Good afternoon. It is Tuesday, November 25, 2014 and on behalf of Simulations Plus, I welcome you to our fourth quarter and fiscal year 2014 financial results conference call. Chairman and Chief Executive Officer, Walt Woltosz; and President Ted Grasela will be presenting this afternoon. Joining then as panelists are Chief Financial Officer, John Kneisel; and Vice President of Marketing and Sales, John DiBella. An opportunity to ask questions will follow the presentation. You may send your written question using the questions pane on your control panel or if you’d like to ask your question directly, please simply use the hand-raising icon on your control panel. If you are using a telephone please be sure to enter the unique audio pin displayed when you join the call. This call is being recorded for playback at our website, www.simulations-plus.com. It’s now my pleasure to turn the presentation over to Walt Woltosz.

Thank you Renee and welcome everyone to the last of our conference calls with only Simulations Plus. The next conference call will be a combined Simulations Plus and Cognigen quarterly report. We will have Ted talking on a few slides today about the acquisition of Cognigen and the impact of that we see going forward. We were nearly through our first quarter of the combined companies, but we don’t have any numbers that we can release to the pubic just yet. We will have preliminary revenues after November 30, as we can consolidate all of the estimates for consulting projects. So as usual, I’ll read the safe harbor statement, got to keep the attorneys happy. 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. So to begin with the fourth quarter, which is June, July, August for us, to sum -- it’s our slowest quarter each year because it’s the second quarter. Comparing 4Q ’14 to 4Q ’13 ’14 was our 28th consecutive profitable quarter and a new record fourth quarter. Our revenues just missed $2 million, so $1.997 million that was a 27.4%…

No, it look like number looks – percentage looks correct Walt.

Well, if we go from $2.7 million to $3 million, that’s an increase of $300,000, that’s more than 10% of $2.7 million.

It was $2.886 million last year and it was $3.025 million this year for net income.

Okay, so that $2.7 million – that should be at $2.9 million.

That should be a $2.9 million that’s correct.

Okay, looking at revenues by quarter, a very steady climb quarter-over-quarter. In the normal accounting instance, its a little higher rate of increase in the last two quarters compared to the same quarters of the previous fiscal year. Gross profit by fiscal quarter, again a very similar trend. EBITDA by fiscal quarter jumps up and down a little bit. Just a variety of expenses, R&D, tax credits and things like that. Well, that wouldn’t affect that. Probably there we are looking at variations in capitalized software developments cost as we shift staff between marketing and sales activities, which are expensed and development in new software capabilities, which can be capitalized. And those do vary on as we – yes.

The amortization of the TSRL agreement is also in there this year.

Oh, thank you, you are right. And then net income by quarter that was definitely impacted by the tax change from last year, where we had a credit last year and this year we had to pay some taxes. New customers by quarter, this is especially encouraging. If you look at the total for this year, we are what, 37, 57, 77, 85 new customers this year. This means a new company or a completely different department in a very large organization, but essentiality it is a new customer and a very nice increase in the number of new customers that it tells us we are still along ways from saturating the market. We believe that the pharmaceutical industry is still very far behind aerospace and automotive and other industries in the use of Simulation and modeling and that the future is going to be very bright and now with the addition of Cognigen we have a broader set of offerings that incorporates Simulation model. Our balance sheet items; cash as of August 31, $8.6 million and I forgot to change the footnote here, cash as of today is $5.6 million, because since that footnote was made we paid out over $2 million towards the Cognigen acquisition and about $800,000 in dividends and you will see that on the slides coming up. Our shareholders equity per share, a nice increase from $0.87 a share to $0.94 and of course the shareholders equity itself increasing from $4.2 million to $15.4 million. Current ratio remains very healthy at about [8.3] [ph] and returning cash to shareholders. So you will see the $8.8 million there and then you see the decrease, net of $5.9 million. We used $2.1 million for the Cognigen acquisitions that was paid out so far and you can also…

Thank you, Walt. As Walt just indicated, we focus on clinical pharmacology cliental, mostly as our clinical development after the compound was first introduced in demand, all the way up until the time that a new drug is submitted to the FDA for consideration for approval. We are actually the first contract research organization to offer pharmacokinetic and pharmacodynamic modeling simulation services to that clinical pharmacology community. We have been business since 1992 and currently have 35 employees; about third of them are scientist, about a third will be the programmers and about a third our administrating support and my group in here are IT professionals who are responsible for keeping our systems up and running. Next slide please. Can you switch the – thank you Walt.

I did. It took about five seconds to change.

Yes. So just giving you an idea of the scope of our activities, we provide various kinds of modeling and simulation support for about 30 to 40 drugs per year and we work on a total of over a hundred different compounds over the last five years. We like to explain that number, because it demonstrates the depth and breadth of our experience and the variety of different kinds of clients and situations that we’ve worked in. We do in fact crossed all of the stages of development, a little bit of pre-clinical work, but mostly during the clinical phases, Phase I through IV of clinical development. One of the reasons why clients like to work with us is because of the well-established quality management system that we’ve put in place. We are audited regularly by our clients, both new clients who want to make sure that we’ll deliver a quality product, as well as clients that we worked on in the past, who are simply checking to make sure that we follow our procedures. We’ve had 44 of these client audits over the last 10 years and in all of them we passed very successfully with no findings. All this adds-up to a track record of successfully supporting regulatory filings from pharmaceutical companies and we worked on more than 25 of these regulatory submissions over the last five years alone. This slide is just in attendance to give you an overview of the different kinds of therapeutic areas that we’ve worked in. Really, quite a broad range; everything from neurology to oncology, cardiology, infectious disease and most recently we’ve been working on a very large project with a Fortune 100 company to help get a new drug for osteoporosis. Next slide. I just wanted to give you an idea of the kinds of systems that we have in place. We recently made a significant investment in our great engine, the oxys [ph] to the right, and that’s the basis for all of the heavy-duty computing and modeling simulation activities that we do. We have developed a product we call KIWI, which is the way that our scientists access that grid, submit complicated modeling runs, receive that date and then organize it and present it to our clients. This has been very successful and a very valuable tool to us internally and we are now beginning to explore some of that to the modeling simulation community on the outside.

Okay, thank you Ted.

Thanks Walt.

I just realized with Ted there that when I make the slide change here, I can take as much of seven or eight seconds before you even see it in time, I try to allow for that. Marketing and sales, John D would you like to talk about this one, John DiBella.

Sure, I’d be happy to. We’ve continued to be aggressive with our marketing programs over fiscal year 2014, both through our attendance at conferences and also through online initiatives. In fiscal year 2014 we averaged approximately four conferences per month around the globe, with an even split between those focused on discovery research, which would be the cheminformatics software program we offer and also the development research activities, which would be more focused on a simulation tools. At those conferences our scientist presented 30 posters or podium presentations on different applications of the products, which is certainly helpful for marketing efforts, and we are also excited to say that we begun to attend conferences focused on the new extensions of some of our products, namely the aerospace and MRI Modeling initiatives that I think Walt will talk a little bit more about coming up. We’ve identified the importance of educating and training scientist as a key driver for greater adoption of our modeling and simulation technology and because of this we’ve decided to increase the number of onsite trainings at client sites and also the workshops that we host at various locations around the globe. The workshops in Europe and North America which we hosted in 2014 were at full capacity and we also saw overflow crowds at our Asian courses, and we just finalized a full slate of workshops which are going to be scheduled for calendar year 2015. We see the majority of evaluation requests for our software directly coming from the webinar series that we, and also our friends at the GastroPlus user group had started over the past two years. In fiscal year 2014 we hosted together seven webinars and had over 1,100 scientists register. And we also continue to be very active on social media,…

Thank you, John. Thank you very much. Allowing a few seconds for the slides to catch up on the other end of the wire here. Additional growth opportunities, MembranePlus we mentioned was just released just after the end of the recording period, the recording months for fiscal ’14. So our first new software product in about 10 years, we have many enhancements of our existing products over the 10 years, a tremendous number, but as a completely new product this is the first one, so we are very excited about that. We’ve had quite a few enhancements of our current products, especially in GastroPlus we have funded collaborations from two different large pharma companies, one for dermal and one for improving the oral cavity dosing. So on top of the tongue or under the tongue or patches that attach to the inside of your cheek, they call it the buckle patch. Those collaborations were actually funded by those companies recognizing that once they are done and released, they are available to other companies to license as well. We are finishing up the addition of biologics or antibodies to GastroPlus as these are a completely new area, the biotech area, monoclonal antibodies or the term, quite a strong presence in the pharmaceutical industry. Stimulating how they behave in the bodies is very different from how they stimulate the behavior of small molecules that we’ve been doing traditional amounts that [indiscernible]. And we see another growth area as the addition of larger animals such as horses, swine, cows for example. Even I’ve been told there is an interest in not only the behavior of drugs in these new animals. If you have a sick elephant, which can happen, how do you know how much of a certain medication to give that thing.…

From Howard Hoffman, will FY ’15 revenue be broken out into two line items? I’m guessing software and consulting service. If so, what should we look at as the percentage breakdown? Ballpark, we are going to do the same thing we did when we had our Awards Plus subsidiary. We going to break out both divisions, so that you can see how each division is performing and what they do. So I’m expecting the Simulations Plus side to continue to look like you have seen in the past and that you will now see an additional reporting element for Cognigen, and of course we will report everything that is consolidated, our revenues, earnings and so on, so that you can see the breakdown between the two divisions. I will make that very clear for everyone. Percentage breakdown, well Simulations Plus is mostly software and so that’s about two-thirds of the revenues, but a much higher percentage of the earnings because the margins are so high on software. I would say the consulting part is probably going to be about one-third of revenues moving forward with lower margins and I can’t tell you what those margins are going to be yet. I think we’ll have to get few quarters under our belt here to see how that all works out. We do see some synergies between the two companies. I know we can help each other, cross selling essentially from our customers to Cognigen and vise versa and so we are very optimistic about how things look going forward. What should we look at for gross margins from software versus consulting services and for the combined company? I can tell you, for software again you saw our margins this past quarter were around 86%. I think that you know the low…

Yes, we talked with them quite a bit about setting off a network for them. They have a lot of scientists who work around the world in different environments and we are talking about setting up a cloud application for them and this we are looking to see if we can help support various modeling and some simulation services that they require.

Thank you, Ted. Walter, as of September 1, 2014 after the merger, what was the value of shareholders equity? I did show the shareholders equity in earlier slides. See if anyone is there to back us there…

Walt, Walt…

Yes.

The amount of equity will increase about $3.3 million to $3.5 million the day after the date of the acquisition.

Okay. So we’re at what now? As of August 31 we were at 15.4, so we’re up to about 18 or 19.

Yes.

Okay, thank you. Another question from Walter Ramsey. What was the software license renewal rate for the year? John DiBella, do you know that one?

Yes. We were definitely within our historical norms. In terms of accounts, the renewal rate was around 91% for the year. In terms of fees it was a little bit higher, around 94%, 95%. So that means that most of the non-renewals were of the university non-profit type license. So renewals were very strong as they historically are.

Thank you. Again from Walter Ramsey, the company added 75 customers during the fiscal year. What was the grand total number of customers? John DiBella, what’s our total number of customers?

Well, remember when we say we added 75 customers that is new companies and then new departments at existing companies. So using that definition we are well over 200 now customers that license technology. I think we are probably close to approaching 250.

And that would be counting companies or departments, but without actual users, software users, where we gather are multiple users in most of these. Any estimate there of the total number of users of Simulations Plus software?

Well, if we want to think in terms of license, there are approximately 700 or 800 licenses that have been purchased by companies in fiscal year 2014. And so for use, I like to use as an average maybe three users per license. So we are probably looking at well over 2,000 people who have access to the software.

Thank you John. Don [Indiscernible] asks what is the status of the COX-1 and COX-2 molecular project. Are you talking to any companies interested in pursuing it? Again, these NCE projects were not intended to sell molecules, to sell our molecule designs. They were intended to show what our software can do when you apply it to a situation where you have a certain amount of seed data which you can begin with, where you can build activity models for some existing molecules against a particular target or for COX-1 and COX-2 different targets and then design new molecules from what you learned from the old ones. This is how the industry worked. Your constantly building on what you learnt last time around. So we have not been really actively seeking anyone to turn to the COX-1 and COX-2 molecules further and develop that. We go out and present and we talk about what we do and we don’t have any activity pursuing selling the modules at source. Rob Ray [ph], how many more quarters will $150,000 agreement expense with the TSRL incurred. John K?

That’s a 10-year amortization period, so 10 years less one quarter basically.

Okay, thank you. One from Ramsay, will software prices increase during the fiscal year. Are there plans to raise them in the current year? John D, are you making any comment on that? I don’t think you we said anything publicly.

Well, I think we certainly mentioned that we’ve decided to evaluate software license fees every other year and so we did evaluate the software fees starting around the beginning of calendar year 2014. So about one to two quarters into our fiscal year and we did identify some changes to those prices. I don’t expect us to reevaluate those in fiscal year 2015. The next period would be the beginning of the calendar year 2016.

Thank you. What percentage of sales were international from Walter Ramsey?

Yes, I can give an estimate. The international sales were greater than the sales in North America. So I think North America is somewhere around the 45% level. I think we are getting close now to an even split in terms of the revenue seen between Europe and Asia and by Asia we are going to be lumping in Japan, India, China and Korea as the four major countries there. But it’s about close to 50% for North America and then evenly split between Europe and Asia and that’s a big jump for Asia over the last couple of years.

Thank you. Then the last question I see right now, Walter Ramsey. Are the new software customers mainly purchasing through the cloud and is cloud pricing the same? No, they are not really purchasing from the cloud. I don’t know that anyone yet has purchased. We have been using the cloud for evaluations and training. John, you want to comment on that, John D?

The new customers have still been purchasing the standard server licenses or stand alone licenses, but we have now had two existing customers make the switch over to the cloud. So we have identified a pricing plan to offer the software on the cloud. Right now its still through Amazon web services. We’ll have some discussions internally about what we can do with the Cognigen cloud. The pricing for the licenses are the same and then there are additional fees that are tagged on for providing services from our end to host and manage that server.

Great. Okay, that’s the end of the question list I should say that I see, and so I want to thank everyone for attending today. Our next conference call will be in January for first quarter Q1 of FY15. And we look forward to talking to you again then. The slides will be posted with an 8-K here probably later today. Renee.

Thank you Walt. Before we conclude, we’d like to mention a few upcoming investor conferences. We’ll be presenting at LD MICRO in Los Angeles on December 3. On December 11 we’ll be attending The Benchmark Micro Cap Discovery one-on-one conference in Chicago and on January 12, 2015 we’ll be presenting at Sidoti’s Emerging Growth Institutional Investor Forum in New York City. So with that we conclude today’s conference call. If you missed any part of today’s presentation the playback will be available at our website www.simulations-plus.com. Thank you for joining us today and may all of you have a very Happy Thanksgiving.