|By Business Wire||
|July 24, 2014 06:04 PM EDT||
Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today provided additional details regarding its Agreement and Plan of Merger (the “Agreement”) with Cognigen Corporation (“Cognigen”) of Buffalo, New York, announced yesterday.
Walt Woltosz, chairman and chief executive officer of Simulations Plus, Inc., said: “The excitement around this announcement has generated a number of questions on the part of our shareholders. In order to provide a level playing field for everyone, we are providing answers to the questions we have received to the market all at once through this release, and we will conduct an investor conference call tomorrow right after the close of the market. Answers to those questions we can answer at this time are provided below.”
Q. What is the current cash position of Simulations Plus, Inc.
post-transaction, and should we expect the dividend to continue at the
A. The Board of Directors of Simulations Plus, Inc. (the “Board”) has indicated that they anticipate the dividend will continue at the current rate for the foreseeable future; however, the Board votes on this issue each quarter and reserves the right to increase, decrease, or discontinue dividend distributions as the cash needs of the business dictate. As of today, cash is approximately $9.5 million. Following the closing of the transactions contemplated by the Agreement, which we expect to occur on September 2, 2014, after the current Simulations Plus fiscal year closes on August 31, 2014, cash is expected to be approximately $6 million.
Q. Does Cognigen have any debt?
A. There will be no Cognigen debt at the close of the transaction.
Q. What will be the name of the new company?
A. Simulations Plus will continue to be Simulations Plus, Inc. Cognigen will be “Cognigen, a wholly owned subsidiary of Simulations Plus.”
Q. What share price will be used to determine the number of shares to be
issued to the Cognigen shareholders?
A. The volume-weighted average trading price for the 30 trading days two days prior to closing.
Q. Is a Simulations Plus shareholder vote required?
A. The number of shares anticipated to be issued is currently expected to be well below the threshold that would require a shareholder vote under applicable law.
Q. Does Cognigen have similar revenue seasonality to Simulations Plus,
A. Cognigen has not previously experienced a significant seasonality.
Q. What will the expected $5 million in new revenues add to EBITDA and
A. Simulations Plus does not provide earnings guidance. As noted in the initial press release, Cognigen is a profitable company and the Company anticipates it will continue to operate profitably. Because Cognigen’s revenues come primarily from consulting activities, the margins are not as high as for Simulations Plus’ software offerings, but management anticipates net margins of approximately 10 percent going forward.
Q. At what rate over the trailing 12 months has Cognigen been growing
revenue and net income?
A. Revenue growth through May 31, 2014 has been just over 7%. Net income has not yet been determined for the period.
Q. What cost synergies are expected?
A1. One anticipated synergy will be in marketing and sales, where Cognigen will be able to “piggy-back” on the marketing and sales programs from Simulations Plus at minimal additional cost. Simulations Plus attends 50 to 60 conferences/shows per year, exhibiting at a majority of them. Cognigen has not exhibited at more than one or two shows per year, relying on the Company’s strong reputation to generate sales. Simulations Plus will be taking over all financial transactions, freeing up senior Cognigen management to participate in expanded marketing and sales activities. Management anticipates these activities to begin in the fall of 2014. Note that no staff reductions are planned for either company – management hopes all of Cognigen’s employees will stay on and participate in the combined company as new members of the Simulations Plus family.
A2. A second potential synergy involves Cognigen’s in-house cloud facility – a modern, secure capability used in their work. The capacity of the Cognigen cloud should be approximately doubled at minimal cost to accommodate hosting Simulations Plus software. Several Simulations Plus customers are currently asking for cloud-based capabilities and management has been testing using the Amazon cloud. Whether the Company would remain on the Amazon cloud or move some or all of the cloud-based offerings to the Cognigen cloud will require a study to determine the most cost-effective way to operate. Cognigen has built a resource and has IT staff who are familiar with not only operation of the cloud, but such activities as programming for parallel processing, and management anticipates there should be benefit to Simulations Plus as well as Cognigen.
A3. A third potential synergy is expected from the Simulations Plus customer base, which is larger than Cognigen’s and includes most of Cognigen’s customers, but from different departments. Cross-selling will be a focus, as each company will have the opportunity to be introduced to the other’s customers and relationships.
Q. Aside from the revenue metrics, what financial metrics and multiples
were used in determining the purchase price?
A. A combination of multiples involving sales, revenues, and EBITDA were used in comparison with recent deals in the industry, along with consideration of the strategic value and financial potential of combining the capabilities of the two companies going forward.
Q. What are the cross-selling opportunities for customers of both
A. This is one of the primary strategic reasons for this acquisition. Regulatory agencies have begun to take strong interest in using physiologically based pharmacokinetics (“PBPK” – a major strength of Simulations Plus) in clinical trial data analysis (a major strength of Cognigen). Management believes the combined capabilities of Simulations Plus and Cognigen will provide the industry with what the Company believes is a best-in-class offering to meet this new opportunity.
Q. Where do Cognigen’s product offerings fit within Simulations Plus’
product suite? Are there any competitive products or expected
cannibalization of revenue from overlap?
A. Cognigen’s business is primarily analysis and reporting of clinical trial data. There is also a relatively new software product called KIWI, which manages much of the workflow for this type of work, and is currently in use at a small number of pharmaceutical companies. These services and software do not overlap with Simulations Plus’ business. There is a very small part of Simulations Plus’ consulting services that does similar calculations to some of Cognigen’s activities; however, the nature of Simulations Plus’ consulting contracts is quite different than Cognigen’s, so management does not expect any loss in revenues on either side. On the contrary, management expects the synergies of the combined capabilities of the two companies should provide growth opportunities that exceed those for either company alone.
Q. Is all of the software used by Cognigen homegrown/fully owned by the
A. Cognigen uses a mix of proprietary software and standard commercial and open-source software licensed by industry scientists for clinical trial data analysis.
Investor Conference Call
The Company will hold an investor conference call on Friday, July 25, at 1:15 PM PT/4:15 PM ET. The call will be webcast live and may be joined by registering at the following website: https://www2.gotomeeting.com/register/346573050. Upon registering, you will receive a confirmation e-mail with a unique link and instructions for joining the call. Please dial in five to ten minutes prior to the scheduled start time. For listen-only mode, you may dial 646-307-1705, and enter access code: 630-706-152.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to properly manage the new combined company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports as filed with the U.S. Securities and Exchange Commission.
WebRTC services have already permeated corporate communications in the form of videoconferencing solutions. However, WebRTC has the potential of going beyond and catalyzing a new class of services providing more than calls with capabilities such as mass-scale real-time media broadcasting, enriched and augmented video, person-to-machine and machine-to-machine communications. In his session at @ThingsExpo, Luis Lopez, CEO of Kurento, will introduce the technologies required for implementing these ideas and some early experiments performed in the Kurento open source software community in areas ...
Sep. 3, 2015 06:00 AM EDT
Containers are not new, but renewed commitments to performance, flexibility, and agility have propelled them to the top of the agenda today. By working without the need for virtualization and its overhead, containers are seen as the perfect way to deploy apps and services across multiple clouds. Containers can handle anything from file types to operating systems and services, including microservices. What are microservices? Unlike what the name implies, microservices are not necessarily small, but are focused on specific tasks. The ability for developers to deploy multiple containers – thous...
Sep. 3, 2015 06:00 AM EDT
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo in Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The Internet of Things (IoT) is the most profound change in personal an...
Sep. 3, 2015 05:15 AM EDT Reads: 2,017
WebRTC has had a real tough three or four years, and so have those working with it. Only a few short years ago, the development world were excited about WebRTC and proclaiming how awesome it was. You might have played with the technology a couple of years ago, only to find the extra infrastructure requirements were painful to implement and poorly documented. This probably left a bitter taste in your mouth, especially when things went wrong.
Sep. 3, 2015 05:00 AM EDT Reads: 496
The 3rd International WebRTC Summit, to be held Nov. 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA, announces that its Call for Papers is now open. Topics include all aspects of improving IT delivery by eliminating waste through automated business models leveraging cloud technologies. WebRTC Summit is co-located with 15th International Cloud Expo, 6th International Big Data Expo, 3rd International DevOps Summit and 2nd Internet of @ThingsExpo. WebRTC (Web-based Real-Time Communication) is an open source project supported by Google, Mozilla and Opera that aims to enable bro...
Sep. 3, 2015 05:00 AM EDT Reads: 1,582
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes about through a Communications Platform as a Service which allows for messaging, screen sharing, video...
Sep. 3, 2015 04:00 AM EDT Reads: 733
The 17th International Cloud Expo has announced that its Call for Papers is open. 17th International Cloud Expo, to be held November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, brings together Cloud Computing, APM, APIs, Microservices, Security, Big Data, Internet of Things, DevOps and WebRTC to one location. With cloud computing driving a higher percentage of enterprise IT budgets every year, it becomes increasingly important to plant your flag in this fast-expanding business opportunity. Submit your speaking proposal today!
Sep. 3, 2015 02:30 AM EDT Reads: 1,684
SYS-CON Events announced today that the "Second Containers & Microservices Expo" will take place November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities.
Sep. 2, 2015 11:45 PM EDT Reads: 644
In his session at @ThingsExpo, Lee Williams, a producer of the first smartphones and tablets, will talk about how he is now applying his experience in mobile technology to the design and development of the next generation of Environmental and Sustainability Services at ETwater. He will explain how M2M controllers work through wirelessly connected remote controls; and specifically delve into a retrofit option that reverse-engineers control codes of existing conventional controller systems so they don't have to be replaced and are instantly converted to become smart, connected devices.
Sep. 2, 2015 11:15 PM EDT Reads: 237
Akana has announced the availability of the new Akana Healthcare Solution. The API-driven solution helps healthcare organizations accelerate their transition to being secure, digitally interoperable businesses. It leverages the Health Level Seven International Fast Healthcare Interoperability Resources (HL7 FHIR) standard to enable broader business use of medical data. Akana developed the Healthcare Solution in response to healthcare businesses that want to increase electronic, multi-device access to health records while reducing operating costs and complying with government regulations.
Sep. 2, 2015 10:00 PM EDT Reads: 314
SYS-CON Events announced today that IceWarp will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. IceWarp, the leader of cloud and on-premise messaging, delivers secured email, chat, documents, conferencing and collaboration to today's mobile workforce, all in one unified interface
Sep. 2, 2015 06:00 PM EDT Reads: 473
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of technology leadership, Micron's memory solutions enable the world's most innovative computing, consumer,...
Sep. 2, 2015 05:30 PM EDT Reads: 277
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on demos and comprehensive walkthroughs.
Sep. 2, 2015 04:45 PM EDT Reads: 406
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevOps to advance innovation and increase agility. Specializing in designing, imple...
Sep. 2, 2015 04:15 PM EDT Reads: 364
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts, GM of Platform at FinancialForce.com, will discuss the value of business applications on wearable ...
Sep. 2, 2015 04:00 PM EDT
17th Cloud Expo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some form of XaaS – software, platform, and infrastructure as a service.
Sep. 2, 2015 04:00 PM EDT Reads: 1,591
Consumer IoT applications provide data about the user that just doesn’t exist in traditional PC or mobile web applications. This rich data, or “context,” enables the highly personalized consumer experiences that characterize many consumer IoT apps. This same data is also providing brands with unprecedented insight into how their connected products are being used, while, at the same time, powering highly targeted engagement and marketing opportunities. In his session at @ThingsExpo, Nathan Treloar, President and COO of Bebaio, will explore examples of brands transforming their businesses by t...
Sep. 2, 2015 02:00 PM EDT Reads: 274
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
Sep. 2, 2015 01:30 PM EDT Reads: 949
While many app developers are comfortable building apps for the smartphone, there is a whole new world out there. In his session at @ThingsExpo, Narayan Sainaney, Co-founder and CTO of Mojio, will discuss how the business case for connected car apps is growing and, with open platform companies having already done the heavy lifting, there really is no barrier to entry.
Sep. 2, 2015 12:45 PM EDT Reads: 204
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
Sep. 2, 2015 12:15 PM EDT Reads: 425