Good afternoon. It is Wednesday, November 18, 2015, and on behalf of Simulations Plus, I welcome you to our Fourth Quarter and Fiscal Year 2015 Financial Results Conference Call and Webinar. Presenting this afternoon will be Chairman and CEO, Walt Woltosz, Chief Financial Officer, John Kneisel, Vice President of Marketing and Sales John DiBella and Company President, Ted Grasela. An opportunity to ask questions will follow today's presentation. [Operator Instructions] This call is being recorded for playback at our website www.simulaitons-plus.com. Before we begin, I will read the Safe Harbor statements. 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 this 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 U.S. Securities and Exchange Commission. It is now my pleasure to turn the presentation over to Walt Woltosz, Chairman and CEO of Simulations Plus.

[Indiscernible] over to the other folks here and then give you a wrap up at the end. Overview, for those of you who might - we are a major provider of software and consulting services for pharmaceutical R&D, all the way from earliest drug discovery, when a chemists first draw us a molecule [indiscernible] and animal testing and to first in human trial then Phase II and III clinical trials and then beyond patent life to supporting generic company, so we pretty well cover everything from the earliest to the latest stages of drug development and delivery to the public. We are also now developing some new applications in both aerospace and in general healthcare using the machine learning technologies that we’ve developed to do our property prediction for pharmaceutical and other chemicals. Our financial performance has been outstanding, in fiscal year '15 revenues up $6.85 million. That is 59.8% to 18.3 million. Of course a large part of that was due to the 5.22 million increase from our Buffalo division, acquisition of Cognigen Corporation last year. Now Simulations Plus Buffalo, and $1.63 million was from growth in the California division. Fourth quarter '15 revenues up by $1.7 million or 85.8% to $33.71 million, again, significant boost there from the Buffalo division, where the fourth quarter revenue in California is typically the weakest quarter in the summer time, it is not quite so true for the Buffalo division, so it really helped our Q4. Diluted earnings per share for fiscal '15 increased 22.4% to rounded off $0.23 per share compared to $0.18 in fiscal '14. For the highlights of the fourth quarter software renewal rates 99% based on fees, little less than that based on numbers of units, but a lot of those were units that were very cheap academic…

Okay. Great. Thank you, Walt. I appreciate it. We are going to take fourth-quarter first here. Again, as Walt said the revenues are up quite a bit. They are up $1.7 million. Again, $1.4 million of that was from the Cognigen Buffalo acquisition for the year, but the results in California were still good. Software sales were still up 10.5% for the quarter and our analytical revenues, study revenues were up 94,000 for the quarter, so that is still showing growth. Our gross margin is up 71% and now $2.64 million for the quarter. Again, much of the growth is coming from Buffalo, but California is still maintaining a very high margin and our consolidated margins have decreased a little bit, but that is basically the result of blending the margins from the consulting revenues in Buffalo compared to the California software sales market. Our SG&A for the year was up 42%, $449,000. The $470,000 of that increase is from Buffalo, so effectively the Simulations Plus SG&A has had sort of very small decrease in the last quarter of the year. SG&A as a percentage of revenues for the fourth quarter decreased to 41% compared to last year when it was 53%. Our R&D expenses went up $145,000 for the year and was a little bit higher in the fourth quarter and that is really the combination of just what is expensable and what we capitalize when we are developing our software. As Walt indicated, our earnings per share were up actually 114% and they were up to $0.03 a share from a $0.01 a share or about a $0.015 a share the prior year. Again, we distributed during this quarter cash dividends of $0.05 a share. Let's go to next slide, Walt. For the fiscal year '15 compared to…

Okay. John, do you want me to make you the presenter or do you - John D?

Yes. Walt, I think if you just continue with the way we are going that will be fine.

Okay.

Thanks, John. Thanks, Walt. In case, we have anyone new to the Company online, I want to briefly describe our products and services and where they fit in the drug development process. In nutshell, we offer end-to-end solutions, which span from early discovery through clinical development and going into regulatory filings. Our cheminformatics software consisting of the ADMET Predictor, MedChem Studio, MedChem Designer platforms allow research scientists design new compounds and virtually screen them across the spectrum of properties helping to prioritize testing. The simulation software consisting of the GastroPlus, DDDPlus, MembranePlus and new PKPlus platforms help scientists model and predict complex in-vitro experiments and ultimately the in-vivo exposure in animals and humans. The software tools are going to be complemented by a team of expert scientists who can provide consulting support on a project-by-project basis. Next slide, diving a little bit deeper into the products and sales, our software development team is working very hard on new releases of all tools scheduled for 2016. The next version of GastroPlus, the flagship product is expected in the spring and will include a new optional add-on feature for intramuscular dosing and also enhancements to our recently released biologics module, which we expect will help deliver more sales of FD during the future. The cheminformatics development team has been hard at work on refreshing the ADMET Predictor and MedChem Studio interfaces, which based upon some initial feedback is being very well received. We are also adding an optional add-on module to the new ADMET Predictor, which we expect will lead to increase sales of the tool. The simulation tools for in-vitro experiments, DDDPlus for dissolution and MembranePlus for permeability absorption, will have new versions coming in 2016. Some features of note here include new optional add-on modules to predict properties from chemical…

Thanks very much, John. Can you hear me?

Yes. Not well, but we can hear you.

Thanks very much, John. What I would like to do is give an update on the activities of the Buffalo office and talk about how we been expanding our reach into the pharmaceutical industry in terms of consulting services as well as product offerings. Next slide; one of the important reasons for agreeing to the merger with Simulations Plus was that we saw that there were going to be very important strategic and synergistic benefits of being able to have strong collaborations between the Buffalo scientists in Lancaster. In fact those benefits of this collaborations are being realized as you have seen from some of the financial results that John Kneisel reported previously. As part of those collaborations, we have been identifying new and innovative ways of using modeling and simulation to bring valuable insights to our clients' research and development programs and that is helping them be successful in their programs as well as creating new opportunities for us to work with those clients. Similar to what John was describing about social media efforts we have been employing flow as email blast that emphasize the fact that we are now working together with the Lancaster group in terms of providing modeling and simulation services and also ancillary services like data assembly as well as promoting our KIWI software, which I will talk about a minute. We have also been attending the number of national and international scientific meetings that have proven very valuable as opportunity to demonstrate our software as well as to promote our consulting services. As of today, we are currently working with 20 different companies on 49 different projects. Of those projects 15 started in the first quarter of the fiscal year 2016. In addition, we have seen expanding scope of projects with three companies where…

Thank you, Ted. As you can see, California and Buffalo divisions both have been performing well. We are realizing the synergies that we expected to with the acquisition last year. I think, with our first full year under our belts, we are very pleased with how the teams have been working together both, in the physiologically-based pharmacokinetic modeling for clinical pharmacology, but also in the development of our new PKPlus software, the Buffalo scientists in Lancaster scientists have been working quite well as a team in that effort. Software sales continue our strong growth trends. The annual license business model continues to be very profitable method for us to do our sales and has become standard in the industry. I believe, we are actually first to propose an annual license back in 1998. Some people kind of rock back on their heels, but it seems to be the way just about everyone is doing software licensing. Our traditional products are doing well, the new PKPlus software, we are very excited about that. We think the potential here is quite high. It is going to take a little time to build out the course, but there is a potentially large user base for this type of software out in the industry and the fact that we are looking at some other industries now to expands a little more into aerospace and some general healthcare applications of our machine learning engine gives us another potential growth area. Just to reiterate, fiscal year '15 revenue was up $6.85 million to $18.3 million, it is 50-something percent and a significant part from Buffalo, but also excellent both from California. The fourth quarter up by $1.7 million, very have a very large part of that from Buffalo, but also see growth in California, but it is normally the weakest quarter. Our diluted earnings per share increased 22.4% to I rounded off to $0.23 per share compared to $0.18 per share. That is the conclusion of our presentation. We will open it up now for questions and should I turn it back to you Renee to read the questions?

Sure, Walter. I will read the questions. No, I can take care of that.

Okay.

Howard Halpern has been working hard this afternoon. He has a number of questions. His first question at the start of fiscal year '16, how much larger is the consulting pipeline versus fiscal year 2015?

I do not know that we have made that public yet. If you mean at the end of fiscal '15, we can talk about that, but the first quarter '16 there is nothing public yet. I guess, we will have to talk about as of the end of the fiscal '15. John D or Ted, do you want to talk about that?

Well, I do not mind commenting on something that I had mentioned earlier, which is that because of the fact that you have done a pretty good job promoting the consulting services and also even more importantly gotten a few folks over in Buffalo trained up on doing PBPK modeling, we did see a pretty significant increase in consulting revenue for 2015 and we expect that I think to continue as we head into the New Year. It is this opportunity for us to have more resources in place to handle the requests that are coming is going to set us up very nicely.

Thank you, John. Ted, any comments on that?

The only think that I would add is that the overall tone of the industry is one of more and more modeling and simulation and I presented about the symposium that happened over the summer and that is just part of a growing feeling that many of the concerns that the industry has about productivity are hopefully going to be addressed by some of the software products that we have as well as consulting services.

Thank you. Next question, Renee?

Our next question is, what is the initial interest level for the standalone PKPlus application and what is the long-term potential for this application?

Okay. Good question. PKPlus was first presented to the public at our Japan user meeting in October. I gave them an overview of what we were planning to release in the near future and then we presented again to our western user meeting at the AAPS Conference, American Association of Pharmaceutical Scientists conference just a week or two after that. In both cases, the interest was very high. There is a large population of people that do this type of analysis, probably close to 10,000 people around the world use this type of analysis and things that they do, but at the moment there is really a one dominant program that seems to be recognized as being acceptable to the regulatory agencies. In fact, other programs can be used, but there is a perception that only this one program has all of the validations and audit trails and all that that is needed, so now there is going to be a choice and we believe that choice is going to be very much appreciated by the industry.

Okay. Thank you, Walt. Howard's next concerns hiring, excluding the Cognigen acquisition, how many new hires did you have in fiscal year '15. Do you have a hiring plan for fiscal year 2016?

John K, do you know - remember the number of new hires for a fiscal '15?

Yes. We are about the same number of employees this year. We have been up and down one or two in Lancaster. We have another one joining us relatively shortly and we have a pipeline of a couple of additional PhDs that we are working on.

Thank you, John.

Okay. Howard's next question, can you describe the customer base for DDDPlus and MembranePlus? What type of growth do you hope to achieve?

John D, do you want take that one?

Currently the customer base for DDDPlus and MembranePlus is pretty small. It is approximately 5% of the GastroPlus customer base. As mentioned earlier, we will be releasing new versions of both products and I think we have identified what were some of the gaps with those tools currently. If we can execute on these new feature developments and also execute on the promotion of the increased synergies with GastroPlus, we hope to see I think these programs reach a quarter or more of the GastroPlus customer base. There is really, I think, a lot of interest in both programs and it has just trying to educate people on their proper use and ultimately how information flows from one program to the other.

Thanks, John.

James [Morato] [ph], sent the question. He asks does your PKPlus product overlap with any of your other products. Do you expect it to cannibalize sales at all from your other products? Thanks.

Actually PKPlus has been a module within GastroPlus for about 15 years. Over those years, we repeatedly had requests from different customers to make it a standalone product. Maybe we should have given it more priority sooner, but it is not the same capability as the standalone product. It is a much more condensed quick and dirty way of generating pharmacokinetic models, where they standalone PKPlus is a substantial program built on its own database architecture, which is not the case in the PKPlus module within GastroPlus. Again the co-validation, the ability to import and export all the different data file types that clinical pharmacologist use to feed this type of program to do the non-compartmental analysis and compartmental, the reporting capabilities, the audit trail, all of that is completely unique to the standalone product, so it is a different product and we do not see it cannibalizing any sales at all from the other products.

Okay. Thank you, Walt. [Scott Bilado] [ph] has a question concerning housekeeping. Could you tell us how the capitalized software will flow back through the income statement? Over how long does it flow back?

Walt, I will take that one.

Yes. Please. Thanks.

We use a five-year amortization period for our capitalized software unless there is some other indicator that it’s shorter period of time, so what we capitalize comes back out over the five years following the release date for that version of the software. I think that hopefully answers the question. There is also another one on software amortization, [indiscernible] amortization exceeded spending in the fourth quarter. Is that relationship likely to continue? I do not think so. That is a little bit of a function of just what we were actually working on in the fourth quarter, but it does go up and down over time.

Okay. Thank you, John. I believe, we have somebody who would like to ask a question. [Jordan Viel] [ph] has raised his hand, so I am going to un-mute his line and allow the question to be asked. Jordan, you are un-muted, but you need to be sure to have your audio pin entered. Okay. [Jordan Viel] [ph] is no longer raising hand, so that may be the end of our questions. Okay. Walter Ramsley [ph] just sent a question. Walter Ramsley asks what was the geographic revenue breakdown in the fourth quarter and for the year?

Let me go back up to that slide. John D, do you want to answer that?

Well, this slide here shows the numbers for software PBPK consulting for the year and I do not believe those numbers changed very much in Q4. John K would have a little bit more information, I think, on that, but I do not expect that they had changed very much from the percentages that you see here.

Yes. John, there is not much of a significant change among the areas that I would recall off hand going back into the detail here.

That it appears to be the last question.

Okay. If there is nothing else, I want to congratulate the teams in California and in New York and those that are in a few other states for just a fantastic job they been doing fiscal year '15. Obviously a banner year, and with the growing pains that inevitability come from putting two cultures together between Buffalo and New York, it has just been a fantastic marriage and I believe that we are in the right place at the right time at the right offerings and capabilities to address the needs that the regulatory agencies see for physiologically-based pharmacokinetics in clinical pharmacology and that also the PKPlus and KIWI. Our products offer potential for a significant continued growth. I would also like to congratulate our marketing and sales team, great job for everyone on the team, as well as our scientific team, our administrative team. They are now going to be an accelerated [ph] five it appears after February 28 and we are having to deal with more complex issues with Sarbanes Oxley, so John Kneisel our Chief Financial Officer and others have taken on the challenge that is going to come with that and increase our overhead a little bit, but something we just have to do. Thanks to everyone for a great job and I will turn it back to Renee now to close.

Walter, there is actually one more questions Donald Borcea [ph] has asked. Could you discuss the recent FDA arrangement in the current quarter?

Okay. Sure. This was a proposal we submitted last spring and it was just awarded. This is to look at modeling and simulation for long-acting injectable microspheres. These are very tiny spherical particles made from different polymers that contain the drug. When you inject these either into subcutaneous tissue or into muscle, the polymer degrades slowly and by controlling the polymer mixture, the ratio of different polymers used, you can control that release rate, so that you can release the drug over a long period of time weeks or sometimes even months. This is a very different kind of simulation, Donald, we dealt with before. The act of dissolution, decomposition of the polymer is a different physical and chemical process that we have to model, so it is a challenge and this is why the FDA decided to put up a $600,000 into this over three years and we are very pleased that they selected us to this particular project.

Okay, Walt. Thank you. Just before I sign off, I want to remind everybody we have two investor conferences coming up in December. John DiBella will be presenting at the LD MICRO Main events on December 2nd, and also he will be presenting at the Benchmark Micro Cap Discovery Conference in Chicago on December 10th. This concludes today's conference call and webinar. If you missed any part as today's presentation, a replay will be available at our website www.simulations-plus.com. Thank you everyone for joining us and have a wonderful afternoon.