Good afternoon. It is Monday, July 10, 2017 and on behalf of Simulations Plus, I welcome you to our Third Quarter Fiscal Year 2017 Financial Results Conference Call and Webinar. Presenting this afternoon will be Chairman and Chief Executive Officer, Walt Woltosz and Chief Financial Officer, John Kneisel. An opportunity to ask questions will follow today's presentation. You may send your written question using the questions pane on your control panel or you may use the hand-raising feature on your control panel to ask your question directly. 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. Before starting today's presentation we will begin with our Safe Harbor Statement. 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. It is now my pleasure to introduce Walt Woltosz.

Thank you, Renee, and welcome everyone to our third quarter fiscal 2017 conference call. For an overview for those who may be new to Simulations Plus we are a major provider of both software and consulting solutions for R&D predominantly in the pharmaceutical industry but also serving food, chemicals, and some other industries, cosmetics for example. We cover all the way in pharmaceutical development process from the earliest drug discovery when a chemist might be drawing the molecule or using a computer program to generate a million potential new molecules that have never existed to see if any of them might eventually become a drug through the preclinical development plus laboratory [working with animal] [ph] and finally into first in human trials on into safety research and risk assessment, phase 2 and phase 3 clinical trials data analysis by our Cognigen division in Buffalo, beyond patent life to supporting generic companies in integration of data from multinational R&D efforts. This is a major $5 million, five year contract being performed by our Cognigen division in Buffalo for a major research foundation. I should mention in the safety research and risk assessment we are now into a new area dealing with drug induced liver injury as a result of the acquisition of DILIsym Services in Research Triangle Park, North Carolina at the beginning of last month. We will talk more about that in a couple of slides. For our third quarter it was a record quarter of any quarter ever in our history. Our revenues were up $736,000 or 12.2% to 6.75 million. Our net income was up 171,000 or 8.9% to 2.08 million and the footnotes, there are notes that there are some onetime charges which will be detailed little more in John Kneisel's presentation with a few more slides…

Alright, thanks Walt. We will cover the first the last three months third quarter, and then we will go to the nine month numbers. So, I will walk into the excitement of the accounting world here. So our consolidated revenues like Walt said we reached sort of a new height for our quarter this last year. They were up 12.2%, 736,000 or 6.75 million for the third quarter from 6 million the prior year. 284,000 of that increase came from our Lancaster division. It represented a 6.1% increase and Buffalo increased 453,000. They had a 33.6% increase over the prior year. It was a nice increase and I'm really happy with that one. Our consolidated software and software related sales increased to 223,000 or about 4.9% while we saw a real good growth in our consolidated consulting and analytical study revenues which were up 34.9% for the quarter. Our consolidated cost of revenues increased $250,000, they were up about 21% for the third quarter to 1.45 million over last year. The cost of revenues as a percentage increased by 1.54% and 209,000 of those increases were for labor related costs for the studies and contracts and software amortization accounted for about 50,000 of that increase. Our gross profit increased 10.1% to 5.3 million from 4.82 million the prior year. Lancaster accounted for 233,000 of the increase which came from the mix of software and analytical study revenues while Cognigen and Buffalo showed about $253,000 increase and those come mainly from the consulting revenues of that division. A consolidated gross profit as a percentage decreased 1.5 to 78.6% from 80.1% the prior year. During this period SG&A expenses increased $274,000, they were up about 16.3% to 1.95 million. One of the major increases in the quarter was about 144,000 of onetime…

Well unfortunately Ted was flying through Chicago going to Seattle on a trip and his flight got delayed so he was not able to get into Seattle in time to join the call. He sends his regrets. And John DiBella as John Kneisel has mentioned is in Asia. So from a marketing and sales standpoint just to cover the breadth of technologies that we deal with, all the way from early drug discovery through preclinical and clinical and post clinical trial, post patents to their generic companies. Our software programs that are on the left hand side here ADMET Predictor, MedChem Studio, MedChem Designer. We call these Chem Informatics programs. These deal with chemical structures like this either individual structures or millions of structures potentially analyzing what those compounds would be like if we were to make them before they have ever been synthesized or mining data that comes from for example high throughput screening of one of the features of MedChem Studio's data mining. Also designing these new molecules is another function of MedChem Studio as well as MedChem Designer. On the right hand side, GastroPlus, DDDPlus, and MembranePlus, these are programs that are simulation programs. So we recall these modeling programs on the left. Generally those are based on static equations with no time dependency although there is a miniature version of GastroPlus as one of the potential modules in ADMET Predictor. On the right side these are all GastroPlus, DDDPlus, MembranePlus and DILIsym and NAFLDsym which I will explain in a second. These are all differential equation base which means they are actually simulating things that are changing over time. PKPlus has the ability to do both, some static analysis and differential equation based analysis. And KIWI is the data management, data integration program that is being…

Thank you, Walt. The acquisition of DILIsym is of great interest out there, Howard Halpern has sent some questions.

Prior to acquiring DILIsym how many new scientists and support staff did you hire to support the increase in demand for consulting service projects and how many new project requests are you currently seeing?

Boy, John K you probably have a better headcount than I do but I'm going to guess we have grown 10% to 15% in the last nine months.

Well, in Lancaster we've added three consulting type people here, three PhD's and over in Buffalo I think they're up in net five people. Cindy would know the exact number because we've got a retirement or two through there but I think they're up five people in the last nine months over there because we're handling the major contract and looking to expand to handle the work there.

Okay next question, where does DILIsym fit strategically and what will the increase in staff enable you to accomplish productivity wise going forward across all your consulting and simulation software platforms?

Okay, so DILIsym is involved in what's called QSP or quantitative systems pharmacology. Some people refer to it in another term in my mind at this point is biological systems simulation or something like that, I have forgotten the term. But basically everything that we do other than DILIsym involves what's happening outside of cells for the most part. We don't really deal in how proteins interact with each other inside of cells in very complex ways. Systems pharmacology deals with that. So this adds a whole new realm of science and capability. The DILIsym science advisory board is absolutely world class when it comes to drug induced liver injury and diseases of the liver. The person who runs the - or who chairs the DILI-sym which is what's the consortium or initiatives call is Dr. Paul Watkins of University of North Carolina. Paul is a -- he is the man on the mountain when it comes to drug induced liver injury and he combined with the science advisory board and the consortium which consists right now of about dozen companies whose scientists also many are specialists in drug induced liver injury are guiding this development effort, give us a really unique capability, I don't know of any other capability in the world that has the sophistication and understanding of drug induced liver injury of the DILIsym team and the consortium. So it adds a new dimension where we're now dealing with very complex process that go on inside of cells and particularly in the liver cells. And eventually we will be looking at some other tissues probably the kidney is one that we will be following on very shortly.

Okay, next question concerns the new FDA Director. How do you see the new FDA Director impacting the future of simulation modeling since it appears he wants to accelerate the timeline for generics and biosimilars coming to market?

Well it's always good when the FDA wants to accelerate things because the highest leverage capability that I know of myself is [Indiscernible] simulation. When we can predict things well enough to avoid failing trials or to avoid unnecessary experiments that maybe successful experiments but we can show they are not necessary then time and money is saved. And having that added to the [tone] [ph] at the top as we say at the FDA I hope –[Indiscernible] industry we certainly expect modeling simulation will be a key element in satisfying his desire to accelerate drug development and reduce cost.

Okay, next question is how are sales into non-pharmaceutical markets tracking and are they skewed to either software sales or consulting services?

Oh boy, I will leave John the bolus for that one and he seemed pretty -- I don’t know the answer to that, John K or anybody else, any ideas?

Yeah, I mean looking at John's slides Walt, I know we have got lot of new commercial companies and if you go back to slides you can see them. But I can't -- I think most of the -- I think most of the consulting services are going to the pharma companies from my from my reads of the contracts that I've seen.

Okay, and next question, I know in prior announcements that the acquisition of DILIsym would be accretive to the bottom line. I do have some modeling questions, will revenue from DILIsym be broken out as coming from North Carolina Division or will it be folded into Lancaster sales?

I think we will continue to show each division’s performance so that you'll be able to see that. You know as we reported earlier DILIsym last year, calendar year 2016 was their fiscal year also and during that fiscal year they did just over 3 million in sales and netted about 720,000 in net earnings. Again we expect to grow the company. They don't have quite the seasonality that we have in the West Coast, in particular where software license renewals tend to fall in the same quarter that the company initially signed up. And so you see in the bar charts you could see a pattern where the fourth quarter, June, July, August was always the lowest quarter. Even though the fourth quarter now is better than the third quarter which has typically been our highest quarter if you look at just three or four years ago fourth quarter is now exceeding where the third quarter used to be as a record. So I think DILIsym will be a little bit more linear and again we expect to grow the division.

Okay, that pretty much answers the next question if there was any quarterly seasonality for DILIsym sales and what could their contribution be in 4Q 2017 based on historic numbers?

It's anybody's guess but I just gave you the numbers for last year so everybody's guess is about equal.

Okay, and next question is what are the approximate growth and operating margins for DILIsym and are there synergies that you can leverage expenses?

I don't know those numbers. They're certainly not public at this point. We see synergies more I would say in the ability to co-market to cross sell. The customer base that we have between Buffalo and Lancaster is much larger than the customer base in ITP and so we definitely plan to be introducing and already have begun to introduce DILIsym to our other customers and have had conference calls and things like that to begin to try to expand the market for DILIsym.

Okay Walt. The next question is from Walter Ramsley [ph].

Please describe DILIsym's business model also how does the group of 17 companies work, how large is the backlog, and what is the revenue run rate?

Okay, well 17 companies is the number that has been participating one time or another. There are 12, right now if I remember the number correctly. It is a consortium model so consortium dues are low six figures dues. As part of the dues they are able to use the software and so they get access to the software. They also get reduced consulting rights. Overall the consortium dues run -- I'm just going to ballpark it very roughly about a third of the total revenues ballparkish and the rest is consulting. Consulting is done with companies who are not part of the consortium. They did not get the software that the DILIsym team uses the software in performing the studies for them. And that includes the non-alcoholic fatty liver disease simulation software as well. That software is tailored more per customer where DILIsym itself as a software product is more of what we might think is a shrink wrap product. It's a product that you develop the software, you send it out to all the consortium members, and they all get the same copy. For the non-alcoholic fatty liver disease the software has to be tailored for the specific interests of the customer. So it is not as amenable to our consortium efforts that we have with DILIsym. I think that pretty much answers the question.

Okay, and Walter Ramsey's next question is has the competition undercut the PKPlus launch either with performance upgrades or more attractive pricing, if not what is holding up the sales acceleration?

Well what's holding this up is as I mentioned when we put the software out almost a year ago for evaluation. The feedback we got was wow, this is pretty slick, well can we make it do this and that. And it has been far more difficult to make it do this in the aftermath we've been doing. It's coming along, it's coming quite far from what it was say a year ago. I think it was year ago in September or August when we released version 1. So we have been working very hard to kind of wrap that up and be able to put up version 2 with all of the requests that we got from different folks around the world during the evaluations.

Okay and Walter Ramsey asks what was the tax rate on DILIsym's 2016 income?

It is not public and I wouldn’t even know what it is. John.

You know what, Walt those numbers will come out relatively soon when we do the 8-K(A). So I will let that come out when it comes out to this next month.

Thank you John.

Well that appears to be the last of the written questions that I see.

Okay, well we finished up right on the hour. I will turn it back to Renee to wrap it up.

Thank you so much Walt. It was great having you around the call today. With that we have concluded today's conference call. If you missed any part of today's presentation the replay will be available at our website www.simulations-plus.com. Thank you all for joining us today and may you all have a wonderful summer.