Simulations Plus Closes Acquisition of Cognigen Corporation

Division: Cognigen

Simulations Plus, Inc. (NASDAQ: SLP), a leading provider of simulation and modeling software for pharmaceutical discovery and development, today announced that the Agreement and Plan of Merger (the “Agreement”) with Cognigen Corporation of Buffalo, New York, announced on July 23, 2014, has been closed as of today and the two companies are now merged.

Pursuant to the Agreement, upon closing, Cognigen has become a wholly-owned subsidiary of Simulations Plus and will continue to operate under the Cognigen name. As a result of this accretive acquisition, the total number of Simulations Plus employees is increasing from 30 to 65, and it is expected to add approximately $5 million to the revenues of the combined company in the coming fiscal year.

Walt Woltosz, chairman and chief executive officer of Simulations Plus, Inc. said, “This is an exciting step forward for both Simulations Plus and Cognigen. Dr. Thaddeus (“Ted”) Grasela, the former President of Cognigen, has been appointed President of the combined companies and will join the board of directors to replace Virginia Woltosz, who is retiring from her position on the board. I will remain as Chairman and CEO. At my request, my new contract reduces my time to 60% of my productive time. I look forward to working with Ted and the management teams of both companies, especially devoting my time to products, services, and business development.”

Dr. Grasela added, “I am pleased to be appointed President of the combined companies and I look forward to working with Walt and the board of directors to ensure the continued success of our company. I am excited about the opportunities this merger affords for the future of clinical pharmacology. The recent push by regulatory agencies to use physiologically based pharmacokinetics (PBPK), a strength of Simulations Plus, in clinical pharmacology, a strength of Cognigen, makes the timing of this merger ideal.”

The Agreement

The Agreement called for the merger of Cognigen with and into a wholly-owned subsidiary of Simulations Plus with the subsidiary continuing as the surviving corporation.

Under the terms of the Agreement, Simulations Plus will pay the shareholders of Cognigen total consideration of $7,000,000, comprised of $2,800,000 of cash and $4,200,000 worth of newly-issued, unregistered shares of common stock of Simulations Plus. The Agreement provides that $1,800,000 of the total consideration will be held back for two years to satisfy any indemnifiable claims that may arise pursuant to the terms of the Agreement.

Excel Partners, an investment bank with offices in New York and Los Angeles, acted as exclusive financial advisor to Simulations Plus in connection with this transaction.