8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

CURRENT REPORT

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

April 6, 2018

(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. □

1

Item 7.01 Regulation FD Disclosure

On April 9, 2018, Simulations Plus, Inc., a California corporation (the "Company"), issued a press release announcing that its board of directors has declared a quarterly cash dividend of $0.06 per share of common stock, payable on May 2, 2018 to shareholders of record on April 25, 2018.

A copy of press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 8.01 Other Events

On April 9, 2018, Simulations Plus, Inc., a California corporation (the "Company"), issued a press release announcing financial results for its second quarter of fiscal year 2018 ended February 28, 2018. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

On April 9, 2018, Simulations Plus, Inc., a California corporation (the "Company"), held an investor conference call reporting its second quarter financial results of fiscal year 2018 ended February 28, 2018. 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.

2

Item 9.01 Financial Statements and Exhibits

(d)       Exhibits

99.1 Press release issued on April 9, 2018.

99.2 PowerPoint presentation at the Investor Conference Call on April 9, 2018.

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: April 10, 2018	By: /s/ John R Kneisel
	John R. Kneisel
	Chief Financial Officer

3

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:

April 9, 2018

Simulations Plus Reports Record Second Quarter FY2018 Revenue

Board of Directors Announces Quarterly Dividend of $0.06 Per Share

LANCASTER, CA, April 9, 2018 – Simulations Plus, Inc. (NASDAQ: SLP), the premier provider of simulation and modeling software and consulting services for all stages of pharmaceutical discovery and development from the earliest discovery through all phases of clinical trials, today reported financial results for its second quarter of fiscal year 2018, the period ended February 28, 2018 (2QFY18).

2QFY18 highlights compared with 2QFY17:

· Revenues were $7.4 million, up $1.7 million, or 28.9%, compared to $5.7 million in 2QFY17

o 57% of the increase is from DILIsym Services, acquired on June 1, 2017

· Gross profit was $5.2 million, up $1.1 million, or 26.2%, compared to $4.2 million in 2QFY17

o 48% of the increase is from DILIsym Services, acquired on June 1, 2017

o Gross margin was 71.2%, down slightly from 72.8% in 2Q17, because more of the new revenues from DILIsym are from consulting rather than software

· SG&A expenses were $2.3 million, up $0.4 million, or 20.1%, compared to $1.9 million in 2QFY17

· Income from operations was $2.4 million, up $0.6 million, or 34.7%, compared to $1.8 million in 2QFY17

o 31% of this operating income increase is from DILIsym Services, acquired on June 1, 2017

· The Company recorded a benefit for income taxes of $1.1 million in 2QFY18 compared to $589,000 of income tax expense in 2QFY17, due to the effects of a $1.5 million one-time adjustment to deferred taxes based on the new Federal tax law and the lower blended Federal tax rates for the 2^nd quarter of this fiscal year

· Inclusive of the $1.5 million adjustment, net income was $3.5 million, up $2.3 million, or 190.6%, compared to $1.2 million in 2QFY17; without the adjustment, income would have been $2.0 million for the quarter, up $0.8 million or 65%

· Inclusive of the tax benefit, diluted earnings per share increased $0.13 to $0.19 from $0.07; the tax adjustment accounted for $0.08 of the increase in quarterly diluted earnings per share

1

6MoFY18 highlights compared with 6MoFY17:

· Revenues were $14.4 million, up $3.3 million, or 29.7%, compared to $11.1 million for 6MoFY17

o 62% of the increase is from DILIsym Services, acquired on June 1, 2017

· Gross profit was $10.6 million, up $2.34 million, or 28.4%, compared to $8.2 million for 6MoFY17

o 56% of the increase is from DILIsym Services, acquired on June 1, 2017

o Gross margin was 73.3%, down slightly from 74.0% in 2Q17, because more of the new revenues from DILIsym are from consulting rather than software

· SG&A expenses were $4.7 million, up $0.94 million, or 24.6%, compared to $3.8 million for 6MoFY17

· Income from operations was $5 million, up $1.26 million, or 33.8%, compared to $3.7 million for 6MoFY17

o 48% of this operating income increase is from DILIsym Services, acquired on June 1, 2017

· The non-recurring benefit for income taxes for the six-month period was $289,000, compared to $1.2 million of income tax expense in 6MoFY17, due to the adjustment mentioned above and the lower blended Federal rates for the second quarter of this fiscal year.

· Inclusive of the tax benefit, net income was $5.2 million, up $2.63 million, or 103.0%, compared to $2.6 million for 6MoFY17; without the adjustment, income would have been $3.7 million for the quarter, up $1.1 million or 44%

· Inclusive of the tax benefit, diluted earnings per share increased $0.14 to $0.29 from $0.15, the tax adjustment accounted for $0.08 of the increase in diluted earnings per share

John Kneisel, chief financial officer of Simulations Plus, said, “We saw another strong quarterly revenue growth in our core divisions in Lancaster and Buffalo coupled with the new revenues and profits from DILIsym Services acquired in the last quarter of our prior fiscal year. Even with the addition of a higher percentage of non-software sales we have seen increases in operating income margins. The Company produced a 28.9% growth in revenues and a 34.7% growth in income from operations.”

Kneisel continued: “This quarter we completed our assessment of deferred taxes based on the new tax rates enacted under the Tax Cuts and Jobs Act of 2017 passed this last December. Based on the assessment, the Company has posted a tax benefit in the amount of approximately $1.5 million in the second fiscal quarter of 2018, the result of estimating future deferred liabilities at the lower tax rates under the newly enacted tax provisions. The Company will continue to benefit from the lower rate structure under the new Federal tax law allowing for future investment in staffing for development and future growth initiatives.”

“Inclusive of this $1.5 million non-recurring and non-taxable benefit, which had an $0.08 per diluted share effect, we recorded net income of $3.5 million for the second fiscal quarter and $5.2 million for the first six months of fiscal year 2018, resulting in diluted earnings per share of $0.19 and $0.29 for the second fiscal quarter and six months, respectively.”

Walt Woltosz, chairman and chief executive officer of Simulations Plus, added: “Simulations Plus is benefitting from a strategic transformation that began in 2011 when we divested a business which didn’t fit with the pharmaceutical software business, and sometimes represented a drag on earnings. Subsequently, we have acquired two complementary businesses that are accretive to both revenues and earnings, resulting in three consistently profitable divisions selling essentially to the same customers. Today, we are a diversified provider of sophisticated services to a growing pharmaceutical industry. We have the ability to leverage a modest, fixed cost structure as we grow, which has been seen to drive our bottom line faster than the top line. As a result, we have increased our dividend from $0.05 per share per quarter last summer to $0.06 per share per quarter today. We expect the positive impact of the new tax law to allow us to further benefit our customers and shareholders through continued expansion of our products and services.”

Quarterly Dividend Declared

The Company’s Board of Directors declared a cash dividend of $0.06 per share of the Company’s common stock payable on May 2, 2018 to shareholders of record as of April 25, 2018. The declaration of any future dividends will be determined by the Board of Directors each quarter and will depend on earnings, financial condition, capital requirements and other factors.

2

Investor Conference Call

The Company has announced an investor conference call that will be webcast live at 1:15 p.m. PDT/4:15 p.m. EDT on Monday, April 9, 2018. All interested parties are invited to join the call by registering here. 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 (562) 247-8422, and enter access code 553-540-204. A replay will be available on the Simulations Plus website following the call.

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 and quantitative systems pharmacology models for drug-induced liver injury and nonalcoholic fatty liver disease. The company is a global leader focused on improving the ways scientists use knowledge and data to predict the properties and outcomes of pharmaceutical, biotechnology, and chemical agents. Our software is licensed to and used in the conduct of drug research by major pharmaceutical, biotechnology, chemical, and consumer goods 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.

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. 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 our new software products as well as 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, and a sustainable market. Further information on our risk factors is contained in our quarterly and annual reports and filed with the U.S. Securities and Exchange Commission.

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3

Simulations Plus, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS

	(Unaudited)		(Audited)
	February 28,		August 31,
ASSETS
	2018		2017
Current assets
Cash and cash equivalents	$	6,920,792	$	6,215,718
Accounts receivable, net of allowance for doubtful accounts of $0		6,003,051		4,048,725
Revenues in excess of billings		1,837,952		1,481,082
Prepaid income taxes		136,312		462,443
Prepaid expenses and other current assets		436,652		459,902
Total current assets		15,334,759		12,667,870
Long-term assets
Capitalized computer software development costs, net of accumulated amortization of $10,416,501 and $9,795,469		4,834,058		4,307,600
Property and equipment, net		288,708		291,135
Intellectual property, net of accumulated amortization of $2,557,501 and $2,095,417		6,367,499		6,829,583
Other intangible assets net of accumulated amortization of $673,750 and $495,000		3,816,250		3,995,000
Goodwill		10,387,198		10,387,198
Other assets		37,227		34,082
Total assets	$	41,065,699	$	38,512,468
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	164,857	$	240,892
Accrued payroll and other expenses		938,100		983,293
Current portion -  Contracts payable		2,910,000		247,328
Billings in excess of revenues		452,365		216,958
Deferred revenue		1,056,819		353,962
Total current liabilities		5,522,141		2,042,433
Long-term liabilities
Deferred income taxes,net		3,204,373		4,926,960
Payments due under Contracts payable		2,904,564		5,738,188
Total liabilities		11,631,078		12,707,581
Commitments and contingencies
Shareholders' equity (note 6)
Preferred stock, $0.001 par valu 10,000,000 shares authorized no shares issued and outstanding	$	–	$	–
Common stock, $0.001 par value 50,000,000 shares authorized 17,287,652 and 17,277,604 shares issued and outstanding		7,326		7,278
Additional paid-in capital		12,624,190		12,109,141
Retained earnings		16,803,105		13,688,468
Total shareholders' equity		29,434,621	$	25,804,887
	$	–		–
Total liabilities and shareholders' equity	$	41,065,699	$	38,512,468

4

Simulations Plus, Inc.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	Three months ended						Six months ended
	(Unaudited)
	2018			2017			2018			2017
Revenues	$	7,356,715		$	5,705,590		$	14,425,496		$	11,123,525
Cost of revenues		2,115,482			1,553,952			3,851,090			2,889,935
Gross margin		5,241,233			4,151,638			10,574,406			8,233,590
Operating expenses
Selling, general, and administrative		2,339,721			1,948,136			4,748,237			3,811,692
Research and development		484,330			408,536			845,146			698,836
Total operating expenses		2,824,051			2,356,672			5,593,383			4,510,528
Income from operations		2,417,182			1,794,966			4,981,023			3,723,062
Other income (expense)
Interest income		6,179			4,429			10,489			8,886
Interest expense		(38,188	)		–			(76,658	)		–
Miscellaneous income		–			–			–			–
Gain (loss) from sale of assets		–			–			–			–
Gain(loss) on currency exchange		(584	)		(14,441	)		(13,262	)		20,486
Total other income (expense)		(32,593	)		(10,012	)		(79,431	)		29,372
Income before provision for income taxes		2,384,589			1,784,954			4,901,592			3,752,434
Benefit (Provision) for income taxes		1,090,198			(589,194	)		289,198			(1,195,109	)
Net Income	$	3,474,787		$	1,195,760		$	5,190,790		$	2,557,325
Earnings per share
Basic	$	0.20		$	0.07		$	0.30		$	0.15
Diluted	$	0.19		$	0.07		$	0.29		$	0.15
Weighted-average common shares outstanding
Basic		17,302,763			17,233,017			17,292,391			17,229,586
Diluted		17,855,351			17,438,508			17,843,345			17,421,457

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EX-99.2

Exhibit 99.2

(NASDAQ:SLP) Investor Conference Call April 9, 2018

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 • 2QFY18 • Revenues up $1.7 million (28.9%) to $7.4 million • Income from operations up $622,000 (34.7%) to $2.4 million • Net income up $2.3 million (190.6%) to $3.5 million, includes one time, non - cash $1.5M deferred tax adjustment • Diluted earnings per share increased to 19¢ per share up 13¢ • Software renewal rates: 89% (accounts); 94%(fees) • 15 new software clients added • 6MoFY18 • Revenues up $3.3 million (29.7%) to $14.4 million • Income from operations up $1.3 million (33.8%) to $5.0 million • Net income up $2.6 million (103%) to $5.2 million, includes one time, non - cash $1.5M deferred tax adjustment • Diluted earnings per share increased to 29¢ per share, up 14¢ • Software renewal rates: 85% (accounts); 91%(fees) • 36 new software clients added • Significant consulting pipeline resulted in significant increase in revenues Overview

5 Financial Overview John Kneisel Chief Financial Officer

6 Income Statement: 2QFY18 Versus 2QFY17 (in millions) Lancaster Buffalo North Carolina (ACQ. 6/01/17) 2QFY18 2QFY17 Diff % chg Net sales $ 4.6 $ 1.9 $ 0.9 $ 7.4 $ 5.7 $ 1.7 29.0% Gross profit 3.7 1.0 0.5 5.2 4.2 1.1 26.3% Gross profit margin 81.7% 53.5% 55.9% 71.2% 72.8% - 1.5% - 2.1% SG&A $ 1.4 $ 0.6 $ 0.3 $ 2.3 $ 1.9 $ 0.4 20.1% R&D 0.4 0.0 0.0 0.5 0.4 0.1 18.6% Total operating expenses 1.8 0.7 0.3 2.8 2.4 0.5 19.8% Income from operations 1.9 0.3 0.2 2.4 1.8 0.6 34.7% Other income (expense) 0.0 0.0 0.0 0.0 0.0 0.0 270.0% Income before income taxes 1.9 0.3 0.2 2.4 1.8 0.6 33.6% Net income $ 3.1 $ 0.2 $ 0.1 $ 3.5 $ 1.2 $ 2.3 190.6% Diluted earnings per share (in dollars) $ 0.19 $ 0.07 $ 0.13 183.8% EBITDA $ 2.3 $ 0.4 $ 0.3 $ 3.1 $ 2.3 $ 0.8 33.5%

7 Income Statement: 6MoFY18 Vs. 6MoFY17 (in millions) Lancaster Buffalo North Carolina (ACQ. 6/01/17) 6mo FY18 6mo FY17 Diff % chg Net sales $ 8.6 $ 3.8 $ 2.1 $ 14.4 $ 11.1 $ 3.3 29.7% Gross profit 7.0 2.2 1.3 10.6 8.2 2.3 28.4% Gross profit margin 82.0% 58.4% 64.2% 73.3% 74.0% - 0.7% - 1.0% SG&A $ 2.8 $ 1.3 $ 6 $ 4.7 $ 3.8 $ 0.9 24.6% R&D 0.7 0.0 0.1 0.8 0.7 0.1 21.0% Total operating expenses 3.5 1.4 0.7 5.6 4.5 1.1 24.0% Income from operations 3.5 0.8 0.6 5.0 3.7 1.3 33.8% Other income (expense) (0.1) 0.0 0.0 (0.1) $ 0.0 (0.1) - 372.4% Income before income taxes 3.4 0.8 0.6 4.9 3.8 1.1 30.6% Net income $ 4.2 $ 0.6 $ 0.4 $ 5.2 $ 2.6 $ 2.6 103.0% Diluted earnings per share (in dollars) $ 0.29 $ 0.15 $ 0.14 98.2% EBITDA $ 4.3 $ 1.0 $ 0.9 $ 6.2 $ 4.8 $ 1.4 30.2%

8 Consolidated Revenues: Fiscal Quarter ( in millions) $4.0 $4.6 $5.9 $3.7 $4.8 $5.2 $6.0 $4.0 $5.4 $5.7 $6.8 $6.3 $7.1 $7.4 $0 $1 $2 $3 $4 $5 $6 $7 $8 Q1 Q2 Q3 Q4 2015 2016 2017 2018

9 Consolidated Income from Operations by Fiscal Quarter (in millions) $0.7 $1.5 $2.9 $0.8 $1.7 $1.7 $2.8 $1.0 $1.9 $1.8 $3.1 $1.4 $2.6 $2.4 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 Q1 Q2 Q3 Q4 2015 2016 2017 2018 Note: 2Q18 $0.08 tax benefit of deferred tax adjustment

10 $0.5 $1.0 $1.9 $0.5 $1.1 $1.2 $1.9 $0.8 $1.4 $1.2 $2.1 $1.2 $1.7 $3.5 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 Q1 Q2 Q3 Q4 2015 2016 2017 2018 $2.0 Consolidated Net Income: Fiscal Quarter (in millions) Note: 2Q18 $1.5M tax benefit of deferred tax adjustment

11 Consolidated Diluted Earnings Per Share $0.03 $0.06 $0.11 $0.03 $0.06 $0.07 $0.11 $0.05 $0.08 $0.07 $0.12 $0.06 $0.10 $0.19 $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20 Q1 Q2 Q3 Q4 FY15 FY16 FY17 FY18 $0.11 Note: 2Q18 $0.08 tax benefit of deferred tax adjustment

12 Consolidated EBITDA: Fiscal Quarter (in millions) $1.2 $2.0 $3.3 $1.2 $2.2 $2.2 $3.3 $1.5 $2.5 $2.3 $3.6 $2.0 $3.2 $3.1 $0 $1 $2 $3 $4 Q1 Q2 Q3 Q4 2015 2016 2017 2018

13 Cash Position Remains Excellent (in millions) Over $24 million cash paid out over last three FYs $0.6 $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $1.0 $1.0 $2.5 $2.1 $0.8 $0.7 $0.8 $1.0 $5.0 $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 $6.2 $7.0 $7.5 $8.5 Dividend Paid Acquisitions Cash on Hand Cash paid to TSRL Cash paid for Cognigen Final cash paid for Cognigen Cash paid for DILIsym (some from Q2 and Q3) Cash paid to TSRL Cash paid to TSRL Final cash paid to TSRL

14 Selected Consolidated Balance Sheet Items (in millions, except where indicated) February 28, 2018 August 31, 2017 Cash and cash equivalents $ 6.9* $ 6.2* Cash per share ( in Dollars ) $ 0.40 $ 0.36 Total current assets 15.3 12.6 Total assets 41.0 38.5 Total current liabilities 5.5 2.0 Total liabilities 11.6 12.7 Current ratio 2.78x 6.20x Shareholders’ equity 29.4 25.8 Total liabilities and shareholders’ equity 41.0 38.5 Shareholders’ equity per diluted share ( in Dollars ) $1.650 $1.473 * Cash as of April 5, 2018 ~$8.5 million.

15 Lancaster Division Walt Woltosz CEO and Chairman

16 • Version 9.6 scheduled for April 2018 ‒ New special population physiology models – enhancement to optional add - on module ‒ Improvements to all mechanistic absorption models – enhancement to optional add - on module • Version 9.0 scheduled for May 2018 ‒ Updates to HTPK Simulation Module – new optional add - on module ‒ New capabilities to ADMET Modeler™ Module – enhancement to optional add - on module Software Product News – Lancaster Division • Version 6.0 scheduled for summer 2018 ‒ New long - acting injectable model developed from the FDA grant (expands user base) ‒ New precipitation assay & biphasic dissolution models • Version 2.0 released in September 2017 ‒ New models to analyze data collected from hepatocyte studies (expands user base) ‒ Improved integration with the ADMET Predictor™ Module – optional add - on module • Version 2.0 released in January 2018 ‒ New simulation/prediction options to complement model - fitting routines ‒ Command line capabilities to quickly process files/generate reports in a non - GLP environment ‒ Improved user operations to create a ‘plug ‘n play’ environment

2QFY18 Sales Review – Lancaster Division • Revenue +12.6% vs. 2QFY17 • Highlights: – Software revenue +7% • 89% renewal rate (accounts) • 94% renewal rate (fees) • 8% increase in license units • 8 new commercial companies • 7 new nonprofit groups – Consulting & training revenue +83% • Projects with 26 companies + 2 FDA funded collaborations 75% 12% 12% 1% Revenue Breakdown Renewal New Consulting Training 150 174 225 157 194 201 199 181 190 211 238 195 198 228 Q1 Q2 Q3 Q4 Software License Units/Quarter FY15 FY16 FY17 FY18 17

6MoFY18 Sales Review – Lancaster Division • Revenue +11% vs. 6MoFY17 • Highlights: – Software revenue +5% • 85% renewal rate (accounts) • 91% renewal rate (fees) • 6% increase in license units • 19 new commercial companies • 17 new nonprofit groups – Consulting & training revenue +74% • Projects with 30 companies + 2 FDA funded collaborations 72% 14% 13% 1% Revenue Breakdown Renewal New Consulting Training 150 174 225 157 194 201 199 181 190 211 238 195 198 228 Q1 Q2 Q3 Q4 Software License Units/Quarter FY15 FY16 FY17 FY18 18

6MoFY18 Software Revenue – by Region Europe 33% North America 41% Asia 26% South America <1% Japan = 55% China = 24% India = 21% Korea = <1% 19

2QFY18 Marketing Activities Website Content • Increased production of video content for promotional/branding purposes • Increased focus on SEO performance • Continued migration of content from different division sites to main Simulations Plus domain Workshops and Conferences • PBPK workshop held at University of Maryland • Hosted 6 onsite trainings at individual companies • Attended 2 scientific conferences; delivered 3 poster/podium presentations Strategic Digital Marketing Initiatives • Hosted 3 webinars on modeling & simulation applications • Continued with active social media campaigns – Twitter/LinkedIn/YouTube followers have increased 20% vs. February 2017 – GastroPlus User Group membership increased 8% vs. February 2017 20

21 Earnings Call Update April 9 th , 2018 Ted Grasela, PharmD , Ph.D. President, Cognigen

22 Cognigen Status Report Pharmacometric Services • In FY2018 relationships with 25 companies on 38 drugs, 62 projects – 2 new companies in FY2018 – 19 new projects in FY2018 – 11 projects expanded scope in FY2018 – 3 projects with reduced scope – 41 outstanding proposals with 28 different companies • In FY2018 presented 7 posters, and 5 peer - reviewed publications – Modeling & Simulation Poster won Blue Ribbon at ASCPT conference – Working on 20 publications and 5 conference abstracts • Presenting two posters on KIWI at the PAGE conference in May – Pharmacometric Specific Data Repository Adds to Science - based Collaborations – Visualization tools added for dynamic representation of complex data • Most common therapeutic area is oncology, followed by neurology, endocrinology, and infectious disease – ~45% of projects result directly in regulatory interaction.

23 • Increased Marketing and Sales activities • Ongoing recruitment of new scientific talent • Pharmacometric services continue to expand ‒ Healthy pipeline of new projects, including global health initiative projects ‒ Bridging global regulatory filings ‒ Embedded client partner opportunities from first - in - human to commercialization of new medicines • Cross - selling opportunities with Simulations Plus and DILIsym ‒ Creating broader spectrum business models with clients ‒ Expanding scientific synergies across company scientists • KIWI™ Pharmacometric Communication Platform design and deployment accelerating Cognigen Summary

24 Drug - Induced Liver Injury and Liver Diseases Brett A. Howell, President DILIsym Services, Research Triangle Park, NC

DILIsym Services, Inc. – Our Vision 25 • DILIsym Services, Inc. offers comprehensive program services: – DILIsym software licensing, training, development (DILI - sim Initiative) – DILIsym and NAFLDsym simulation consulting projects – Consulting and data interpretation – in vitro assay experimental design and management “Our vision is safer, effective, more affordable medicines for patients through modeling and simulation.” DILIsym ®

DILIsym Services Fiscal Q2 Sales Review • DILIsym software consulting projects – 18 active DILIsym consulting projects during fiscal Q2 – DILIsym software is focused on helping companies predict drug - induced liver injury probability for drugs and drug candidates – Involve data management and analysis components • NAFLDsym consulting projects – 2 active consulting projects during fiscal Q2 – One significant NAFLDsym consulting project, which is allowing for great enhancements of the software’s capabilities for future consulting – NAFLDsym software is focused on helping companies evaluate targets for nonalcoholic fatty liver disease and nonalcoholic steatohepatitis (NASH) • DILIsym software licensing – 9 active consortium contracts, which is the vehicle used for DILIsym licensing – Focused on adding new science and features to DILIsym including adaptive immune components, new simulated populations, and advanced integration with GastroPlus – Completing process for FDA to acquire licenses 26 19% 67% 14% Q2 DSS Revenue Source Breakdown DILIsym Software DILIsym Projects NAFLDsym Projects

DILIsym Services Software Product News • DILIsym version 7A is running smoothly by all accounts – Includes large number of expanded features and exemplar drugs – Version 8A development is well underway – release in early 2019 • DILIsym refactoring (recoding) in progress for improved use and tight integration with GastroPlus • NAFLDsym development continues through large pharma company sponsorships – Addition of fibrosis and inflammation pathways and additional simulated patients – Available towards end of 2018 for internal consulting use • Government grant proposal for development of software focused on drug - induced kidney injury was submitted; awaiting final funding decision 27 DILIsym ®

DILIsym Services Marketing and Event Updates • Successfully completed first 3 day DILIsym training workshop in San Diego in March • Great interest in DILIsym software use at March 2018 professional meetings including the annual Society of Toxicology meeting in San Antonio – Conducted a co - marketing lunch and learn session in collaboration with Simulations Plus Lancaster to a packed audience; presented GastroPlus + DILIsym • Website revisions are progressing nicely and should be complete in next 3 months; will lead to a clean look and feel for potential clients of all 3 divisions 28

DILIsym Services Summary • Latest version of DILIsym is working well • Active development across multiple products for expanded applications, including possible kidney injury product • Continuing to work with Simulations Plus Lancaster and Cognigen on integrative marketing and other synergies • Number of consulting clients continues to grow; now well over 30 companies • Number of DILIsym licensees continues to grow; now 19 major pharmaceutical companies have licensed DILIsym at some point in the history of the consortium, as well as FDA 29

30 Final Summary Walter S. Woltosz CEO and Chairman

31 • 2QFY18 • Revenues up $1.7 million (28.9%) to $7.4 million • Income from operations up $622,000 (34.7%) to $2.4 million • Net income up $2.3 million (190.6%) to $3.5 million, includes one time, non - cash $1.5M deferred tax adjustment • 6MoFY18 • Revenues up $3.3 million (29.7%) to $14.4 million • Income from operations up $1.3 million (33.8%) to $5.0 million • Net income up $2.6 million (103%) to $5.2 million, includes one time, non - cash $1.5M deferred tax adjustment • Diluted earnings per increased to 29¢ per share up 14¢ • California, Buffalo, and North Carolina divisions all 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 • We believe Simulations Plus continues to lead the trend toward greater use of modeling and simulation in research & development Summary

32 Thank you! http://www.simulations - plus.com https://www.linkedin.com/company/95827/ https://www.linkedin.com/company/46152/