XML 34 R20.htm IDEA: XBRL DOCUMENT
v3.20.2

ACQUISITION/MERGER WITH SUBSIDIARIES | 12 Months Ended
--- | ---
Aug. 31, 2020
Business Combinations [Abstract] |
ACQUISITION/MERGER WITH SUBSIDIARIES | NOTE 14 - ACQUISITION/MERGER WITH SUBSIDIARIES On March 31, 2020, the Company entered into a Stock Purchase and Contribution Agreement (the “Agreement”) with Lixoft, a French société par actions simplifiée (“Lixoft”). On April 1, 2020, the Company consummated the acquisition of all outstanding equity interests of Lixoft pursuant to the terms of the Agreement, with Lixoft becoming a wholly owned subsidiary of the Company. We believe the combination of Simulations Plus and Lixoft provides substantial future potential based on the complementary strengths of each of the companies. Under the terms of the Agreement, as described below, the Company will pay the former shareholders of Lixoft total consideration of up to $16,500,000, consisting of two-thirds cash and one-third newly issued, unregistered shares of the Company’s common stock. In addition, the Company will pay $3,456,029 of excess working capital based on the March 31, 2020 financial statements of Lixoft. On April 1, 2020, the Company paid the former shareholders of Lixoft a total of $10,789,362, comprised of cash in the amount of $9,460,129 and the issuance of 111,682 shares of the Company’s common stock valued at $3,662,337, net of adjustments and a holdback for representations and warranties (under the terms of the Agreement a price of approximately $32.15 dollars per share was used based upon the volume-weighted average closing price of the Company’s shares of common stock for the 30-consecutive-trading-day period ending two trading days prior to April 1, 2020). 9,669 shares are held in an escrow for offset for representations and warrantees. Within three business days following the two-year anniversary of March 31, 2020 (the date of the Agreement) and subject to any offsets for representations and warrantees, the Company will pay the former shareholders of Lixoft a total of $2,000,000, comprised of $1,333,333 of cash and the release from an escrow shares of stock valued at $666,337 issued at the date of the Agreement. The Agreement provides for a two-year market standoff period in which the newly issued shares may not be sold by the recipients thereof. In addition, the agreement calls for earn-out payments up to an additional $5,500,000, two-thirds cash and one-third newly issued, unregistered shares of the Company’s common stock based on a revenue growth formula each year for the two years subsequent to April 1, 2020. The former shareholders can earn up to $2,000,000 the first year and $3,500,000 in year two. The Earn-out liability has been recorded at fair value. Under the acquisition method of accounting, the total purchase price reflects Lixoft’s tangible and intangible assets and liabilities based on their estimated fair values at the date of the completion of the acquisition (April 1, 2020). The following table summarizes the preliminary allocation of the purchase price for Lixoft:
Allocation of purchase price |  |  |  |
Assets acquired, Including cash of $3,799,134 and accounts receivable of $629,481 |  | $ | 5,006,892 |
Developed Technologies Acquired |  |  | 8,010,000 |
Estimated value of Intangibles assets acquired (Customer Lists, trade name etc.) |  |  | 4,160,000 |
Estimated Goodwill acquired |  |  | 2,533,987 |
Liabilities Assumed |  |  | (1,117,519 | )
Total Consideration |  | $ | 18,593,360 |
Goodwill has been provided in the transaction based on estimates of future earnings of this subsidiary including anticipated synergies associated with the positioning of the combined company as a leader in model-based drug development. Consolidated supplemental Pro Forma information The following unaudited consolidated supplemental pro forma information assumes that the acquisition of Lixoft took place on September 1, 2017 for the income statement years periods ended August 31, 2020. These amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Lixoft to reflect the same expenses in the years ended August 31, 2019 and 2018. The adjustments include costs of acquisition, and amortization of intangibles and other technologies acquired during the merger, assuming the fair-value adjustments applied on September 1, 2017, together with consequential tax effects.
Schedule of statement of income |  |  |  |  |  |  |  |  |
|  | (Pro forma) |  |  | (Pro forma) |  |  | (Pro forma) |
|  | 2020* |  |  | 2019 |  |  | 2018 |
|  | (in thousands) |  |  | (in thousands) |  |  | (in thousands) |
|  | (unaudited) |  |  | (unaudited) |  |  | (unaudited) |
Net Sales |  | $ | 43,970 |  |  | $ | 36,918 |  |  | $ | 31,891 |
Net Income |  | $ | 10,630 |  |  | $ | 9,250 |  |  | $ | 9,132 |
*Balances include five months actual results for Lixoft.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for business combinations, including leverage buyout transactions (as applicable), and divestitures. This may include a description of a business combination or divestiture (or series of individually immaterial business combinations or divestitures) completed during the period, including background, timing, and assets and liabilities recognized and reclassified or sold. This element does not include fixed asset sales and plant closings. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_MergersAcquisitionsAndDispositionsDisclosuresTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration