Core Viewpoint - Simulations Plus, Inc. is under investigation for potential violations of federal securities laws following disappointing financial results and issues related to its acquisition of Pro-ficiency Holdings, Inc. [1][2][3] Company Overview - Simulations Plus is a software company focused on modeling and simulation tools for the pharmaceutical, biotechnology, and chemical industries [2]. - The company acquired Pro-ficiency Holdings, Inc. in June 2024, aiming to double its total addressable market and enhance sales [2][3]. Financial Performance and Issues - Simulations Plus claimed successful integration of Pro-ficiency and effective internal controls over financial reporting, which appears to be misleading as the company struggled with integration and lacked effective controls [3]. - On June 11, 2025, the company announced disappointing preliminary financial results for Q3 2025, attributing challenges to market uncertainties, leading to a stock price drop of over 24% [4]. - The Q3 2025 financial results included a $77.2 million charge related to prior acquisitions, and the company dismissed its auditor Grant Thornton, citing unresolved matters regarding segment reporting and internal controls [5]. Stock Market Reaction - Following the announcement of the impairment charge and auditor dismissal, Simulations Plus's stock fell nearly 26% from $17.47 to $12.97 per share [5].

Core Insights - Holzer & Holzer, LLC is investigating whether Simulations Plus, Inc. complied with federal securities laws following a significant financial report [1] - Simulations Plus reported a one-time non-cash impairment charge of $77.2 million for the third quarter of fiscal 2025 [1] - The company has transitioned from a business unit structure to a functionally-driven operating model as part of a strategic reorganization [1] - Following the announcement of these financial results, the stock price of Simulations Plus experienced a decline [1] Company Overview - Simulations Plus, Inc. is publicly traded on NASDAQ under the ticker SLP [1] - The company is undergoing a strategic reorganization to improve operational efficiency [1] Legal Context - Holzer & Holzer, LLC is a law firm that specializes in representing shareholders and investors in securities litigation [3] - The firm has a history of recovering significant amounts for shareholders affected by corporate misconduct [3]

Group 1 - The core issue involves potential violations of federal securities laws by Simulations Plus, Inc. due to allegations of providing misleading business information to investors [1] - Simulations Plus reported third fiscal quarter sales of $20.4 million, missing the consensus estimate by approximately $500,000, and experienced a net loss of $67.3 million compared to a net income of $3.1 million in the same period of 2024 [3] - Following the negative financial report, Simulations Plus's stock price dropped by $4.70 per share, or 25.76%, closing at $12.97 per share on July 15, 2025 [3] Group 2 - Simulations Plus is a life sciences software and consulting company that provides advanced biosimulation tools and consulting services to pharmaceutical and biotechnology companies globally [2] - The company has implemented workforce reductions and cost-cutting measures as part of an operational restructuring plan initiated in June 2025 [3]

Core Viewpoint - Simulations Plus, Inc. experienced a significant decline in share price following a substantial net loss and the dismissal of its independent auditor, raising concerns about asset valuations and corporate governance [1][2][4]. Financial Performance - The company reported a net loss of $67.3 million for Q3 2025, which included a $77.2 million impairment charge [1]. - The impairment charge was attributed to adjustments in the book value of assets to align with current market values [4]. Auditor Dismissal - Simulations Plus terminated its engagement with Grant Thornton on July 9, 2025, just a few months after hiring them on April 15, 2025 [1][4]. - The company cited issues related to segment reporting and internal controls over financial reporting as reasons for the auditor change, claiming no "reportable events" occurred [5]. Investigation - Hagens Berman, a national shareholders rights firm, has initiated an investigation into whether Simulations Plus misled investors regarding asset valuations and the reasons for the auditor's dismissal [2][7]. - Grant Thornton disputed the company's account, indicating that they had raised specific concerns during their review of the financial statements [6].

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Simulations Plus, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Company Performance - Simulations Plus reported sales of $20.4 million for the third quarter of 2025, which is a 10% year-over-year increase but below the consensus estimate of $20.9 million [3]. - The company had previously released preliminary third-quarter sales figures in June, which were also lower than expectations, ranging from $19 million to $20 million compared to a consensus of $22.78 million [3]. - Following the earnings report, Simulations Plus stock price fell by 25.75% on July 15, 2025 [3]. Group 2: Legal Action - Rosen Law Firm is preparing a class action to seek recovery of investor losses for those who purchased Simulations Plus securities [2]. - Investors can join the prospective class action without any out-of-pocket fees through a contingency fee arrangement [2]. Group 3: Rosen Law Firm's Credentials - Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4]. - The firm was ranked No. 1 by ISS Securities Class Action Services for the number of securities class action settlements in 2017 and has consistently ranked in the top 4 since 2013 [4]. - In 2019, the firm secured over $438 million for investors, showcasing its capability in recovering significant amounts for clients [4].

Core Insights - Simulations Plus, Inc. is under investigation for potential securities fraud and unlawful business practices involving its officers and directors [1] - The company reported disappointing financial results for Q3 2025, with sales of $20.4 million, a net loss of $67.3 million, and a diluted loss per share of $3.35, significantly down from a net income of $3.1 million and earnings per share of $0.15 in Q3 2024 [3] - Following the financial report, Simulations Plus's stock price dropped by $4.50, or 25.76%, closing at $12.97 per share [4] - The company revised its fiscal 2025 adjusted earnings guidance down to a range of $0.93 to $1.06, from a previous estimate of $1.07 to $1.20 [3] - A restructuring initiative was initiated in June 2025, which includes workforce reductions and cost-cutting measures aimed at improving operational efficiency [3]

Core Insights - Simulations Plus is under investigation for potential securities fraud and unlawful business practices [1] - The company reported third fiscal quarter sales of $20.4 million, missing the consensus estimate of $20.9 million, and incurred a net loss of $67.3 million, including a non-cash impairment charge of $77.2 million [2] - Following the financial report, Simulations Plus's stock price dropped by $4.50, or 25.76%, closing at $12.97 per share [3] - The company revised its fiscal 2025 adjusted earnings guidance down to $0.93 to $1.06 from a previous range of $1.07 to $1.20 [2] - A restructuring initiative was initiated in June, involving workforce reductions and cost-cutting measures to enhance operational efficiency [2]

Core Viewpoint - Rosen Law Firm is investigating potential securities claims on behalf of shareholders of Simulations Plus, Inc. due to allegations of materially misleading business information issued by the company [1]. Group 1: Investigation and Class Action - Shareholders of Simulations Plus may be entitled to compensation through a class action lawsuit without any out-of-pocket fees, as the Rosen Law Firm prepares to seek recovery of investor losses [2]. - Interested investors can join the prospective class action by submitting a form or contacting the law firm directly [2]. Group 2: Company Performance and Market Reaction - Simulations Plus reported sales of $20.4 million for the third quarter of 2025, which is a 10% year-over-year increase but fell short of the consensus estimate of $20.9 million [3]. - The company had previously released preliminary sales figures in June, which were already lower than expectations, with estimates ranging from $19 million to $20 million compared to a consensus of $22.78 million [3]. - Following the release of the earnings report, Simulations Plus stock price dropped by 25.75% on July 15, 2025 [3]. Group 3: Rosen Law Firm's Credentials - The Rosen Law Firm has a strong track record in securities class actions, having achieved the largest securities class action settlement against a Chinese company at the time [4]. - The firm has been consistently ranked among the top firms for securities class action settlements and has recovered hundreds of millions of dollars for investors, including over $438 million in 2019 alone [4].

Core Insights - Simulations Plus Inc. reported a 10% year-over-year increase in sales to $20.4 million, but this was below the consensus estimate of $20.9 million [1] - The company experienced a significant net loss of $67.3 million, primarily due to a non-cash impairment charge of $77.2 million, contrasting with a net income of $3.1 million in the prior year [3] - Adjusted earnings per share increased to 45 cents, up from 27 cents a year ago, despite the revenue miss [2] Financial Performance - Sales for the third quarter reached $20.4 million, a 10% increase year-over-year, but below the consensus estimate [1] - Software revenue increased by 6% to $12.6 million, while services revenue rose by 17% to $7.7 million [2] - Gross profit was $13.0 million, achieving a 64% margin [2] - Adjusted EBITDA was $7.4 million, representing 37% of total revenue, an increase from $5.6 million (30% of total revenue) in the same period last year [3] Guidance and Outlook - The fiscal 2025 adjusted earnings guidance was revised down to $0.93 to $1.06 from $1.07 to $1.20 [4] - Sales forecast for fiscal 2025 was adjusted to $76 million to $80 million, down from $90 million to $93 million, and below the consensus of $82.9 million [4] - The anticipated adjusted EBITDA margin for fiscal 2025 was revised to between 23% and 27%, down from 31% to 33% [5] Market Conditions - Analysts noted ongoing cautious spending by biopharma clients due to uncertainties surrounding funding, drug pricing, and potential tariffs, leading to budget cuts and project cancellations [6] - Despite some resilience in the software business, signs of potential softening were observed as the company heads into fiscal 2026 [7] - KeyBanc downgraded Simulations Plus from Overweight to Sector Weight, citing challenges due to customer concentration and biotech exposure [7] Stock Performance - Following the earnings report, SLP stock declined by 25% to $13.10 [8]

Company Performance - Simulations Plus, Inc. reported third-quarter fiscal 2025 adjusted earnings of 45 cents per share, a 66.7% increase year over year, surpassing the Zacks Consensus Estimate of 26 cents per share [1] - Quarterly revenues increased by 10% year over year to $20.4 million, driven by growth in software and services, along with a $2.4 million contribution from the Pro-ficiency acquisition [2] - Organic revenue fell by 4%, primarily due to reduced QSP/QST software sales and a decline in biosimulation services revenue [3] Strategic Developments - The company underwent a strategic reorganization, transitioning to a functionally-driven operating model to streamline operations and focus on high-growth areas [4] - Simulations Plus announced a $1 million investment in Nurocor, a cloud-based software company, as part of its Corporate Development Initiative targeting early-stage technology companies [5] Market Outlook - The clinical trial technology and services sector was estimated at $25.7 billion in 2024, with a projected CAGR of 15.5% from 2025 to 2030, driven by the adoption of digital health technologies [6] - Despite macroeconomic challenges, the company is committed to innovation, focusing on integrating AI-driven capabilities across its product lines [7] Financial Details - The gross margin for the quarter was 64%, down from 71.5% in the prior-year quarter, attributed to a $2 million rise in cost of revenues [16] - Total operating expenses increased by 667% to $87.3 million due to a one-time non-cash impairment charge of $77.2 million [17] - Cash and short-term investments as of May 31, 2025, were $28.5 million, up from $21.5 million as of February 28, 2024 [18] Guidance Revision - The company revised its fiscal 2025 revenue guidance to between $76 million and $80 million, down from the previous estimate of $90-$93 million [21] - Adjusted earnings per share are now expected to be in the range of 93 cents to $1.06, a decrease from the earlier projection of $1.07 to $1.20 [22]