||
Stock-based Compensation
|
127,597 | 127,597 | ||||||||||||||||||
Stock Repurchases
|
(500,050 | ) | (500 | ) | (1,033,607 | ) | (1,034,107 | ) | ||||||||||||
Deferred tax adjustments
|
1,130,577 | 1,130,577 | ||||||||||||||||||
Net income
|
2,156,073 | 2,156,073 | ||||||||||||||||||
Balance, August 31, 2010 | 15,833,006 | $ | 4,304 | $ | 5,891,268 | $ | 7,150,281 | $ | 13,045,853 |
August 31,
|
||||||||
2010
|
2009
|
|||||||
Cash flows from operating activities
|
||||||||
Net income
|
$ | 2,156,073 | $ | 1,412,084 | ||||
Adjustments to reconcile net income to net cash
provided by operating activities
|
||||||||
Depreciation and amortization of property and equipment
|
25,215 | 21,893 | ||||||
Amortization of customer relationships
|
13,714 | 19,699 | ||||||
Amortization of capitalized computer software development costs
|
644,014 | 519,415 | ||||||
Bad debts
|
176,978 | 219,998 | ||||||
Excess tax benefits from share-based arrangements
|
(1,130,577 | ) | - | |||||
Stock-based compensation
|
127,597 | 183,294 | ||||||
Gain on sale of equipment
|
(1,993 | ) | - | |||||
Deferred income taxes
|
289,829 | 32,628 | ||||||
(Increase) decrease in
|
||||||||
Accounts receivable and Contracts receivable
|
335,216 | (83,397 | ) | |||||
Income tax refundable
|
298,641 | - | ||||||
Inventory
|
(228,940 | ) | 88,205 | |||||
Prepaid expenses and other assets
|
24,532 | 36,592 | ||||||
Increase (decrease) in
|
||||||||
Accounts payable
|
42,741 | 17,988 | ||||||
Accrued payroll and other expenses
|
(41,327 | ) | 15,068 | |||||
Accrued income taxes
|
167,993 | |||||||
Accrued warranty and service costs
|
(7,651 | ) | 9,337 | |||||
Deferred revenue
|
13,902 | (1,143 | ) | |||||
Net cash provided by operating activities
|
2,905,957 | 2,491,661 | ||||||
Cash flows from investing activities
|
||||||||
Purchases of property and equipment
|
(51,532 | ) | (44,560 | ) | ||||
Proceeds from sale of investments
|
- | 750,000 | ||||||
Capitalized computer software development costs
|
(887,541 | ) | (673,552 | ) | ||||
Net cash provided by (used in) investing activities
|
(939,073 | ) | 31,888 | |||||
Cash flows from financing activities
|
||||||||
Repurchase of common stock
|
(1,034,106 | ) | (1,064,429 | ) | ||||
Excess tax benefits from share-based arrangements
|
1,130,577 | - | ||||||
Proceeds from the exercise of stock options
|
94,922 | 124,764 | ||||||
Net cash provided by (used in) financing activities
|
191,393 | (939,665 | ) | |||||
Net increase in cash and cash equivalents
|
$ | 2,158,277 | $ | 1,583,884 | ||||
Cash and cash equivalents, beginning of year
|
7,473,485 | 5,889,601 | ||||||
Cash and cash equivalents, end of period
|
$ | 9,631,762 | $ | 7,473,485 | ||||
Supplemental disclosures of cash flow information
|
||||||||
Interest paid
|
$ | 1,045 | $ | - | ||||
Income taxes paid
|
$ | 390,696 | $ | 549,122 |
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
|
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.
|
Level I
|
Level II
|
Level III
|
Total
|
|||||||||||||
Cash and cash equivalents
|
$
|
9,631,762
|
$
|
-
|
$
|
-
|
$
|
9,631,762
|
||||||||
Total assets
|
$
|
9,631,762
|
$
|
-
|
$
|
$
|
9,631,762
|
2010
|
2009
|
|||||||
Numerator
|
||||||||
Net income attributable to common shareholders
|
$ | 2,156,073 | $ | 1,412,084 | ||||
Denominator
|
||||||||
Weighted-average number of common shares outstanding during the year
|
15,831,294 | 16,126,471 | ||||||
Dilutive effect of stock options
|
681,724 | 1,061,076 | ||||||
Common stock and common stock equivalents used for diluted earnings per share
|
16,513,018 | 17,187,547 |
2010
|
2009
|
|||||||
Automobile
|
$ | 21,769 | $ | 21,769 | ||||
Equipment
|
80,830 | 80,830 | ||||||
Computer equipment
|
403,635 | 376,680 | ||||||
Furniture and fixtures
|
61,498 | 61,498 | ||||||
Leasehold improvements
|
53,898 | 53,898 | ||||||
621,630 | 594,675 | |||||||
Less accumulated depreciation and Amortization
|
565,646 | 541,455 | ||||||
Total
|
$ | 55,984 | $ | 53,220 |
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Remaining Funds
Available Under the
Share Repurchase Plan
(including broker’s fees)
|
|||
12/02/08 to 12/31/08
|
90,632
|
$0.9764
|
$2,409,631
|
|||
01/01/09 to 01/31/09
|
105,752
|
$1.0352
|
$2,296,807
|
|||
02/01/09 to 02/28/09
|
73,118
|
$1.0086
|
$2,221,124
|
|||
03/01/09 to 03/31/09
|
73,315
|
$0.9575
|
$2,149,168
|
|||
04/01/09 to 04/30/09
|
55,580
|
$1.0045
|
$2,091,896
|
|||
05/01/09 to 05/31/09
|
44,083
|
$1.1360
|
$2,041,649
|
|||
06/01/09 to 06/30/09
|
171,740
|
* |
$1.3885
|
$1,799,550
|
||
07/01/09 to 07/31/09
|
131,308
|
$1.5321
|
$1,596,486
|
|||
08/01/09 to 08/31/09
|
101,314
|
$1.7467
|
$1,416,478
|
|||
09/01/09 to 09/30/09
|
82,630
|
$1.6989
|
$1,274,155
|
|||
10/01/09 to 10/31/09
|
52,364
|
$1.5685
|
$1,190,386
|
|||
11/01/09 to 11/30/09
|
42,061
|
$1.4884
|
$1,126,560
|
|||
12/01/09
|
2,586
|
$1.3823
|
$1,122,985
|
|||
Phase I Total
|
1,026,483
|
$1.3823
|
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Remaining Shares
Authorized for
Repurchase Under the
Share Repurchase
Plan – Phase II
|
|||
04/01/10 to 04/30/10
|
86,976
|
$2.2237
|
913,024
|
|||
05/01/10 to 05/31/10
|
170,101
|
$2.3515
|
742,923
|
|||
06/01/10 to 06/30/10
|
33,665
|
$2.3670
|
709,258
|
|||
07/01/10 to 07/31/10
|
18,789
|
$2.4433
|
690,469
|
|||
08/01/10 to 08/31/10
|
10,878
|
$2.4283
|
679,591
|
|||
Phase II Total
|
320,409
|
$2.3264
|
Transactions in FY09
|
Number of
Options
|
Weighted-Average Exercise Price
Per Share
|
Weighted-Average Remaining Contractual
Life
|
|||||||||
Outstanding, August 31, 2008
|
2,714,536 | $ | 0.91 | |||||||||
Granted
|
392,000 | $ | 1.09 | |||||||||
Exercised
|
(237,000 | ) | $ | 0.51 | ||||||||
Canceled/Forfeited
|
(3,000 | ) | $ | 3.02 | ||||||||
Expired
|
(4,000 | ) | $ | 0.38 | ||||||||
Outstanding, August 31, 2009
|
2,862,536 | $ | 0.97 | 3.927 | ||||||||
Exercisable, August 31, 2009
|
2,158,136 | $ | 0.74 | 2.346 |
Transactions in FY10
|
Number of
Options
|
Weighted-Average Exercise Price
Per Share
|
Weighted-Average Remaining Contractual
Life
|
|||||||||
Outstanding, August 31, 2009
|
2,862,536 | $ | 0.97 | |||||||||
Granted
|
252,666 | $ | 1.79 | |||||||||
Exercised
|
(931,800 | ) | $ | 0.60 | ||||||||
Canceled/Forfeited
|
(41,000 | ) | $ | 1.39 | ||||||||
Expired
|
(648,500 | ) | $ | 1.44 | ||||||||
Outstanding, August 31, 2010
|
1,493,902 | $ | 1.13 | 4.248 | ||||||||
Exercisable, August 31, 2010
|
934,036 | $ | 0.87 | 3.245 |
Exercise Price
|
Awards Outstanding
|
Awards Exercisable
|
||||||||||||||||||||||
Low
|
High
|
Quantity
|
Weighted Average Remaining Contractual Life
|
Weighted Average Exercise Price
|
Quantity
|
Weighted Average Remaining Contractual Life
|
Weighted Average Exercise Price
|
|||||||||||||||||
$ | 0.26 | $ | 0.75 | 392,236 |
0.6 years
|
$ | 0.36 | 392,236 |
0.6 years
|
$ | 0.36 | |||||||||||||
$ | 0.76 | $ | 1.25 | 725,000 |
5.9 years
|
$ | 1.08 | 502,200 |
5.0 years
|
$ | 1.13 | |||||||||||||
$ | 1.26 | $ | 3.02 | 376,666 |
4.9 years
|
$ | 2.03 | 39,600 |
7.6 years
|
$ | 2.69 | |||||||||||||
1,493,902 | 934,036 |
Intrinsic Value of Options Outstanding
|
Intrinsic Value of Options Exercisable
|
Intrinsic Value of Options Exercised
|
||||||||||
FY10
|
$ | 2,029,935 | $ | 1,499,527 | $ | 931,631 | ||||||
FY09
|
$ | 2,713,395 | $ | 2,354,206 | $ | 191,400 |
Transactions in FY09
|
Number of
Options
|
Weighted-Average Exercise Price
Per Share
|
||||||
Outstanding, August 31, 2009
|
51,000 | $ | 1.89 | |||||
Granted
|
24,000 | $ | 2.06 | |||||
Exercised
|
(4,000 | ) | $ | 0.63 | ||||
Outstanding, August 31, 2010
|
71,000 | $ | 2.02 | |||||
Exercisable, August 31, 2010
|
46,850 | $ | 1.99 |
2010
|
2009
|
|||||||
Current
|
||||||||
Federal
|
$ | (531,586 | ) | $ | (491,258 | ) | ||
State
|
(127,014 | ) | (90,690 | ) | ||||
(658,600 | ) | (581,948 | ) | |||||
Deferred
|
||||||||
Federal
|
(260,843 | ) | (14,912 | ) | ||||
State
|
(28,986 | ) | (17,716 | ) | ||||
(289,829 | ) | (32,628 | ) | |||||
Total
|
$ | (948,429 | ) | $ | (614,576 | ) |
2010
|
2009
|
|||||||
Income tax computed at federal statutory tax rate
|
34.0% | 34.0% | ||||||
State taxes, net of federal benefit
|
2.7 | 6.1 | ||||||
Meals & Entertainment
|
0.2 | 0.6 | ||||||
Other permanent differences
|
(1.5 | ) | (1.8 | ) | ||||
Research and development credit
|
(5.1 | ) | (9.4 | ) | ||||
Change in prior year estimated taxes
|
0.3 | 0.8 | ||||||
Total
|
30.6% | 30.3% |
2010
|
2009
|
|||||||
Deferred tax assets
|
||||||||
Accrued payroll and other expenses
|
$ | 108,488 | $ | 90,795 | ||||
Accrued warranty and service costs
|
15,245 | 18,522 | ||||||
Bad debt allowance
|
180,407 | 191,525 | ||||||
Deferred revenue
|
41,166 | 27,945 | ||||||
Property and equipment
|
33,856 | - | ||||||
Research and development credit
|
525,650 | - | ||||||
State taxes
|
43,185 | 69,723 | ||||||
Total deferred tax assets
|
947,997 | 398,510 | ||||||
Less: Valuation allowance
|
- | - | ||||||
947,997 | 398,510 | |||||||
Deferred tax liabilities
|
||||||||
Property and equipment
|
- | (22,799 | ) | |||||
State Tax Deferred
|
(53,481 | ) | - | |||||
Capitalized computer software development costs
|
(940,775 | ) | (832,335 | ) | ||||
Total deferred tax liabilities
|
(994,256 | ) | (855,135 | ) | ||||
Net deferred tax assets or (liabilities)
|
$ | (46,259 | ) | $ | (456,624 | ) |
August 31, 2010
|
||||||||||||||||
Simulations
|
||||||||||||||||
Plus, Inc.
|
Words+, Inc.
|
Eliminations
|
Total
|
|||||||||||||
Net sales
|
$ | 7,620,748 | $ | 3,091,081 | $ | - | $ | 10,711,829 | ||||||||
Income from operations
|
$ | 2,955,389 | $ | (84,761 | ) | $ | - | $ | 2,870,628 | |||||||
Identifiable assets
|
$ | 14,434,920 | $ | 1,673,227 | $ | (1,447,702 | ) | $ | 14,660,445 | |||||||
Capital expenditures
|
$ | 39,013 | $ | 12,519 | $ | - | $ | 51,532 | ||||||||
Depreciation/Amortization
|
$ | 628,677 | $ | 54,266 | $ | - | $ | 682,943 | ||||||||
Stock-based compensation
|
$ | 97,494 | $ | 30,103 | $ | - | $ | 127,597 | ||||||||
Interest Income
|
$ | 101,369 | $ | 176 | $ | - | $ | 101,545 | ||||||||
Income tax expense
|
$ | 948,429 | $ | - | $ | - | $ | 948,429 |
August 31, 2009
|
||||||||||||||||
Simulations
|
||||||||||||||||
Plus, Inc.
|
Words+, Inc.
|
Eliminations
|
Total
|
|||||||||||||
Net sales
|
$ | 6,301,355 | $ | 2,841,916 | $ | - | $ | 9,143,271 | ||||||||
Income from operations
|
$ | 1,899,260 | $ | (87,431 | ) | $ | - | $ | 1,811,829 | |||||||
Identifiable assets
|
$ | 11,937,864 | $ | 1,966,042 | $ | (1,636,900 | ) | $ | 12,267,006 | |||||||
Capital expenditures
|
$ | 23,106 | $ | 21,454 | $ | - | $ | 44,560 | ||||||||
Depreciation/Amortization
|
$ | 508,629 | $ | 52,378 | $ | - | $ | 561,007 | ||||||||
Stock-based compensation
|
$ | 157,169 | $ | 26,125 | $ | - | $ | 183,294 | ||||||||
Interest Income
|
$ | 93,769 | $ | 105 | $ | - | $ | 93,874 | ||||||||
Income tax expense
|
$ | 614,576 | $ | - | $ | - | $ | 614,576 |
August 31, 2010
|
||||||||||||||||||||||||
(in ‘000)
|
North America
|
Europe
|
Asia
|
Oceania
|
South America
|
Total
|
||||||||||||||||||
Simulations Plus, Inc.
|
4,132 | 2,240 | 1,238 | - | 11 | 7,621 | ||||||||||||||||||
Words+, Inc.
|
2,960 | 27 | 44 | 60 | 0 | 3,091 | ||||||||||||||||||
Total
|
7,092 | 2,267 | 1,282 | 60 | 11 | 10,712 |
August 31, 2009
|
||||||||||||||||||||||||
(in ‘000)
|
North America
|
Europe
|
Asia
|
Oceania
|
South America
|
Total
|
||||||||||||||||||
Simulations Plus, Inc.
|
3,505 | 1,822 | 974 | - | - | 6,301 | ||||||||||||||||||
Words+, Inc.
|
2,723 | 50 | 17 | 50 | 2 | 2,842 | ||||||||||||||||||
Total
|
6,228 | 1,872 | 991 | 50 | 2 | 9,143 |
Period
|
Total Number of
Shares Purchased
|
Average Price
Paid per Share
|
Remaining Shares
Authorized for
Repurchase Under the
Share Repurchase
Plan – Phase II
|
|||
09/01/10 to 09/30/10
|
81,070
|
$2.6969
|
598,521
|
|||
10/01/10 to 10/31/10
|
170,494
|
$3.1671
|
428,027
|
|||
11/01/10 to 11/19/10
|
146,116
|
$2.9523
|
281,911
|
|||
As of 11/19/10
|
397,680
|
$2.9923
|
NAME.
|
The name of the corporation is:
Simulations Plus, Inc.
|
Dated: July 11, 1996
|
/s/ Walter S. Woltosz
Walter S. Woltosz
Incorporator
|
|
/s/ Walter S. Woltosz
Walter S. Woltosz
|
1.
|
They are the duly elected President and Secretary, respectively, of Simulations Plus, Inc., a California Corporation.
|
2.
|
Article 4 of the Articles of Incorporation of this Corporation is amended to delete the paragraph that now reads "[T]here shall be one class of shares designated "common" with a par value of $.001 per share. The total number of shares authorized is: 20,000,000" to read as follows:
"A. The aggregate number of shares which the Corporation shall have authority to issue is thirty million (30,000,000) shares, consisting of twenty million (20,000,000) shares of common stock, par value $0.001 per share (the "Common Stock"), and ten million (10,000,000) shares of preferred stock, par value $0.001 per share (the "Preferred Stock").
B. The Board of Directors is authorized, subject to limitations prescribed by law and the provisions of this Article 4, to provide for the issuance of the shares of Preferred Stock in series, and by filing a certificate pursuant to the applicable law of the State of California to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations or restrictions thereof.
|
3.
|
The foregoing amendment of Articles of Incorporation has been duly approved by the
Board of Directors pursuant to Section 902 of the Corporations Code.
|
4.
|
The foregoing amendment of Articles of Incorporation has been duly approved by the required vote of shareholders in accordance with Section 902 of the Corporations Code. The Corporation has one class of shares issued and outstanding that is entitled to vote. The total number of outstanding shares of the Corporation entitled to vote with respect to the foregoing amendment was 3,383,533 shares. The number of shares voting in favor of the amendment equaled or exceeded the vote required in that the affirmative vote of a majority of the outstanding shares was required for the approval of the amendment and the amendment was approved by the affirmative vote of more than 50% of the outstanding voting shares.
|
/s/ Walter S. Woltosz
Name: Walter S. Woltosz
Title: President
/s/ Virginia E. Woltosz
Name Virginia E. Woltosz
Title: Secretary
|
/s/ Walter S. Woltosz
Walter S. Woltosz, President
/s/ Virginia E. Woltosz
Virginia E. Woltosz, Secretary
|
Name
|
Where incorporated
|
Words+, Inc.
|
California, United States
|
1.
|
I have reviewed this Annual Report on Form 10-K of Simulations Plus, Inc., a California corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: November 29, 2010
|
By:
/s/ Walter S. Woltosz
Walter S. Woltosz
Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Simulations Plus, Inc., a California corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: Dated: November 29, 2010
|
By:
/s/ Momoko A. Beran
|
Momoko A. Beran
|
|
Chief Financial Officer
|
|
(Principal Financial Officer)
|
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the report fairly presents, in all material respects, the financial condition and result of operations of the Company.
|