Room 4561

June 1, 2005

Momoko Beran
Chief Financial Officer
Simulations Plus
1220 W. Avenue J
Lancaster, CA 93534-2902
(661) 723-7723

	Re:	Simulations Plus, Inc.
		Form 10-KSB for the Fiscal Year Ended August 31, 2004
      Filed November 30, 2004
      File No. 001-32046

Dear Ms. Beran,

      We have reviewed your filing and have the following
comments.
Please be as detailed as necessary in your explanation.  In some
of
our comments, we may ask you to provide us with information so we
may
better understand your disclosure.  After reviewing this
information,
we may raise additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form 10-KSB for the Fiscal Year Ended August 31, 2004

Note 2 - Summary of Significant Accounting Policies, page F-10

Revenue Recognition

1. Supplementally tell us whether your arrangements with
government
agencies involve fiscal funding clauses.  If so, tell us about
these
arrangements, specifically whether they are cancelable, and how
you
account for them.  In this regard, we note that one government
agency
accounted for 19% of Words+ net revenue in fiscal 2004.  See
paragraph 32 of SOP 97-2.

2. You disclose that PCS revenue is recognized at the time of
product
shipment because PCS obligations are insignificant.  Paragraph 59
of
SOP 97-2 includes other criteria that must be met to allow for
recognition of PCS revenue at the time of product shipment, such
as
that PCS included with the license fee must be for a period of one
year or less.  We note from disclosures throughout your filing
that
certain arrangements extend for a period greater than one year.
Tell
us how you account for the PCS revenue from these multi-year
arrangements and from any other arrangements that extend for a
period
greater than one year.

3. Paragraph 59 of SOP 97-2 states that another condition that
must
be met in order to recognize PCS revenue together with the initial
licensing fee at the time of delivery is that unspecified
upgrades/enhancements offered during PCS arrangements must
historically have been and are expected to continue to be minimal
and
infrequent.  Consistent with this authoritative guidance, you
state
on page F-11 that ongoing improvements and upgrades of any
significance are infrequent and minimal in nature and timing.
However, from the disclosures in the business section of the
document
(pages 1-8) it would appear that upgrades/enhancements have been
historically more than minimal and infrequent.  For example, we
note
that you continue to enhance GastroPlus, QMPRPlus, and QMPRchitect
(page 3) and that you have several enhancements and new products
scheduled to be released in the 12 months subsequent to the end of
your fiscal year.  Explain to us why you believe
upgrades/enhancements are infrequent and minimal in nature and
timing
as used in paragraph 59(d) of SOP 97-2 given the disclosures in
the
business section of your Form 10-KSB.

4. On page F-11, you disclose that from time-to-time the Company
enters into license agreements that provide for extended payment
terms greater than one-year and that you believe you have
sufficient
history of collecting from customers to permit revenue recognition
at
delivery.  Tell us what evidence you relied upon to establish that
you have a standard business practice of using long-term or
installment contracts and a history of successfully collecting
under
the original payment terms, which are sufficiently similar in
nature
and timing, without making concessions.  In this regard, we note
that
the Company generally enters into one-year license agreements with
its customers.  See paragraph 28 of SOP 97-2.  As part of your
response, explain how you concluded that your fees were fixed or
determinable at the outset of the $1.2 million three-year license
arrangement with ADME entered into in 2003.

5. We note that you market and sell your products through direct
sales channels as well as through distributors and dealers.
Supplementally tell us your revenue recognition policy on sales
made
through distributors and dealers.  Indicate how you confirm that
an
end-user has purchased your product and the product has been
shipped.
Describe the type of evidence obtained from the distributors or
dealers and the timeliness of this evidence.  Indicate whether
there
are any rights of return held by the distributor, dealers or end
user.  If so, tell us how your accounting complies with paragraph
5
of SFAS 48.  Also, supplementally tell us how much revenue has
been
recognized from sales by distributors and dealers in each of the
periods presented.  Tell us what consideration you gave to
including
any of the foregoing revenue recognition policies in your notes to
consolidated financial statements.

6. We note from your business section that you conduct contracted
studies for customers rather than licensing the software to these
customers.  Explain how you account for the fees generated from
these
contract research services.  Cite the authoritative literature
relied
upon in your response.  Also tell us what consideration was given
to
including a description of your related revenue recognition policy
for these services in your notes to consolidated financial
statements.

*	*	*	*	*

      As appropriate, please respond to these comments via EDGAR
within 10 business days or tell us when you will provide us with a
response.  Please understand that we may have additional comments
after reviewing any amendment and your responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision.  Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

	In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.

      You may contact Steve Williams at (202) 551-3478 or Melissa
Walsh (202) 551-3224 if you have any questions regarding comments
on
the financial statements and related matters.  Please contact me
at
(202) 551-3226 with any other questions.


							Sincerely,



							Craig Wilson
							Senior Assistant Chief
Accountant



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Momoko Beran
Simulations Plus, Inc.
June 1, 2005
Page 1