8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

July 10, 2017

(Date of the earliest event reported)

Simulations Plus, Inc.

(Exact name of registrant as specified in its charter)

California	001-32046	95-4595609
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

42505 10^th Street West, Lancaster, California 93534-7059

(Address of principal executive offices) (Zip Code)

661-723-7723

Registrant's telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14z-12 under Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

     Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events

On July 10, 2017, Simulations Plus, Inc., a California corporation (the "Company"), issued a press release announcing financial results for its third quarter of FY2017 ended May 31, 2017. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On July 10, 2017, Simulations Plus, Inc., a California corporation (the "Company"), held an investor conference call reporting financial results for its third quarter of FY2017 ended May 31, 2017. The PowerPoint slides, which were used for this Investor Conference Call, are attached herein as exhibit 99.2 to this Current Report on Form 8-K.

The information contained in this Current Report on Form 8-K shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth in this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this report on Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

This report on Form 8-K (the "Report"), including the disclosures set forth herein, contains certain forward-looking statements that involve substantial risks and uncertainties. When used herein, the terms "anticipates," "expects," "estimates," "believes" and similar expressions, as they relate to us or our management, are intended to identify such forward-looking statements.

Forward-looking statements in this Report or hereafter, including in other publicly available documents filed with the Securities and Exchange Commission (the "Commission"), reports to the stockholders of Simulations Plus, Inc., a California corporation (the "Company" or "us," "our" or "we") and other publicly available statements issued or released by us involve known and unknown risks, uncertainties and other factors which could cause our actual results, performance (financial or operating) or achievements to differ from the future results, performance (financial or operating) or achievements expressed or implied by such forward-looking statements. Such future results are based upon management's best estimates based upon current conditions and the most recent results of operations. These risks include, but are not limited to, the risks set forth herein and in such other documents filed with the Commission, each of which could adversely affect our business and the accuracy of the forward-looking statements contained herein. Our actual results, performance or achievements may differ materially from those expressed or implied by such forward-looking statements.

Item 9.01 Financial Statements and Exhibits

(d)       Exhibits

99.1 Press release issued on July 10, 2017.

99.2 PowerPoint presentation at the Investor Conference Call on July 10, 2017.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIMULATIONS PLUS, INC.
Dated: July 11, 2017	By: /s/ John R Kneisel
	John R. Kneisel
	Chief Financial Officer

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EX-99.1

Exhibit 99.1

 

For Further Information:

Simulations Plus, Inc.

42505 10^th Street West

Lancaster, CA 93534-7059

CONTACT:

Simulations Plus Investor Relations	Hayden IR
Ms. Renee Bouche	Mr. Cameron Donahue
661-723-7723	651-653-1854
renee@simulations-plus.com	cameron@haydenir.com

For Immediate Release:

July 10, 2017

Simulations Plus Reports Third Quarter FY2017 Financial Results

Record quarter as revenues grow 12.2%, 9MoFY17 net income up 11.4%

LANCASTER, CA, July 10, 2017 – Simulations Plus, Inc. (NASDAQ: SLP), the premier provider of simulation and modeling software and consulting services for pharmaceutical discovery and development from the earliest discovery through all phases of clinical trials, today reported financial results for its third quarter of fiscal year 2017 (3QFY17) and the first nine months of fiscal year 2017 (9moFY17), the period ended May 31, 2017.

3QFY17 highlights compared with 3QFY16:

· Net revenues increased 12.2% to $6.75 million, an increase of $736,000 from $6.01 million

o An all-time high for any quarter

· Gross profit was up 10.1% to $5.30 million, an increase of $486,000 from $4.82 million

· SG&A was $1.95 million, an increase of 16.3% or $274,000 from $1.68 million

o Includes approximately $144,000 in one-time charges for the acquisition of DILIsym Services, Inc. that were expensed in the quarter

· R&D expenditures were $598,000, a decrease of $19,000, or 3.2% over $617,000

o In 3QFY17, $344,000 was capitalized and $254,000 was expensed

o In 3QFY16, $269,000 was capitalized and $348,000 was expensed

· Income before taxes increased 10.2% to $3.08 million, an increase of $284,000 from $2.80 million

· Net income increased 8.9% to $2.08 million, an increase of $171,000 from $1.91 million

o Reduced by the one-time charges for the acquisition of DILIsym Services, Inc.

· Diluted earnings per share increased 6.7% to $0.12 from $0.11

9moFY17 highlights compared with 9moFY16:

· Net revenues increased 11.6% to $17.87 million, an increase of $1.86 million from $16.01 million

· Gross profit was up 8.5% to $13.54 million, an increase of $1.06 million from $12.47 million

· SG&A was $5.77 million, an increase of $687,000, or 13.5%, from $5.08 million

o Includes approximately $261,000 in one-time charges for the acquisition of DILIsym Services, Inc. that were expensed in the first nine months

· R&D expenditures were $1.89 million, a decrease of $84,000, or 4.3% over $1.97 million

o For 9moFY17, $928,000 was capitalized and $953,000 was expensed

o For 9moFY16, $814,000 was capitalized and $1.16 million was expensed

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· Income before taxes increased 10.1% to $6.84 million, an increase of $628,000 from $6.21 million

· Net income increased 11.4% to $4.64 million, an increase of $476,000 from $4.16 million

o Reduced by the one-time charges for the acquisition of DILIsym Services, Inc.

· Diluted earnings per share increased 9.9% to $0.27 from $0.24

John Kneisel, chief financial officer of Simulations Plus, said: “The Company continues to produce record financial results and maintains a strong cash position. Consolidated cash as of July 7, 2017, was $6.0 million, after approximately $5.0 million of distributions related to the acquisition of DILIsym Services were made just after the May 31, 2017 quarterly close. In addition, during the quarter ended May 31, 2017, the Company made a dividend distribution of approximately $862,000 on May 15, 2017, and the final payment of $1,000,000 to TSRL was made in April. The strong and consistent profitability has enabled the Board of Directors to identify accretive acquisitions and return cash to shareholders in the form of a cash dividend, and has allowed management to take steps to improve the balance sheet and eliminate long-term royalty agreements.”

John DiBella, vice president for marketing and sales of Simulations Plus, said: “Simulations Plus continues to engage with more companies across a variety of markets, and this is reflected in the strong revenue performance from both software licensing and consulting services seen in both 3QFY17 and 9moFY17. We added 63 new software clients and achieved 23% growth in consulting service revenue through the first nine months of the fiscal year, and the scientists that have recently joined the company are actively contributing to the increasing number of new projects. We have added staff on our marketing and sales team over the past two months and, coupled with increased promotional activities from our new distributor channels in India and Korea, we expect to expand our global reach and end fiscal year 2017 on a positive note.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, concluded: “June marked the 20^th anniversary of Simulations Plus’ 1997 initial public offering of one million shares at $5 per share, with another 2.2 million shares (~69%) held by insiders. Our initial market cap was $16 million. As of last Friday’s close, our market cap was approximately $223 million and the total number of shares after two stock splits, some stock repurchases, and new shares issued in acquisitions and for exercised stock options, is now approximately 17.25 million, with approximately 37% held by insiders. As of June, we became part of the Russell 3000® index, underscoring our progress and attracting new institutional investors. Having completed the exciting acquisition of DILIsym Services, Inc. on June 1, we are almost halfway through our first fiscal quarter that will include the additional revenues and earnings from that division, which achieved just over $3 million in revenues and approximately $720,000 in net earnings during 2016. More importantly, we are now in a position to advance the modeling of drug-induced liver injury through the synergies with our traditional software offerings, and thereby we expect to further expand the market for our software and consulting services.”

Investor Conference Call

The Company will host a conference call on July 10, 2017, at 4:15 p.m. Eastern Time. All interested parties are invited to join the call by registering at this link. On registering, you will receive a confirmation e-mail with instructions for joining the call. Please dial in five to ten minutes prior to the scheduled start time. For listen-only mode, you may dial +1 (914) 614-3221, and enter access code 154-734-397.

About Simulations Plus, Inc.

Simulations Plus, Inc. is a premier developer of drug discovery and development software as well as a leading provider of both preclinical and clinical pharmacometric consulting services for regulatory submissions. The company is a global leader focused on improving the ways scientists use knowledge and data to predict the properties and outcomes of pharmaceutical and biotechnology agents. Our software is licensed to and used in the conduct of drug research by major pharmaceutical and biotechnology companies and regulatory agencies worldwide. Our innovations in integrating new and existing science in medicinal chemistry, computational chemistry, pharmaceutical science, biology, and physiology into our software have made us the leading software provider for physiologically based pharmacokinetic modeling and simulation. For more information, visit our website at www.simulations-plus.com.

Follow us on Twitter | LinkedIn

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995 – With the exception of historical information, the matters discussed in this press release are forward-looking statements that involve a number of risks and uncertainties. Words like “believe,” “expect” and “anticipate” mean that these are our best estimates as of this writing, but that there can be no assurances that expected or anticipated results or events will actually take place, so our actual future results could differ significantly from those statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to maintain our competitive advantages, acceptance of new software and improved versions of our existing software by our customers, the general economics of the pharmaceutical industry, our ability to finance growth, our ability to continue to attract and retain highly qualified technical staff, our ability to identify and close acquisitions on terms favorable to the Company, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports as filed with the U.S. Securities and Exchange Commission.

--Tables follow --

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)		(Audited)
	May 31,		August 31,
ASSETS
	2017		2016
Current assets
Cash and cash equivalents	$	8,248,197	$	8,030,284
Accounts receivable, net of allowance for doubtful accounts of $0		5,010,589		3,009,517
Revenues in excess of billings		1,130,154		694,131
Prepaid income taxes		241,540		555,486
Prepaid expenses and other current assets		304,408		410,811
Total current assets		14,934,888		12,700,229
Long-term assets
Capitalized computer software development costs, net of accumulated amortization of $9,477,930 and $8,613,487		4,077,144		4,013,127
Property and equipment, net		257,552		256,381
Intellectual property, net of accumulated amortization of  $1,864,375 and $1,408,750		4,210,625		4,666,250
Other intangible assets net of accumulated amortization of $405,625 and $295,000		1,244,375		1,355,000
Goodwill		4,789,248		4,789,248
Other assets		34,082		34,082
Total assets	$	29,547,914	$	27,814,317
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	211,645	$	108,111
Accrued payroll and other expenses		647,203		481,610
Accrued bonuses to officers		45,750		121,000
Other current liabilities		–		8,274
Current portion - Contracts payable		–		1,000,000
Billings in excess of revenues		313,399		230,100
Deferred revenue		48,964		176,422
Total current liabilities		1,266,961		2,125,517
Long-term liabilities
Deferred income taxes		3,055,465		2,956,206
Total liabilities		4,322,426		5,081,723
Commitments and contingencies
Shareholders' equity
Preferred stock, $0.001 par value 10,000,000 shares authorized no shares issued and outstanding		–		–
Common stock, $0.001 par value 50,000,000 shares authorized 17,242,510 and 17,225,478 shares issued and outstanding		7,244		7,227
Additional paid-in capital		11,816,573		11,376,007
Retained earnings		13,401,671		11,349,360
Total shareholders' equity		25,225,488		22,732,594
	$	–		–
Total liabilities and shareholders' equity	$	29,547,914	$	27,814,317

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SIMULATIONS PLUS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the three and nine months ended May 31, 2017 and 2016

	Three months ended						Nine months ended
	(Unaudited)						(Unaudited)
	2017			2016			2017			2016
Net Revenues	$	6,748,518		$	6,012,193		$	17,872,044		$	16,014,539
Cost of revenues		1,444,764			1,194,815			4,334,699			3,541,903
Gross margin		5,303,754			4,817,378			13,537,345			12,472,636
Operating expenses
Selling, general, and administrative		1,954,871			1,680,707			5,766,563			5,079,985
Research and development		253,799			348,427			952,635			1,161,124
Total operating expenses		2,208,670			2,029,134			6,719,198			6,241,109
Income from operations		3,095,084			2,788,244			6,818,147			6,231,527
Other income (expense)
Interest income		4,663			4,553			13,548			13,507
Gain(loss) on currency exchange		(14,913	)		7,733			5,573			(35,490	)
Total other income (expense)		(10,250	)		12,286			19,121			(21,983	)
Income before provision for income taxes		3,084,834			2,800,530			6,837,268			6,209,544
Provision for income taxes		(1,004,805	)		(891,191	)		(2,199,914	)		(2,048,383	)
Net Income	$	2,080,029		$	1,909,339		$	4,637,354		$	4,161,161
Earnings per share
Basic	$	0.12		$	0.11		$	0.27		$	0.24
Diluted	$	0.12		$	0.11		$	0.27		$	0.24
Weighted-average common shares outstanding
Basic		17,241,891			17,028,634			17,233,470			17,000,228
Diluted		17,585,528			17,227,540			17,454,864			17,219,835

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EX-99.2

Exhibit 99.2

(NASDAQ:SLP) Investor Conference Call July 10, 2017

2 With the exception of historical information, the matters discussed in this presentation are forward - looking statements that involve a number of risks and uncertainties . The actual results of the Company could differ significantly from those statements . Factors that could cause or contribute to such differences include, but are not limited to : continuing demand for the Company’s products, competitive factors, the Company’s ability to finance future growth, the Company’s ability to produce and market new products in a timely fashion, the Company’s ability to continue to attract and retain skilled personnel, and the Company’s ability to sustain or improve current levels of productivity . Further information on the Company’s risk factors is contained in the Company’s quarterly and annual reports and filed with the Securities and Exchange Commission . Safe Harbor Statement

3 Highlights Walter S. Woltosz CEO and Chairman

4 • Major provider of software and consulting solutions for R&D • Earliest drug discovery – when a chemist first draws a molecule • Preclinical development (lab and animals) through first - in - human trials • Safety research and risk assessment • Phase 2 and 3 clinical trials • Beyond patent life to supporting generic companies • Integration of data from multinational R&D efforts • 3QFY17 • Revenues up $736,000 (12.2%) to $6.75 million • Net income up $171,000 (8.9%) to $2.08 million* • Software renewal rates: 89% (accounts); 93%(fees) • 20 new software clients added • Strong consulting pipeline resulted in significant increase in revenues • Current backlog remains high – new hires onboard and contributing • 9MoFY17 • Revenues up $ 1.86 million (11.6%) to $17.87 million • Net income up $476,000 (11.4%) to $4.64 million* • Diluted earnings per share up 9.9% to 27¢ per share* • 63 new software clients added Overview *Reduced by one - time charges associated with acquisition

Acquisition of DILIsym Services, Inc. • DILIsym® is a mechanistic, mathematical model that has been constructed to support pharmaceutical risk assessment and decision making – Intersection of compound distribution and metabolism (PBPK), hepatotoxicity mechanisms, and patient variability • DILIsym has been applied to support decisions related to compound DILI risk throughout the clinical development pipeline – Evaluate and interpret clinical biomarker signals in clinical trials – Optimize clinical trial design (dose selection, monitoring, inclusion/exclusion criteria) – Translate preclinical safety risk to first - in - human clinical trials – Rank compounds by risk – Evaluation of compound risk based on preclinical data • DILIsym simulation results have been included in numerous communications with regulatory agencies – Antimicrobial drugs advisory committee meeting, 2016 – https://www.fda.gov/downloads/AdvisoryCommittees/CommitteesMeetingMaterials/Drugs/Anti - InfectiveDrugsAdvisoryCommittee/UCM536448.pdf • DILIsym Services has joined the Simulations Plus family – Complementary, world class PBPK and DILI prediction capabilities with GastroPlus ™ and DILIsym – Additional synergistic potential for combined predictive abilities of ADMET Predictor™, GastroPlus, and DILIsym 5

The DILI - sim Initiative : P artnership between DILIsym Services and p harmaceutical c ompanies to m inimize DILI • Overall Goals – Improve patient safety – Reduce the need for animal testing – Reduce the cost and time necessary to develop new drugs • History – Officially started in 2011 – 17 major pharmaceutical companies have participated – Members have provided compounds, data, and conducted experiments to support effort – Over $7 million total invested in project 6 DILIsym ®

7 • Now in 3 rd and final year of $200,000/year collaboration for improved ocular dosing simulations • Established consortium of leading pharmaceutical companies • The global ophthalmic drugs market was valued at $16 billion in 2012, and was expected to reach an estimated value of $21.6 billion in 2018 • Prevalence of eye disorders is increasing as the population ages (e.g., diabetic retinopathy, macular degeneration) FDA Office of Generic Drugs (OGD) Funded Collaborations • In year two of 3 - year, $200,000/year collaboration for simulation of long - acting injectable microspheres • Formed consortium of industry partners, FDA scientists, and Simulations Plus • Added intramuscular dosing to GastroPlus (v9.5) • Developed enhancements to DDDPlus to simulate in vitro dissolution/release from polymer microspheres

* Yahoo! Data 7/10/2017 Two - year stock performance compared to DOW, NASDAQ, & S&P 500 *

9 Financial Overview John Kneisel Chief Financial Officer

10 Income Statement: 3QFY17 Versus 3QFY16 (in millions) Lancaster Buffalo 3QFY17 3QFY16 Diff % chg Net sales $ 4.95 $ 1.80 $ 6.75 $ 6.01 $ 0.74 12.3% Gross profit 4.26 1.05 5.30 4.82 0.49 10.1% Gross profit margin 86.0% 58.1% 78.6% 80.1% - 1.5% - 1.9% SG&A $ 1.33 $ 0.62 $ 1.95 $ 1.68 $ * 0.27 16.3% R&D 0.24 0.01 0.25 0.35 (0.10) - 27.3% Total operating expenses 1.58 0.63 2.21 2.03 0.18 8.9% Income from operations 2.68 0.41 3.10 2.79 0.31 11.0% Income from operations before income taxes 2.67 0.42 3.09 2.80 0.28 10.1% Net income $ 1.82 $ 0.27 $ 2.08 $ 1.91 $ ** 0.17 9.0% Diluted earnings per share (in dollars) $ 0.12 $ 0.11 $ 0.01 6.7% EBITDA $ 3.09 $ 0.51 $ 3.60 $ 3.29 $ 0.31 9.6% * Includes one - time charges of ~$144K related to DILIsym acquisition ** Includes one - time net charges of ~$97K related to DILIsym acquisition

11 Income Statement: 9MoFY17 Versus 9MoFY16 (in millions) Lancaster Buffalo 9MoFY17 9MoFY16 Diff % chg Net sales $ 12.69 $ 5.19 $ 17.87 $ 16.02 $ 1.86 11.6% Gross profit 10.58 2.95 13.54 12.47 1.06 8.5% Gross profit margin 83.4% 56.9% 75.7% 77.9% - 2.1% - 2.7% SG&A $ 3.92 $ 1.85 $ 5.77 $ 5.08 $ * 0.69 13.5% R&D 0.93 0.03 0.95 1.16 (0.21) - 18.0% Total operating expenses 4.85 1.87 6.72 6.24 0.48 7.7% Income from operations 5.74 1.08 6.82 6.23 0.59 9.4% Income from operations before income taxes 5.76 1.08 6.84 6.21 0.63 10.1% Net income $ 3.95 $ 0.69 $ 4.64 $ 4.16 $ ** 0.48 11.4% Diluted earnings per share (in dollars) $ 0.27 $ 0.24 $ 0.024 9.9% EBITDA $ 7.02 $ 1.37 $ 8.38 $ 6.82 $ 1.56 22.9% * Includes one - time charges of ~$260K related to DILIsym acquisition ** Includes one - time net charges of ~$177K related to DILIsym acquisition

12 Consolidated Revenues: Fiscal Quarter (pro forma prior to 2012; in millions) 2.29 3.12 3.09 1.58 2.64 3.08 3.74 2.00 4.01 4.57 5.94 3.71 4.84 5.16 6.01 3.96 5.42 5.71 6.75 $0 $1 $2 $3 $4 $5 $6 $7 $8 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017

13 Consolidated Net Income: Fiscal Quarter (pro forma prior to 2012; in millions) $0.59 $1.06 $0.99 $0.24 $0.69 $0.81 $1.31 $0.22 $0.53 $0.97 $1.85 $0.49 $1.11 $1.15 $1.91 $0.79 $1.36 $1.20 $2.08 $ - $0.50 $1.00 $1.50 $2.00 $2.50 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017

14 Consolidated Diluted Earnings Per Share $0.04 $0.06 $0.06 $0.01 $0.04 $0.05 $0.08 $0.01 $0.03 $0.06 $0.11 $0.03 $0.06 $0.07 $0.11 $0.05 $0.08 $0.07 $0.12 $ - $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 Q1 Q2 Q3 Q4 Quarterly EPS FY13 FY14 FY15 FY16 FY17

15 Consolidated EBITDA: Fiscal Quarter (in millions) 1.09 1.76 1.73 0.44 1.20 1.35 2.30 0.67 1.22 1.97 3.33 1.19 2.22 2.18 3.28 1.51 2.48 2.30 3.60 $0 $1 $2 $3 $4 Q1 Q2 Q3 Q4 2013 2014 2015 2016 2017

16 Returning Cash to Shareholders (in millions) 0.8 0.8 2.2 0 0.5 0.5 0.6 0.81 0.81 0.81 0.84 0.84 0.84 0.85 0.85 0.85 0.85 0.85 0.86 0.86 0.86 12.7 11.4 9.3 9.8 10.0 10.1 10.6 11.0 7.8 8.6 5.8 6.1 6.4 8.6 7.2 7.1 8.8 8.0 8.8 7.4 8.2 6.0 $0 $1 $1 $2 $2 $3 $0 $2 $4 $6 $8 $10 $12 $14 Dividend Paid Cash on Hand Cash paid $2.5M TSRL Cash paid $2.1M for Cognigen Cash paid $720K for Cognigen Cash paid out $5MM related to DILIsym acquisition

17 Selected Balance Sheet Items (in millions, except where indicated) May 31, 2017 August 31, 2016 Cash and cash equivalents $ 8.248* $ 8.030* Cash per share ( in Dollars ) $ 0.48 $ 0.47 Total current assets 14.935 12.700 Total assets 29.547 27.814 Total current liabilities 1.267 2.126 Total liabilities 4.322 5.082 Current ratio 11.79x 5.98x Shareholders’ equity 25.225 22.733 Total liabilities and shareholders’ equity 29.547 27.814 Shareholders’ equity per diluted share( in Dollars ) $1.445 $1.335 * Cash as of July 7, 2017 ~$6.0 million.

18 Marketing and Sales Walter S. Woltosz CEO and Chairman

N H O OH O CH 3 CH 3 CH 3 ADMET Predictor™ GastroPlus ™ MedChem Studio™ MedChem Designer™ DDDPlus ™ MembranePlus™ Consulting Services and Collaborations Discovery Preclinical Clinical PKPlus™ KIWI™ Simulations Plus: Your end - to - end M&S solutions provider DILIsym ® NAFLDsym™

20 • Version 9.5 released in April 2017 ‒ Intramuscular dosing model – optional add - on module ‒ New PBPK models for antibody - drug conjugates (ADCs) – optional add - on module • Version 8.5 scheduled for fall 2017 ‒ Rapid compound library screening in virtual humans and rats – optional add - on module ‒ Synthetic feasibility assessment for virtual molecules – upgrade to MedChem Studio™ Module Software Product News • Version 6.0 scheduled for fall 2017 ‒ New long - acting injectable model developed from the FDA grant ‒ New precipitation assay & biphasic dissolution models • Version 2.0 scheduled for July 2017 ‒ New models to analyze data collected from hepatocyte studies (expands user base) ‒ Improvement integration with the ADMET Predictor™ Module – optional add - on module • Version 2.0 scheduled for fall 2017 ‒ Addresses several items reported from prospects/clients during testing ‒ Numerous evaluations ongoing

3QFY17 Sales Review • Consolidated revenue +12.3% vs. 3QFY16 • Highlights: – Software revenue +5% • 89% renewal rate (accounts) • 93% renewal rate (fees) • 20% increase in license units • 10 new commercial companies • 10 new nonprofit groups – Continued expansion of licenses at China FDA – Consulting revenue +34.9% • +33.9% in Buffalo • +43.5% in Lancaster 58% 11% 29% 2% Consolidated Sales Breakdown Renewal New Consulting Training 0 50 100 150 200 250 Q1 Q2 Q3 Q4 Software License Units/Quarter FY14 FY15 FY16 FY17 21

9MoFY17 Sales Review • Consolidated revenue +11.6% vs. 9MoFY16 • Highlights: – Software revenue +6.7% • 88% renewal rate (accounts) • 95% renewal rate (fees) • 8% increase in license units • 32 new commercial companies • 31 new nonprofit groups – Consulting revenue +23% • +20.6% in Buffalo • +42.6% in Lancaster – Training revenue +25.3% 54% 12% 33% 1% Consolidated Sales Breakdown Renewal New Consulting Training 0 50 100 150 200 250 Q1 Q2 Q3 Q4 Software License Units/Quarter FY14 FY15 FY16 FY17 22

3QFY17 Software Revenue – by Region Europe 21% North America 53% Asia 26% South America <1% Japan = 69% China = 22% India = 9% Korea = <1% 23

9MoFY17 Software Revenue – by Region Europe 24% North America 49% Asia 27% South America <1% Japan = 62% China = 23% India = 17% Korea = <1% 24

3Q17 Marketing Activities Website Content • Continued production of video content for promotional/branding purposes • Increased focus on SEO performance Workshops and Conferences • PBPK and/or population PK data analysis workshops held in San Diego, Germany, Shanghai, and Buffalo – Workshops scheduled in Korea, Boston, and Tokyo in summer/fall • Hosted several onsite trainings at individual companies • Attended 12 scientific conferences; delivered 9 poster/podium presentations Strategic Digital Marketing Initiatives • Hosted 2 webinars on GastroPlus modeling applications • Continued with active social media campaigns – Twitter/LinkedIn/YouTube followers have increased 18% vs. June 2016 – GastroPlus User Group membership increased 13% vs. June 2016 25

26 Buffalo (Cognigen) Division Update Re - imagining the future of science - based research and development Ted Grasela President July 10, 2017

27 Status Report - Consulting • In FY2017 working with 26 companies on 39 drugs, 65 projects – 6 new companies in FY2017 – 36 new projects in FY17 – 22 projects expanded scope in FY17 – 3 projects with reduced scope – 32 outstanding proposals with 20 different companies • In FY2017 presented 9 posters, published 2 peer - reviewed manuscripts; 4 invited presentations, and 1 book chapter published – Working on 21 publications and 5 conference abstracts • Most common therapeutic area is oncology, followed by neurology, endocrinology, and infectious disease – ~45% of projects result directly in regulatory interaction. • Successful recruitment and on - boarding of new scientists to maintain growth

28 • Continued to work on $4.7 million contract with a major foundation to implement a KIWI platform for global teams engaged in model - based drug development; 5 - year term contingent on satisfactory completion of milestones • KIWI platform development continuing • Deploying data repository in July • Establishing KIWI - based collaborations on Global Health projects • Continuing design and development activities • Currently have 9 KIWI licenses • Several KIWI demonstrations ongoing with research groups ranging from academics to large pharma KIWI Update

29 Cognigen continues to grow: • Consulting activities continuing to expand; healthy pipeline of new projects, including collaborations with Lancaster colleagues for PBPK modeling in clinical pharmacology • Excited about collaboration opportunities with our new colleagues at DILIsym • KIWI platform development and deployment continuing; deploying data repository in July, establishing KIWI - based collaborations on Global Health projects, continuing design and development activities • Continued interest in the academic and industry communities regarding licensing the product Summary

30 Final Summary Walter S. Woltosz CEO and Chairman

31 • 3QFY17 • Revenues up 12.2% to $6.75 million • Net income up 8.9% to $2.08 million (diluted earnings = 1 2¢ per share) • 9MoFY17 • Revenues up 11.6% to $17.87 million • Net income up 11.4% to $4.64 million* • D iluted earnings up 9.9% to 27¢ per share* • California and Buffalo divisions both performing well • Expected synergies being realized • Addressing regulatory agency focus on applying PBPK modeling in clinical pharmacology & safety research • New guidance documents issued by FDA and EMA helping drive interest • Executing on 5 - year, $4.7 million contract with major research foundation • Offers potential for additional such contracts with other organizations • New DILIsym Services acquisition will expand offerings into systems toxicology • Exciting opportunities to provide end - to - end solutions for clients in different markets • We believe Simulations Plus continues to lead the trend toward greater use of modeling and simulation in research & development Summary *Reduced by one - time charges for acquisition