Thanks so much for holding everyone. Welcome to the Simulations Plus first quarter fiscal year 2008 financial results conference call. Just a reminder today’s conference is being recorded. And now at this time I would like to turn the conference over to our host Mr. Walter Woltosz, Chief Executive Officer. Please go ahead sir.

Thank you very much and welcome everyone to our conference call to discuss the first quarter of fiscal year 2008 which ended on November 30th. I am required to read this Safe Harbor statement so 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 or 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 personal, the company’s ability to identify evaluate and close suitable acquisitions 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. Okay, so the lawyers are happy now and now we can have a discussion. First, I’ll discuss the first quarter 2008 results and then a brief discussion of our strategy going forward and then I will welcome any questions that you might have. In the first quarter our gross revenues were $1.98 million. This is up over 36% from first quarter of 2007. Our pharmaceutical software and services portion of the business was $1.438 million up about 75% or 74.5% from the first quarter last year. That was in large part due to a large order where the customer renewed in November to avoid having a gap in some software licenses at some of their sites. That order was received in December of last year. We expect that it will…

(Operator Instructions) We will go first to Mr. Howard Halpern at Taglich Brothers. Howard Halpern – Taglich Brothers: I’ll dive in on a little bit about the shift in the revenues from the second quarter into the first quarter. Based on what you are seeing because last year in the pharmaceutical software area you did about $1.8 million in revenue. Do you believe that you will be able to grow that number even with that shift?

I am not sure where your $1.8 million comes from. Last year we did over $5 million in pharmaceutical. Howard Halpern – Taglich Brothers: No, for the second quarter.

Oh, for the second quarter. Well we haven’t said anything publicly about the second quarter but, the second quarter is looking very good at this time. I will leave it at that. Howard Halpern – Taglich Brothers: Okay, so then with just my general math calculations and I know there’s seasonality in the quarter, based on the first quarter increasing by $3 million year-over-year on a whole. On average you have to do in excess of $3 million dollars per quarter. Do I have that math correct? Walter S. Waltosz Yes. We did just under $9 million last year. So, we would have to do just under $12 million and in order to that we would have to be up on average $750 per quarter. Howard Halpern – Taglich Brothers: I know that the third quarter normally tends to be seasonally strong based on past history at least.

First quarter is almost always is the lowest. Not always but almost always the lowest. Howard Halpern – Taglich Brothers: You know I think we have talked about it before but, the consulting contracts it is sort of getting your name out there and it is almost as good as marketing too. Have you seen recently conversions into customers buying the product?

Yes. That’s the good news and the bad news. The good news is that when they do license the product it becomes renewed year-after-year. The bad news is that we lose the consulting income. You can’t have both. Once you teach them to use the product on their own then they are off on their own. It’s a very good entrée, it’s a good point you make there. Once we work with the customer and they see, not just what the product does but the thinking process and how to apply it to different kinds of analysis then they get comfortable with it and they start to think, “Well gee, why should we pay these guys to consult? We’ll just license the software and do it ourselves.” And, that is a good thing.

We have a question now from Dick Mills a private investor. Dick Mills – Private Investor : Kind of almost a trivia question, I guess, the year ending August, why did you do that? And, have you considered going to a calendar year ending in December?

Well when we started Words+ in 1981 we incorporated in September of that year and so we made that the beginning of our fiscal year and we just kind of stuck with that ever since. When we founded Simulations Plus we incorporated Simulations Plus in July of that year so we said, “Hey we’re coming up on the fiscal year beginning for Words+. Let’s just make them the same.” There are some advantages, we end up hitting our auditing firms when they are not as busy as we would if we used the calendar year and everybody’s doing there tax returns at the same time. We have a little bit of advantage that way. But, that is really why, it just kind of was tradition from 1981 with Words+.

(Operator instructions) We will go next now to Mr. Frank Gristina at MicroCapital Frank Gristina – MicroCapital: I was hoping you could help those of us that are trying to drive revenue by explaining, I guess, in the Simulations revenue, what percent of that, you have been doing this for quite a while, what percentage of that would be renewal of licenses versus new seats sold? Is that something you can give us color on?

Let me check with my CFO. Do you have an estimate for new licenses as opposed to renewals approximate in terms of revenue? She says it’s probably our marketing and sales department that would be the better one to reply to that. But what you can typically see from year-to-year our renewals are very, very high. They are well over 90% typically. We do give a renewal discount but, in the majority of cases that I have seen, even with the discount we end up with a higher license fee because more seats are added or more software licenses are added for different programs that weren’t licensed in the first year. So by and large the growth that you see, I would say that the new licenses taken by existing customers probably balances out the renewal discount to some extent. So, most of what you see in increases is going to be from new business from companies or department within very large companies that were not licensing software the year before. Frank Gristina – MicroCapital: Okay. Just in terms of you have so many different products with different price points, is there any way that you can either give us an idea of how many active licenses you have, in terms of seats? Or, kind of an average AST for the difference seats?

It is a little difficult to do that because some of the licenses are site licenses and so they’re essentially unlimited, as many people that want to log on. But I would say what I tend to count is number of customers and even that is a bit misleading because Pfizer or GlaxoSmithKline or Lilly; any of the large companies count as one customer and yet they may have four, five or six sites and each site they may have 10 to 50 people working on projects that use our software. But, I would say it is probably reasonable to say that there are around 100 companies total, somewhere in that neighborhood and probably I am going to guess 500 users overall. Just to pull a number out of the air. Frank Gristina – MicroCapital: Okay. I will take your guess out of the air over mine. And then, can you just in terms of the market size, again you are adding products and that is going to open up new markets but, I mean if you have 100 companies doing R&D and using these different seats what do you think the real addressable market is in terms of how many companies could you sell one or all of these products to over the next five years?

Yeah, that is something that we, over the years we have kind of hesitated to answer but I think our confidence is building now because we are seeing so many of these smaller companies coming in now for initially for consulting work or sometimes coming right into a software license. Companies that we may not have even heard there name a year or two ago and now we have a relationship with them and these are world wide. These are in Asia, Europe and the United States. Years ago we looked at something called the Atlas Directory, I have referred to it before in conference calls and there were 3,600 or something like that, firms that were in businesses either biotech or drug delivery and formulation companies or actual drug companies. And so if you count all of those and figure probably 20% maybe would be a reasonable number that might end up being able to use one or more of our software products you would see that we have just really scratched the surface. We have a long way to go. Now, the size of the company does make a difference but what we have found now is that the smaller companies are beginning to realize that these in silico tools are tremendous equalizers. They can develop analysis or design new drugs almost as fast as the big guys if they have the right piece of software and the expertise and the computing horsepower to run the programs. I think that is why we are seeing more and more adoption of the in silico or the computer based methods by the smaller companies. They are finally recognizing that it is not really an expense it is something that pays for itself. Frank Gristina – MicroCapital: Great and last question, I mean when you think about you just said 20% of the directory.

That came out of the same air as the other number. Frank Gristina – MicroCapital: You would think that those are companies that are actually doing drug research and development. Out of that Atlas I imagine there are companies that probably don’t develop or try to formulate new drugs. Is that how you are getting the 20%?

Yes and that is a totally, totally wild guess. I can’t substantiate that at all. It’s just a feeling that when we look at all the companies that we see, you see a lot of companies that are supplying different kinds of equipment or supplies and stuff and obviously they are not going to use this type of software. But, just kind of a gut feel just looking at companies names that pop up in the different newsletters that I get, I would say about a fifth of them maybe are the ones that would be doing the kind of work where if we can convince them, they would be potential users of software.

We go now to Fred Milligan at Sanders Morris Harris Fred Milligan – Sanders Morris Harris Group Inc. : With capitalized computer software development costs and the amortization of that, how much does that come to in a quarter? And could you break that up because potentially helps in regards to determining cash flow.

[Inaudible] capitalized software developing costs per quarter. I am asking my CFO now if she has got that handy. I am finding that on the computer here. While she is looking that up let me point out for those that may not be familiar with this, when you develop new software tools some of the work that we do is ordinary maintenance, bug fixes or minor improvements and that is expense. When you are developing a new capability either within an existing program or brand new program, if it’s a new capability once management has established that what you are doing is technically feasible, you know it can be done you just have to do it then, you can begin to capitalize the labor and so it becomes a capital asset. Until the time that that new capability is offered for sale and then you begin to amortize that and you can’t capitalize that anymore unless you are developing something else that is a new capability. You also have in this category acquired capitalized software development costs. So, when we did the Bioreason and Sage Informatics acquisitions in the fall of 2005 there was a certain amount of a couple $100,000 or so as I recall that also went into that capitalized software development asset. And, those began to be written down right away of course because as soon as we acquired the products we were selling them. So, we have in the asset itself right now we have a mix of both labor of our own that is capitalized and then the Bioreason acquisition capitalized assets. So, for this quarter we looked at about $106,000 for Simulations Plus for the pharmaceutical side and about $10,000 for Words+ as the amortized part of the capitalized software development cost. Fred Milligan – Sanders Morris Harris Group Inc. : Is that a [inaudible] quarter?

Yes. Fred Milligan – Sanders Morris Harris Group Inc. : Okay. You mentioned the R&D credit, tax credit that you get. What does it amount to roughly?

Well it depends on the year and it depends on the law. They change the law every time they renew it. The house HR 2138 I think it is, that is under consideration now has proposed to make it up to 20% and permanent. Fred Milligan – Sanders Morris Harris Group Inc. : 20% of the R&D expenses?

That would be 20% of the R&D expenses over a base. So, you have a base that you calculate. Originally, I think the base was calculated based on several years back in the 1980’s if you were in business then, if not then you used an average over a certain period of years since you had started your business. But, the law changes every time they renew it and we just have to wait. Again, it is expected they always have done it for 25 years but more than half the time they have been late. Fred Milligan – Sanders Morris Harris Group Inc. : On another subject, would it make any sense you mentioned consulting and actually over the last few years consulting has become a bigger part of the story, actually. Does it make any sense to break that out in terms of what the consulting fees are on a quarter-by-quarter basis?

We haven’t thought about that. You mean just for reporting purposes? Fred Milligan – Sanders Morris Harris Group Inc. : You know for reporting to shareholders.

I will talk with our CFO about that and see if it makes any sense. Fred Milligan – Sanders Morris Harris Group Inc. : That would give you some idea as to the potential coming out of it.

(Operator Instructions) Walter it appears that we have no further questions this afternoon. Sir, I would like to turn the conference back to you for any closing or additional remarks.

Okay well just to remind everyone I do use PowerPoint slides as a set of speaking notes for the conference call and if you would like a copy of those you can request those either by calling the company or just send us an email at Info@SimulationsPlus.com. Thank you all for attending and I’ll see you at the end of next quarter.

Again, that does conclude our conference call. We would like to thank you all for joining us and wish you all a great afternoon. Goodbye.