What changed in this filing

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Item 1. Business

2024-10-30 compared with 2023-10-27 · 179 added, 183 removed, 149 unchanged (71% of the section changed)

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As used in this Report, each of the terms “we,” “us,” “our,” the “Company,” and “Simulations Plus” refers to Simulations Plus, Inc.

and its wholly owned subsidiaries (both current and previous, as applicable), Simulations Plus International, Inc.

(“SLPI”), which owns 100% of the outstanding equity interests of Lixoft of Paris, France, and Immunetrics, Inc., unless otherwise stated or the context otherwise requires.

On December 20, 2022, SLPI, a Delaware corporation, was created as a wholly owned subsidiary of Simulations Plus, Inc.

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, Inc.

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.

On June 16, 2023, Simulations Plus, Inc.

acquired Immunetrics, Inc.

(“Immunetrics”) through a reverse triangular merger.

Pursuant to the Agreement and Plan of Merger (the “Merger Agreement”), at closing, Simulation Plus, Inc.’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.

Effective September 1, 2023, the Company merged Immunetrics with and into Simulations Plus, Inc.

through a short-form mergers (the “Merger”).

To effectuate the Merger, the Company filed Certificates of Ownership with the Secretaries of State of the states of Delaware (Immunetrics’ state of incorporation) and California (Simulation Plus, Inc.’s state of incorporation).

Consummation of the Merger was not subject to approval of the Company’s stockholders and did not impact the rights of the Company’s stockholders.

Simulations Plus, Inc., incorporated in 1996, is a premier developer of modeling and simulation software for drug discovery and development, including the prediction of properties of molecules utilizing both artificial intelligence (“AI”) and machine-based technology.

We also provide consulting services ranging from early drug discovery through preclinical and clinical trial development to regulatory submissions supporting product approval.

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.

The Company is headquartered in Southern California, with offices in Buffalo, NY, Research Triangle Park, NC, Pittsburgh, PA, and Paris, France.

and its wholly owned subsidiaries (both current and previous, as applicable).

Simulations Plus, Inc.

was incorporated in California on July 17, 1996.

We are a global leader and premier provider in the biopharma sector, offering advanced software and consulting services that enhance drug discovery, development, research, clinical trial operations, regulatory submissions, and commercialization.

With the June 2024 acquisition of Pro-ficiency Holdings, Inc.

and its subsidiaries (collectively, “Pro-ficiency”), the Company extended its reach across the drug development value chain from the initial protocol stage through all phases of clinical research and development (“R&D”) to product commercialization.

Simulations Plus now has a one-of-a-kind platform to serve its clients at every step in the drug development process.

This optimizes efficiency, costs and time-to-market for our clients and enhances our competitive position.

Our clients face many challenges.

Developing new therapies is time-consuming and expensive, requiring an average of 10-15 years and an average cost of $6.16 billion to develop a single drug.

Drug sponsors must prioritize not only efficacy of the drug, but also issues like drug-drug interactions, inclusion of diverse populations, regulatory approvals, reduction of animal testing, safety and compliance during clinical trials, and commercial success.

Our model-informed drug development (“MIDD”) software and services allow clients to use modeling and simulation to accelerate the drug development timeline, reduce the costs of R&D, comply with regulatory guidance and best practices, and increase confidence in the safety and efficacy of their drugs.

Our adaptive learning solutions support the success of clinical trials by increasing the diversity and retention of participants and driving competency and compliance with trial protocols, while our medical communications solutions provide support in obtaining regulatory approval and post regulatory commercialization of drugs.

Through these offerings, we fulfill our mission to create value for our customers by accelerating and reducing the costs of R&D through innovative science-based software and consulting solutions that optimize treatment options and improve patient lives.

At the beginning of fiscal year 2024, the Company reorganized its internal structure to create a more integrated and cohesive operating platform based on key product and services offerings rather than separate divisions based on its prior acquisitions.

This business unit restructuring is engendering greater scientific collaboration and knowledge sharing within the Company that leads to identifying new opportunities that both advance the Company’s business objectives and deepen client relationships.

Continuing with our strategic plan of aligning our business units around products and services, the Pro-ficiency acquisition resulted in two new business units, Adaptive Learning & Insights and Medical Communications, giving the Company six business units that include:

• Cheminformatics (“CHEM”);

• Physiologically Based Pharmacokinetics (“PBPK”);

• Clinical Pharmacology and Pharmacometrics (“CPP”);

• Quantitative Systems Pharmacology (“QSP”);

• Adaptive Learning & Insights (“ALI”);

• Medical Communications (“MC”).

The Company is headquartered in Southern California, with offices in Buffalo, NY;

Research Triangle Park, NC;

Pittsburgh, PA;

and Paris, France.

Our common stock 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.

We are a global leader, delivering relevant, cost-effective software and creative and insightful consulting services.

Pharmaceutical and biotechnology companies and hospitals use our software programs and scientific consulting services to guide early drug discovery (molecule design screening and lead optimization), preclinical, and clinical development programs, and the development of generic medicines after patent expiration, including using our software products and services to enhance their understanding of the properties of potential new therapies and to use emerging data to improve formulations, select and justify dosing regimens, support generic pharmaceutical product development, optimize clinical trial designs, and simulate outcomes in special populations, such as in elderly and pediatric patients.

We provide end-to-end offerings across the drug development continuum, including guiding early drug discovery, establishing pre clinical protocols, developing clinical programs, enabling clinical trial operations, facilitating regulatory submissions for product approval, and supporting commercial market launches.

We are a premier developer of modeling and simulation software for drug discovery and development, including the prediction of properties of molecules utilizing both artificial intelligence (“AI”) and machine-learning technologies.

Our customers use our software programs and scientific consulting services to enhance their understanding of the properties of potential new therapies and to use emerging data to improve formulations, select and justify dosing regimens, support generic pharmaceutical product development, optimize clinical trial designs, and simulate outcomes in special populations, such as in elderly and pediatric patients.

SEGMENT INFORMATION

During the year ended August 31, 2023, our business was organized into two reportable segments, software and services.

We currently offer twelve software products for pharmaceutical research and development, as follows:

During the fiscal year ended August 31, 2024, our business was organized into two reportable segments, software and services.

We currently offer software products for pharmaceutical research, development, and commercialization, as follows:

• Three simulation products that provide time-dependent results based on solving large sets of mechanistic differential equations:

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◦ MedChem Designer™

• Six products that are based on mechanistic, mathematical models:

• Seven products that are based on mechanistic, mathematical models and differential equations:

◦ OBESITYsym™

• One product designed for modeling and simulation that allows for population analyses, rapid clinical trial data analyses, and regulatory submissions:

◦ MonolixSuite™ (the combination of Monolix (c) , PKanalix (c) , and Simulx (c) ).

Our software business represented 61% of our total revenue during the year ended August 31, 2023, primarily generated by the following products:

◦ MonolixSuite™ (the combination of Monolix ® , PKanalix ® , and Simulx ® ).

• One product for education and compliance training:

◦ Pro-ficiency Performance Management

• One product for key opinion leader (“KOL”) research in the medical community:

◦ Panorama KOL Insights

Our software business represented 59% of our total revenue during the fiscal year ended August 31, 2024, primarily generated by the following products:

Our flagship product, initially introduced in 1998, and currently our largest single source of software revenue, is GastroPlus.

GastroPlus mechanistically simulates the absorption and drug interaction of compounds administered to humans and animals.

GastroPlus mechanistically simulates the absorption and drug interactions of compounds administered to humans and animals.

It is currently one of the most widely used commercial software products of its type by industry and regulatory agencies in the U.S.

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We work to release updated versions of the program on an ongoing basis.

In October 2022, GastroPlus version 9.8.3, which included new mechanisms and updated documentation for key drug interaction standards models, was released.

This version also added important new capabilities, including improvements to nonalcoholic fatty liver disease (“NAFLD”) and nonalcoholic steatohepatitis (“NASH”) disease population simulations to inform the NAFLDsym® platform, additional dosage route models, and improved reporting templates for the Monolix™ software to support the statistical analysis of virtual physiologically-based pharmacokinetic (“PBPK”) population results.

Because of the widespread use of GastroPlus, we have been able to enter both funded and unfunded collaborations with industry and government agencies to drive advances to modeling and simulation science.

In May 2024, GastroPlus version 10 (branded as GPX™) was released.

This version was the culmination of a long-term collaboration with our partners to understand how we can better support their program needs and enable critical scientific thinking.

This resulted in a completely redesigned, intuitive, and flexible platform which incorporated the proven top-rated science, advanced models, refined algorithms, and integrated machine learning (“ML”) technology that has been validated over 26 years.

Because of the widespread use of GastroPlus, we have been able to enter both funded and unfunded collaborations with industry and government agencies to drive advances in modeling and simulation science.

In all such collaborations, we own the intellectual property developed within the GastroPlus program, and updates are integrated into future versions and made available to all clients.

In the year ended August 31, 2023, we received six funded grants from the U.S.

FDA to enhance PBPK modeling science.

In the fiscal year ended August 31, 2024, we participated in nine funded grants from the U.S.

Food and Drug Administration (“FDA”) to enhance PBPK modeling science.

Recent collaborations include:

• Animal health models:

in November 2022, we entered into a funded collaboration with the University of Bath and the FDA to improve the accuracy of drug concentrations predicted locally within gut tissue and to outline novel strategies for applying in vitro systems and in silico models to assess new formulation approaches for addressing GI diseases.

• Long-acting injectable (LAI) formulation model:

in October 2022, through a joint proposal with the University of Florida’s College of Pharmacy, we were awarded a newly funded contract from the FDA to advance in vitro and (patho) physiology-based PBPK models to understand and predict pulmonary absorption and tissue retention of inhaled drugs.

• Virtual bioequivalence studies:

in September 2023, we entered into a funded collaboration with the FDA to validate and define best practices for PBPK modeling workflows to simulate virtual bioequivalence (“VBE”) studies in support of regulatory bio-waivers.

• Modified-release (“MR”) product development model:

in January 2024, through a joint proposal with Northeastern University and InnoGI Technologies, we were awarded a newly funded contract from the FDA to advance the development and approval of generic oral MR drug products through the combination of novel in vitro testing and mechanistic modeling and simulation.

MonolixSuite ™

The MonolixSuite is a unique solution for modeling and simulation for pharmaceutical companies, biotechnology enterprises, and hospitals.

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The extended MonolixSuite contains three main products:

Monolix, Simulx, and PKanalix.

PKanalix, Monolix, and Simulx.

Monolix 2024R1 was released in March 2024, which combines the most advanced algorithms with a unique ease of use.

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Version 12 of ADMET Predictor was released in July 2024, which added many new features including:

• New industry partner data that more than doubles the training dataset of ionization constants (“pKa”), leading to enhanced predictive accuracy and wider applicability of our S+pKa model

• New functionality to perform 3D virtual screening based on shape and pharmacophore-feature similarity

• New CYP inhibition (“Ki”) models to allow for rapid drug-drug interaction (“DDI”) risk assessment

• Significant enhancements to the AI-driven drug design (“AIDD”) module

• Enhanced Models :

New and expanded models offer greater predictive accuracy, with an average 30% increase in training set sizes, for microsome and hepatocyte clearance, protein binding, bio relevant solubilities, MDCK-LE/PAMPA permeability, and more

• High-Throughput Pharmacokinetics (“HTPK”) :

New options for solution dosing, adjusted free fraction outputs, and species-specific simulations enhance the flexibility and precision of HTPK studies

• Artificial Intelligence-Driven Drug Design (“AIDD”) :

Integration of 3D shape matching and tissue sensitivities (based on tissue Kp values) as new objectives, facilitating innovative lead optimization processes

• New DILI Module :

Introduction of the first drug-induced liver injury (“DILI”) endpoint models to support high-throughput (“HT”) DILIsym® predictions in early drug development

• Boosted ANN Regression Models and added 37 new descriptors in ADMET Modeler™

• General Usability and Informatics Improvements

We have made significant investments in three key areas with recent versions:

improving integration of our top-ranked ADMET Predictor and GastroPlus models to leverage our novel high-throughput pharmacokinetic (“HTPK”) simulation approaches for chemists and safety researchers, enhancing our best-in-class AI/machine-learning engine to assist with drug discovery, and advancing on our innovative AIDD Module to apply generative AI technology to design and optimize lead molecules for any combination of properties.

improving integration of our top-ranked ADMET Predictor and GastroPlus models to leverage our novel high-throughput pharmacokinetic (“HTPK”) simulation approaches for chemists and safety researchers, enhancing our best-in-class AI/ML engine to assist with drug discovery, and advancing our innovative AIDD Module to apply generative AI technology to design and optimize lead molecules for any combination of properties.

Recent collaborations include:

• Machine-learning models for ionization constants ( “ pKa ” ):

in August 2022, we entered into a new collaboration with a large pharmaceutical company to leverage their expansive internal databases to improve the accuracy of predictions, and extend the chemical coverage space, of our pKa models using the novel AI/machine-learning and atomic descriptor calculation methods within ADMET Predictor.

In February 2023, we entered another new data-sharing collaboration with a large agrochemicals company to further extend our top-rated AI/machine learning models for predicting ionization descriptors and endpoints.

• Qualification of in silico methods for risk assessment of chemicals:

in February 2024, we extended a collaboration with the Translational Toxicology Division at the National Institute of Environmental Health Sciences (“NIEHS”) to support the rapid safety assessment of chemicals in animals and humans.

• Drug design collaboration using the AIDD Module:

in March 2023, we entered into a collaborative research agreement with the Polish Academy of Sciences (“PAS”) to jointly design new compounds for the RORγ/RORγT nuclear receptors using our cutting-edge AI/machine learning (“ML”) technology in the ADMET Predictor® software platform.

in March 2023, we entered into a collaborative research agreement with the Polish Academy of Sciences (“PAS”) to jointly design new compounds for the RORγ/RORγT nuclear receptors using our cutting-edge AI/ML technology in the ADMET Predictor® software platform.

Emerging intellectual property, in the form of encouraging lead compounds, will be jointly owned by the Company and PAS for further development opportunities.

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Subsequent milestone payments will be made to the Company as key research and development goals are met.

Pro-ficiency Performance Management

Pro-fiency Performance Management is an adaptive learning platform that uses lifelike simulation and detailed data tracking to increase recruitment, retention, and protocol compliance during clinical trials.

In simulations of complex real-world scenarios, learners are asked to make decisions and practice implementation of the trial protocol.

The generated data provides insight into areas of the trial protocol that are unclear to healthcare practitioners, enabling clarification and further education prior to start of clinical trials.

Panorama KOL Insights

Panorama KOL Insights is a platform for KOL research in the life sciences industry.

It provides current information about influential industry leaders, which can be filtered by criteria including but not limited to therapeutic expertise, professional affiliation(s), and geographic location.

Our scientists and engineers have extensive expertise in drug absorption via various dosing routes, pharmacokinetics, pharmacodynamics, drug-drug interactions, and other areas related to the drug development process.

We conduct contracted consulting studies for large customers with complex problems who recognize our expertise in solving them, as well as for smaller customers.

We also offer services supporting marketplace insight and medical communications for clinical and commercial drug development.

The demand for our consulting services has been steadily increasing, and we have expanded our consulting teams to meet the increased workload.

Our services business represented 39% of our total revenue during the year ended August 31, 2023, primarily generated by the following service offerings:

Our services business represented 41% of our total revenue during the fiscal year ended August 31, 2024, primarily generated by the following service offerings:

Our clinical-pharmacology-based consulting services include population pharmacokinetic and pharmacodynamic (“PKPD”) modeling, exposure-response analyses, clinical trial simulations, data programming, and technical writing services in support of regulatory submissions.

In addition to modeling and simulation consulting services, we provide expertise and assistance with development-related decision making and support for regulatory interactions related to dose selection, clinical trial design, and understanding of the determinants of safety and efficacy for new medicines.

We provide creative and insightful consulting services to support our quantitative systems pharmacology/quantitative systems toxicology (“QSP/QST”) modeling focused on NAFLD, and NASH, idiopathic pulmonary fibrosis (“IPF”), heart disease, liver and kidney safety, as well as other areas.

In 2014, the FDA and other regulatory agencies began to emphasize the need to encourage mechanistic PBPK modeling and simulation in clinical pharmacology, with final guidance documents completed in 2018.

New draft guidance documents, which were released in October 2020, focused on additional biopharmaceutics applications for oral drug product development, manufacturing changes, and controls.

This has resulted in an increased need for our scientific consulting staff to drawn upon its extensive experience across multiple therapeutic areas of modeling and simulation methods to provide consulting-related services in support of this sophisticated technique.

We support Model-Informed Drug Discovery and Development throughout the entire product lifecycle, from discovery through translational research and clinical development, when an organization does not have the time or resources to use our software directly.

We provide creative and insightful consulting services to support our quantitative systems pharmacology, QSP, modeling focused on NAFLD, and NASH, idiopathic pulmonary fibrosis (“IPF”), heart disease, and liver and kidney safety, as well as other areas.

In 2014, the FDA began to emphasize the need to encourage mechanistic PBPK modeling and simulation in clinical pharmacology, with final guidance documents completed in 2018.

Draft guidance documents from the FDA, which were released in October 2020, focused on additional biopharmaceutics applications for oral drug product development, manufacturing changes, and controls.

Other global agencies, including the European Medicines Agency (“EMA”), Japan’s Pharmaceutical and Medical Devices Agency (“PMDA”), the Chinese National Medical Products Administration (“NMPA”), and Health Canada, have all published their own guidance, or extended existing ones, over the past several years.

This has resulted in an increased need for our scientific consulting staff to draw upon its extensive experience across multiple therapeutic areas of modeling and simulation to provide consulting-related services utilizing these sophisticated techniques.

We support MIDD throughout the entire product lifecycle, from discovery through translational research and clinical development, when an organization does not have the time or resources to use our software directly.

More specifically, our clients seek out our consulting services to acquire scientific, therapeutic-area-related modeling and simulation expertise that they do not have in-house.

Early Drug Discovery ( “ EDD ” )

At Simulations Plus, we have a team of experts, including computational and medicinal chemists, cheminformatics specialists, and drug development professionals with decades of experience, all here to facilitate small and large companies’ drug discovery and development journeys.

At Simulations Plus, we have a team of experts, including computational and medicinal chemists, cheminformatics specialists, and drug development professionals with decades of experience, all able to facilitate small and large companies’ drug discovery and development journeys.

With our EDD services offering, we provide end-to-end in silico drug design and optimization services, as well as help with individual steps in the process, including:

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• High-throughput screening (“HTS”) library design and hit visualization and analysis

• QSAR/QSPR modeling and simulation

• Quantitative Structure-Activity Relationship (“QSAR”)/Quantitative Structure-Property Relationship (“QSPR”) modeling and simulation

Adaptive Learning & Insights

Our expert content creation team delivers programming that is focused on the development of engaging, adaptive learning solutions independent of individualized analytics.

Our team of experts supports clients in developing training materials for complex procedures, providing insight derived from learner data, and optimizing learning in life sciences.

Medical Communications

Our experienced medical communications consultants provide strategy, positioning, messaging and tactical support for our clients in support of their market intelligence and commercial endeavors.

Below is a summary of revenue percentages by each of our software and services businesses for the fiscal years ended August 31:

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We market our software and services globally through attendance and presentations at scientific meetings, exhibits at trade shows, seminars at pharmaceutical companies and government agencies, online presentations, our website, and various communication channels to our database of prospects and customers.

At various yearly scientific meetings worldwide, numerous presentations and posters report research performed using our software.

At various scientific meetings worldwide, research accomplishments using our software are reported through numerous presentations and posters.

Many of these presentations are from industry and FDA scientists;

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Our sales and marketing efforts are handled primarily internally by sales and marketing staff, with our scientific team and several senior management staff assisting our marketing and sales staff with trade shows, seminars, and customer training both online and on-site.

During fiscal year 2023, the Company invested in learning management software which streamlined our ability to offer online training to customers.

During fiscal year 2024, the Company invested in marketing automation tools to increase customer insights and engagement.

In addition, enhancements were made to our customer relationship management software, providing insights about our targeted markets and customers.

We also have independent distributors in Japan, China, India, South Korea, and Brazil, who sell and market our products with support from our scientists and engineers.

In March 2021, we launched our MIDD+ (Model-Informed Drug Development) scientific conference, where speakers shared their real-world impact using modeling and simulation technology.

During the two-day event, representatives from the U.S.

FDA Offices of Clinical Pharmacology, New Drug Products, Research and Standards, and Translational Sciences, and from the U.S.

FDA Centers of Drug Evaluation and Research and the National Center for Toxicological Research, as well as ANVISA (The Brazilian Health Regulatory Agency) and Health Canada, provided case studies and software demonstrations on a wide range of topics.

The event also featured a panel discussion on the ascent of model-informed drug development and the increasing importance of developing next-generation technology.

The conference was well received, and we hosted it again in February 2022 and February 2023.

We compete against a number of established companies that provide screening, testing, and research services, and products that are not based on simulation software.

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Smaller companies generally need to outsource a greater percentage of this effort.

Thus, we compete not only with other software suppliers and scientific consulting service providers, but also with the in-house development and scientific consulting teams at some of the larger pharmaceutical companies.

Thus, we compete not only with other software suppliers, scientific consulting service providers, and contract research organizations ("CROs"), but also with the in-house development and scientific consulting teams at some of the larger pharmaceutical companies.

Our competitors include, but are not limited to, Optibrium, Certara, ICON, Metrum Research Group, Veeva, and WCG.

Based on our technical knowledge and expertise, we believe that we are strategically positioned to offer competitive modeling and simulation consulting services to companies.

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(i) to acquire scientific, therapeutic-area-related modeling expertise that they do not have in-house, (ii) to address a need for modeling and simulation efforts beyond the capacity of in-house resources, (iii) to fulfill their modeling requirements more efficiently than they could do in-house, and (iv) to utilize our software when they do not have the in-house expertise to do so.

We apply our software and assist companies in such areas as PKPD, PBPK, and QSP/QST.

We compete against numerous service providers, ranging from departments within large contract research organizations ("CROs") to independent consulting organizations of various sizes, as well as individual consultants.

We apply our software and assist companies in such areas as MIDD, PKPD, PBPK, and QSP.

We believe the key factors in our ability to successfully compete in this field are our ability to:

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TRAINING AND TECHNICAL SUPPORT

Customer training and technical support are important factors in customer satisfaction for our products, and we believe we are an industry leader in providing strong customer training and technical support in our business areas.

The acquisition of Pro-ficiency expanded our software and services portfolio to include customer-facing professional development and medical communications capabilities within the clinical trial and commercial space.

The adaptive learning/simulation-based training approach delivers bespoke education underpinned by a proprietary software foundation that allows for rapid content development with multi-language and cultural adaptability, with insights derived from learned behavior that highlight performance/execution risk areas and allow them to be addressed before trials or projects begin.

The medical communications team delivers a customer-centric approach to supporting sponsors in their endeavors to drive intelligent clinical development, from medical affairs to commercialization, with programming such as advisory boards, focus groups and medical education.

These new solutions address the previously untapped clinical research and medical communications markets for Simulations Plus.

Customer training and technical support are important factors in customer satisfaction for our modeling and simulation products, and we believe we are an industry leader in providing strong customer training and technical support in our business areas.

We provide in-house seminars at customers’ and potential customers’ sites, as well as at selected universities to train students who will soon be industry scientists.

These seminars often serve as initial training in the event the potential customer decides to license or evaluate our software.

Technical support is provided after the sale of any software in the form of on-site training (at the customer’s expense), web meetings and telephone, fax, and e-mail assistance to the customer’s users during the customer’s license period.

Technical support for our software is provided by our life sciences teams and our inside sales and support staff.

We have found that most clients need minimal technical support for our software products.

We provide support to the GastroPlus User Group in Japan, which was organized by Japanese researchers in 2009.

In early 2013, a group of scientists in Europe and North America organized another GastroPlus User Group following the example set in Japan.

Over 1,575 members have joined this group to date.

We support this group through coordination of online meetings each month and managing the user group website for exchange of information among members.

These user groups provide us valuable feedback for desired new features and suggested interface changes.

RESEARCH AND DEVELOPMENT

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In certain instances, these arrangements have required that we pay royalties to third parties;

we paid no royalties during the year ended August 31, 2023.

we paid no royalties during the fiscal year ended August 31, 2024.

We intend to continue to license or otherwise acquire technology or products from third parties when we believe that it makes business sense to do so.

Research and development ("R&D") activities include both enhancement of existing products and development of new products.

Development of new products and adding functionality to existing products are capitalized in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 985-20, “Costs of Software to Be Sold, Leased, or Marketed.” R&D expenditures, which primarily relate to both capitalized and expensed salaries, R&D supplies, and R&D consulting, were $7.8 million during fiscal year 2023, of which $3.3 million was capitalized.

R&D expenditures were $6.4 million during fiscal year 2022, of which $3.2 million was capitalized.

R&D expenditures during fiscal year 2021 were $6.9 million, of which $2.9 million was capitalized.

Our software products are designed and developed by our development teams, which work remotely using collaboration software.

Our products and services are delivered electronically.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

We primarily protect our intellectual property through trademarks, copyrights, trade secrets, and through contractual measures.

Our intellectual property consists primarily of source code for computer programs, online platforms, and data files for various applications of those programs and platforms for use by pharmaceutical businesses.

The expertise of our staff is a considerable asset closely related to intellectual property and attracting and retaining highly qualified scientists and engineers is essential to our business.

Our customers include companies involved in pharmaceuticals, biotechnology, agrotechnology, and cosmetics, as well as universities, hospitals, and government research organizations.

We concentrate on serving the needs of our customers in drug discovery, development, clinical trials, and post-patent generic formulation development.

Our current customer base is highly fragmented.

For the year ended August 31, 2023, our three largest customers in terms of revenue each accounted for 6%, 4%, and 3% of our revenues, respectively.

Our revenues exhibit seasonal fluctuations, with the first fiscal quarter (September-November) generally having the lowest revenues.

This is due to pharmaceutical industry buying patterns as well as our revenue recognition policies for software, consulting service slowdowns due to summer vacations in the previous quarter, and lower customer and employee conference attendance in those periods.

We concentrate on serving the needs of our customers in drug discovery, development, clinical trials, post-patent generic formulation development, and post-approval drug commercialization.

Our current customer base is highly fragmented, and we did not derive a material portion of our revenues from any single client for the fiscal year ended August 31, 2024.

Our revenues exhibit seasonal fluctuations, with the first fiscal quarter (September-November) generally having the lowest revenues for biosimulation software and services, while clinical trial and commercial activity tends to be slow during the last fiscal quarter (June-August).

This is due to pharmaceutical industry buying patterns, consulting service slowdowns due to summer vacations in the previous quarter, and lower customer and employee conference attendance in those periods.

Revenues for any quarter are not necessarily indicative of revenues for any future period;

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Presently, we do not anticipate that efforts to maintain such compliance will have a material effect on capital expenditures, earnings, or competitive position with respect to any of our operations.

HUMAN CAPITAL RESOURCES

We are committed to our people, and we embrace a culture of engagement, empowerment, and equity.

Over 95% of our global employees are employed full-time, and more than 75% work within our life sciences software or consulting divisions.

HUMAN CAPITAL

We are committed to our people, and embrace a culture of engagement, empowerment, and equity.

Over 98% of our global employees are employed full-time, and more than 68% work within our life sciences software or consulting business units.

Given the specialized nature of our business, candidates for our open positions are strategically selected for their unique education and skills.

The majority of our employees have advanced degrees with over 70% of our technical and scientific staff holding a doctoral degrees in mathematics, chemistry, biomedical engineering, and/or the pharmaceutical sciences.

As of August 31, 2023, we employed a total of 197 persons, including 192 full-time employees and 5 part-time employees, consisting of 127 in scientific, technical, and research and development, 18 in marketing and sales, and 52 in administration, operations, and accounting.

We believe that our future success will depend, in part, on our ability to continue to attract, hire, and retain qualified personnel.

To continue to support the endeavor, we have focused heavily on our total rewards program, which includes components of compensation, training, time off, recognition and support for business travel.

At the end of 2022, we were recognized by Comparably for several workplace accolades including Best Company for Women, A+ culture rating and A+ Diversity rating.

We continue to seek additions to our science and technical staff, although the competition for such personnel in the pharmaceutical industry is intense.

We added 10 new scientists via direct recruiting and 19 scientific and technical staff with the acquisition of Immunetrics this past year.

We also achieved a turnover rate of under 8%.

None of our employees are represented by a labor union, and we have never experienced a work stoppage.

We believe that our relations with our employees are good.

The majority of our employees have advanced degrees, with over 65% of our technical and scientific staff holding doctoral degrees in mathematics, chemistry, biomedical engineering, and/or the pharmaceutical sciences.

As of August 31, 2024, we employed a total of 247 persons, including 243 full-time employees and 4 part-time employees.

We believe that our continued success depends on our ability to continue to attract, hire, and retain qualified personnel.

To support the endeavor, we have continued to focus heavily on our total rewards program, which includes components of compensation, health and wellness benefits, training, time off, recognition and support for business travel.

Over the past year, the Company was recognized by Comparably as Best Company for Diversity, Best Company for Women, Best Company Culture and a Best Company Compensation awards winner, as determined based on direct feedback from our employees.

We had a voluntary turnover rate of less than 4% during fiscal year 2024, further exemplifying our good relations with employees.

Diversity, Equity, and Inclusion

We embrace diversity with the knowledge that it can lead to greater innovation, and in our workplace, we foster inclusion, so all employees feel they are a part of our team with equal access to all opportunities.

One of our goals is to continue expanding our focus on diversity, equity, and inclusion.

One of our goals is to always continue expanding our focus on diversity, equity, and inclusion.

In terms of gender equity, women currently comprise 48% of our workforce and 47% of our scientific staff.

We have also increased racial diversity with over 39% of our employees from minority backgrounds.

We have implemented the ADP workforce now platform, which allows us to access and better understand trends in our staff and hiring relative to diversity.

We are utilizing the recruitment platform to track our applicants and push job postings out to reach as many diverse applicants as possible.

We continue to refine our policies and benefits to be inclusive, and implemented a new parental leave program in 2023 allowing all of our employees to take company paid time off after birth or adoption.

Our ADP Workforce Now platform, allows us to access and better understand trends in our staff and hiring relative to diversity.

We regularly track our metrics to ensure we are aligning our recruitment efforts and continue to refine our policies and benefits to be inclusive of all employees.

We continue to pay parental leave to all employees for birth or adoption, and have a flexible time off and remote-first work culture that supports the ability to work globally and allows us to hire the best fit for the role regardless of location.

Compensation, Training, and Awareness Programs

We are continuing to refine career paths for the different functions within our organization.

We continue to refine career paths for the different functions within our organization.

We use these career paths as a basis for promoting employee career development and growth within the organization, as well as in recruiting and hiring new talent.

We have continued the effort to provide top tier benefits and in fiscal year 2023, we also added a paid parental leave program.

Over the past two years, we have focused on mandated compliance, soft-skill and data privacy training.

In the coming year, we will be rolling out an education and training reimbursement program that will allow all employees access to company paid technical, leadership or skills training opportunities.

In addition to these new employee training and development initiatives, we have an ongoing program of cross-specialty training consisting of presentations by expert modelers from each division.

These monthly sessions serve to familiarize all divisions with the applications and techniques unique to each division and, in so doing, create opportunities to find synergies, expand the knowledge base across all divisions, and build a shared sense of purpose.

We have implemented a new performance platform within our ADP Workforce Now system that allows for better performance management processes.

We plan to use the features to continue to focus on performance, goal tracking, and succession planning as part of our future personnel growth strategies.

This past year, we implemented a training program that allowed all employees access to company-paid technical, leadership or skills training opportunities in an area that they selected with management support.

In the coming year, we intend to focus even more training efforts on leadership development.

In addition to these recently implemented employee training and development initiatives, we continue to offer an ongoing program of cross-specialty training consisting of presentations by expert modelers from each business unit.

These monthly sessions serve to familiarize all business units with the applications and techniques unique to each business unit and, in so doing, create opportunities to find synergies, and cross-selling opportunities, expand the knowledge base across all business units, identify cross-selling opportunities, and build a shared sense of purpose.

Health & Safety

We place a high value on maintaining a clean, safe, and healthy environment for our employees.

In 2023, we implemented a new Human Rights Policy confirming our commitment to basic human rights worldwide.

We also updated our Code of Conduct to ensure we require our employees and vendors work within our established principals of ethics.

The well-being of our employees, whether they are working in our divisional offices or remotely from home offices, is paramount.

Our Human Rights Policy confirms our commitment to basic human rights worldwide and our Code of Conduct requires our employees and vendors to work within our established principals of ethics.

The well-being of our employees, whether they are working in our offices or remotely from home offices, is one of our highest priorities.

We believe that we are substantially in compliance with all applicable laws, regulations, and standards, and we make every reasonable effort to be attentive and responsive to our employees’ needs.

In our offices, we have provided employees with ergonomic equipment, including ergonomic chairs and standing desks, and for their home offices, we provide an allowance for the purchase of home office equipment.

We continue to provide very competitive health and wellness benefits, and in 2023, we ran a wellness challenge that had monetary incentives to encourage a healthy and less sedentary lifestyle.

We continue to provide very competitive health and wellness benefits, and each year we host a wellness challenge for all employees with monetary incentives to encourage a healthy and less sedentary lifestyle.

We also host regular “coffee breaks” to encourage, even in a remote environment, interacting with colleagues outside of work meetings or topics.

We also consider open and transparent channels of communication to be a critical component of our employee health and wellness program.

Toward this end, on a quarterly basis, we hold a company-wide virtual meeting to keep our employees engaged, informed, and apprised of activities occurring at the company and at each division, including quarterly financial results, future goals, and notable milestones.

INTELLECTUAL PROPERTY AND OTHER PROPRIETARY RIGHTS

We primarily protect our intellectual property through copyrights and trade secrets.

Our intellectual property consists primarily of source code for computer programs and data files for various applications of those programs in the pharmaceutical software businesses.

The expertise of our staff is a considerable asset closely related to intellectual property and attracting and retaining highly qualified scientists and engineers is essential to our business.

EFFECT OF GOVERNMENT REGULATIONS

Toward this end, on a quarterly basis, we hold a company-wide virtual meeting to keep our employees engaged, informed, and apprised of activities occurring at the Company and within each business unit, including quarterly financial results, future goals, and notable milestones.

GOVERNMENT REGULATION

We believe that our operations are substantially in compliance with all applicable laws and regulations and that we hold all necessary permits to operate our business in each jurisdiction in which our facilities are located.

Laws and government regulations are subject to change and interpretation.

Our pharmaceutical software products are tools used in research and development and are neither approved nor approvable by the FDA or other government agencies.

Our pharmaceutical software products and platforms are tools used in research and/or development and are neither approved nor approvable by the FDA or other government agencies.

No significant pollution or other types of hazardous emission result from our operations and it is not anticipated that our operations will be materially affected by federal, state, or local provisions concerning environmental controls.

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Furthermore, compliance with federal, state, and local requirements regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, have not had, nor are they expected to have, any material effect on the capital expenditures, earnings, or competitive position of the Company.

COMPANY WEBSITE

We maintain a corporate website at:

www.simulations-plus.com.

The contents of this website are not incorporated in or otherwise to be regarded as part of this Report.

We file reports with the SEC, which are available on our website free of charge.

These reports include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, “Section 16” filings on Form 3, Form 4, and Form 5, and other related filings, each of which is provided on our website as soon as reasonably practical after we electronically file such materials with or furnish them to the SEC.

In addition, the SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Company.

ENVIRONMENTAL, SOCIAL, GOVERNANCE

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The topics covered in this section are identified through third-party ESG reporting frameworks, standards and metrics, such as the Sustainability Accounting Standards Board (“SASB”), and United Nations Sustainable Development Goals ("SDGs").

More information regarding our key ESG programs, goals and commitments, and key metrics can be found on our website and within our 2022 ESG Update and 2020 ESG Report.

More information regarding our key ESG programs, goals and commitments, and key metrics can be found on our website and within our 2023 ESG Update, 2022 ESG Update, and 2020 ESG Report.

Our ESG highlights include the following:

Environmental Matters

We participate in a recycling program through our local waste management facilities to divert all recyclable materials – bottles, cans, plastics, paper, and cardboard – from landfills.

Across the Company, our facilities provide for recycling, and our electronic waste is sent to local approved e-waste recycling centers.

We have achieved 90% reduction in energy usage for data center cooling.

We have implemented a policy of using exclusively IT hardware vendors that embrace environmental sustainability.

We are continuing with the commitment to work-from-home, with 74% employees working remotely.

We participate in recycling programs through local waste management facilities to divert all recyclable materials away from landfills, including but not limited to bottles, cans, plastics, paper, and cardboard.

Our electronic waste is sent to approved local e-waste recycling centers.

We have a policy of using IT hardware vendors that embrace environmental sustainability.

We continue in our commitment to remote work;

with most employees working from home, which reduces emissions from commuting to workplaces.

As part of our ongoing commitment to environmentally sustainable business operations, we recently consolidated the servers in our U.S.

offices into our existing colocation facility to reduce energy usage and our carbon footprint.

As a result, our energy usage was reduced by 75% compared to the prior year.

Greenhouse Gas Emission:

Our purpose is to calculate the greenhouse gas (GHG) emissions for better visibility of environmental impact.

We have identified our base year to calculate emissions inventory for the year ended August 31, 2023.

We have used control approach to identify and determine the organizational boundaries.

offices are in Pittsburgh-PA with 7,141 square feet of leased office space, Lancaster-CA with 4,200 square feet of leased office space, Buffalo-NY with 4,317 square feet of leased office space, and Raleigh-NC with 1,510 square feet of leased office space.

Our Data Center is located in Buffalo-NY.

We lease 2,300 square feet of office in Paris, France.

Currently, we have identified our U.S.A.

offices including data center for calculating GHG emissions.

Scope 1 covers emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles).

Scope 1 is not applicable to our organization as it does not own or control any sources that produces direct greenhouse gas emissions (GHG).

The Scope 2 Guidance standardizes how corporations measure emissions from purchased or acquired electricity, steam, heat, and cooling (called “scope 2 emissions”).

We have identified electricity as our source of greenhouse gas (GHG) emissions that produces greenhouse gas (GHG) emissions.

Scope 3 encompasses emissions that are not produced by the company itself and are not the result of activities from assets owned or controlled by them, but by those that it’s indirectly responsible for up and down its value chain.

Scope 1 covers direct greenhouse gas (“GHG”) emissions that occur from sources that are controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, and vehicles).

Scope 1 is not applicable to our organization as it does not own or control any sources that produce direct GHG emissions.

Guidance standardizes how corporations measure emissions from purchased or acquired electricity, steam, heat, and cooling (called “scope 2 emissions”).

We have identified electricity as our source that produces GHG scope 2 emissions.

Scope 3 encompasses emissions that are not produced by the company itself and are not the result of activities from assets owned or controlled by them, but by those entities with which it engages up and down its value chain.

An example of this is when we buy, use, and dispose of products from suppliers.

Scope 3 emissions include all sources not within the scope 1 and 2 boundaries.

We believe that we do not produce greenhouse gas (GHG) emissions that falls within Scope 3.

We have identified and determined our source of emission is the electricity usage at facilities referenced within organizational boundaries in U.S.A.

We have used EPA Simplified GHG Emissions Calculator (SGEC) for calculating the GHG emission.

For the year ended August 31, 2023, using the SGEC calculator, the total CO2 equivalent GHG emissions is 470.6 metric tons.

Our operations are built on continual improvements in efficiency and clean energy.

We are attentive to energy use in our office operations and strive to only use what is necessary for business purposes.

In 2023, we reduced the footprint of our US-based facilities by 35%, decreasing it from 19,300 sf to 12,400 sf.

We also implemented LearnUpon LMS and Adobe e-signature to reduce travel for in-person training and the need for printed materials, with virtual on-demand programs using only digital materials.

We believe that we do not produce GHG emissions that fall within Scope 3.

We believe we are in compliance in all material respects with all applicable environmental laws.

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Social Impact and Supporting our Communities

• We donated $100,000 to four different charities selected by our employees.

• We released ILDsym® version 1A, which targets treatments to reduce the progression of ILD in patients with systemic sclerosis (SSc), an underserved condition.

• Our support for the academic community is broad and deep.

We provide certain distinguished professors at academic institutions with free reference site licenses for nonprofit research and teaching, including providing free access to our software in university instruction.

In addition to reference site licenses, academic and research institutions are entitled to a 95% discount off commercial license fees, and we offer students and professors either free or substantially reduced fees to attend our training courses and workshops.

In recent years, we have sponsored several students with awards given by the Society of Toxicology.

In 2022, we provided 245 free software licenses to recipients in 53 countries through our University+ program to support the next generation of scientists.

In 2023, we expanded our University+ program to provide 307 free software licenses to recipients in 51 different countries to further promote education in our industry and support the next generation of scientists.

• We provide sponsorships to numerous conferences, symposia, and associations such as the American Conference on Pharmacometrics ("ACoP"), American Association of Pharmaceutical Scientists ("AAPS"), American Chemical Society ("ACS"), Controlled Release Society ("CRS"), Groupe de Métabolisme et Pharmacocinétique ("GMP"), and the Gordon Research Conferences.

• We encourage employees to volunteer in their local communities, and we offer our employees the flexibility they need to participate, from sponsoring and participating in charity golf tournaments to volunteering to serve hot meals to the disadvantaged.

In recent years, we have joined the global GivingTuesday movement and donated food, clothing, and financial support to several organizations that serve those in need in our communities.

• We focus on maintaining policies that support our social commitments worldwide.

This past year we updated our Company privacy policy and processes in the PDP Program to reflect changes to global personal data protection laws and developed and implemented a Human Rights Policy to support our Company commitment to all basic human rights around the globe.

• Our commitment to our people lies in our continued efforts to support and value our most important asset - our employees.

• This past year we conducted an employee engagement survey and received over 80% engagement to ensure culture alignment and success of internal programs and to further support their needs.

• In 2023, we established a paid parental leave program to support working parents and implemented a new recognition system to encourage peer to peer and leader to employee recognition.

• We also implemented a program to ensure that all our employee have the opportunity to attend in person employee events to collaborate face to face with their colleagues around the globe.

• This past year, we added additional supplemental benefits to our health benefit offerings increased our focus on physical and mental wellness with all our teams through an online wellness challenge hosted by the Company.

• We conduct an annual employee engagement survey to ensure cultural alignment and success of internal programs and to further support our employees' needs.

• We have a paid parental leave program to support working parents and a recognition system to encourage peer- to-peer and leader-to-employee recognition.

• We also ensure that all our employees have the opportunity to attend in-person employee events to collaborate face-to-face with their colleagues around the globe.

• We continue to provide supplemental benefits to our health benefit offerings, and have increased our focus on physical and mental wellness with all our teams through an online wellness challenge hosted by the Company.

• We continue to engage with our employees and listen to their feedback in order to work toward building a culture of trust, collaboration and transparency.

• We have conducted compensation benchmarking study with external compensation consultant, and aligned all roles to market salary ranges.

• We conducted a compensation benchmarking study with an external compensation consultant, and have made efforts to better align our compensation practices with market salary ranges.

Customer Privacy & Data Security

• We value customer privacy, and the data we collect are only as needed to deliver company information, software products, and consulting services.

Our website includes our comprehensive Privacy Policy, which details what and how data are collected, how data are used and stored, and the options for controlling personal data, including opting out, accessing, updating, or deleting it.

• We value customer privacy, and we endeavor to collect data only to the extent needed to deliver company information, software products, and consulting services.

Our website includes a copy of our comprehensive Privacy Notice, which details what and how data are collected, how data are used and stored, and the options for controlling personal data, including opting out, accessing, updating, or deleting it.

• In recognition of the critical importance of data security to our operations, including cybersecurity, data protection, and customer privacy, our leadership team conducts a thorough examination of all elements of data security.

Our objective is to ensure the security, confidentiality, and privacy of our systems and information assets, and to follow and be compliant with all relevant laws, regulations, and guidelines, including, but not limited to:

Our objective is to ensure the security, confidentiality, and privacy of our systems and information assets, and to follow and be compliant with all applicable laws, regulations, and guidelines, including, but not limited to:

and State data privacy laws

◦ The EU’s General Data Protection Regulation ("GDPR")

◦ The EU’s General Data Protection Regulation (“the EU GDPR”)

◦ The U,K Data Protection Act 2018 (the “UK GDPR”)

◦ Pharmaceutical Good Practice Quality Guidelines, including FDA 21 CFR Part 11

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◦ The Personal Information Protection Law of the People’s Republic of China ("PIPL")

• Our corporate-level IT department brings greater consistency, efficiency, and functional IT support across all divisions.

The IT department is responsible for centralizing divisional data processing, storage, and backup capabilities at each of our geographical locations.

The IT department is also responsible for ensuring that corporate IT policies are aligned and compliant with all applicable regulatory provisions and current best practices.

• We have appointed VeraSafe as our Data Protection Officer ("DPO").

The DPO is responsible for ensuring that we have a Personal Data Protection program that is compliant with data privacy laws such as the EU’s GDPR, UK GDPR, China’s PIPL, and data privacy laws enacted at the state level, as applicable to us.

• Our corporate-level IT department provides consistency, efficiency, and functional IT support across all business units.

Our IT department is responsible for centralizing business unit driven data processing, storage, and backup capabilities at each of our geographical locations.

Our Quality and Compliance department is also responsible for ensuring that corporate IT policies are aligned and compliant with all applicable regulatory provisions and current best practices.

• We have engaged a third-party consulting firm, VeraSafe, as our Data Protection Officer ("DPO").

The DPO is responsible for ensuring that we have a Personal Data Protection program in place that is compliant with data privacy laws such as the EU GDPR, UK GDPR, China’s PIPL, and data privacy laws enacted at the state level, as applicable to us.

Our corporate Personal Data Protection program includes policies, practices, and training directed to protecting personal data.

Business Ethics

• From the Company’s inception, we have placed the highest emphasis on conducting our business with honesty and integrity.

The highest ethical standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust.

• From the Company’s inception, we have placed a strong emphasis on conducting our business with honesty and integrity.

High ethical standards are expected of management and employees alike, and we continuously strive to create a corporate culture of honesty, integrity, and trust.

Throughout our operations and in our dealings with our stakeholders, we endeavor to engender the confidence that the Company’s conduct is beyond reproach.

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In addition, all our employees, contractors, and vendors are required to follow our Code of Conduct as a part of our good governance practice.

We have increased gender and racial diversity of the Board of Directors with appointment of new independent director.

Our Board of Directors is gender and racially diverse and we have appointed a lead independent director.

Our ESG steering committee oversees and executes matters related to ESG.

More information about our corporate governance features can be found in our Proxy Statement for the 2024 Annual Meeting of Shareholders (the "Proxy Statement" ) , which we intend to file with the SEC within 120 days after August 31, 2023, the close of our fiscal year covered by this Report.

More information about our corporate governance features will be included in our Proxy Statement for the 2025 Annual Meeting of Shareholders (the "Proxy Statement"), which we intend to file with the Securities and Exchange Commission within 120 days after August 31, 2024, the close of our fiscal year covered by this Report.

COMPANY WEBSITE

We maintain a corporate website at:

www.simulations-plus.com.

The contents of this website, including without limitation any documents, web pages or other information accessible through our website (whether or not referred to in this Report), are not incorporated in or otherwise to be regarded as part of this Report.

We file reports with the SEC, which are available on our website free of charge.

These reports include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and other related filings, each of which is provided on our website as soon as reasonably practical after we electronically file such materials with or furnish them to the SEC.

Our officers and directors also file “Section 16” filings on Form 3, Form 4, and Form 5 with the SEC, which filings are also accessible on our website as soon as reasonably practicable after they are filed with the SEC.

In addition, the Securities and Exchange Commission maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, including the Company.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business