Simulations Plus, Inc.SLP

Simulations Plus, Inc. Commitments Disclosure

10-KFiled Dec 1, 20252 min read
COMMITMENTS AND CONTINGENCIES
Leases
Rent expense, including common area maintenance fees, was $0.5 million, $0.5 million, and $0.5 million for the fiscal years ended August 31, 2025, 2024, and 2023, respectively.

Lease liability maturities as of August 31, 2025, were as follows:
(in thousands)Years Ending August 31,Amount
2026$236 
202789 
202872 
202972 
203072 
Thereafter235 
Total undiscounted liabilities776 
Less: imputed interest(160)
Total operating lease liabilities (including current portion)$616 
Employment Agreements

In the normal course of business, the Company has entered into employment agreements with certain of its executive officers that may require compensation payments upon termination.
Income Taxes

We follow guidance issued by the FASB with regard to our accounting for uncertainty in income taxes recognized in the financial statements. Such guidance prescribes a recognition threshold of more-likely-than-not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position, and must assume that the tax position will be examined by taxing authorities. Our policy is to include interest and penalties related to income tax expense. We file income tax returns with the IRS and various state jurisdictions as well as with the countries of India and France. Our federal income tax returns for fiscal years 2021 through 2024 are open for audit, and our state tax returns for fiscal years 2019 through 2024 remain open for audit.

Our review of prior-year tax positions using the criteria and provisions presented in guidance issued by FASB did not result in a material impact on our financial position or results of operations.
Litigation

We are not a party to any legal proceedings and are not aware of any pending or threatened legal proceedings of any kind.

Historical Timeline

Fiscal YearFiled
2025Dec 1, 2025Showing above
2024Oct 30, 2024
2023Oct 27, 2023
2022Oct 28, 2022
2021Oct 27, 2021
2020Nov 16, 2020
2019Nov 13, 2019
2018Nov 14, 2018
2017Nov 14, 2017
2016Nov 14, 2016
2015Nov 20, 2015

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

Other Available Disclosures

Income TaxesRevenuePP&ESegmentsStock CompensationNew StandardsPay vs Performance