Simulations Plus, Inc. (SLP) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Simulations Plus' Annual Shareholders Meeting. I am Shawn O'Connor, CEO of Simulations Plus, and I will be Chairing the proceedings today. Given the extraordinary circumstances arising from the COVID pandemic, we're holding our Annual Shareholder Meeting in a virtual format today. In doing so, we strive to make the meeting as inclusive as possible by offering similar opportunities to participate as provided at in-person meetings. You may vote and electronically submit questions via the online platform while this annual meeting is in session. We really appreciate your participation today. With me to conduct the meeting is Will Frederick, our CFO and Corporate Secretary. Members of our Board of Directors and senior management team are also joining us on the call. I'm pleased to introduce members of our Board joining us today. Walter Woltosz, our Co-Founder, Board Chair and Director since 1996; Dr. David Ralph, our Nominations and Corporate Governance Committee Chair and Director since 2012; Dr. John Paglia, our Audit Committee Chair and Director since 2014; Dr. Daniel Weiner, our Compensation Committee Chair and Director since 2017; and Dr. Lisa LaVange, our Director since 2019. Attending from our management team are John DiBella, President of our Simulations Plus division; Jill Fiedler-Kelly, President and Co-Founder of our Cogen -- Cognigen division; Brett Howell, President of our DILIsym division; and Jonathan Chauvin, President of our Lixoft division. Also joining us are representatives from Rose, Snyder, Jacobs LLP, our independent registered public accounting firm; and Procopio Cory Hargreaves & Savitch LLP, our outside counsel. And now I'd like to call the Annual Shareholder Meeting to order. As Chair of the meeting, I've adopted an agenda that will govern via order of business and the rules of conduct for the meeting. Copies of the agenda are available on the virtual meeting site. I will now hand off to Will to report the notice of the meeting, the proxies received and present the matters to be voted on. Will?

Thanks, Shawn. The polls are now open for those who have not voted and will close in a few minutes after the presentation of our business matters. If you previously voted by the Internet, phone or mail, you do not need to take any additional action. If you previously voted and wish to change your vote, please do so before the closing of the polls using the voting buttons on the portal. After the poll has closed, we will release the preliminary results of the votes. The Board of Directors has appointed Broadridge Financial Solutions to serve as Inspector of Election. A representative of Broadridge is participating by conference call and serving as the inspector. At the end of voting, Broadridge will tabulate the vote. [Operator Instructions] We will be taking both presubmitted and live questions during the Q&A session. We are committed to answering your questions, and we'll address as many as time allows during the Q&A session. The notice of the meeting and Internet availability of the proxy materials were mailed by Broadridge Corporation beginning January 15, 2021, and it went to all shareholders of record as of December 29, 2020. As a result, the meeting is being held pursuant to proper notice. A list of all shareholders entitled to vote as of the record date, December 29, 2020, has been filed and certified by the Inspector of Election. We have received proxies representing more than 83% of roughly 20 million shares of the company's stock that are eligible to vote. And this is more than a majority of the shares entitled to vote, it means that we do have a quorum present, and the meeting is duly constituted and will proceed. Today, we have 3 management proposals for you to consider. They are all described in the proxy materials provided to you for today's meeting. Copies of the company's notice of the annual meeting, proxy statement and annual report on Form 10-K for the year ended August 31, 2020, are each available for inspection by request to the Inspector of Election. The first item is the election of directors. The following 5 people have been properly nominated by the Board: Walter Woltosz, Dr. David Ralph, Dr. John Paglia; Dr. Daniel Weiner and Dr. Lisa LaVange. The Board recommends a vote for each nominee. The second item is to ratify the election of Rose, Snyder & Jacobs LLP, or RSJ, as our independent registered public accounting firm for the fiscal year ending August 31, 2021. The Board recommends a vote for this proposal. It is important to note that the Audit Committee or our Board of Directors may terminate the appointment of RSJ without the approval of the company's shareholders whenever the Audit Committee or Board deems such termination necessary or appropriate. The third item is to amend the company's 2017 equity incentive plan to increase the number of shares issuable under the plan from 1 million to 1.75 million shares. The 2017 plan was initially approved by our Board in December 2016 and our shareholders in February 2017, to promote the interest of the company and the shareholders by attracting and retaining exceptional directors, employees and consultants and enabling these individuals to participate in the long-term growth and financial success of the company. The Board recommends a vote for this proposal. At this time, with the discussion of the matters for shareholder consideration completed, the polls are now closed. Let me now share with you the preliminary voting tabulation. First, all 5 director nominees on the ballot are elected with over 99% of votes cast. They'll serve until the next Annual Shareholders Meeting or until their successors are elected and qualified. Proposal 2, ratification of the company's auditor, RSJ, has been approved by over 99% of votes cast. Finally, proposal 3, amendment of the company's 2017 equity incentive plan, was not approved, receiving less than 50% of votes cast. We expect to post the details of the final voting results on all of these matters on our Investor Relations website tomorrow. We'll also report the results in a Form 8-K that will be filed with the Securities and Exchange Commission within 4 business days. With that, we've completed the formal portion of the meeting, and let me hand it back over to Shawn for the Q&A portion of the meeting.

Thank you, Will. Welcome to the Q&A portion of the meeting. [Operator Instructions] As of this time, there are no questions, and this wraps up our Annual Shareholders Meeting. Thank you again for joining us today and for your participation in our meeting. If you have any further questions, please visit our Investor Relations website. Thank you.