Simulations Plus, Inc. Faces Investigation Over SEC Violations
Simulations Plus, Inc. Under Investigation
Simulations Plus, Inc. (NASDAQ: SLP), a renowned software company focusing on modeling and simulation tools primarily for the pharmaceutical, biotechnology, and chemical sectors, is currently facing scrutiny over potential violations of federal securities laws. A significant turning point occurred when the company acquired Pro-ficiency Holdings, Inc. in June, an entity specializing in simulation-based learning and intelligence solutions.
The Impact of the Acquisition
Following the acquisition of Pro-ficiency, Simulations Plus claimed that this merger would effectively double its total addressable market and significantly contribute to its revenue streams. However, internal reviews have cast doubt on these assertions, revealing struggles in effectively integrating the acquired company and showing evidence of ineffective internal controls over financial reporting.
Details of the Investigation
Recent developments highlight a concerning trajectory for Simulations Plus. Initially, the company touted the acquisition as a major success, only to later disclose financial difficulties. The hiring of Grant Thornton LLP as a new auditor in April marked the beginning of these revealing issues. By June, preliminary financial results announced by the company indicated unexpected market challenges and a significant drop in stock value.
The Stock Decline
On June 11, Simulations Plus announced disappointing financial results for the third quarter of 2025. The announcement cited various market uncertainties that posed significant challenges to growth. Following this disclosure, shares plummeted by more than 24%, with the stock price dropping from $26.44 to $20.05 in just one day.
Further Financial Fallout
The challenges didn’t stop there. When the company disclosed a staggering $77.2 million charge related to prior acquisitions on July 14, the disarray continued. There was also the unexpected dismissal of Grant Thornton, which sparked further scrutiny. Discussions surrounding the auditor’s termination revealed unresolved disagreements on internal controls, particularly regarding financial reporting, raising red flags for investors.
Repercussions for Investors
In light of these revelations, investors are left questioning the integrity of information previously shared by Simulations Plus. The stock dropped again, this time close to 26% after the news of the impairment charge and auditor termination hit the market. These continuous declines prompted alarm among shareholders and the broader investment community.
Legal Options for Shareholders
If you have invested in Simulations Plus, it is crucial to understand that you may have legal avenues to explore. Bleichmar Fonti & Auld LLP, a leading securities law firm, is currently looking into these matters and encourages impacted investors to come forward. Submitting your information poses no financial risk, as representation is on a contingency fee basis. Shareholders are not liable for any court costs or litigation expenses.
Contact Information and Next Steps
To learn more about your potential legal rights or to submit relevant information regarding your investment, interested parties should reach out to BFA's offices. Investors can contact Ross Shikowitz at 212.789.3619 or via email. The firm aims to assist in navigating this challenging situation for investors of Simulations Plus.
Frequently Asked Questions
What does the ongoing investigation of Simulations Plus involve?
The investigation examines potential violations of federal securities laws, focusing on the company’s financial disclosures and internal controls after its acquisition of Pro-ficiency Holdings.
Why did Simulations Plus's stock price drop significantly?
The decline of over 24% was triggered by the announcement of disappointing financial results and market uncertainties that affected the company’s revenue outlook.
What can I do if I invested in Simulations Plus?
Investors are encouraged to explore their legal options. Resources are available through law firms specializing in securities class actions.
Who can I contact for assistance?
Ross Shikowitz from Bleichmar Fonti & Auld LLP is available for questions and can be reached at 212.789.3619 or via email.
Is there a cost associated with seeking legal representation?
No, BFA operates on a contingency fee basis, meaning investors do not bear any upfront costs for legal assistance.
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