8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

April 1, 2020

(Date of the earliest event reported)

Simulations Plus, Inc.

(Exact name of registrant as specified in its charter)

California	001-32046	95-4595609
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

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

(Address of principal executive offices) (Zip Code)

661-723-7723

Registrant's telephone number, including area code

N/A

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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14z-12 under Exchange Act (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	SLP	The Nasdaq Stock Market LLC

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

Emerging Growth Company □

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

Item 9.01 Financial Statements and Exhibits.

On April 2, 2020, Simulations Plus, Inc., a California corporation (the “Company”), filed a Current Report on Form 8-K (the “Original 8-K”) with the Securities and Exchange Commission (the “Commission”) regarding the consummation of the acquisition of all the capital stock of Lixoft, a French société par actions simplifiée (“Lixoft”).

This Current Report on Form 8-K/A (“Amendment No. 1”) amends and supplements the Original Form 8-K to provide certain financial statements and pro forma financial information as required by Items 9.01(a) and (b) of Form 8-K. No other amendments are being made to the Original Form 8-K by this Amendment No. 1. This Amendment No. 1 should be read in connection with the Original Form 8-K, which provides a more complete description of the acquisition of Lixoft.

(a)          Financial Statements of Business Acquired.

(i) The audited financial statements of Lixoft, as of December 31, 2019 are filed as Exhibit 99.1 hereto.

(ii) The unaudited balance sheet of Lixoft as of March 31, 2020 and the unaudited statements of operations for the three months ended March 31, 2020 and 2019 are filed as Exhibit 99.2 hereto.

(iii) The consent of RSM LLP with respect to the Registration Statement of Simulations Plus, Inc. on Form S-8 (No. 333-219446) is attached as Exhibit 23.1 hereto.

(b)          Pro Forma Financial Information.

The unaudited pro forma condensed combined balance sheet of the Company as of February 29, 2020, which gives effect to the acquisition of Lixoft, and the unaudited pro forma condensed combined statements of operations for the six months ended February 29, 2020 and the year ended August 31, 2019, which give effect to such acquisition, are attached hereto as Exhibit 99.3 hereto.

(d)         Exhibits

23.1 Consent of RSM LLP.

99.1 The audited financial statements of Lixoft, as of December 31, 2019.

99.2 The unaudited balance sheet of Lixoft as of March 31, 2020 and the unaudited statements of operations for the three months ended March 31, 2020 and 2019.

99.3 The unaudited pro forma condensed combined balance sheet as of February 29, 2020 and the unaudited pro forma condensed combined statements of operations for the six months ended February 29, 2020 and the year ended August 31, 2019.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SIMULATIONS PLUS, INC.

By: /s/ John R. Kneisel

John R. Kneisel

Chief Financial Officer

Dated: June 16, 2020

3

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

Simulations Plus, Inc.

Lancaster, CA

We hereby consent to the incorporation by reference in Registration Statement No. 333-219446 on Form S-8 of Simulations Plus, Inc. of our report dated March 6, 2020 with respect to the financial statements as of December 31, 2019 of Lixoft, a French société par actions simplifiée, included in this Current Report on Form 8-K/A.

/s/ RSM Paris SAS

Paris, France

June 15, 2020

EX-99.01

Exhibit 99.01

 

LIXOFT

Limited Liability Company – Share capital 11.175 € 8, rue de la Renaissance – 92160 ANTONY

REPORT ON THE FINANCIAL STATEMENTS

Year ending December 31st, 2019

 

LIXOFT

Limited Liability Company–Share capital 11.175 € 8, rue de la Renaissance– 92160

ANTONY

REPORT ON THE FINANCIAL STATEMENTS

Year ending December 31st ,2019

To the Shareholders,

We have audited the accompanying financial statements of LIXOFT, which comprise the statement of financial position as at December 31, 2019 the profit and loss statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management is responsible for the preparation and fair presentation of these financial statements in accordance with French accounting standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

  LIXOFT Report on the financial statements
Year ending December 31st 2019

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

In our opinion, the financial statements present fairly, in all material respects, the financial position of LIXOFT as at December 31st, 2019, and the results of its operations for the year then ended in accordance with French accounting standards.

Without no modification of the opinion expressed above, we draw your attention on the Note 1 – “Règles et méthodes comptables”, which set out the change in accounting policy during the year related to the recognition of development costs.

Paris, March 6st 2020

RSM Paris

Represented by

/s/ Benoit COUSTAUX

Benoit COUSTAUX

Partner

 

LIXOFT

Modelisation des medicaments

8 rue de la Renaissance

92160 ANTONY

Annual Accounts

Year ended on 31/12/2019

GMBA ESSONNE

Listed in the Order of Chartered Accountants of the Paris Region Member of the Regional Company of Auditors of Paris Independent member of WALTER FRANCE and Allinial Global International

Headquarters Social : 6 Boulevard Dubreuil - 91400 Orsay Phone : +33 (0) 1 69 07 60 18 - Fax : +33

(0) 1 69 07 50 88

E-mail: orsay@gmba.fr

SARL with a capital of 25,000 Euros - 402,685,747 RCS Evry NAF 6920 Z - VAT number: FR47402685747

www.gmba-allinial.com

Summary

Contents	1
Active Balance Sheet	2
Passive Balance Sheet	3
C ount of result 4	4
Account of results (Continued)	5
Accounting rules and methods 1	6
Accounting rules and methods 2	7
Accounting rules and methods 3	7
Accounting rules and methods 4	9
Accounting rules and methods 5	10
State of Fixed Assets	11
Amortization Statement	13
Statement of Claims	14
Statement of Debts	15
Statement of Provisions	16
Products to Receive	17
Fees to Pay	17
Income and expenses recognized in advance	18

1

Active Balance Sheet

ACTIVE BALANCE SHEET	From 01/01/2019 to 31/12/2019			As of 12/31/2018
	Brut	Amort. Prov.	Net	Net
Uncalled committed capital
FIXED ASSETS
Intangible assets
Establishment costs
Development costs
Concessions, patents and similar rights
Commercial funds	50,000	9,000	41,000
Other intangible assets
Advances and payments on intangible assets	648,133	–	648,133
Tangible fixed assets
Land Constructions
Technical installations, industrial equipment and tools Other tangible fixed assets
Fixed assets in progress
Advances and deposits	59,435	30,910	28,525	21,749
Financial fixed assets
Investments valued using the equity method Other investments
Receivables from securities holdings fixed for the activity in portfolio securities Other fixed Loans
Other financial assets	11,740		11,740	36,508

TOTAL I		769,309	39,910	729,399	58 ,257
CURRENT ASSETS
Stocks and work in progress
Raw materials, other supplies
Work in progress of goods - from
Production Services - In
Intermediate and finished products
Goods
Advances and deposits paid on order
Receivables
Customers and related accounts Others		885,168		885,168	469,073
Subscribed and called-up capital, not paid		779,791		779,791	175,800
Marketable securities
Own shares
Other securities
Cash instruments
Availability
Prepaid expenses		3,052,514		3,052,514	2,772,915
		22,818		22,818	50,915
TOTAL II		4,740,291		4,740,291	3,468,717
Debt issue costs to be spread	III
Bond redemption premiums	IV
Active conversion differences	V	2,747		2,747
TOTAL GENERAL (I + II + III + IV + V)		5,512,348	39,910	5,472,438	3,526,974

2

Passive Balance Sheet

PASSIVE BALANCE		From 01/01/2019	From 01/01/2018
SHEET		As of 12/31/19	As of 12/31/2018
SHAREHOLDERS’ EQUITY
Capital social or individual (including paid)	11,175	11,175	12,849
Issue, merger, contribution premium		5,688	5,688
Revaluation differences
Equivalence difference
Reserves:
- Legal
- Statutory or contractual Reservations		1,563	1,563
- Regulated
- Others
Carryover
YEAR PROFIT (Profit or loss)		744,287	855,477
Investment grants Regulated provisions		1,718,740	799,112
		660,938
TOTAL I		3,142,389	1,674,688
OTHER EQUITY
Income from the issuance of equity securities
Conditional advances
Other		80,500
TOTAL I (to)		80,500
PROVISIONS FOR RISKS AND CHARGES
Provisions for:
- Risks
- Charges
TOTAL II
LOANS AND DEBTS
Convertible bond loans
Other bond loans
- From credit institutions
Borrowings and debts:			475,000
- Miscellaneous financials		43	137
Advances and deposits received on open orders
- Suppliers and related accounts
Dets:
- Tax and social		34,923	126,059
- On fixed assets and related accounts		278,392	143,792
Other debts
Cash instruments			8,568
Prepaid income		1,936,549	1,098,731
TOTAL III		2,249,549	1,852,286
Differences conversion passive IV
TOTAL GENERAL (I + I bis + II + III + IV)		5,472,439	3,526,974

3

Income statement

RESULTS	From 01/01/2019 to 12/31/2019			As of 12/31/2018
ACCOUNT	France	Exportation	Total	Total
Products operating
Sales of goods
- Goods
Production sold
- Services	134,684	2,361,772	2,496,456	1,752,826
NET SALES	134,684	2,361,772	2,496,456	1,752,826
Production:
-Stored			648,133
- Immobolized
Operating grants received				10,727
Reversals of depreciation, depreciation and provisions and transfers of charges			5,296
Other products			7,254	4,955
TOTAL I			3,157,139	1,768,508
Exploitation charges
Purchases of goods (including customs duties
Change in Stocks (goods)
Purchases of raw materials and other supplies
Change in stocks (raw materials and other supplies)
Other purchases and external charges *
Taxes and similar payments			363,314	256,381
Wages and salaries			17,923	16,347
Social charges			744,664	324,652
- Depreciation on fixed assets			307,483	124,265
- Impairment on fixed assets			13,570	5,782
Allocations to:
- Impairment of active circulating
- Provisions for risks and charges
Other expenses			58,618	79,159
TOTAL II			1,505,573	1,106,585
- Leasing fees furniture included:
* Are
- Real Estate leasing fees
RESULTAT D’EXPLOITATION (I-II)			1,651,567	661,923
Allocated profit or transferred loss	III
Loss incurred or profit transferred	IV
Financial products
Financial participation products
Products of other values securities and receivables active immobilized
Other interest and assimilated
Reversals of provisions, impairments and transfers of charges
Positive exchange differences
Net proceeds from disposals of marketable securities			-318
	TOTAL V		-318
Financial expenses
Financial allocations for depreciation, impairment and provisions
Interest and similar charges			17,192	7,000
Negative exchange differences			-7
Net charges on disposals of investment securities
TOTAL VI			17,184	7,000
FINANCIAL RESULT (V - VI)			-17,502	-7,000
RESULTS Cours AVANT powerless (III + III - IV & V - VI)			1,634,065	654,923

4

Income statement (Continued)

INCOME STATEMENT (CONTINUED)	As of 12/31/2019	As of 12/31/2018
Exceptional income
On management operations	85,850
On capital operations	25,000
Reversals of provisions, depreciations and transfers of charges
TOTAL VII	110 850
Extraordinary charges
On management operations
On capital transactions	162,742
Exceptional depreciation, impairment and provisions
TOTAL VIII	162,742
EXCEPTIONAL RESULTS (VII - VIII)	-51 892
Participations employees IX
Tax on the profit X	-136 567	-144,189
TOTAL PRODUCTS (I + III + V + VII)	3,267,672	1,768,508
TOTAL DES CHARGES (II + IV + VI + VIII + IX + X)	1,548,932	969,396
PROFIT OR LOSS (Total income - Total expenses)	1,718,740	799,112

5

I. ACCOUNTING RULES AND METHODS

(Decree nº 83-1020 of 29-11-1983 - articles 7, 21, 24 start, 24-1, 24-2 and 24-3)

The balance sheet before allocation for the financial year ended 31/12/2019 shows a total of 5,472,438 euros.

The profit and loss account for the year, presented; in the form of a list, the total income of which is 3,267,672 euros, shows a result of 1,718,740 euros.

The financial year has a duration of 12 months, covering the period from 01/01/2019 to 31/12/2019. The notes or tables below are an integral part of the annual accounts.

The corporate accounts are drawn up in accordance with the accounting rules and principles generally accepted in France according to the provisions of the general accounting plan (ANC Regulation n ° 2014-03 on the PCG and following).

General accounting policies have been applied in accordance with the principle of prudence, in accordance with the basic assumptions:

• faithful picture 

• comparability and continuity of operations regularity and

• sincerity independence of fiscal years

• The basic method used for the valuation of items entered in the accounts is the historical cost method.

Only significant information is expressed.

The tax regime for intellectual property was extended to software companies from 1 January 2019. This scheme allows to calculate a tax on corporations to 10% on the results related to each asset. The activity of Lixoft being mainly the sale of licenses for the software it creates, Lixoft decided to opt for the tax system. For this to be applicable, the software concerned by this tax regime must be activated. Excluding, Lixoft's development expenses have always been recognized as expenses. Lixoft therefore decided to opt for the benchmark method by activating these costs this year.

The impact on the 2018 income statement is 320,361 euros, according to the table below.

6

	2018 according to the method of reference	2018 according to old method	Impact
Fixed assets	524,853	58,257	466,596
Current assets	3,322,482	3,468,717	-146,235
Total assets	3,847,335	3,526,974	320,361
Equity	1,995,049	1,674,688	320,361
Other equity	0	0	0
Loans and Debts	1,852,286	1,852,286	0
Total liabilities	3,847,335	3,526,974	320,361
Operating profit	1,128,519	661,923	466,596
Bottom line	-7,000	-7,000	0
Exceptional result	0	0	0
Tax	-2,046	144,189	-146,235
Net profit	1,119,473	799,112	320,361

II. FAITS MARQUANTS

The partners noted the final completion of the cancellation of the 1,674 shares at a nominal value of 1 euro, by redemption by the Company on December 27, 2019.

The company opted for the IP BOX tax system, allowing it to submit part of its profit to 10%.

III. NOTES TO THE BALANCE SHEET AND STATEMENT OF INCOME

3.1. Fixed assets

Investments (see attached table)

Depreciation (see attached table)

Intangible and tangible fixed assets are valued at their acquisition cost, after deduction of discounts, rebates and payment discounts or at their production cost. Ancillary costs are not included in the acquisition cost of fixed assets.

During the year, the company decided to activate research and development costs for a total amount of € 648,133. (see paragraph 3.6.)

During the year, the company acquired computer equipment for a total amount of 10,435 euros, and a brand for 20,000 euros and a license for 30,000 euros from INRIA.

Depreciation for depreciation is calculated using the linear method based on the useful life which corresponds to the generally accepted useful life, hence the absence of special depreciation. No component has been identified in the corporate accounts:

7

At the end of the 2019 financial year, € 13,570 of depreciation was recorded, resulting from the following depreciation periods:

License and brand 5 years

General installations, fixtures, fittings 10 years linear

Office and computer equipment

3 years linear

Linear 10 year furniture

3.2. the receivables

Receivables amounted to € 1,699,518 as of December 31, 2019, and entirely less than a year, and are mainly constituted as follows:

- Other financial assets for 11 740 euros,

- Trade receivables for 885,168 euros,

- Financial aid for R&D projects to be received for 620,688.

The receivables have been valued at their nominal value and are, if necessary, written down by provision to take account of the recovery difficulties to which they were likely to give rise. No provision was recorded at 12/31/2019

3.3. Equity

The share capital is made up of 11,175 1 euro shares, fully paid up. Equity evolved as follows:

Wording	2,018	+	-	2019
CAPITAL	12,849		1,674	11,175
PRIME D'EMISSION	5,688			5,688
RESERVE LEGALE	1,563			1,563
OTHER RESERVES				0
POSTPONEMENT AGAIN	855,477	799,112	910,303	744,287
allocation of profit - 799,112.38
Capital reduction: 910,302.78
RESULTS	799,112	1,718,740	799,112	1,718,740
SUBSIDIES INVESTMENT	0	660,938		660,938
TOTAL	1,674,689	3,178,790	1,711,089	3,142,391

3.4. Provisions for risks and charges (see attached table)

The financial year did not give rise to the recognition of any provision.

3.5. Debts (see attached tables)

Debts amount to € 2,249,549 and are all within one year.

3.6. Costs of Research and Development

Research and development costs were activated for € 648,133, and will be amortized over 1 year from January 1, 2020. These costs consist of 553,298 euros in payroll and 94,835 euros in other fees.

8

3.7. Product operating

The company's turnover comes from 2 sources:

- Sales of services : this is a license over a given period,

- Sales of services : it is for advice or training.

The procedures for recognizing the related income are as follows:

- Licensing services: turnover is recorded according to the start and end dates of use of the licenses sold. At the end of the financial year, revenue is recognized in advance for the unfinished period of the license.

- Consulting or training services: turnover is recognized as the service is rendered.

3.8. Exceptional result

The exceptional result at 12/31/2019 was -51,892 euros compared to 0 in 2018 last year. These are mainly:

the acquisition from INRIA of software of 30,000 euros. As this version is obsolete, this amount is recognized as an expense. provisions on royalties linked to the INRIA contract for 2016 to 2018 which will not be paid and are not due.

3.9. Research tax credit

The amount of research tax credit for 2019 is 293,123 euros.

IV. OTHER SIGNIFICANT INFORMATION

4.1. Average headcount

The average workforce for the year was 11 people as for the previous year.

4.2. Latent prosecutor

The amount of deficits carried forward to the end of the financial year amounts to 520,048 euros.

4.3. Commitment in terms of retirement

The company's workforce is mainly made up of people under the age of 50 with low seniority. As a result, the retirement commitment appears to be insignificant to date: no retirement commitment has therefore been noted.

4.4. Off balance sheet commitments

There were no significant off-balance sheet commitments at the end of the financial year.

4.5. Other

BSPCE

In 2012, the company issued 625 share creator share subscription warrants (BSPCE) each giving the right to subscribe to a share with a nominal value of 1 euro at a unit price of 6.67 euros.

9

The Extraordinary General Meeting on October 18, 2013 noted the lapse of these 625 warrants for the creation of shares in founders of companies.

BSA 1

The extraordinary general meeting of October 18, 2013 authorized the Chairman to issue and allocate free of charge 625 category 1 share subscription warrants (BSA 1), each giving the right to subscribe to 1 share in the company 1 euro of nominal value, to a price of 10.10 euros.

This operation would increase the capital by a maximum of 625 euros, and would be accompanied by an issue premium of a maximum of 5,687.50 euros.

The 625 BSA 1 warrants were subscribed on October 18, 2013 by the company Inria, which exercised them in 2017, which made it possible to carry out a capital increase of 625 euros, accompanied by an issue premium of 5687, 50 euros.

BCE2

The Extraordinary General Meeting dated 4 April 2016 decided to issue and allocate 1250 warrants subscription of shares creators of business (BSPCE) maximum, giving everyone the right to subscribe for 1 share of the company 1 euro of par, at a price of 66.67 euros.

Following the extraordinary general meeting of April 4, 2016, the Chairman decided to issue and allocate 625 BSPCE (BCE2) free of charge, which were subscribed the same day by the employee concerned.

The 625 BSPCE would increase the capital by 625 euros maximum, and would be accompanied by an issue premium of 40,668.75 euros.

The extraordinary general meeting of January 3, 2018 noted the lapsing of the 625 BSPCE (BCE2) not issued.

BCE3

The extraordinary general meeting on October 18, 2013 authorized the Chairman to issue and allocate free of charge 700 category 1 share subscription warrants (BCE 3), each giving the right to subscribe to 1 share of the company 1 euro of nominal value, a price at least equal to 133.33 euros.

This operation would increase the capital by 700 euros maximum, and would be accompanied by an issue premium at least equal to 92,632 euros.

The Chairman made use of the delegation of power and decided on the date of the issue of 700 BCE3 to 2 employees, which were subscribed the same day.

10

State of fixed assets

FRAMEWORK A	Gross value at the start of the fiscal year	Increases
		Reassessment of the exercise	Acquisitions receivables transfers
Intangible assets
Establishment and development costs			698,133
Other intangible costs
TOTAL			698,133
Tangible fixed assets
Terrains
- On clean soil
Constructions:
- On ground of others
- General, fixtures and fittings construction facilities
Installations:
- Technologies, equipment and tools
- General, various layouts and layouts	18,752
- By transport
Material;
- From office and computer furniture	29,337		11,346
Recoverable packaging and miscellaneous
Tangible fixed assets in progress
Advances and deposits
TOTAL	48,089		11,346
Financial fixed assets
Investments valued using the equity method
Others:
- Participations
- Fixed assets
Loans and other financial fixed assets	36,508
TOTAL	36,508
GRAND TOTAL	84,597		709,479

11

FRAME B	Decreases		Gross Value of real estate	Legal reassessment or appraisal. by equity method.
	Transfer	Cession	at the end of the financial year	Original value of real estate at year end
Establishment and development costs
Other intangible assets			698,133
TOTAL			698,133
Terrains
- On clean soil
Constructions:
- On ground of others
- Scales, agents and facilities, const.
Installations:
-Techniques, materials and tools
- Scales, agents and facilities, various			18,752
Material:
- By transport
- From office and computer furniture			40,683
Recoverabe and miscellaneous packaging
Investments in progress
Advances and deposits
Investments valued using the equity method
- Participations
Others
- Fixed assets
Loans and other financial fixed assets	24,768		11,740
			11,740
TOTAL	24,768		11,740
GRAND TOTAL	24,768		769,309

12

Amortization Statement

FRAMEWORK A - Situations and movements of the exercise
DEPRECIABLE FIXED ASSETS	Amount at the beginning of the financial year	Augmentations	Diminutions	Amount at year end
Intangible assets
Establishment and development costs
Other intangible assets		9,000		9,000
TOTAL		9,000		9,000
Terrains
- On clean soil
Constructions:
- On ground of others
General installations, fixtures and fittings of constructions
Technical installations, equipment and industrial tools	5,795	1,875		7,670
General installations, layouts and miscellaneous fittings
Transport equipment	20,545	2,695		23,240
Office and IT equipment, furniture
Recoverable and miscellaneous packaging
TOTAL	26,340	4.570		30,910
GRAND TOTAL	26,340	13,570		39,910

BOX B - Breakdown of movements affecting the provision for special depreciation
DEPRECIABLE	Endowments			Reversals			Net movement of
FIXED ASSETS	Differential time	Decreasing mode	To death. exceptional tax	Differential time	Decreasing mode	To death. exceptional tax	depreciation the fiscal year
Intangible assets
Establishment costs and dvp.
Other real estate positions, intangible
TOTAL
Tangible fixed assets
Terrains
- On clean soil
Constructions:
- On ground of others
Inst. scabies, fixtures and fittings, constructions
Inst. technical, mat. and industrial tools
Inst. scabs, agency and various amenities
Transportation equipment
Office and IT equipment, furniture
Recovered packaging and various
TOTAL
Securities acquisition costs of participations
GRAND TOTAL
TOTAL GENERAL NOT VENTILE		TOTAL GENERAL NOT VENTILE			TOTAL GENERAL NOT VENTILE

13

Statement of Claims

Receivables (a)	Gross	Liquidity of assets
		Maturities less than 1 year	Maturities over 1 year
Fixed assets
Receivables attached to equity interests Loans (1) (2)
Other financial assets	11,740		11,740
Current assets
Doubtful or litigious customers
Other trade receivables	885,168	885,168
Receivables representing securities loaned
Staff and related accounts	1,484	1,484
Social security and other social organizations
Income taxes	136,567	136,567
Value added tax	20,559	20,559
Other taxes, levies and similar payments
Divers
Group and associates (2)	494	494
Miscellaneous accounts receivable (including receivables relating to securities repurchase transactions)	620,688		620,688
Prepaid expenses	22,818	22,818
TOTAL	1,699,518	1,067,089	632,428
(1) Amount of loans granted during the year (1) Amount of refunds obtained in the course of exercise (2) Loans and advances granted to natural persons partners	494

14

Statement of Debts

Debts (b)	Gross	Degree of liability due
		Maturities less than 1 year	Maturities over 1 year	Maturities over 5 years
Convertible bonds (1)
Other bond loans (1)
Loans and debts with establishments from - Up to 1 year originally
Credit (1) : - A more than 1 year in the original
Miscellaneous borrowings and financial debts (1) (2)
Accounts payable	34,923	34,923
Staff and related accounts	56,452	56,452
Social security and other social organizations	138,484	138,484
Income taxes
Value added tax	52,115	52,115
Bonded bonds
Other taxes, charges and similar	31,341	31,341
Debts on fixed assets and accounts piecing
Group and associates (2)	43	43
Other debts (including debts relating to securities repurchase transactions)
Debt representative of securities borrowed
Prepaid income	1,936,191	1,936,191
GRAND TOTAL	2,249,549	2,249,549
(1) Loans taken out during the year
(1) Loans repaid during the year	475,000
(2) Loans and debts contracted from partners who are physical persons	43

15

Statement of Provisions

NATURE DES PROVISIONS	Amount at the beginning of the financial year	Increases: endowments for the year	Decreases: reversals at the end of the financial year	Amount at the end of the fiscal year
Regulated - Reconstitution of deposits Provisions for: - Investments -Rising prices Depreciation derogatory Tax provision for establishment abroad: - Before 01.01.1992 - After 01.01.1992 Provisions for installation loans Other regulated provisions
TOTAL
Risks and charges - Litigation - Guarantees given to customers - Futures market losses - Fines and penalties -Exchange losses Provisions for: - Pensions and obligations - Taxes - Renovation of immobilisations - Major maintenance and major revisions -Social and tax charges on leave payable Other provisions for risks and charges
TOTAL
NATURE DES DEPRECIATIONS	Amount at the beginning of the financial year	Increases: endowments for the year	Decreases: reversals at the end of the financial year	Amount at the end of the fiscal year
Impairment - Intangible -Tangible fixed assets: Investments in associates - Securities holdings -Financial On stocks and work in progress On customer accounts Other provisions for depreciation
TOTAL
GRAND TOTAL
- Operating Of which allocations and reversals: - Financial
- Exceptional
Titles set in equivalence : Amount of the depreciation

16

Products to Receive

(Article R123-189 of the Commercial Code)

PRODUCTS TO RECEIVE INCLUDED IN THE FOLLOWING BALANCE SHEET ITEMS	Fiscal year ended	Fiscal year ended
	31/12/2019	31/12/2018
Receivables attached to equity interests Other fixed assets Loans Other financial fixed assets Trade receivables and related accounts Other receivables Marketable securities Availabilities
TOTAL

Detail of Products to be Received

PRODUCTS TO RECEIVE INCLUDED IN THE FOLLOWING BALANCE SHEET ITEMS	Fiscal year ended	Fiscal year ended
	31/12/2019	31/12/2018
Receivables related to the investments Other investments Loans Other financial fixed assets Trade receivables and related accounts Other receivables Marketable securities Availabilities
TOTAL

Fees to Pay

(Article R123-189 of the Commercial Code)

EXPENSES TO PAY INCLUDED IN THE FOLLOWING BALANCE SHEET ITEMS	Fiscal year ended	Fiscal year ended
	31/12/2019	31/12/2018
Convertible bond loans Other bond loans Borrowings and debts with credit institutions Miscellaneous borrowings and financial debts
Trade payables and related accounts	22,000.00	117,941.20
Social and tax debts	88,184.72	77,380.99
Debts on fixed assets and related accounts Other
debts
TOTAL	110,184.72	195,322.19

17

Details of accrued charges

EXPENSES TO PAY INCLUDED IN THE FOLLOWING	Fiscal year ended	Fiscal year ended
BALANCE SHEET ITEMS
	31/12/2019	31/12/2018
Convertible bonds
Other bond loans
Loans and debts from credit institutions
Loans and various financial debts
Trade payables and related accounts	22,000.00	117,941.20
408100 Suppliers - invoices not received	22,000.00	117,941.20
Social and tax debts	88,184.72	77,380.99
428100 Leave provisions payable	45,962.71	49,110.22
428110 Provision RTT	5,819.21	6,961.69
428120 Provision Primes	4,596.27
428600 Expense reports	73.72
438 400 Provision for social security contributions on paid holidays	15,538.52	9,517.92
438410 Provision charges sociales sur RTT	1,996.27	1,435.45
438420 Provision for charges on Premiums	1,553.85
448600 State, accrued charges	8,276.00	2,663.00
448610 Vocational training	4,221.17	3,469.00
448620 Apprenticeship tax		4,103.11
448630 Adesatt	147.00	120.60
Debts on fixed assets and accounts piecing
Other debts
TOTAL	110,184.72	195,322.19

Income and Expenses Recognized in Advance

ADVANCED PRODUCTS	Fiscal year ended	Fiscal year ended
	31/12/2019	31/12/2018
Products : - Operating - Financial - Exceptional	1,936,191	1,098,731
TOTAL	1,936,191	1,098,731

ADVANCE CHARGES	Fiscal year ended	Fiscal year ended
	31/12/2019	31/12/2018
Expense : -Operating - Financial - Exceptional	22,818	50,929
TOTAL	22,818	50,929

18

EX-99.2

Exhibit 99.2

Lixoft

Balance sheet

March 31, 2020

(Unaudited)

in Euro  

ASSETS
Current assets
Cash and cash equivalents	€	3,444,365.00
Accounts receivable, net		506,191
Prepaid expenses and other current assets		207,660
Total current assets		4,158,216
Long-term assets
Property and equipment, net		28,687
Intellectual property, net of accumulated amortization		841,022
Other Intangible assets		38,500
Other assets		11,540
Total assets	€	5,077,965.00
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	€	39,892.00
Accrued payroll and other expenses		451,497
Other Current Liabilities		82,042
Deferred revenue		1,631,150
Total current liabilities		2,204,581
Long-term liabilities		–
Commitments and contingencies
Shareholders' equity
Capital stock		12,738
Additional paid-in capital		121,524
Retained earnings		2,739,122
Total shareholders' equity		2,873,384
Total liabilities and shareholders' equity	€	5,077,965.00

1

Lixoft

Statements of Operations

For the three months ended March 31, 2020 and 2019

(Unaudited)

in Euro

	2019			2020
Net revenues	€	555,977		€	761,677
Cost of revenues		–			182,648
Gross profit		555,977			579,029
Operating expenses
Selling, general, and administrative		358,310			793,936
Research and development		–			–
Total operating expenses		358,310			793,936
Income from operations		197,666			(214,908	)
Other income (expense)
Interest income (exp)		–			(1,665	)
Gain on currency exchange		(1,995	)		410
Total other income (expense)		(1,995	)		(1,255	)
Income before income taxes		195,671			(216,163	)
Provision(Benefit) for income taxes		(123,539	)		56,835
Net Income	€	319,210		€	(272,998	)

2

EX-99.3

Exhibit 99.3

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

The accompanying unaudited pro forma condensed combined financial statements present the pro forma combined balance sheets and results of operations of the combined company based upon the historical financial statements of Simulations Plus, Inc. (“SIMPLUS”) and Lixoft, a French société par actions simplifiée (“Lixoft”), after giving effect to the acquisition of Lixoft and adjustments described in the following footnotes, and are intended to reflect the impact of this acquisition on SIMPLUS on a pro forma basis.

On March 31, 2020, Simulations Plus, Inc., a California corporation (the “Company”) entered into a Share Purchase and Contribution Agreement (the “Purchase Agreement”) with the owners of Lixoft, (the “Transferors”) whereby the Company shall acquire 100% of the equity interests of Lixoft from the Transferors on a debt-free basis which shall result in Lixoft becoming a wholly-owned subsidiary of the Company (the “Transaction”).

As consideration for the Transaction, the Company shall provide up to US$16,500,000 in aggregate consideration to the Transferors consisting of two-thirds (2/3) cash and one-third (1/3) in newly issued shares of restricted common stock of the Company (the “Shares”), as follows:

· US$11,000,000 shall be issued at closing (the “Closing Consideration”) consisting of:

o US$7,333,333 in cash; plus

o US$3,666,667 in Shares

· Up to US$5,500,000 issuable in connection with future earnout payments (2/3 cash and 1/3 Shares) (the “Earnout Consideration”):

o Number of Shares to be determined by the volume-weighted average price of the Company’s common stock for the thirty (30) trading days immediately preceding each earnout reference date;

o Subject to customary exchange rate provisions defining an acceptable range of USD/EUR exchange rate fluctuation;

o Payable in two installments: 12 months and 24 months after closing if and to the extent certain year-over-year performance thresholds are met

A portion of the Closing Consideration, totaling US$2,000,000 (2/3 in cash and 1/3 in Shares), shall be held back (with the Shares being held in an escrow account) against any indemnification claims by the Company for a period of 24 months after the closing of the Transaction.

In addition, at closing, the cash consideration at closing payable to Transferors was increased by the amount by which Lixoft’s cash on hand exceeds US$150,000, which amount the Company estimates to be approximately US$3,600,000 (“Excess Cash”), and reduced by the amount of Lixoft’s indebtedness and transaction expenses at closing. The aforementioned consideration is subject to adjustment in the event certain working capital targets differ from working capital at closing.

The Shares issued in the Transaction shall not have registration rights and may not be sold for a period of two years after closing of the Transaction.

Lixoft shall be responsible for all taxes relating to all periods prior to and up to the closing of the Transaction. Certain members of senior management of Lixoft have agreed to remain employed and/or consulting with the Company for a period of three years after the closing of the Transaction and shall enter into customary employment/consulting arrangements, including non-competition and non-solicitation provisions for such period.

1

The Purchase Agreement includes customary representations, warranties and covenants by the parties. Each party has agreed, among other things, (i) to generally conduct its business in the ordinary course consistent with past practice during the interim period between the execution of the Purchase Agreement and the closing (other than agreed actions to be taken in anticipation of the closing); (ii) not to engage in certain types of transactions during this period; and (iii) to secure all necessary approvals to ratify the Purchase Agreement and the Transaction.

The unaudited pro forma condensed combined balance sheet reflects the acquisition of Lixoft as if it had been consummated on February 29, 2020 and includes pro forma adjustments for preliminary valuations by SIMPLUS management of certain tangible and intangible assets as of the acquisition date of April 1, 2020. These adjustments are subject to further revision upon finalization of the transaction, the related intangible asset valuations and fair value determinations.

The unaudited pro forma condensed combined statement of operations for the fiscal year ended August 31, 2019 and for the six months ended February 29, 2020 combines SIMPLUS’s historical results for the fiscal year ended August 31, 2019 and the six months ended February 29, 2020 with Lixoft’s historical results for the same periods. The unaudited pro forma statements of operations gives effect to the acquisition as if it had been consummated on September 1, 2018 and 2019, respectively.

The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only. They do not purport to represent what SIMPLUS’s combined results of operations and financial position would have been had the transaction actually occurred as of the dates indicated, and they do not purport to project SIMPLUS’s future combined results of operations or financial position.

Pro Forma Adjustments

Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect the amounts related to Lixoft’s tangible and intangible assets and liabilities at an amount equal to the preliminary estimate of their fair values. The historical combined financial information has been adjusted to give effect to pro forma events that are (1) directly attributable to the acquisition and (2) factually supportable and reasonable under the circumstances. There are no events that are expected to have a continuing impact and therefore, no adjustments to the pro forma condensed combined statements of operations were made in that regard.

The pro forma adjustments reflecting the completion of the acquisition are based upon the acquisition method of accounting in accordance with Accounting Standards Codification, or ASC, 805 “Business Combinations” and the assumptions set forth in the notes to the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed combined balance sheet has been adjusted to reflect the preliminary allocation of the estimated purchase price to identifiable assets and liabilities acquired, including an amount for goodwill representing the difference between the purchase price and the fair value of the identifiable assets and liabilities.

The pro forma adjustments are based upon available information and certain assumptions that SIMPLUS believes are reasonable under the circumstances. A final determination of the fair value of the assets acquired and liabilities assumed may differ materially from the preliminary estimates. This final valuation will be based on the actual fair values of tangible and intangible assets and liabilities assumed of Lixoft that are acquired as of the date of completion of the acquisition. The final valuation may change the purchase price allocation, which could affect the fair value assigned to the assets acquired and liabilities assumed, and could result in a change to the unaudited pro forma condensed combined financial statements.

2

You should read this information in conjunction with:

• the accompanying notes to the unaudited pro forma condensed combined financial statements included herein;

• the separate historical audited financial statements of Lixoft as of December 31, 2019 and for the year then ended  included as Exhibit 99.1 to this Current Report on Form 8-K/A (Amendment No. 1);

• the separate historical unaudited financial statements of SIMPLUS as of February 29, 2020 and for the six months then ended included in SIMPLUS’ Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on April 9, 2020;

• the separate historical unaudited balance sheet of Lixoft. as of March 31, 2020 and separate historical unaudited statements of operations for the three months ended March 31, 2020 and 2019 included as Exhibit 99.2 hereto.

• the separate historical audited financial statements of SIMPLUS as of August 31, 2019 and 2018 and for the years then ended included in SIMPLUS’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on November 13, 2019;

• the Stock Purchase and Contribution Agreement attached to the SIMPLUS’s Current Reports on Form 8-K filed with the Securities and Exchange Commission on April 2, 2020; and

• SIMPLUS’s Current Reports on Form 8-K related to its acquisition of Lixoft filed with the Securities and Exchange Commission on April 2, 2020.

3

SIMULATIONS PLUS, INC.

PRO FORMA CONDENSED COMBINED BALANCE SHEETS

As of February 29, 2020

	(Unaudited)		(Unaudited)		(Unaudited)			(Unaudited)
	Simulations Plus, Inc.		Lixoft		Adjustments (NOTE D)			Pro-Forma Combined
ASSETS
Current assets
Cash and cash equivalents		12,248,652		3,792,592		(9,471,352	)		6,569,892
Prepaid income taxes		457,232		–		–			457,232
Accounts receivable, net		7,244,344		557,366		–			7,801,710
Prepaid expenses and other current assets		612,505		228,654		–			841,159
Revenues in excess of billings		4,113,185		–		–			4,113,185
Total current assets		24,675,918		4,578,612		(9,471,352	)		19,783,178
Long-term assets
Capitalized computer software development costs, net of accumulated amortization		5,458,837		–		–			5,458,837
Property and equipment, net		335,298		31,588		–			366,886
Operating lease right of use asset		637,509		229,843					867,352
Intellectual property, net of accumulated amortization		4,561,666		–		8,030,000			12,591,666
Other Intangible assets		3,106,250		–		4,160,000			7,266,250
Goodwill		10,387,198		–		2,259,311			12,646,509
Other assets		37,227		12,707		–			49,934
Total assets		49,199,903		4,852,750		4,977,959			59,030,612
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable		624,645		43,924		–			668,569
Consideration payable						2,000,000			2,000,000
Accrued payroll and other expenses		1,526,891		587,481		–			2,114,372
Billings in excess of revenues		891,905		–		–			891,905
Operating lease liability, current portion		493,257		54,505		–			547,762
Current portion -  Contract payable		1,761,028		–		–			1,761,028
Deferred revenue		183,310		–		–			183,310
Total current liabilities		5,481,036		685,910		2,000,000			8,166,946
Long-term liabilities
Deferred income taxes		2,714,398		–		–			2,714,398
Operating lease liability, current portion		142,343		175,338					317,681
Consideration payable		–		–		2,528,000			2,528,000
Holdback Liability Due Sellers						1,333,333			1,333,333
Other long-term liabilities		–		–		–			–
Total liabilities		8,337,777		861,248		5,861,333			15,060,358
Commitments and contingencies
Shareholders' equity									–
Preferred stock									–
Common stock		7,651		141,572		(141,460	)		7,763
Additional paid-in capital		16,406,702		6,263		3,101,753			19,514,718
Retained earnings		24,447,773		3,843,667		(3,843,667	)		24,447,773
Total shareholders' equity		40,862,126		3,991,502		(883,374	)		43,970,254
Total liabilities and shareholders' equity		49,199,903		4,852,750		4,977,959			59,030,612

4

SIMULATIONS PLUS, INC.

PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

For the year ended August 31, 2019

	(Audited)			(Unaudited)			(Unaudited)				(Unaudited)
	Simulations Plus, Inc.			Lixoft			Adjustments			Note	Pro-Forma Combined
Net revenues	$	33,970,440		$	2,947,753		$	–			$	36,918,193
Cost of revenues		9,025,704			–			501,875		A		9,527,579
Gross profit		24,944,736			2,947,753			(501,875	)			27,390,614
Operating expenses
Selling, general, and administrative		11,796,027			1,466,628			197,142		B		13,459,797
Research and development		2,499,980			–			–				2,499,980
Total operating expenses		14,296,007			1,466,628			197,142				15,959,777
Income from operations		10,648,729			1,481,125			(699,017	)			11,430,837
Other income (expense)
Interest income		33,522						–				33,522
Gain (Loss) on currency exchange		(109,078	)		–			–				(109,078	)
Other income (Expense)					(49,584	)						(49,584	)
Interest expense		(16,697	)		(7,637	)		–				(24,334	)
Total other income (expense)		(92,253	)		(57,221	)		–				(149,474	)
Income before income taxes		10,556,476			1,423,904			(699,017	)			11,281,363
Provision for income taxes		(1,973,147	)		(232,943	)		174,754		C		(2,031,336	)
Net Income	$	8,583,329		$	1,190,961		$	(524,263	)		$	9,250,027
Earnings per share:
Basic	$	0.49									$	0.53
Diluted	$	0.48									$	0.51
Weighted-average common shares outstanding
Basic		17,492,258			111,682			111,682				17,603,940
Diluted		18,057,431			111,682			111,682				18,169,113

5

SIMULATIONS PLUS, INC.

PRO FORMA CONDENSED COMBINED STATEMENTS OF OPERATIONS

For the six months ended February 29, 2020

	(Unaudited)			(Unaudited)			(Unaudited)				(Unaudited)
	Simulations Plus, Inc.			Lixoft			Adjustments			Note	Pro-Forma Combined
Net revenue	$	19,750,968		$	2,239,429		$	–			$	21,990,397
Cost of revenues		5,309,297			9,999			250,932		A		5,570,228
Gross profit		14,441,671			2,229,430			(250,932	)			16,420,169
Operating expenses
Selling, general, and administrative		7,623,381			988,612			(215,409	)	B		8,396,585
Research and development		1,273,965			–			–				1,273,965
Total operating expenses		8,897,346			988,612			(215,409	)			9,670,550
Income from operations		5,544,325			1,240,817			(35,523	)			6,749,619
Other income (expense)
Interest income		23,349			–			`				23,349
Gain on currency exchange		1,886			(30,792	)		–				(28,906	)
Gain on sale of assets		–			27,280			–				27,280
Interest expense		–			(15,434	)		–				(15,434	)
Total other income (expense)		25,235			(18,946	)		–				6,289
Income before income taxes		5,569,560			1,221,871			(35,523	)			6,755,908
Provision for income taxes		(1,361,203	)		(392,566	)		8,881		C		(1,744,889	)
Net Income	$	4,208,357		$	829,305		$	(26,642	)		$	5,011,019
Earnings per share:
Basic	$	0.24									$	0.28
Diluted	$	0.23									$	0.27
Weighted-average common shares outstanding
Basic		17,638,406			111,682			111,682				17,750,088
Diluted		18,315,824			111,682			111,682				18,427,506

6

SIMULATIONS PLUS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS

1. Basis of Presentation

The unaudited pro forma condensed combined financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and certain footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, management believes that the disclosures are adequate to make the information presented not misleading.

The acquisition method of accounting under U.S. GAAP requires, among other things, that most assets acquired and liabilities assumed be recognized at their fair values at the acquisition date. Fair value is defined under U.S. GAAP as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” Market participants are assumed to be buyers and sellers in the principal (or most advantageous) market for the asset or liability. Fair value measurements for an asset assume the highest and best use by these market participants. Fair value measurements can be highly subjective and it is possible that other professionals, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. Accordingly, the assets acquired and liabilities assumed were recorded at their respective fair values and added to those of SIMPLUS.

2. Acquisition of Lixoft

On April 1, 2020, Lixoft, a private company provider of modeling and simulation software for advanced model-based drug development, specializing in non-linear mixed effects modeling (NMLE) for pharmacometrics, became a wholly owned subsidiary of SIMPLUS pursuant to the terms of a Stock Purchase and Contribution Agreement, dated March 31, 2020 (the “Agreement”), by and among SIMPLUS, and the shareholders of Lixoft (the “Lixoft Shareholders”), each, a “Party,” and collectively, the “Parties.” The merger is accounted for under the acquisition method of accounting.

On April 1, 2020, the Company consummated the acquisition of all outstanding capital stock of Lixoft pursuant to the terms of the Agreement and Lixoft became a wholly owned subsidiary of the Company (the “Acquisition”). Under the terms of the Agreement, the Company: (1) paid to the Lixoft Shareholders Eleven Million Dollars ($11,000,000) payable at the closing of the Acquisition (the “Closing”) subject to certain adjustments and holdbacks as provided in the Agreement and as more fully described below; and (2) will pay to the Lixoft Shareholders certain earn-out payments, to be measured by the revenues of Lixoft, payable following the Closing, as more particularly described in the Agreement and as more fully described below (the “Earn-out Payments”):

(i)	On April 1, 2017, the Company paid the Lixoft Shareholders total cash consideration of $9,460,129; which such amount included $3.456,000 in working capital left in Lixoft’ s accounts in excess of the amount required under the Agreement, and
(ii)	The Company held back $2,000,000 (2/3s in cash and 1/3 in escrowed shares of SIMPLUS stock) at the Closing from the initial consideration as for potential offset for representations and warrantees. These funds will be held for a period of 24 months
(iii)	In addition, the Company may pay up to an additional $5,500,000 in Earn-out Payments over the 2 years following the Closing if and when such Earn-out Payments become due and payable, and subject to certain offsets as provided in the Agreement, according to the Agreement.

7

Under the acquisition method of accounting, the total estimated purchase price is allocated to Lixoft’ s tangible and intangible assets and liabilities based on their estimated fair values at the date of the completion of the acquisition (April 1, 2020). The following table summarizes the preliminary allocation of the purchase price for Lixoft:

Assets acquired	$	4,998,662
Estimated value of technologies acquired over book value		8,030,000
Estimated value of Intangibles acquired		4,160,000
Goodwill		2,259,311
Total Purchase Consideration	$	19,447,973

3. Pro Forma Condensed Combined Financial Statements

The accompanying unaudited pro forma condensed combined financial statements present the pro forma consolidated financial position and results of operations of the combined company based upon the historical financial statements of SIMPLUS and Lixoft, after giving effect to the Lixoft acquisition and adjustments described in the following footnotes, and are intended to reflect the impact of this acquisition on SIMPLUS on a pro forma basis.

The unaudited pro forma condensed combined balance sheet reflects the acquisition of Lixoft as if it had been consummated on February 29, 2020 and includes pro forma adjustments for preliminary valuations by SIMPLUS management of certain tangible and intangible assets as of the acquisition date of April 1, 2020. These adjustments are subject to further revision upon finalization of the fair value determinations.

The unaudited pro forma condensed combined statements of operations for the fiscal year ended August 31, 2019 and the six months ended February 29, 2020 combines SIMPLUS’s historical results for the fiscal year ended August 31, 2019 and the six months ended February 29, 2020 with Lixoft historical results for the same periods on a US GAAP basis. The unaudited pro forma statement of operations gives effect to the acquisition as if it had taken place on September 1, 2018 and 2019, respectively.

The accompanying unaudited pro forma condensed combined financial statements are presented for illustrative purposes only.

4. Pro Forma Adjustments

Pro forma adjustments are necessary to reflect the estimated purchase price and to reflect amounts related to Lixoft’ s net tangible and intangible assets and liabilities at an amount equal to the preliminary estimate of their fair values. The intangible assets identified were customer lists, non-compete agreements, and the trade name valued at $2,550,000, $60,000 and $1,550,000, respectively. The trade name is capitalized on the balance sheet until it is either abandoned or written off.

There were no significant intercompany balances or transactions between SIMPLUS and Lixoft at the dates and for the period of these pro forma condensed combined financial statements.

The unaudited pro forma condensed combined financial statements do not include any adjustments for liabilities that will result from integration activities related to the Lixoft acquisition. Additional assets or liabilities may be recorded that could affect amounts in the unaudited pro forma condensed combined financial statements. During the measurement period, any such adjustments to provisional amounts would increase or decrease goodwill. Adjustments that occur after the end of the measurement period will be recognized in the post-combination current period operations.

8

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

Note		Adjustments to Operating Expenses	Six Months Ended February 29, 2020			Fiscal Year Ended August 31, 2019
	A	Adjustments to Cost of Sales:
		Amortization of Value of Acquired Technologies	$	(250,932	)	$	(501,875	)
		Acquisition transaction costs posted by SIMPLUS and Lixoft during the period		313,977			0
		Amortization of Intangible assets acquired		(98,568	)		(197,142	)
	B	Adjustments to Selling, General and Admin Expenses	$	215,409		$	(197,142	)
	C	Income tax effect of pro forma adjustments	$	8,881		$	174,754

Note		Pro forma balance sheet adjustments	February 29, 2020
	D	Cash paid at Closing	$	(9,471,352	)
		Estimated Value of Acquired Technologies in excess of carrying costs		8,030,000
		Estimated value of Intangibles assets acquired		4,160,000
		Estimated Fair Value of Earn-out payments payable over 2 years		(4,528,000	)
		Estimated amount of Holdback liabilities due 2 years from purchase		(1,333,333	)
		Post-closing elimination of Lixoft common stock		141,460
		Additional Paid-in-Capital effect of acquisition		(3,101,753	)
		Post-closing elimination of Lixoft retained earnings		3,843,667
		Estimated Goodwill acquired	$	2,259,311

5. Pro Forma Earnings per Share

Shares used to calculate unaudited pro forma combined basic and diluted net loss per share are based on the sum of the following:

a. The number of SIMPLUS weighted-average shares used in computing historical net income per share, basic and diluted; and

b. The number of SIMPLUS common shares issued to the former stockholders of Lixoft on April 1, 2020, as initial consideration for the acquisition

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6. Transaction Costs

For the six months ended February 29, 2020, SIMPLUS incurred transaction costs related to the acquisition of Lixoft totaled $313,977. Lixoft’ s cost of acquisition were paid by the former shareholders of Lixoft, no expenses were paid by Lixoft. Company paid expenses have been recorded as a pro forma adjustment to reduce general and administrative expenses in the statement of operations for the six months ended February 29, 2020. $1,102,000 of transaction costs were incurred in the period between April 1, 2020 and May 31, 2020, all of which were SIMPLUS expenses for due diligence, legal and investment banking fees. The combined company expects to incur approximately $1,416,000 in direct transaction costs in connection with the acquisition.

The combined company may incur additional one-time charges to operations that SIMPLUS cannot reasonably estimate, in the quarter in which the acquisition is completed or the following quarters, to reflect costs associated with integrating the two businesses. In addition, the combined company may incur additional charges relating to the transaction in subsequent periods, which could have a material impact on the combined company’s financial position or results of operations.

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