Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended | |||||
OR | |||||
Transmission Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______ |
(State or other jurisdiction of Incorporation or Organization) | (I.R.S. Employer identification No.) |
Title of Each Class Common Stock, par value $0.001 per share | Trading Symbol SLP | Name of Each Exchange on Which Registered |
x | o | Accelerated Filer | |||||||||
o | Non-accelerated Filer | Smaller reporting company | |||||||||
Emerging Growth Company |
Page | ||||||||
Item 1A. | ||||||||
(Unaudited) | (Audited) | |||||||||||||
(in thousands, except share and per share amounts) | May 31, 2023 | August 31, 2022 | ||||||||||||
ASSETS | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $ | ||||||||||||||
Prepaid income taxes | ||||||||||||||
Prepaid expenses and other current assets | ||||||||||||||
Short-term investments | ||||||||||||||
Total current assets | ||||||||||||||
Long-term assets | ||||||||||||||
Capitalized computer software development costs, net of accumulated amortization of $ | ||||||||||||||
Property and equipment, net | ||||||||||||||
Operating lease right-of-use assets | ||||||||||||||
Intellectual property, net of accumulated amortization of $ | ||||||||||||||
Other intangible assets, net of accumulated amortization of $ | ||||||||||||||
Goodwill | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued compensation | ||||||||||||||
Accrued expenses | ||||||||||||||
Income taxes payable | ||||||||||||||
Operating lease liability - current portion | ||||||||||||||
Deferred revenue | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term liabilities | ||||||||||||||
Deferred income taxes, net | ||||||||||||||
Operating lease liability | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies | ||||||||||||||
Shareholders' equity | ||||||||||||||
Preferred stock, $ | $ | $ | ||||||||||||
Common stock, $ | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total shareholders' equity | ||||||||||||||
Total liabilities and shareholders' equity | $ | $ |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
(in thousands, except per common share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Revenues | ||||||||||||||||||||||||||
Software | $ | $ | $ | $ | ||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
Total revenues | ||||||||||||||||||||||||||
Cost of revenues | ||||||||||||||||||||||||||
Software | ||||||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
Total cost of revenues | ||||||||||||||||||||||||||
Gross profit | ||||||||||||||||||||||||||
Operating expenses | ||||||||||||||||||||||||||
Research and development | ||||||||||||||||||||||||||
Selling, general, and administrative | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Income from operations | ||||||||||||||||||||||||||
Other income (expense), net | ( | |||||||||||||||||||||||||
Income before income taxes | ||||||||||||||||||||||||||
Provision for income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Earnings per share | ||||||||||||||||||||||||||
Basic | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted-average common shares outstanding | ||||||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | ||||||||||||||||||||||||||
Foreign currency translation adjustments | ( | |||||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
(in thousands, except per common share amounts) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Common stock and additional paid in capital | ||||||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Exercise of stock options | ||||||||||||||||||||||||||
Stock-based compensation | ||||||||||||||||||||||||||
Shares issued to Directors for services | ||||||||||||||||||||||||||
Shares issued - Lixoft | ||||||||||||||||||||||||||
Repurchase and retirement of common shares | ||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||
Retained earnings | ||||||||||||||||||||||||||
Balance, beginning of period | ||||||||||||||||||||||||||
Declaration of dividends | ( | ( | ( | ( | ||||||||||||||||||||||
Repurchase and retirement of common shares | ( | ( | ||||||||||||||||||||||||
Net income | ||||||||||||||||||||||||||
Balance, end of period | ||||||||||||||||||||||||||
Accumulated other comprehensive (loss) income | ||||||||||||||||||||||||||
Balance, beginning of period | ( | ( | ( | ( | ||||||||||||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||||||||||||||
Balance, end of period | ( | ( | ( | ( | ||||||||||||||||||||||
Total shareholders’ equity | $ | $ | $ | $ | ||||||||||||||||||||||
Cash dividends declared per common share | $ | $ | $ | $ |
Nine Months Ended May 31, | ||||||||||||||
(in thousands) | 2023 | 2022 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Change in value of contingent consideration | ||||||||||||||
Amortization of investment (discounts) premiums | ( | |||||||||||||
Stock-based compensation | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Currency translation adjustments | ( | |||||||||||||
(Increase) decrease in | ||||||||||||||
Accounts receivable | ( | |||||||||||||
Prepaid income taxes | ||||||||||||||
Prepaid expenses and other assets | ( | |||||||||||||
Increase (decrease) in | ||||||||||||||
Accounts payable | ||||||||||||||
Other liabilities | ( | |||||||||||||
Accrued income taxes | ||||||||||||||
Deferred revenue | ||||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Purchases of property and equipment | ( | ( | ||||||||||||
Purchase of short-term investments | ( | ( | ||||||||||||
Proceeds from maturities of short-term investments | ||||||||||||||
Purchased intangibles | ( | |||||||||||||
Capitalized computer software development costs | ( | ( | ||||||||||||
Net cash provided by investing activities | ||||||||||||||
Cash flows from financing activities | ||||||||||||||
Payment of dividends | ( | ( | ||||||||||||
Payments on contracts payable | ( | |||||||||||||
Proceeds from the exercise of stock options | ||||||||||||||
Repurchase and retirement of common shares | ( | |||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net increase in cash and cash equivalents | ||||||||||||||
Cash and cash equivalents, beginning of year | $ | $ | ||||||||||||
Cash and cash equivalents, end of period | $ | $ | ||||||||||||
Supplemental disclosures of cash flow information | ||||||||||||||
Income taxes paid | $ | $ | ||||||||||||
Non-Cash Investing and Financing Activities | ||||||||||||||
Right of use assets capitalized | $ | $ |
Revenue Components | Typical Payment Terms | |||||||
Software Revenues: | ||||||||
Software revenues are generated primarily from sales of software licenses at the time the software is unlocked, and the term commences. The license period typically is one year or less. Along with the license, a di minimis amount of customer support is provided to assist the customer with the software. Should the customer need more than a di minimis amount of support, they can choose to enter into a separate contract for additional training. Most software is installed on our customers’ servers and the Company has no control of the software once the sale is made. | Payments are generally due upon invoicing on a net 30 basis, unless other payment terms are negotiated with the customer based on customer history. Typical industry standards apply. | |||||||
For certain software arrangements the Company hosts the licenses on servers maintained by the Company. Revenue for those arrangements is accounted as Software as a Service over the life of the contract. These arrangements account for a small portion of software revenues of the Company. | ||||||||
Consulting Contracts: | ||||||||
Consulting services provided to our customers are generally recognized over time as the contracts are performed and the services are rendered. The Company measures its consulting revenue based on time expended compared to total estimated hours to complete a project. The Company believes the method chosen for its contract revenue best depicts the transfer of benefits to the customer under the contracts. | Payment terms vary, depending on the size of the contract, credit history and history with the client, and deliverables within the contract. | |||||||
Consortium Member Based Services: | ||||||||
The performance obligation is recognized on a time-elapsed basis, by month for which the services are provided, as the Company transfers control evenly over the contractual period. | Payment is due at the beginning of the period, generally on a net-30 or -60 basis. |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Software licenses | ||||||||||||||||||||||||||
Point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Over time | ||||||||||||||||||||||||||
Services | ||||||||||||||||||||||||||
Over time | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
(in thousands) | Three Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
$ | % of total | $ | % of total | |||||||||||||||||||||||
Americas | $ | % | $ | % | ||||||||||||||||||||||
EMEA | % | % | ||||||||||||||||||||||||
Asia Pacific | % | % | ||||||||||||||||||||||||
Total | $ | % | $ | % |
(in thousands) | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||
$ | % of total | $ | % of total | |||||||||||||||||||||||
Americas | $ | % | $ | % | ||||||||||||||||||||||
EMEA | % | % | ||||||||||||||||||||||||
Asia Pacific | % | % | ||||||||||||||||||||||||
Total | $ | % | $ | % |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Balance, beginning of period | $ | $ | $ | $ | ||||||||||||||||||||||
Provision for expected credit losses | ( | |||||||||||||||||||||||||
Write-offs | ( | ( | ||||||||||||||||||||||||
Balance, end of period | $ | $ | $ | $ |
Equipment | |||||
Computer equipment | |||||
Furniture and fixtures | |||||
Leasehold improvements | Shorter of life of asset or lease |
(in thousands) | ||||||||
Right of use assets | $ | |||||||
Lease liabilities, current | $ | |||||||
Lease liabilities, long-term | $ | |||||||
Operating lease costs | $ | |||||||
Weighted-average remaining lease term | ||||||||
Weighted-average discount rate | % |
(in thousands) | Amortization Period | Acquisition Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||
Trade names | None | $ | $ | — | $ | |||||||||||||||||||||
Covenants not to compete | Straight line | |||||||||||||||||||||||||
Other internal use software | Straight line | |||||||||||||||||||||||||
Customer relationships | Straight line | |||||||||||||||||||||||||
ERP | Straight line | |||||||||||||||||||||||||
$ | $ | $ |
(in thousands) | Amortization Period | Acquisition Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||
Trade names | None | $ | $ | — | $ | |||||||||||||||||||||
Covenants not to compete | Straight line | |||||||||||||||||||||||||
Customer relationships | Straight line | |||||||||||||||||||||||||
ERP | Straight line | |||||||||||||||||||||||||
$ | $ | $ |
(in thousands) | ||||||||
Year Ending August 31, | Amount | |||||||
Remainder of 2023 | $ | |||||||
2024 | $ | |||||||
2025 | $ | |||||||
2026 | $ | |||||||
2027 | $ |
Level Input: | Input Definition: | |||||||
Level I | Inputs that 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. |
May 31, 2023 | ||||||||||||||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Commercial notes (due within one year) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Term deposits (due within one year) | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
August 31, 2022 | ||||||||||||||||||||||||||
(in thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||||
Commercial notes (due within one year) | $ | $ | $ | ( | $ | |||||||||||||||||||||
Term deposits (due within one year) | ||||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
(in thousands) | Amortization Period | Acquisition Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||
Termination/nonassertion agreement-TSRL Inc. | Straight line | |||||||||||||||||||||||||
Developed technologies–DILIsym acquisition | Straight line | |||||||||||||||||||||||||
Intellectual rights of Entelos Holding Company | Straight line | |||||||||||||||||||||||||
Developed technologies–Lixoft acquisition | Straight line | |||||||||||||||||||||||||
$ | $ | $ |
(in thousands) | Amortization Period | Acquisition Value | Accumulated Amortization | Net Book Value | ||||||||||||||||||||||
Royalty Agreement buy out-Enslein Research | Straight line | $ | $ | $ | ||||||||||||||||||||||
Termination/nonassertion agreement-TSRL Inc. | Straight line | |||||||||||||||||||||||||
Developed technologies–DILIsym acquisition | Straight line | |||||||||||||||||||||||||
Intellectual rights of Entelos Holding Company | Straight line | |||||||||||||||||||||||||
Developed technologies–Lixoft acquisition | Straight line | |||||||||||||||||||||||||
$ | $ | $ |
(in thousands) | ||||||||
Year Ending August 31, | Amount | |||||||
Remainder of 2023 | $ | |||||||
2024 | $ | |||||||
2025 | $ | |||||||
2026 | $ | |||||||
2027 | $ |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Numerator | ||||||||||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | ||||||||||||||||||||||
Denominator | ||||||||||||||||||||||||||
Weighted-average number of common shares outstanding during the year | ||||||||||||||||||||||||||
Dilutive effect of stock options | ||||||||||||||||||||||||||
Common stock and common stock equivalents used for diluted earnings per share |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
(in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Interest income | $ | $ | $ | $ | ||||||||||||||||||||||
Change in valuation of contingent consideration | ( | ( | ||||||||||||||||||||||||
Gain on sale of assets | ||||||||||||||||||||||||||
(Loss) gain on currency exchange | ( | ( | ( | |||||||||||||||||||||||
Total other income (expense), net | $ | $ | ( | $ | $ |
(in thousands) | Year Ending August 31, | Amount | |||||||||
Remainder of 2023 | $ | ||||||||||
2024 | |||||||||||
2025 | |||||||||||
2026 | |||||||||||
2027 | |||||||||||
2028 | |||||||||||
Total undiscounted liabilities | |||||||||||
Less: imputed interest | ( | ||||||||||
Total operating lease liabilities (including current portion) | $ |
Three Months Ended May 31, | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||||||||||||
Common stock outstanding, beginning of period | ||||||||||||||||||||||||||
Common stock repurchased during the period * | ( | ( | ||||||||||||||||||||||||
Common stock issued during the period | ||||||||||||||||||||||||||
Common stock outstanding, end of period |
(in thousands, except dividend per share) | Fiscal Year 2023 | |||||||||||||||||||||||||
Record Date | Distribution Date | Number of Shares Outstanding on Record Date | Dividend per Share | Total Amount | ||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
Total | $ |
(in thousands, except dividend per share) | Fiscal Year 2022 | |||||||||||||||||||||||||
Record Date | Distribution Date | Number of Shares Outstanding on Record Date | Dividend per Share | Total Amount | ||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
$ | ||||||||||||||||||||||||||
Total | $ |
(in thousands, except per share and weighted-average amounts) | ||||||||||||||||||||
Transactions During The Nine Months Ended May 31, 2023 | Number of Options | Weighted-Average Exercise Price Per Share | Weighted-Average Remaining Contractual Life | |||||||||||||||||
Outstanding, August 31, 2022 | $ | |||||||||||||||||||
Granted | ||||||||||||||||||||
Exercised | ( | |||||||||||||||||||
Canceled/Forfeited | ( | |||||||||||||||||||
Outstanding, May 31, 2023 | $ | |||||||||||||||||||
Vested and Exercisable, May 31, 2023 | $ | |||||||||||||||||||
Vested and Expected to Vest, May 31, 2023 | $ |
(in thousands, except prices) | Nine Months Ended May 31, 2023 | Fiscal Year 2022 | ||||||||||||
Estimated fair value of awards granted | $ | $ | ||||||||||||
Unvested Forfeiture Rate | % | % | ||||||||||||
Weighted-average grant price | $ | $ | ||||||||||||
Weighted-average market price | $ | $ | ||||||||||||
Weighted-average volatility | % | % | ||||||||||||
Weighted-average risk-free rate | % | % | ||||||||||||
Weighted-average dividend yield | % | % | ||||||||||||
Weighted-average expected life |
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 | |||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||
$ | $ |
(in thousands) | Three Months Ended May 31, 2023 | |||||||||||||||||||
Software | Services | Total | ||||||||||||||||||
Revenues | $ | $ | $ | |||||||||||||||||
Cost of revenues | ||||||||||||||||||||
Gross profit | $ | $ | $ | |||||||||||||||||
Gross margin | % | % | % |
(in thousands) | Three Months Ended May 31, 2022 | |||||||||||||||||||
Software | Services | Total | ||||||||||||||||||
Revenues | $ | $ | $ | |||||||||||||||||
Cost of revenues | ||||||||||||||||||||
Gross profit | $ | $ | $ | |||||||||||||||||
Gross margin | % | % | % |
(in thousands) | Nine Months Ended May 31, 2023 | |||||||||||||||||||
Software | Services | Total | ||||||||||||||||||
Revenues | $ | $ | $ | |||||||||||||||||
Cost of revenues | ||||||||||||||||||||
Gross profit | $ | $ | $ | |||||||||||||||||
Gross margin | % | % | % |
(in thousands) | Nine Months Ended May 31, 2022 | |||||||||||||||||||
Software | Services | Total | ||||||||||||||||||
Revenues | $ | $ | $ | |||||||||||||||||
Cost of revenues | ||||||||||||||||||||
Gross profit | $ | $ | $ | |||||||||||||||||
Gross margin | % | % | % |
(in thousands) | Three Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||||
Revenue | $ | 16,234 | $ | 14,959 | $ | 1,275 | 9 | % | ||||||||||||||||||
Cost of revenue | 2,961 | 2,559 | 402 | 16 | % | |||||||||||||||||||||
Gross profit | 13,273 | 12,400 | 873 | 7 | % | |||||||||||||||||||||
Research and development | 945 | 655 | 290 | 44 | % | |||||||||||||||||||||
Selling, general, and administrative | 8,231 | 6,799 | 1,432 | 21 | % | |||||||||||||||||||||
Total operating expenses | 9,176 | 7,454 | 1,722 | 23 | % | |||||||||||||||||||||
Income from operations | 4,097 | 4,946 | (849) | (17) | % | |||||||||||||||||||||
Other income (loss), net | 843 | (112) | 955 | 853 | % | |||||||||||||||||||||
Income before income taxes | 4,940 | 4,834 | 106 | 2 | % | |||||||||||||||||||||
Provision for income taxes | (932) | (747) | (185) | (25) | % | |||||||||||||||||||||
Net income | $ | 4,008 | $ | 4,087 | $ | (79) | (2) | % |
(in thousands) | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | $ Change | % Change | |||||||||||||||||||||||
Revenue | $ | 43,948 | $ | 42,172 | $ | 1,776 | 4 | % | ||||||||||||||||||
Cost of revenue | 8,252 | 8,145 | 107 | 1 | % | |||||||||||||||||||||
Gross profit | 35,696 | 34,027 | 1,669 | 5 | % | |||||||||||||||||||||
Research and development | 3,428 | 2,439 | 989 | 41 | % | |||||||||||||||||||||
Selling, general, and administrative | 23,259 | 17,371 | 5,888 | 34 | % | |||||||||||||||||||||
Total operating expenses | 26,687 | 19,810 | 6,877 | 35 | % | |||||||||||||||||||||
Income from operations | 9,009 | 14,217 | (5,208) | (37) | % | |||||||||||||||||||||
Other income, net | 2,617 | 6 | 2,611 | 43,517 | % | |||||||||||||||||||||
Income before income taxes | 11,626 | 14,223 | (2,597) | (18) | % | |||||||||||||||||||||
Provision for income taxes | (2,199) | (2,701) | 502 | (19) | % | |||||||||||||||||||||
Net income | $ | 9,427 | $ | 11,522 | $ | (2,095) | (18) | % |
(in thousands) | Three Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 10,632 | $ | 9,647 | $ | 985 | 10 | % | ||||||||||||||||||
Services | 5,602 | 5,312 | 290 | 5 | % | |||||||||||||||||||||
Total | $ | 16,234 | $ | 14,959 | $ | 1,275 | 9 | % |
(in thousands) | Three Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 908 | $ | 730 | $ | 178 | 24 | % | ||||||||||||||||||
Services | 2,053 | 1,829 | 224 | 12 | % | |||||||||||||||||||||
Total | $ | 2,961 | $ | 2,559 | $ | 402 | 16 | % |
(in thousands) | Three Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 9,724 | $ | 8,917 | $ | 807 | 9 | % | ||||||||||||||||||
Services | 3,549 | 3,483 | 66 | 2 | % | |||||||||||||||||||||
Total | $ | 13,273 | $ | 12,400 | $ | 873 | 7 | % |
(in thousands) | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 27,193 | $ | 26,767 | $ | 426 | 2 | % | ||||||||||||||||||
Services | 16,755 | 15,405 | 1,350 | 9 | % | |||||||||||||||||||||
Total | $ | 43,948 | $ | 42,172 | $ | 1,776 | 4 | % |
(in thousands) | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 2,636 | $ | 2,245 | $ | 391 | 17 | % | ||||||||||||||||||
Services | 5,616 | 5,900 | (284) | (5) | % | |||||||||||||||||||||
Total | $ | 8,252 | $ | 8,145 | $ | 107 | 1 | % |
(in thousands) | Nine Months Ended May 31, | |||||||||||||||||||||||||
2023 | 2022 | Change ($) | Change (%) | |||||||||||||||||||||||
Software | $ | 24,557 | $ | 24,522 | $ | 35 | — | % | ||||||||||||||||||
Services | 11,139 | 9,505 | 1,634 | 17 | % | |||||||||||||||||||||
Total | $ | 35,696 | $ | 34,027 | $ | 1,669 | 5 | % |
Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Program | Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | |||||||||||||||||||||||
12/01/2022 - 12/31/2022 | — | $— | — | $ | — | |||||||||||||||||||||
01/01/2023 - 01/31/2023 | 408,685 | (1) | 408,685 | $ | 30,000,000 | |||||||||||||||||||||
02/01/2023 - 02/28/2023 | — | $— | — | $ | — | |||||||||||||||||||||
03/01/2023 - 03/31/2023 | — | $— | — | $ | — | |||||||||||||||||||||
04/01/2023 - 04/30/2023 | — | $— | — | $ | — | |||||||||||||||||||||
05/01/2023 - 05/31/2023 | 83,356 | (1) | 83,356 | $ | 30,000,000 | |||||||||||||||||||||
Total | 492,041 | (1) | 492,041 | $ | 30,000,000 |
EXHIBIT NUMBER | DESCRIPTION | |||||||
2.1^ | ||||||||
2.2^ | ||||||||
2.3^ | ||||||||
2.4^ | ||||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
4.1 | Form of Common Stock Certificate, incorporated by reference to the Company’s Registration Statement on Form SB-2 (Registration No. 333-6680) filed March 25, 1997. | |||||||
4.2 | Share Exchange Agreement, incorporated by reference to the Company’s Registration Statement on Form SB-2 (Registration No. 333-6680) filed March 25, 1997. | |||||||
10.1^ | ||||||||
10.2 | ||||||||
10.3 | ||||||||
10.4^ | ||||||||
10.5 | ||||||||
31.1 * | ||||||||
31.2 * | ||||||||
32.1 ** | ||||||||
101.INS*** | Inline XBRL Instance Document | |||||||
101.SCH*** | Inline XBRL Taxonomy Extension Schema Document | |||||||
101.CAL*** | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF*** | Inline XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB*** | Inline XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE*** | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
^ | Schedules and exhibits omitted pursuant to Item 601(b)(2) of Registration S-K. The registrant agrees to furnish supplementally a copy of any omitted schedule to the SEC upon request. | |||||||
* | Filed herewith. | |||||||
** | Furnished herewith. | |||||||
*** | The XBRL related information in Exhibit 101 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document. |
SIMULATIONS PLUS, INC. | |||||||||||
Date: | July 7, 2023 | By: | /s/ Will Frederick | ||||||||
Will Fredrick Chief Financial Officer (Principal financial officer) |
Dated: July 7, 2023 | By: | /s/ Shawn O’Connor | ||||||
Shawn O’Connor Chief Executive Officer (Principal Executive Officer) |
Dated: July 7, 2023 | By: | /s/ Will Frederick | ||||||
Will Frederick Chief Financial Officer (Principal Financial Officer) |
/s/ Shawn O’Connor | |||||
Shawn O’Connor | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) | |||||
July 7, 2023 |
/s/ Will Frederick | |||||
Will Frederick | |||||
Chief Financial Officer | |||||
(Principal Financial Officer) | |||||
July 7, 2023 |
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GENERAL |
9 Months Ended |
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May 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | GENERAL This Quarterly Report on Form 10-Q for the quarter ended May 31, 2023, should be read in conjunction with our Annual Report on Form 10-K for the fiscal year ended August 31, 2022, filed with the Securities and Exchange Commission (“SEC”) on October 28, 2022. As contemplated by the SEC under Article 8 of Regulation S-X, the accompanying consolidated financial statements and footnotes have been condensed and therefore do not contain all disclosures required by generally accepted accounting principles. The interim financial data are unaudited; however, in the opinion of Simulations Plus, Inc., the interim data include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. Results for interim periods are not necessarily indicative of those to be expected for the full year. Organization Simulations Plus, Inc. (“Simulations Plus”) was incorporated on July 17, 1996. In September 2014, Simulations Plus acquired all of the outstanding equity interests of Cognigen Corporation (“Cognigen”) and Cognigen became a wholly owned subsidiary of Simulations Plus, Inc. In June 2017, Simulations Plus acquired DILIsym Services, Inc. (“DILIsym”) as a wholly owned subsidiary. In April 2020, Simulations Plus acquired Lixoft, a French société par actions simplifiée (“Lixoft”), as a wholly owned subsidiary pursuant to a stock purchase and contribution agreement. (Simulations Plus together with its subsidiaries, collectively, the “Company,” “we,” “us,” “our”). Effective September 1, 2021, the Company merged both Cognigen and DILIsym with and into Simulations Plus, Inc. through short-form mergers (the “Mergers”). To effectuate the Mergers, the Company filed Certificates of Ownership with the Secretaries of State of the states of Delaware (Cognigen’s and DILIsym’s state of incorporation) and California (Simulation Plus’ state of incorporation). Consummation of the Mergers was not subject to approval of the Company’s stockholders and did not impact the rights of the Company’s stockholders. On December 20, 2022, Simulations Plus International, Inc. (“SLPI”), a Delaware corporation, was created as a wholly owned subsidiary of Simulations Plus in order to facilitate future international acquisitions, if any, and global integrations. In furtherance of this objective, the Company added the trade name “SLP France” to Lixoft, and on April 25, 2023, Simulations Plus transferred its ownership of Lixoft to SLPI pursuant to a contribution and acceptance agreement, resulting in Lixoft becoming a wholly owned subsidiary of SLPI. The transfer did not impact the rights of the Company’s stockholders. Lines of Business We are a premier developer of drug discovery and development software for modeling and simulation, and for the prediction of molecular properties utilizing both artificial-intelligence-based and machine-learning-based technologies. We also provide consulting services ranging from early drug discovery through preclinical and clinical development analysis and for submissions to regulatory agencies. Our software and consulting services are provided to major pharmaceutical, biotechnology, agrochemical, cosmetics, and food industry companies and academic and regulatory agencies worldwide for use in the conduct of industry-based research.
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SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation The consolidated financial statements include the accounts of Simulations Plus and its wholly owned operating subsidiary, Lixoft. All significant intercompany accounts and transactions are eliminated in consolidation. Use of Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Actual results could differ from those estimates. Reclassifications Certain numbers in the prior year have been reclassified to conform to the current year’s presentation. Revenue Recognition We generate revenue primarily from the sale of software licenses and by providing consulting services to the pharmaceutical industry for drug development. In accordance with ASC 606, we determine revenue recognition through the following steps: i.Identification of the contract, or contracts, with a customer ii.Identification of the performance obligations in the contract iii.Determination of the transaction price iv.Allocation of the transaction price to the performance obligations in the contract v.Recognition of revenue when, or as, we satisfy a performance obligation Components of Revenue The following is a description of principal activities from which the Company generates revenue. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. Standalone selling prices are determined based on the prices at which the Company separately sells its services or goods.
Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of May 31, 2023, remaining performance obligations were $11.2 million. Ninety-three percent of the remaining performance obligations are expected to be recognized over the next 12 months, with the remainder expected to be recognized thereafter. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations and changes in the scope of contracts. Disaggregation of Revenues The components of disaggregation of revenue for the three and nine months ended May 31, 2023, and 2022 were as follows:
In addition, the Company allocates revenues to geographic areas based on the locations of its customers. Geographical revenues for the three and nine months ended May 31, 2023, and 2022 were as follows:
Contract Balances We receive payments from customers based upon contractual billing schedules, while we recognize revenue when, or as, we satisfy our performance obligations. This timing difference results in accounts receivable, contract assets, and contract liabilities. We record accounts receivable when the right to consideration becomes unconditional. We record a contract asset if the right to consideration is conditioned on something other than the passage of time, such as our future performance. Contract assets are included in prepaid expenses and other current assets on our condensed consolidated balance sheets. We record a contract liability when we have an obligation to transfer goods or services to a customer for which we have either received consideration or a payment is due from a customer. We refer to contract liabilities as deferred revenue on our condensed consolidated balance sheets. Contract asset balances as of May 31, 2023, and August 31, 2022, were $3.3 million and $1.7 million, respectively. During the three and nine months ended May 31, 2023, the Company recognized $0.2 million and $2.5 million, respectively, of revenue that was included in contract liabilities as of August 31, 2022, and during the three and nine months ended May 31, 2022, the Company recognized $0.1 million and $0.6 million, respectively, of revenue that was included in contract liabilities as of August 31, 2021. Deferred Commissions Sales commissions earned by our sales force and our commissioned sales representatives are considered incremental and recoverable costs of obtaining a contract with a customer. We apply the practical expedient as described in ASC 340-40-25-4 to expense costs as incurred for sales commissions, since the amortization period of the asset that we otherwise would have recognized is one year or less. This expense is included in the condensed consolidated statements of operations and comprehensive income as selling, general, and administrative expense. Cash and Cash Equivalents For purposes of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. Accounts Receivable and Allowance for Credit Losses The Company extends credit to its customers in the normal course of business. The Company evaluates its allowance for credit losses based on its estimate of the collectability of its trade accounts receivable. As part of this assessment, the Company considers various factors including the financial condition of the individual companies with which it does business, the aging of receivable balances, historical experience, changes in customer payment terms, current market conditions, and reasonable and supportable forecasts of future economic conditions. In times of economic turmoil, the Company’s estimates and judgments with respect to the collectability of its receivables is subject to greater uncertainty than in more stable periods. Accounts receivable balances will be charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. The activity in the allowance for credit losses related to our trade receivables is summarized as follows:
Investments The Company may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds, and/or commercial paper within the parameters of our Investment Policy and Guidelines. The Company accounts for its investments in marketable securities in accordance with ASC 320, Investments – Debt and Equity Securities. This statement requires debt securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are measured at amortized cost and are presented at the net amount expected to be collected. Any change in the allowance for credit losses during the period is reflected in earnings. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value. For available-for-sale debt securities in an unrealized-loss position, we evaluate as of the balance sheet date whether the unrealized losses are attributable to a credit loss or other factors. The portion of unrealized losses related to a credit loss is recognized in earnings, and the portion of unrealized loss not related to a credit loss is recognized in other comprehensive income (loss). We classify our investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. We subsequently reassess the appropriateness of that classification at each reporting date. During the quarter ended May 31, 2023, all of our investments were classified as held-to-maturity. Capitalized Computer Software Development Costs Software development costs are capitalized in accordance with ASC 985-20. Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenue, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in our software products. Amortization of capitalized software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products (not to exceed five years). Amortization of software development costs amounted to $0.4 million and $0.3 million for the three months ended May 31, 2023, and 2022, respectively, and $1.2 million and $0.9 million for the nine months ended May 31, 2023, and 2022, respectively. We expect future amortization expense to vary due to increases in capitalized computer software development costs. We test capitalized computer software development costs for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Property and Equipment Property and equipment are recorded at cost, or fair market value for property and equipment acquired in business combinations, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives as follows:
Maintenance and minor replacements are charged to expense as incurred. Gains and losses on disposals are included in the results of operations. Internal-use Software We have capitalized certain internal-use software costs in accordance with ASC 350-40, which are included in intangible assets. The amortization of such costs is classified as selling, general, and administrative expenses on the condensed consolidated statements of operations. Maintenance of and minor upgrades to internal-use software are also classified as selling, general, and administrative expenses as incurred. Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities (current and long-term) in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. The operating lease ROU asset also includes any lease payments made at or before the commencement date and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Supplemental balance sheet information related to operating leases was as follows as of May 31, 2023:
Intangible Assets and Goodwill We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and recognize the assets acquired and liabilities assumed at their acquisition-date fair value. Acquired intangible assets include customer relationships, software, trade names, and noncompete agreements. We determine the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Finite-lived intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill and indefinite-lived intangible assets are tested for impairment annually or when events or circumstances change that would indicate that they might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Goodwill and intangible assets are tested for impairment at the reporting unit level, which is either one level below or the same level as an operating segment. During the three and nine months ended May 31, 2023, and 2022, there were no changes to our reporting units, and we did not recognize any impairment charges or additions to goodwill. The following table summarizes other intangible assets as of May 31, 2023:
The following table summarizes other intangible assets as of August 31, 2022:
Total amortization expense for the three months ended May 31, 2023, and 2022 was $0.1 million and $0.2 million, respectively, and amortization expense for the nine months ended May 31, 2023, and 2022 was $0.4 million and $0.4 million, respectively. Estimated future amortization of finite-lived intangible assets for the next five years is as follows:
Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows:
For certain of our financial instruments, including accounts receivable, accounts payable, and accrued compensation and other accrued expenses, the carrying amounts are representative of their fair value due to their short maturities. We invest a portion of our excess cash balances in short-term debt securities. Investments at May 31, 2023, consisted of corporate bonds and term deposits with maturities remaining of less than 12 months. Under the fair-value hierarchy, the fair market values of the Company’s cash equivalents and investments are Level I. We may also invest excess cash balances in certificates of deposit, money market accounts, government-sponsored enterprise securities, and/or commercial paper. We account for our investments in accordance with ASC 320, Investments – Debt and Equity Securities. As of May 31, 2023, all investments were classified as held-to-maturity securities, as we have the positive intent and ability to hold these securities until maturity. We believe unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality, and, accordingly, we have not recorded an allowance for credit losses on our debt securities as of May 31, 2023, and August 31, 2022. The following tables summarize our short-term investments as of May 31, 2023, and August 31, 2022:
Research and Development Costs Research and development costs are charged to expense as incurred until technological feasibility has been established. These costs include salaries, laboratory experiments, and purchased software that was developed by other companies and incorporated into, or used in the development of, our final products. Income Taxes We account for income taxes in accordance with ASC 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. Intellectual property The following table summarizes intellectual property as of May 31, 2023:
The following table summarizes intellectual property as of August 31, 2022:
Total amortization expense for intellectual property agreements for the three months ended May 31, 2023 and 2022 was $0.4 million and $0.4 million, respectively, and amortization expense for intellectual property agreements for the nine months ended May 31, 2023 and 2022 was $1.1 million and $1.1 million, respectively. Estimated future amortization of intellectual property for the next five years is as follows:
Earnings per Share We report earnings per share in accordance with ASC 260. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similarly to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The components of basic and diluted earnings per share for the three and nine months ended May 31, 2023, and 2022 were as follows:
Stock-Based Compensation Compensation costs related to stock options are determined in accordance with ASC 718. Compensation cost is calculated based on the grant-date fair value estimated using the Black-Scholes pricing model and then amortized on a straight-line basis over the requisite service period. Stock-based compensation expense related to stock options, not including shares issued to directors for services, was $1.1 million and $0.7 million for the three months ended May 31, 2023, and 2022, respectively, and $3.2 million and $2.0 million for the nine months ended May 31, 2023, and 2022, respectively. Impairment of Long-lived Assets We account for the impairment and disposition of long-lived assets in accordance with ASC 360. Long-lived assets to be held and used are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. We measure recoverability by comparing the carrying amount of an asset to the expected future undiscounted net cash flows generated by the asset. If we determine that the asset may not be recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, we recognize an impairment charge to the extent of the difference between the fair value and the asset's carrying amount. No impairment losses were recorded during the three and nine months ended May 31, 2023, and 2022. Recently Issued Accounting Standards None.
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OTHER INCOME (EXPENSE), NET |
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OTHER INCOME (EXPENSE), NET | OTHER INCOME (EXPENSE), NET The components of other income (expense), net for the three and nine months ended May 31, 2023, and 2022, were as follows:
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COMMITMENTS AND CONTINGENCIES |
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COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Leases On May 25, 2023, we entered into an amendment, effective October 1, 2023, to the lease agreement for our office space in Durham, North Carolina. Prior to entering into the amendment, this lease was scheduled to terminate pursuant to its terms effective on September 30, 2023. The amendment extends the lease through September 30, 2026, and effective October 1, 2023, reduces the leased square footage from 3,386 to approximately 1,510, and reduces the monthly base rent from $8 thousand per month to $4 thousand per month with an annual increase of 3%. The amended lease agreement gives the Company the right to extend the lease for 60 months, upon 9 months prior notice. On February 17, 2023, we entered into an amendment, effective May 1, 2023, to the lease agreement for our office space in Lancaster, California, where our corporate headquarters are located. Prior to entering into the amendment, this lease was scheduled to terminate pursuant to its terms effective on January 31, 2026. The amendment extends the lease term through April 30, 2028, reduces the leased square footage from 9,255 to approximately 4,200, and reduces the monthly base rent from $18 thousand per month to $8 thousand per month with an annual increase of 3%. The amended lease agreement gives the Company the right, upon 180 days’ prior notice, to opt out of all or part of the last three years of the lease term with no penalty. We lease 4,317 square feet of office space in Buffalo, New York. The lease term extends to November 30, 2026, and the base rent is $7 thousand per month with an annual 2% increase. The lease agreement provides the Company with two five-year renewal options and the right to terminate the lease with one year’s prior written notice with certain penalties. We lease 2,300 square feet of office space in Paris, France. The lease term extends to November 30, 2024, and the rent is $5 thousand per month, which amount is subject to adjustment each December based on a consumer price index. We have a data center colocation space in Buffalo, New York, with a lease term through November 30, 2026, and rent of $4 thousand per month with an annual 3% increase. Rent expense, including common area maintenance fees for the three months ended May 31, 2023, and 2022, was $0.1 million and $0.1 million, respectively, and was $0.4 million and $0.4 million for the nine months ended May 31, 2023, and 2022, respectively. Lease liability maturities as of May 31, 2023, were as follows:
Employment Agreements In the normal course of business, the Company has entered into employment agreements with certain of its executive officers that may require compensation payments upon termination. Income Taxes We follow guidance issued by the FASB with regard to our accounting for uncertainty in income taxes recognized in the financial statements. Such guidance prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position, and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to income tax expense. We file income tax returns with the IRS and various state jurisdictions as well as with the countries of India and France. Our federal income tax returns for fiscal years 2019 through 2022 are open for audit, and our state tax returns for fiscal years 2018 through 2022 remain open for audit. Our review of prior year tax positions using the criteria and provisions presented in guidance issued by FASB did not result in a material impact on our financial position or results of operations. Litigation We are not a party to any legal proceedings and are not aware of any pending or threatened legal proceedings of any kind.
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SHAREHOLDERS' EQUITY |
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SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Shares Outstanding Shares of Company common stock outstanding for the three and nine months ended May 31, 2023 and 2022 were as follows:
*Common stock repurchased per the ASR Agreement, as discussed in further detail, below. Dividends The Company’s Board of Directors declared cash dividends during the fiscal years 2023 and 2022. The details of dividends paid are in the following tables:
Stock Option Plans On December 23, 2016, the Company’s Board of Directors adopted, and on February 23, 2017, its shareholders approved, the Company’s 2017 Equity Incentive Plan (the “2017 Plan”), under which a total of 1.0 million shares of common stock were reserved for issuance. The 2017 plan would have terminated in December 2026. The 2017 Plan was replaced by the Company’s 2021 Plan (as defined below), and as a result, no further issuances of shares may be made under the 2017 Plan. On April 9, 2021, the Company’s Board of Directors adopted, and on June 23, 2021, its shareholders approved, the Company’s 2021 Equity Incentive Plan (the “2021 Plan,” and together with the 2017 Plan, the “Plans”), under which a total of 1.3 million shares of common stock were initially reserved for issuance. On October 20, 2022, the Company’s Board of Directors approved, and on February 9, 2023, its shareholders approved, an amendment to the 2021 Plan to increase the number of shares of common stock authorized for issuance thereunder from 1.3 million shares to 1.55 million shares of common stock of the Company. The 2021 Plan will terminate in 2031. As of May 31, 2023, employees and directors held Qualified Incentive Stock Options (“ISOs”) and Non-Qualified Stock Options (“NQSOs”) to purchase an aggregate of 1.5 million shares of common stock at exercise prices ranging from $6.85 to $66.14 per share. The following tables summarize information about stock options:
The total grant-date fair value of nonvested stock options as of May 31, 2023, was $15.7 million and is amortizable over a weighted-average period of 3.49 years. The fair value of these options was estimated at the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-valuation model was developed for use in estimating the fair value of traded options, which do not have vesting restrictions and are fully transferable. In addition, option-valuation models require the input of highly subjective assumptions, including the expected stock price volatility. The following table summarizes the fair value of the options, including both ISOs and NQSOs, granted during the current fiscal year 2023 and fiscal year 2022:
The exercise prices for the options outstanding at May 31, 2023, ranged from $6.85 to $66.14, and the information relating to these options is as follows: (in thousands except prices)
During the three and nine months ended May 31, 2023, we issued 3,595 and 10,755 shares of stock valued at $0.2 million and $0.5 million, respectively, to our nonmanagement directors as compensation for board-related duties. The balances of our par-value common stock and additional paid-in capital as of May 31, 2023, were $11 thousand and $143.7 million, respectively. Share Repurchases On January 11, 2023, the Company entered into an accelerated share repurchase agreement (the “ASR Agreement”) with Morgan Stanley & Co. LLC (“Morgan Stanley”) to repurchase an aggregate of $20 million of the Company’s outstanding shares of common stock. The ASR Agreement was executed as part of the Company’s existing $50 million share repurchase program. Pursuant to the terms of the ASR Agreement, the Company made an initial payment, using available cash balances, of $20 million to Morgan Stanley and received an initial delivery of 408,685 shares of Company common stock from Morgan Stanley. These 408,685 shares were retired and are treated as authorized, unissued shares. At final settlement on May 20, 2023, based on the volume-weighted average price of the Company's common stock during the term of the ASR Agreement, Morgan Stanley delivered an additional 83,356 shares of Company common stock to the Company, which shares were also retired and treated as authorized, unissued shares.
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CONCENTRATIONS AND UNCERTAINTIES |
9 Months Ended |
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May 31, 2023 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS AND UNCERTAINTIES | CONCENTRATIONS AND UNCERTAINTIES Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash, cash equivalents, trade accounts receivable, and short-term investments. The Company holds cash and cash equivalents with balances that exceed FDIC insured limits. Cash maintained in excess of these limits is on deposit with a large, national bank. Accordingly, the Company does not have depository exposure to regional banks. In addition, the Company holds cash at a bank in France that is not FDIC-insured. Historically, the Company has not experienced any losses in such accounts, and management believes that the financial institutions at which its cash is held are stable; however, no assurances can be provided. While the Company may be exposed to credit losses due to the nonperformance of its counterparties, the Company does not expect the settlement of these transactions to have a material effect on its results of operations, cash flows, or financial condition. Revenue concentration shows that international sales accounted for 32% and 30% of revenue for the nine months ended May 31, 2023, and 2022, respectively. Our four largest customers in terms of revenue accounted for 6%, 5%, 3%, and 2% of revenue, respectively, for the nine months ended May 31, 2023. Our four largest customers in terms of revenue accounted for 5%, 4%, 3%, and 3% of revenue, respectively, for the nine months ended May 31, 2022. Accounts receivable concentrations show that our six largest customers in terms of accounts receivable each comprised between 3% and 9% of accounts receivable as of May 31, 2023; our four largest customers in terms of accounts receivable comprised between 5% and 6% of accounts receivable as of May 31, 2022. We operate in the biosimulation market, which is highly competitive and changes rapidly. Our operating results could be significantly affected by our ability to develop new products and find new distribution channels for new and existing products.
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTING The Company applies ASC 280, Segment Reporting, in determining reportable segments. The Company has two reportable segments: Software and Services. Segment information is presented in the same manner that the chief operating decision maker (“CODM”) reviews certain financial information based on these reportable segments. The CODM reviews revenue and gross profit for both of the reportable segments. Gross profit is defined as revenue less cost of revenue incurred by the segment. No operating segments have been aggregated to form the reportable segments. The Company does not allocate assets at the reportable segment level, as these are managed on an entity-wide group basis and, accordingly, the Company does not report asset information by segment. The Company does not allocate operating expenses that are managed on an entity-wide group basis and, accordingly, the Company does not allocate and report operating expenses at a segment level. There are no internal revenue transactions between the Company’s segments. The following tables summarize the results for each segment for the three months ended May 31, 2023, and 2022:
Our software business and services business represented 65% and 35% of total revenue, respectively, for the three months ended May 31, 2023.
Our software business and services business represented 64% and 36% of total revenue, respectively, for the three months ended May 31, 2022. The following tables summarize the results for each segment for the nine months ended May 31, 2023, and 2022:
Our software business and services business represented 62% and 38% of total revenue, respectively, for the nine months ended May 31, 2023.
Our software business and services business represented 63% and 37% of total revenue, respectively, for the nine months ended May 31, 2022.
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EMPLOYEE BENEFIT PLAN |
9 Months Ended |
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May 31, 2023 | |
Retirement Benefits [Abstract] | |
EMPLOYEE BENEFIT PLAN | EMPLOYEE BENEFIT PLANWe maintain a 401(k) Plan for eligible employees. We make matching contributions equal to 100% of the employee’s elective deferral, not to exceed 4% of the employee’s gross salary. We contributed $0.2 million and $0.1 million for the three months ended May 31, 2023 and 2022, respectively, and $0.4 million and $0.4 million for the nine months ended May 31, 2023, and 2022, respectively. |
SUBSEQUENT EVENTS |
9 Months Ended |
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May 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Dividend Declared On Thursday, July 6, 2023, our Board of Directors declared a quarterly cash dividend of $0.06 per share to our shareholders. The dividend in the amount of approximately $1.2 million will be distributed on Monday, August 7, 2023, for shareholders of record as of Monday, July 31, 2023. Immunetrics Acquisition On June 16, 2023, the Company acquired Immunetrics, Inc. (“Immunetrics”), a company specializing in quantitative systems pharmacology (“QSP”) modeling, through a reverse triangular merger. Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), at closing, the Company’s newly created wholly owned subsidiary, Insight Merger Sub, Inc., merged with and into Immunetrics, with Immunetrics surviving as a wholly owned subsidiary of the Company. Under the terms of the Merger Agreement, the Company agreed to pay the equityholders of Immunetrics the following cash compensation (collectively, the “Merger Consideration”): i.At closing, a cash payment in the amount of approximately $13.7 million; ii.An amount equal to $1.8 million, which was held-back by the Company at closing, to cover any negative net working capital adjustments (if any) and Immunetrics’ indemnification obligations under the Merger Agreement (the “Holdback Amount”); and iii.Two future earn-out payments in the aggregate amount of up to $8.0 million (the “Earnout Payments”), subject to the terms described below. Additionally, at closing, the Company paid the representative of the Immunetrics stockholders $250,000 as an expense fund to cover expenses that it incurs in its role as such, the excess amount of which, if any, will be distributed to Immunetrics’ stockholders (subject to certain exceptions) at such time as the stockholder representative may determine, in its sole discretion. The Merger Consideration is subject to adjustment based on post-closing adjustments to net working capital, closing cash, indebtedness, and transaction expenses of Immunetrics within 90 days of closing. Concurrently with execution of the Merger Agreement, the parties to the Merger Agreement entered into an Earnout Agreement, which sets forth the terms and conditions applicable to the Earnout Payments. Pursuant to the Earnout Agreement, the Company shall pay the Immunetrics equityholders an aggregate amount of up to $8.0 million of Earnout Payments if Immunetrics achieves certain revenue milestones for the calendar years 2023 and 2024.
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SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Simulations Plus and its wholly owned operating subsidiary, Lixoft. All significant intercompany accounts and transactions are eliminated in consolidation.
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Use of Estimates | Use of Estimates Our financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America. Preparing financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. These estimates and assumptions are affected by management’s application of accounting policies. Actual results could differ from those estimates.
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Reclassifications | Reclassifications Certain numbers in the prior year have been reclassified to conform to the current year’s presentation.
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Revenue Recognition | Revenue Recognition We generate revenue primarily from the sale of software licenses and by providing consulting services to the pharmaceutical industry for drug development. In accordance with ASC 606, we determine revenue recognition through the following steps: i.Identification of the contract, or contracts, with a customer ii.Identification of the performance obligations in the contract iii.Determination of the transaction price iv.Allocation of the transaction price to the performance obligations in the contract v.Recognition of revenue when, or as, we satisfy a performance obligation Components of Revenue The following is a description of principal activities from which the Company generates revenue. As part of the accounting for these arrangements, the Company must develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. Standalone selling prices are determined based on the prices at which the Company separately sells its services or goods.
Remaining Performance Obligations Transaction price allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and unbilled amounts that will be recognized as revenue in future periods. As of May 31, 2023, remaining performance obligations were $11.2 million. Ninety-three percent of the remaining performance obligations are expected to be recognized over the next 12 months, with the remainder expected to be recognized thereafter. Remaining performance obligations estimates are subject to change and are affected by several factors, including contract terminations and changes in the scope of contracts. Disaggregation of Revenues The components of disaggregation of revenue for the three and nine months ended May 31, 2023, and 2022 were as follows:
In addition, the Company allocates revenues to geographic areas based on the locations of its customers. Geographical revenues for the three and nine months ended May 31, 2023, and 2022 were as follows:
Contract Balances We receive payments from customers based upon contractual billing schedules, while we recognize revenue when, or as, we satisfy our performance obligations. This timing difference results in accounts receivable, contract assets, and contract liabilities. We record accounts receivable when the right to consideration becomes unconditional. We record a contract asset if the right to consideration is conditioned on something other than the passage of time, such as our future performance. Contract assets are included in prepaid expenses and other current assets on our condensed consolidated balance sheets. We record a contract liability when we have an obligation to transfer goods or services to a customer for which we have either received consideration or a payment is due from a customer. We refer to contract liabilities as deferred revenue on our condensed consolidated balance sheets. Contract asset balances as of May 31, 2023, and August 31, 2022, were $3.3 million and $1.7 million, respectively. During the three and nine months ended May 31, 2023, the Company recognized $0.2 million and $2.5 million, respectively, of revenue that was included in contract liabilities as of August 31, 2022, and during the three and nine months ended May 31, 2022, the Company recognized $0.1 million and $0.6 million, respectively, of revenue that was included in contract liabilities as of August 31, 2021. Deferred Commissions Sales commissions earned by our sales force and our commissioned sales representatives are considered incremental and recoverable costs of obtaining a contract with a customer. We apply the practical expedient as described in ASC 340-40-25-4 to expense costs as incurred for sales commissions, since the amortization period of the asset that we otherwise would have recognized is one year or less. This expense is included in the condensed consolidated statements of operations and comprehensive income as selling, general, and administrative expense.
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Cash and Cash Equivalents | Cash and Cash Equivalents For purposes of the statements of cash flows, we consider all highly liquid investments purchased with original maturities of three months or less to be cash equivalents.
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Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses The Company extends credit to its customers in the normal course of business. The Company evaluates its allowance for credit losses based on its estimate of the collectability of its trade accounts receivable. As part of this assessment, the Company considers various factors including the financial condition of the individual companies with which it does business, the aging of receivable balances, historical experience, changes in customer payment terms, current market conditions, and reasonable and supportable forecasts of future economic conditions. In times of economic turmoil, the Company’s estimates and judgments with respect to the collectability of its receivables is subject to greater uncertainty than in more stable periods. Accounts receivable balances will be charged off against the allowance for credit losses after all means of collection have been exhausted and the potential for recovery is considered remote. The activity in the allowance for credit losses related to our trade receivables is summarized as follows:
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Investments | Investments The Company may invest excess cash balances in short-term and long-term marketable debt securities. Investments may consist of certificates of deposit, money market accounts, government-sponsored enterprise securities, corporate bonds, and/or commercial paper within the parameters of our Investment Policy and Guidelines. The Company accounts for its investments in marketable securities in accordance with ASC 320, Investments – Debt and Equity Securities. This statement requires debt securities to be classified into three categories: Held-to-maturity—Debt securities that the entity has the positive intent and ability to hold to maturity are measured at amortized cost and are presented at the net amount expected to be collected. Any change in the allowance for credit losses during the period is reflected in earnings. Discounts and premiums to par value of the debt securities are amortized to interest income/expense over the term of the security. Trading Securities—Debt securities that are bought and held primarily for the purpose of selling in the near term are reported at fair value, with unrealized gains and losses included in earnings. Available-for-Sale—Debt securities not classified as either securities held-to-maturity or trading securities are reported at fair value. For available-for-sale debt securities in an unrealized-loss position, we evaluate as of the balance sheet date whether the unrealized losses are attributable to a credit loss or other factors. The portion of unrealized losses related to a credit loss is recognized in earnings, and the portion of unrealized loss not related to a credit loss is recognized in other comprehensive income (loss). We classify our investments in marketable debt securities based on the facts and circumstances present at the time of purchase of the securities. We subsequently reassess the appropriateness of that classification at each reporting date. During the quarter ended May 31, 2023, all of our investments were classified as held-to-maturity.
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Capitalized Computer Software Development Costs | Capitalized Computer Software Development Costs Software development costs are capitalized in accordance with ASC 985-20. Capitalization of software development costs begins upon the establishment of technological feasibility and is discontinued when the product is available for sale. The establishment of technological feasibility and the ongoing assessment for recoverability of capitalized software development costs require considerable judgment by management with respect to certain external factors including, but not limited to, technological feasibility, anticipated future gross revenue, estimated economic life, and changes in software and hardware technologies. Capitalized software development costs are comprised primarily of salaries and direct payroll-related costs and the purchase of existing software to be used in our software products. Amortization of capitalized software development costs is calculated on a product-by-product basis on the straight-line method over the estimated economic life of the products (not to exceed five years). Amortization of software development costs amounted to $0.4 million and $0.3 million for the three months ended May 31, 2023, and 2022, respectively, and $1.2 million and $0.9 million for the nine months ended May 31, 2023, and 2022, respectively. We expect future amortization expense to vary due to increases in capitalized computer software development costs. We test capitalized computer software development costs for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
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Property and Equipment | Property and Equipment Property and equipment are recorded at cost, or fair market value for property and equipment acquired in business combinations, less accumulated depreciation and amortization. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives as follows:
Maintenance and minor replacements are charged to expense as incurred. Gains and losses on disposals are included in the results of operations.
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Internal-use Software | Internal-use Software We have capitalized certain internal-use software costs in accordance with ASC 350-40, which are included in intangible assets. The amortization of such costs is classified as selling, general, and administrative expenses on the condensed consolidated statements of operations. Maintenance of and minor upgrades to internal-use software are also classified as selling, general, and administrative expenses as incurred.
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Leases | Leases We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities (current and long-term) in our condensed consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we generally use our incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at the commencement date. The operating lease ROU asset also includes any lease payments made at or before the commencement date and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense is recognized on a straight-line basis over the lease term.
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Intangible Assets and Goodwill | Intangible Assets and Goodwill We perform valuations of assets acquired and liabilities assumed on each acquisition accounted for as a business combination and recognize the assets acquired and liabilities assumed at their acquisition-date fair value. Acquired intangible assets include customer relationships, software, trade names, and noncompete agreements. We determine the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Finite-lived intangible assets are amortized over their estimated useful lives using the straight-line method, which approximates the pattern in which the majority of the economic benefits are expected to be consumed. Finite-lived intangible assets subject to amortization are reviewed for impairment whenever events or circumstances indicate that the carrying amount of these assets may not be recoverable. Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. Goodwill and indefinite-lived intangible assets are tested for impairment annually or when events or circumstances change that would indicate that they might be impaired. Events or circumstances that could trigger an impairment review include, but are not limited to, a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of our use of the acquired assets or the strategy for our overall business, significant negative industry or economic trends, or significant underperformance relative to expected historical or projected future results of operations. Goodwill and intangible assets are tested for impairment at the reporting unit level, which is either one level below or the same level as an operating segment.
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Other Intangible Assets | The following table summarizes other intangible assets as of May 31, 2023:
The following table summarizes other intangible assets as of August 31, 2022:
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Fair Value of Financial Instruments | Fair Value of Financial Instruments Assets and liabilities recorded at fair value in the condensed consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows:
For certain of our financial instruments, including accounts receivable, accounts payable, and accrued compensation and other accrued expenses, the carrying amounts are representative of their fair value due to their short maturities. We invest a portion of our excess cash balances in short-term debt securities. Investments at May 31, 2023, consisted of corporate bonds and term deposits with maturities remaining of less than 12 months. Under the fair-value hierarchy, the fair market values of the Company’s cash equivalents and investments are Level I. We may also invest excess cash balances in certificates of deposit, money market accounts, government-sponsored enterprise securities, and/or commercial paper. We account for our investments in accordance with ASC 320, Investments – Debt and Equity Securities. As of May 31, 2023, all investments were classified as held-to-maturity securities, as we have the positive intent and ability to hold these securities until maturity. We believe unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality, and, accordingly, we have not recorded an allowance for credit losses on our debt securities as of May 31, 2023, and August 31, 2022. The following tables summarize our short-term investments as of May 31, 2023, and August 31, 2022:
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Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred until technological feasibility has been established. These costs include salaries, laboratory experiments, and purchased software that was developed by other companies and incorporated into, or used in the development of, our final products.
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Income Taxes | Income Taxes We account for income taxes in accordance with ASC 740, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each year-end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities.
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Earnings per Share | Earnings per ShareWe report earnings per share in accordance with ASC 260. Basic earnings per share is computed by dividing income available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings per share is computed similarly to basic earnings per share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based CompensationCompensation costs related to stock options are determined in accordance with ASC 718. Compensation cost is calculated based on the grant-date fair value estimated using the Black-Scholes pricing model and then amortized on a straight-line basis over the requisite service period. Stock-based compensation expense related to stock options, not including shares issued to directors for services, was $1.1 million and $0.7 million for the three months ended May 31, 2023, and 2022, respectively, and $3.2 million and $2.0 million for the nine months ended May 31, 2023, and 2022, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Impairment of Long-lived Assets | Impairment of Long-lived Assets We account for the impairment and disposition of long-lived assets in accordance with ASC 360. Long-lived assets to be held and used are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable. We measure recoverability by comparing the carrying amount of an asset to the expected future undiscounted net cash flows generated by the asset. If we determine that the asset may not be recoverable, or if the carrying amount of an asset exceeds its estimated future undiscounted cash flows, we recognize an impairment charge to the extent of the difference between the fair value and the asset's carrying amount. No impairment losses were recorded during the three and nine months ended May 31, 2023, and 2022.
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Recently Issued Accounting Standards | Recently Issued Accounting Standards None.
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SIGNIFICANT ACCOUNTING POLICIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | The components of disaggregation of revenue for the three and nine months ended May 31, 2023, and 2022 were as follows:
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Schedule of Geographical Revenues | Geographical revenues for the three and nine months ended May 31, 2023, and 2022 were as follows:
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Accounts Receivable, Allowance for Credit Loss | The activity in the allowance for credit losses related to our trade receivables is summarized as follows:
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Property and Equipment estimated useful lives | Depreciation and amortization are calculated using the straight-line method over the estimated useful lives as follows:
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Lease, Cost | Supplemental balance sheet information related to operating leases was as follows as of May 31, 2023:
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Schedule of Finite-Lived Intangible Assets | The following table summarizes other intangible assets as of May 31, 2023:
The following table summarizes other intangible assets as of August 31, 2022:
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Finite-lived Intangible Assets Amortization Expense | uture amortization of finite-lived intangible assets for the next five years is as follows:
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Fair Value, Liabilities Measured on Recurring and Nonrecurring Basis | We invest a portion of our excess cash balances in short-term debt securities. Investments at May 31, 2023, consisted of corporate bonds and term deposits with maturities remaining of less than 12 months. Under the fair-value hierarchy, the fair market values of the Company’s cash equivalents and investments are Level I. We may also invest excess cash balances in certificates of deposit, money market accounts, government-sponsored enterprise securities, and/or commercial paper. We account for our investments in accordance with ASC 320, Investments – Debt and Equity Securities. As of May 31, 2023, all investments were classified as held-to-maturity securities, as we have the positive intent and ability to hold these securities until maturity. We believe unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality, and, accordingly, we have not recorded an allowance for credit losses on our debt securities as of May 31, 2023, and August 31, 2022. The following tables summarize our short-term investments as of May 31, 2023, and August 31, 2022:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes intellectual property as of May 31, 2023:
The following table summarizes intellectual property as of August 31, 2022:
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Schedule of Future Amortization Expenses | Estimated future amortization of intellectual property for the next five years is as follows:
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Schedule of Earnings Per Share, Basic and Diluted | The components of basic and diluted earnings per share for the three and nine months ended May 31, 2023, and 2022 were as follows:
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OTHER INCOME (EXPENSE), NET (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Nonoperating Income (Expense) | The components of other income (expense), net for the three and nine months ended May 31, 2023, and 2022, were as follows:
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COMMITMENTS AND CONTINGENCIES (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lessee, Operating Lease, Liability, Maturity | Lease liability maturities as of May 31, 2023, were as follows:
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SHAREHOLDERS' EQUITY (Tables) |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Shares Outstanding | Shares Outstanding Shares of Company common stock outstanding for the three and nine months ended May 31, 2023 and 2022 were as follows:
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Schedule of Dividends Payable | Dividends The Company’s Board of Directors declared cash dividends during the fiscal years 2023 and 2022. The details of dividends paid are in the following tables:
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Share-based Payment Arrangement, Option, Activity | The following tables summarize information about stock options:
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Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | The following table summarizes the fair value of the options, including both ISOs and NQSOs, granted during the current fiscal year 2023 and fiscal year 2022:
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Share-based Payment Arrangement, Option, Exercise Price Range | The exercise prices for the options outstanding at May 31, 2023, ranged from $6.85 to $66.14, and the information relating to these options is as follows: (in thousands except prices)
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SEGMENT REPORTING (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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May 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following tables summarize the results for each segment for the three months ended May 31, 2023, and 2022:
Our software business and services business represented 65% and 35% of total revenue, respectively, for the three months ended May 31, 2023.
Our software business and services business represented 64% and 36% of total revenue, respectively, for the three months ended May 31, 2022. The following tables summarize the results for each segment for the nine months ended May 31, 2023, and 2022:
Our software business and services business represented 62% and 38% of total revenue, respectively, for the nine months ended May 31, 2023.
Our software business and services business represented 63% and 37% of total revenue, respectively, for the nine months ended May 31, 2022.
|
SIGNIFICANT ACCOUNTING POLICIES - (Details - Revenue recognition) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
Aug. 31, 2022 |
|
Accounting Policies [Abstract] | |||||
Remaining performance obligations | $ 11.2 | $ 11.2 | |||
Remaining performance obligations, percentage | 93.00% | 93.00% | |||
Contract with customer, asset, after allowance for credit loss | $ 3.3 | $ 3.3 | $ 1.7 | ||
Contract with customer, liability, revenue recognized | $ 0.2 | $ 0.1 | $ 2.5 | $ 0.6 |
SIGNIFICANT ACCOUNTING POLICIES (Details Disaggregation of Revenue) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Total revenues | $ 16,234 | $ 14,959 | $ 43,948 | $ 42,172 |
Software licenses | Point in time | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total revenues | 10,348 | 9,380 | 26,341 | 25,980 |
Software licenses | Over time | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total revenues | 284 | 267 | 852 | 787 |
Services | Over time | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total revenues | $ 5,602 | $ 5,312 | $ 16,755 | $ 15,405 |
SIGNIFICANT ACCOUNTING POLICIES (Details - Allowance For Credit Loss) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Accounting Policies [Abstract] | ||||
Balance, beginning of period | $ 12 | $ 12 | $ 12 | $ 78 |
Provision for expected credit losses | 75 | 0 | 75 | (66) |
Write-offs | (38) | 0 | (38) | 0 |
Balance, end of period | $ 49 | $ 12 | $ 49 | $ 12 |
SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Capitalized computer software, amortization, maximum period | 5 years | |||
Capitalized computer software, amortization | $ 400,000 | $ 300,000 | $ 1,200,000 | $ 900,000 |
Stock-based compensation | 1,100,000 | 700,000 | 3,200,000 | 2,000,000 |
Impairment losses | 0 | 0 | ||
Goodwill | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment, long-lived asset, held-for-use | 0 | 0 | ||
Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | 100,000 | 200,000 | 400,000 | 400,000 |
Intellectual Properties | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of intangible assets | $ 400,000 | $ 400,000 | $ 1,100,000 | $ 1,100,000 |
SIGNIFICANT ACCOUNTING POLICIES (Details - Useful lives) |
May 31, 2023 |
---|---|
Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Computer equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Computer equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 7 years |
Furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
SIGNIFICANT ACCOUNTING POLICIES (Details - Lease cost) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
May 31, 2023 |
Aug. 31, 2022 |
|
Accounting Policies [Abstract] | ||
Right of use assets | $ 982 | $ 1,420 |
Lease liabilities, current | 330 | 461 |
Lease liabilities, long-term | 612 | $ 943 |
Operating lease costs | $ 348 | |
Weighted-average remaining lease term | 3 years 9 months 29 days | |
Weighted-average discount rate | 4.71% |
SIGNIFICANT ACCOUNTING POLICIES (Details - Amortization schedule) - Other Intangible Assets $ in Thousands |
May 31, 2023
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2023 | $ 138 |
2024 | 513 |
2025 | 513 |
2026 | 513 |
2027 | $ 466 |
SIGNIFICANT ACCOUNTING POLICIES (Details - Fair value measurements) - USD ($) $ in Thousands |
May 31, 2023 |
Aug. 31, 2022 |
May 31, 2022 |
---|---|---|---|
Defined Benefit Plan Disclosure [Line Items] | |||
Amortized Cost | $ 67,234 | $ 76,668 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (150) | (839) | |
Fair Value | 67,084 | 75,829 | |
Commercial notes (due within one year) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortized Cost | 64,234 | 72,168 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (150) | (839) | |
Fair Value | 64,084 | 71,329 | |
Term deposits (due within one year) | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Amortized Cost | 3,000 | 4,500 | |
Gross Unrealized Gains | 0 | $ 0 | |
Gross Unrealized Losses | 0 | $ 0 | |
Fair Value | $ 3,000 | $ 4,500 |
SIGNIFICANT ACCOUNTING POLICIES (Details - Amortization expenses) - Intellectual property $ in Thousands |
May 31, 2023
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
Remainder of 2023 | $ 343 |
2024 | 1,218 |
2025 | 793 |
2026 | 717 |
2027 | $ 477 |
SIGNIFICANT ACCOUNTING POLICIES (Details - Earnings per share) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Numerator | ||||
Net income attributable to common shareholders | $ 4,008 | $ 4,087 | $ 9,427 | $ 11,522 |
Denominator | ||||
Weighted-average number of common shares outstanding during the year (in shares) | 19,972 | 20,212 | 20,123 | 20,180 |
Dilutive effect of stock options (in shares) | 383 | 556 | 389 | 551 |
Common stock and common stock equivalents used for diluted earnings per share (in shares) | 20,355 | 20,768 | 20,512 | 20,731 |
OTHER INCOME (EXPENSE), NET (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Other Income and Expenses [Abstract] | ||||
Interest income | $ 1,120 | $ 139 | $ 2,876 | $ 278 |
Change in valuation of contingent consideration | 0 | (40) | 0 | (283) |
Gain on sale of assets | 0 | 0 | 0 | 1 |
(Loss) gain on currency exchange | (277) | (211) | (259) | 10 |
Total other income (expense), net | $ 843 | $ (112) | $ 2,617 | $ 6 |
COMMITMENTS AND CONTINGENCIES - Schedule of Operating Lease Liability Maturity Payments for Operating Leases (Details) $ in Thousands |
May 31, 2023
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2023 | $ 95 |
2024 | 321 |
2025 | 262 |
2026 | 246 |
2027 | 111 |
2028 | 51 |
Total undiscounted liabilities | 1,086 |
Less: imputed interest | (144) |
Total operating lease liabilities (including current portion) | $ 942 |
SHAREHOLDERS' EQUITY (Details - Shares Outstanding) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common stock outstanding, beginning of year (in shares) | 19,930,623 | 20,181,784 | 20,260,070 | 20,141,521 |
Common stock repurchased during the period (in shares) | (83,356) | 0 | (492,041) | 0 |
Common stock issued during the period (in shares) | 79,552 | 52,870 | 158,790 | 93,133 |
Common stock outstanding, end of year (in shares) | 19,926,819 | 20,234,654 | 19,926,819 | 20,234,654 |
SHAREHOLDERS EQUITY (Details - Dividends) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
9 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Apr. 24, 2023 |
Jan. 30, 2023 |
Oct. 31, 2022 |
Jul. 25, 2022 |
Apr. 25, 2022 |
Jan. 31, 2022 |
Oct. 25, 2021 |
May 31, 2023 |
Aug. 31, 2022 |
|
Equity [Abstract] | |||||||||
Record Date | Apr. 24, 2023 | Jan. 30, 2023 | Oct. 31, 2022 | Jul. 25, 2022 | Apr. 25, 2022 | Jan. 31, 2022 | Oct. 25, 2021 | ||
Distribution Date | May 01, 2023 | Feb. 06, 2023 | Nov. 07, 2022 | Aug. 01, 2022 | May 02, 2022 | Feb. 07, 2022 | Nov. 01, 2021 | ||
Number of shares outstanding on record date (in shares) | 19,999 | 19,924 | 20,299 | 20,239 | 20,207 | 20,178 | 20,148 | ||
Dividend per share (in usd per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | ||
Total Amount | $ 1,200 | $ 1,195 | $ 1,218 | $ 1,214 | $ 1,212 | $ 1,211 | $ 1,209 | $ 3,613 | $ 4,846 |
SHAREHOLDERS EQUITY (Details - Fair value of options) - USD ($) $ / shares in Units, $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
May 31, 2023 |
Aug. 31, 2022 |
|
Equity [Abstract] | ||
Estimated fair value of awards granted | $ 9,788 | $ 4,597 |
Unvested Forfeiture Rate | 0.00% | 1.04% |
Weighted-average grant price (in usd per share) | $ 43.82 | $ 42.13 |
Weighted-average market price (in usd per share) | $ 43.82 | $ 42.13 |
Weighted-average volatility | 46.15% | 42.80% |
Weighted-average risk-free rate | 4.29% | 1.74% |
Weighted-average dividend yield | 0.55% | 0.58% |
Weighted-average expected life | 6 years 7 months 2 days | 6 years 7 months 2 days |
CONCENTRATIONS AND UNCERTAINTIES (Details Narrative) - Customer concentration risk |
9 Months Ended | |
---|---|---|
May 31, 2023 |
May 31, 2022 |
|
Sales | International Sales | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 32.00% | 30.00% |
Sales | Customer 1 | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 6.00% | 5.00% |
Sales | Customer 2 | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 5.00% | 4.00% |
Sales | Customer 3 | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 3.00% | 3.00% |
Sales | Customer 4 | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 2.00% | 3.00% |
Accounts Receivable | Minimum | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 3.00% | 5.00% |
Accounts Receivable | Maximum | ||
Concentration Risk [Line Items] | ||
Concentration percentage | 9.00% | 6.00% |
SEGMENT REPORTING (Details) |
9 Months Ended |
---|---|
May 31, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
EMPLOYEE BENEFIT PLAN (Details Narrative) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
May 31, 2023 |
May 31, 2022 |
May 31, 2023 |
May 31, 2022 |
|
Retirement Benefits [Abstract] | ||||
Defined contribution plan, employer match | 100.00% | |||
Defined contribution plan, employer match percentage | 4.00% | |||
Defined contribution plan, employer contribution | $ 0.2 | $ 0.1 | $ 0.4 | $ 0.4 |
SUBSEQUENT EVENTS (Details) - USD ($) $ / shares in Units, $ in Thousands |
Jul. 06, 2023 |
Jun. 16, 2023 |
Apr. 24, 2023 |
Jan. 30, 2023 |
Oct. 31, 2022 |
Jul. 25, 2022 |
Apr. 25, 2022 |
Jan. 31, 2022 |
Oct. 25, 2021 |
---|---|---|---|---|---|---|---|---|---|
Subsequent Event [Line Items] | |||||||||
Dividend per share (in usd per share) | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.06 | ||
Subsequent Event | |||||||||
Subsequent Event [Line Items] | |||||||||
Dividend per share (in usd per share) | $ 0.06 | ||||||||
Dividends, common stock, cash | $ 1,200 | ||||||||
Subsequent Event | Immunetrics | |||||||||
Subsequent Event [Line Items] | |||||||||
Cash payment | $ 13,700 | ||||||||
Earnout liability | 8,000 | ||||||||
Expense fund | 250 | ||||||||
Subsequent Event | Immunetrics | Holdback liability - cash | |||||||||
Subsequent Event [Line Items] | |||||||||
Working capital held back | 1,800 | ||||||||
Subsequent Event | Immunetrics | Earnout liability - cash | |||||||||
Subsequent Event [Line Items] | |||||||||
Earnout liability | $ 8,000 |