Simulations Plus (SLP) risk factors, FY2024 10-K

Other

1. 01Certain Risks Related to Our Marketplace and Environment
2. 02Our ability to sustain or increase revenues will depend upon our success in entering new markets, continuing to increase our customer base, and in deriving additional revenues from our existing customers
3. 03A decrease in, or resistance to, the acceptance of model-informed biopharmaceutical discovery and development by regulatory authorities or academic institutions could damage our reputation or reduce the demand for our products and services
4. 04Health care reform and restrictions on reimbursement may affect the pharmaceutical, biotechnology, and industrial chemical companies that purchase or license our products or services, which may affect our results of operations and financial condition
5. 05We face strong competition in the life science market for modeling and simulation software and for cheminformatics products
6. 06We are subject to price pressures in the markets we serve
7. 07Our insurance coverage may not be sufficient to avoid material impact on our financial position or results of operations resulting from claims or liabilities against us, and we may not be able to obtain insurance coverage in the future
8. 08Changes in government regulation or in practices relating to the pharmaceutical or biotechnology industries, including potential health care reform, could decrease the need for the services we provide
9. 09Any negative commentaries made by any regulatory agencies or any failure by us to comply with applicable regulations and related guidance could harm our reputation and operating results, and compliance with new regulations and guidance may result in additional costs
10. 10Many of our contracts are fixed price and may be delayed or terminated or reduced in scope for reasons beyond our control, or we may underprice or overrun cost estimates with these contracts, potentially resulting in financial losses
11. 11Impairment of goodwill or intangible assets may adversely impact future results of operations
12. 12Delays in the release of new or enhanced products or services or undetected errors in our products or services may result in increased cost to us, delayed market acceptance of our products, and delayed or lost revenue
13. 13We are subject to various risks associated with the operation of a global business
14. 14Changes in applicable U.S. and international tax laws or regulations and the resolution of tax disputes could negatively affect our financial results
15. 15Contract research services create a risk of liability
16. 16The drug discovery and development industry has a history of patent and other intellectual property litigation, involvement in intellectual property lawsuits is often very costly
17. 17We may not be able to successfully develop and market new services and products
18. 18We depend on key personnel and may not be able to retain these employees or recruit additional qualified personnel, which could harm our business
19. 19If we are not successful in selecting and integrating the businesses and technologies we acquire, or in managing our current and future divestitures, our business may suffer
20. 20Our quarterly and annual operating results fluctuate and may continue to fluctuate in the future, and if we fail to meet the expectations of analysts or investors, our stock price and the value of your investment could decline substantially
21. 21We conduct business outside the U.S., which exposes us to foreign currency exchange rate risk, amongst other risk, and could have a negative impact on our financial results
22. 22A significant portion of our operating expenses is relatively fixed and planned expenditures are based in part on expectations regarding future revenues
23. 23If our customers cancel their contracts or terminate or delay their clinical trials, we may lose or delay revenues and our business may be adversely impacted
24. 24If our security is breached, our business could be disrupted, our operating results could be harmed, and customers could be deterred from using our products and services
25. 25Changes in and/or failure to comply with applicable data privacy laws, regulations, and interpretations of such laws and regulations could materially adversely affect our reputation, market position, or our business and financial performance
26. 26We rely upon a single internal hosting facility and Amazon Web Services to deliver certain solutions to our customers and any disruption of or interference with our hosting systems, operations, or use of the Amazon Web Services could harm our business and results of operations
27. 27Defects or errors in our software applications could harm our reputation, result in significant cost to us and impair our ability to market our solutions
28. 28If we are not able to reliably meet our data storage and management requirements, or if we experience any failure or interruption in the delivery of our services over the Internet, customer satisfaction and our reputation could be harmed, and customer contracts may be terminated
29. 29Some of our software solutions and services utilize open-source software, and any failure to comply with the terms of one or more of these open-source licenses could adversely affect our business
30. 30We may be unable to adequately enforce or defend our ownership and use of our intellectual property and other proprietary rights
31. 31Current and future litigation against us, which may arise in the ordinary course of our business, could be costly and time-consuming to defend
32. 32We could incur substantial costs resulting from product liability claims relating to our products or services or our customers’ use of our products or services
33. 33Our business depends on the clinical trial market, and a downturn in this market could cause our revenues to decrease
34. 34Cash expenditures associated with our recent acquisitions may create certain liquidity and cash flow risks for us
35. 35The Pro-ficiency business we acquired may not perform as we or the market expects, which could have an adverse effect on the price of our common stock
36. 36The obligations and liabilities of Pro-ficiency, some of which may be unanticipated or unknown, may be greater than we have anticipated, which may diminish the value of Pro-ficiency to us
37. 37We have discontinued the quarterly dividends on shares of our common stock and do not expect to pay any cash dividends for the foreseeable future
38. 38If our operating and financial performance in any given period does not meet any guidance that we provide to the public, the market price of our common stock may decline
39. 39The price of our common stock may be volatile, and our stockholders may not be able to resell shares of our common stock at or above the price they paid
40. 40If securities or industry analysts issue an adverse or misleading opinion regarding our stock, or our inclusion in the S&P 600 discontinues, our stock price and trading volume could decline
41. 41We may raise capital through the issuance of our common stock, convertible debt, or equity-linked securities, which could result in dilution to our stockholders or a negative impact on the price of our common stock
42. 42We cannot guarantee that our share repurchase program will be fully consummated or that it will enhance long-term shareholder value, and share repurchases could increase the volatility of the price of our common stock