Simulations Plus, Inc. 10-K

ITEM 5 – MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The Company’s common stock, par value $0.001 per share, has traded on the Nasdaq Global Select Market under the symbol “SLP” since May 13, 2021, prior to which it traded on the Nasdaq Capital Market under the same symbol. Holders As of October 20, 2023, there were 50 shareholders of record. A substantially greater number of holders of our common stock are “street name” or beneficial holders, whose shares are held by banks, brokers, and other financial institutions. Dividends The following dividends were declared by our Board of Directors during the fourth quarter of fiscal year 2023: (in thousands, except dividend per share amounts) Fiscal Year Record Date Distribution Date # of Shares Outstanding on Record Date Dividend per Share Total Amount 2023 7/31/2023 8/07/2023 19,931 $ 0.06 $ 1,196 Although we paid quarterly dividends of $0.06 per share of common stock in each quarter of fiscal year 2023, all future dividends are subject to declaration by our Board of Directors. There can be no assurances that our Board of Directors will continue the dividend distributions for any specified number of quarters. Refer to Note 6 – Shareholders’ Equity of the Notes to Financial Statements (Part II, Item 8 of this Report) for further details regarding dividends. Securities authorized for issuance under equity compensation plans On December 23, 2016, the Board of Directors adopted, and on February 23, 2017, the 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 initially reserved for issuance. The 2017 plan would have terminated pursuant to its terms in December 2026; however, 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 Board of Directors adopted, and on June 23, 2021, the shareholders approved, the Company's 2021 Equity Incentive Plan (the “2021 Plan”), under which a total of 1.3 million shares of common stock were initially reserved for issuance. On February 9, 2023, the Company's shareholders approved, and the Company adopted, an amendment to the 2021 Plan to increase the number of shares of common stock authorized for issuance thereunder by an additional 250,000 shares. The 2021 Plan will terminate in 2031. As of August 31, 2023, employees and directors of the Company 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. 34 Table of Contents Equity Compensation Plan Information The following table provides information as of August 31, 2023, regarding our equity compensation plans: (in thousands, except weighted-average amounts) Plan category Number of securities to be issued upon exercise of outstanding options Weighted-average exercise price of outstanding options Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) Column reference (a) (b) (c) Equity Compensation Plans Approved by Security Holders 1,478 $ 34.62 847 Equity compensation plans not approved by security holders — $ — — Total 1,478 $ 34.62 847 Shareholder Return Performance Graph The following graph compares the cumulative total stockholder return on Simulations-Plus, Inc. (SLP) common stock of a $100 investment from August 31, 2018, through August 31, 2023, assuming reinvestment of dividends, with a similar investment in the Russell 3000 index (“Russell 3000”) and with the companies listed in the Nasdaq Composite - Total Returns (“IXIC”), and the S&P600 Health Care Equipment & Services Industry Group Index ("SP600-3510"). The historical information set forth below is not necessarily indicative of future performance. This performance graph shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any of our filings under the Securities Act of 1933, as amended, of the Exchange Act, except as shall be expressly set forth by specific reference in such filing. 2019 2020 2021 2022 2023 SLP $176.28 $292.59 $218.39 $299.69 $225.25 NASDAQ $98.41 $145.53 $188.59 $146.86 $173.27 Russell 3000 $99.54 $118.67 $155.69 $134.09 $150.36 SP600-3510 $85.58 $87.53 $135.98 $102.81 $96.18 Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities During the year ended August 31, 2023, there were no other unregistered sales of our securities that were not reported in a Current Report on Form 8-K or our Quarterly Reports on Form 10-Q. 35 Table of Contents Repurchases On December 29, 2022, our Board of Directors authorized and approved a share repurchase program for up to $50 million of the outstanding shares of our common stock, and on January 11, 2023, we 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 our outstanding shares of common stock as part of the share repurchase program, which was settled in full in May 2023. The share repurchase program has no expiration date but may be terminated at any time at our Board of Directors’ discretion. In January 2023, we received an initial delivery of an aggregate of 408,685 shares of our common stock from Morgan Stanley pursuant to the ASR Agreement, in exchange for which we made an initial payment of $20 million to 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 our common stock during the term of the ASR Agreement, Morgan Stanley delivered an additional 83,356 shares of Company common stock to us, which shares were also retired and treated as authorized, unissued shares. After completion of the repurchases under the ASR Agreement, $30 million remains available for additional repurchases under our authorized repurchase program. 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 (1) On January 11, 2023, we entered into the ASR Agreement with Morgan Stanley to repurchase an aggregate of $20 million of our outstanding shares of common stock and received an initial delivery of an aggregate of 408,685 shares of our common stock. At final settlement on May 20, 2023, based on the volume-weighted average price of our common stock during the term of the ASR Agreement, Morgan Stanley delivered an additional 83,356 shares of Company common stock to us, which shares were also retired and treated as authorized, unissued shares. The average price paid per share pursuant to the ASR Agreement was approximately $40.65. ITEM 6 – [RESERVED] 36 Table of Contents