<SEC-DOCUMENT>0001019687-12-004598.txt : 20121220
<SEC-HEADER>0001019687-12-004598.hdr.sgml : 20121220
<ACCEPTANCE-DATETIME>20121220085755
ACCESSION NUMBER:		0001019687-12-004598
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20121210
FILED AS OF DATE:		20121220
DATE AS OF CHANGE:		20121220
EFFECTIVENESS DATE:		20121220

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SIMULATIONS PLUS INC
		CENTRAL INDEX KEY:			0001023459
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		IRS NUMBER:				954595609
		FISCAL YEAR END:			0831

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-32046
		FILM NUMBER:		121275920

	BUSINESS ADDRESS:	
		STREET 1:		42505 10TH STREET WEST
		STREET 2:		*
		CITY:			LANCASTER
		STATE:			CA
		ZIP:			93534-7059
		BUSINESS PHONE:		661-723-7723

	MAIL ADDRESS:	
		STREET 1:		42505 10TH STREET WEST
		CITY:			LANCASTER
		STATE:			CA
		ZIP:			93534-7059
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>simulations_def14a.htm
<DESCRIPTION>PROXY STATEMENT
<TEXT>
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<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">SECURITIES AND EXCHANGE COMMISSION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">WASHINGTON, D.C. 20549</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">SCHEDULE 14A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Proxy Statement Pursuant to Section 14(a) of
the</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Securities Exchange Act of 1934</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Amendment No.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Filed by the Registrant <FONT STYLE="font-family: Wingdings 2">&#83;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Filed by a party other than the Registrant <FONT STYLE="font-family: Wingdings 2">&#163;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Check the appropriate box:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
Preliminary Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <FONT STYLE="font-family: Wingdings 2">&#83;</FONT>
Definitive Proxy Statement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
Definitive Additional Material</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
Soliciting Material under &sect;240.14a-12</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Simulations Plus, Inc.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Name of Registrant as Specified In Its Charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<!-- Field: Rule-Page --><DIV ALIGN="CENTER" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 50%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(Name of Person(s) Filing Proxy Statement, if
other than the Registrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Payment of Filing Fee (Check the appropriate box):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"> <FONT STYLE="font-family: Wingdings 2">&#83;</FONT> No fee
required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 33pt; text-indent: -33pt"> <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">1) Title of each class of securities to which transaction applies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">2) Aggregate number of securities to which transaction applies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0; text-align: justify">3) Per unit price or other underlying
value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 33pt; text-indent: -33pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 33pt; text-indent: -33pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">4) Proposed maximum aggregate value of transaction:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> 5) Total fee paid:<U> </U></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT> Fee paid previously
with preliminary materials:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Wingdings 2">&#163;</FONT> Check box
if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date
of its filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> 1) Amount previously paid:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">2) Form, Schedule or Registration Statement No.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">3) Filing Party:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">4) Date Filed:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">NOTICE OF ANNUAL MEETING OF SHAREHOLDERS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">To be held February 15, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Annual Meeting of Shareholders (&ldquo;Meeting&rdquo;)
of Simulations Plus, Inc. (the &ldquo;Company&rdquo;), a California corporation, will be held on February 15, 2013, at 2:00 p.m.,
Pacific Time, at 42505 10<SUP>th</SUP> Street West, Lancaster, California 93534, for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">1. <B>Proposal No. 1: </B>To elect to the Board
of Directors five (5) directors, to serve until the next Annual Meeting of Shareholders of the Company or until their successors
are elected and qualified, subject to prior death, resignation or removal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">2. <B>Proposal No. 2: </B>To ratify the appointment
of Rose, Snyder and Jacobs as our independent registered public accounting firm for the Company for the fiscal year ended August
31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">3. To consider and transact such other business
as may properly come before the Meeting or any adjournments or postponements thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All shareholders are cordially invited to attend
the Meeting, although only shareholders of record at the close of business on December 14, 2012, will be entitled to notice of
and to vote at the Meeting. Please note that dissenter&rsquo;s rights are not available with respect to any proposal to be voted
upon at this meeting. A list of shareholders entitled to vote at the Meeting will be open to inspection by the shareholders at
the Company&rsquo;s principal office, 42505 10th Street West, Lancaster, California 93534, for a period of 10 days prior to the
Meeting and at the Meeting itself.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Shares can be voted at the Meeting only if
the holder is present in person or represented by proxy. We urge you to date and sign the enclosed proxy and return it in the accompanying
envelope promptly so that your shares may be voted in accordance with your wishes and the presence of a quorum may be assured.
We encourage you to do so even if you plan to attend the Meeting in person. The prompt return of your signed proxy, regardless
of the number of shares you hold, will aid the Company in reducing the expense of additional proxy solicitation. The giving of
such proxy does not affect your right to vote in person in the event you attend the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Important Notice Regarding the Availability
of</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Proxy Materials for the Annual Meeting of
Shareholders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>to be Held on February 15, 2013.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>The proxy statement and our annual report
to shareholders,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>which includes our Annual Report on Form
10-K for the year ended Aug. 31, 2012, </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>will be available at www.simulations-plus.com
in on or around January 4, 2013.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">By Order of the Board of Directors</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><U>/s/ Virginia Woltosz </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Virginia Woltosz</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Secretary</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Lancaster, California</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">December 20, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">YOUR PROXY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">PLEASE SIGN AND RETURN YOUR PROXY PROMPTLY
IN THE ENCLOSED POSTPAID ENVELOPE.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">SHOULD YOU ATTEND THE MEETING, YOU MAY VOTE
IN PERSON EVEN THOUGH YOU HAVE GIVEN A PROXY. THE PROMPT RETURN OF YOUR PROXY WILL BE OF GREAT HELP IN PREPARATION FOR THE MEETING.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">SIMULATIONS PLUS, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">42505 10th STREET WEST, LANCASTER, CALIFORNIA
93534-7059</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(661) 723-7723</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TABLE OF CONTENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="width: 96%; font-weight: bold">QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING</TD>
    <TD STYLE="width: 4%; font-weight: bold; text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Why am I receiving these materials?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>What am I voting on?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Who can vote at the annual meeting?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Am I a shareholder of record for purpose of the annual meeting?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>What if my shares are held in an account at a brokerage firm, bank or dealer?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>How Do I vote?</TD>
    <TD STYLE="text-align: right">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>If my shares are held in &ldquo;street name&rdquo; by a broker or other nominee, will by broker or nominee vote my shares for me?</TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>How are votes counted?</TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>How many votes are needed to approve each proposal?</TD>
    <TD STYLE="text-align: right">2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>How many votes do I have?</TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>What is the quorum requirement?</TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>What does it mean if I receive more than one proxy card?</TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>What if I return a proxy card but do not make specific choices?</TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Can I change my vote after submitting my proxy?</TD>
    <TD STYLE="text-align: right">3</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>How can I find out the results of the voting at the annual meeting?</TD>
    <TD STYLE="text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Who is paying for this proxy solicitation?</TD>
    <TD STYLE="text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>When are shareholder proposals due for next year&rsquo;s annual meeting?</TD>
    <TD STYLE="text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold">PROPOSAL No. 1:&nbsp; ELECTION OF DIRECTORS</TD>
    <TD STYLE="font-weight: bold; text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Nomination of Directors</TD>
    <TD STYLE="text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Information Concerning Directors</TD>
    <TD STYLE="text-align: right">5</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Vote Required; Board Recommendation</TD>
    <TD STYLE="text-align: right">6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold">PROPOSAL No. 2:&nbsp; RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</TD>
    <TD STYLE="font-weight: bold; text-align: right">6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Background</TD>
    <TD STYLE="text-align: right">6</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Independent Registered Public Accounting Firm Fee Information</TD>
    <TD STYLE="text-align: right">6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Audit Committee Policy Regarding Pre-Approval of Audit and Permissible Non-Audit Services of Our Independent Registered
    Public Accounting Firm</TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Vote Required; Board Recommendation</TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;7</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Security Ownership</TD>
    <TD STYLE="text-align: right">7</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Section 16(a) Beneficial Ownership Reporting Compliance</TD>
    <TD STYLE="text-align: right">8</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold">BOARD MATTERS AND CORPORATE GOVERNANCE</TD>
    <TD STYLE="font-weight: bold; text-align: right">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Information Regarding the Board and Its Committees</TD>
    <TD STYLE="text-align: right">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Board Leadership Structure</TD>
    <TD STYLE="text-align: right">11</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Board&rsquo;s Role in Risk Management</TD>
    <TD STYLE="text-align: right">11</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Director Compensation</TD>
    <TD STYLE="text-align: right">11</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Shareholder Communications with the Board</TD>
    <TD STYLE="text-align: right">12</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Certain Relationships and Related Transactions</TD>
    <TD STYLE="text-align: right">12</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">EXCECUTIVE COMPENSATION AND OTHER INFORMATION</TD>
    <TD STYLE="font-weight: bold; text-align: right">12</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Compensation Discussion and Analysis</TD>
    <TD STYLE="text-align: right">12</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Determining Compensation</TD>
    <TD STYLE="text-align: right">13</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Employment and Other Compensation Agreements</TD>
    <TD STYLE="text-align: right">13</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Risk Assessment</TD>
    <TD STYLE="text-align: right">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Compensation Committee Report</TD>
    <TD STYLE="text-align: right">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Compensation Committee Interlocks and Insider Participation</TD>
    <TD STYLE="text-align: right">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Executive Officers Who are not also Directors</TD>
    <TD STYLE="text-align: right">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Summary Table of Named Executive Officer Compensation</TD>
    <TD STYLE="text-align: right">15</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Grants of Plan-Based Awards</TD>
    <TD STYLE="text-align: right">15</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Outstanding Equity Awards at Fiscal Year-End</TD>
    <TD STYLE="text-align: right">16</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Options Exercised and Stock Vested</TD>
    <TD STYLE="text-align: right">17</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">Equity Compensation Plan Information</TD>
    <TD STYLE="text-align: right">17</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Interest of Certain Persons in Matters to be Acted Upon</TD>
    <TD STYLE="text-align: right">17</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-align: justify">HOUSEHOLDING OF PROXY MATERIALS</TD>
    <TD STYLE="font-weight: bold; text-align: right">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-align: justify">SHAREHOLDER COMMUNICATIONS</TD>
    <TD STYLE="font-weight: bold; text-align: right">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">SHAREHOLDER PROPOSALS</TD>
    <TD STYLE="font-weight: bold; text-align: right">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">OTHER MATTERS</TD>
    <TD STYLE="font-weight: bold; text-align: right">19</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>Simulations Plus, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">42505 10<SUP>th</SUP> Street West</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Lancaster, CA 93534</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>PROXY STATEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>FOR THE ANNUAL MEETING OF SHAREHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>TO BE HELD ON FEBRUARY 15, 2013</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>QUESTIONS AND ANSWERS ABOUT THESE PROXY
MATERIALS AND VOTING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Why am I receiving these materials?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Simulations Plus, Inc. (&ldquo;we&rdquo;, &ldquo;us&rdquo;,
&ldquo;Simulations Plus&rdquo; or the &ldquo;Company&rdquo;) sent you this proxy statement (&ldquo;Proxy Statement&rdquo;) and
the enclosed proxy card because our Board of Directors (the &ldquo;Board&rdquo;) is soliciting your proxy to vote at the 2013 annual
meeting of Shareholders (&ldquo;Meeting&rdquo;) to be held on February 15, 2013, at 2:00 p.m. Pacific Time, at the Company&rsquo;s
offices located at 42505 10<SUP>th</SUP> Street West, Lancaster, California 93534.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>What am I voting on? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">There are two matters scheduled for a vote
at the Meeting:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proposal No. 1 &ndash; </B>To<B> </B>elect
to the Board five (5) directors, to serve until the next meeting of shareholders of the Company (each a &ldquo;Shareholder&rdquo;)
or until their successors are elected and qualified, subject to prior death, resignation or removal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proposal No. 2 &ndash; </B>To<B> </B>ratify
the appointment of Rose, Snyder and Jacobs (&ldquo;RSJ&rdquo;) as our independent registered public accounting firm for the fiscal
year ending August 31, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Who can vote at the annual Meeting?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Only Shareholders of record at the close of
business on December 14, 2012, will be entitled to vote at the Meeting. The Company&rsquo;s common stock is its only class of voting
securities. As of December 3, 2012, there were 15,927,806 shares of the Company&rsquo;s common stock of record issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Am I a Shareholder of record for purpose
of the Meeting?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If, on December 14, 2012, your shares were
registered directly in your name with our transfer agent, Integrity Stock Transfer, then you are Shareholder of record for purposes
of the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>What if my shares are held in an account
at a brokerage firm, bank or dealer?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If, on December 14, 2012, your shares were
held in an account at a &ldquo;street name&rdquo; and these proxy materials are being forwarded to you by the organization, the
organization holding your account is considered the Shareholder of record for purposes of voting at the Meeting. As a beneficial
owner, you have the right to direct that organization on how to vote the shares in your account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>How do I vote?</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">With respect to the election of directors,
you may either vote &ldquo;for&rdquo; any or all of the nominees proposed by the Board or you may abstain from voting for any or
all of the nominees. For each of the other matters to be voted on, you may vote &ldquo;for&rdquo; or &ldquo;against&rdquo; or abstain
from voting altogether. Whether you are a Shareholder of record or the beneficial owner of shares held in &ldquo;street name,&rdquo;
the procedures for voting are fairly straightforward, as described below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Shareholders of Record: Shares Registered
in Your Name </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If you are a Shareholder of record, you may
vote in person at Meeting or vote by proxy using the enclosed proxy card. To vote in person, you need only attend the Meeting,
where you will be given a ballot to vote on each of the proposals. To vote using the proxy card, simply complete, sign and date
the enclosed proxy card and return it promptly in the envelope provided. So long as you return your signed proxy card to us before
the Meeting, your shares will be voted as you have directed on the card. We request that all Shareholders voting by proxy return
their completed proxy cards to us by no later than February 4, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Beneficial Owner: Shares Held in &ldquo;Street
Name&rdquo; </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If you are a beneficial owner of shares held
in &ldquo;street name,&rdquo; you should have received a proxy card and voting instructions with these proxy materials from the
organization holding your account. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively,
you may vote in person at the Meeting. However, to vote in person, you must obtain a valid proxy from the organization holding
your account and present it to the inspector of elections at the Meeting. Please refer to the instructions from that organization
included with these proxy materials if you wish to obtain a proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Regardless of how your shares are held and
whether or not you plan to attend the Meeting, we encourage you to vote by proxy to ensure that your vote is counted. Please note
that you may still attend the Meeting and vote in person even if you have already voted by proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>If my shares are held in &ldquo;street name&rdquo;
by a broker or other nominee, will my broker or nominee vote my shares for me? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If your shares are held in street name and
you do not instruct your broker or other nominee on how to vote your shares, your broker or other nominee, in its discretion, may
either leave your shares unvoted or vote your shares on routine matters. The election of directors is considered a non-routine
matter. Consequently, without your voting instructions, your broker or other nominee cannot vote your shares on this proposal.
These unvoted shares, called &ldquo;broker non-votes,&rdquo; refer to: (i)&nbsp;shares held by brokers who have not received voting
instructions from their clients and who do not have discretionary authority to vote on non-routine matters, or (ii)&nbsp;shares
for which the broker did not exercise discretionary authority to vote on a particular matter. The proposal to ratify the selection
of RSJ as our independent registered public accounting firm for the fiscal year ending August 31, 2012, is considered a routine
matter. Therefore, your broker or other nominee will be able to vote on this proposal even if it does not receive instructions
from you, so long as it holds your shares in its name. To the extent your broker or other nominee votes your shares on your behalf
on this proposal, your shares also will be counted as present for the purpose of determining a quorum. A broker non-vote will not
be considered shares voting or as votes cast with respect to any matter presented at the Meeting. As a result, a broker non-vote
will not have any effect on the proposals presented at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>How are votes counted? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Votes will be counted by the Company&rsquo;s
corporate secretary who will separately count &ldquo;for&rdquo; and (with respect to proposals other than the election of directors)
&ldquo;against&rdquo; votes, abstentions and &ldquo;broker non-votes&rdquo;. Abstentions and broker non-votes will be counted towards
the presence or absence of a quorum but will not be counted towards the affirmative vote total for any proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>How many votes are needed to approve each
proposal? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The number of votes needed to approve each
proposal is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proposal No. 1</B>: The election of the
directors contemplated by Proposal No. 1 will be decided by a plurality of votes cast. Accordingly, the five directors receiving
the highest number of votes will be elected and abstentions and broker non-votes will have no effect on the outcome of the vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proposal No.&nbsp;2: </B>The ratification
of the selection of RSJ contemplated by Proposal No.&nbsp;2 must receive a &ldquo;for&rdquo; vote from the holders of a majority
of the shares of our common stock present and entitled to vote either in person or by proxy at the Meeting. Abstentions will have
the same effect as &ldquo;against&rdquo; votes, and broker non-votes will have no effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>How many votes do I have? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Each Shareholder of record as of December
14, 2012, is entitled to cast one vote for each share of our common stock held on each matter to come before the Meeting, except
that Shareholders may have cumulative voting rights with respect to the election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 12pt; text-align: justify">Cumulative voting allows a Shareholder
to cast a number of votes equal to the number of directors to be elected, which is five (5), multiplied by the number of votes
held in the Shareholder&rsquo;s name on December 14, 2012. This total number of votes may be cast for one nominee or may be distributed
among as many nominees as the Shareholder desires. Under California law, no shareholder can cumulate votes unless, prior to voting
at the Meeting, such shareholder has given notice of his or her intention to cumulate his or her votes at the Meeting. If any shareholder
properly gives such notice, then all shareholders may cumulate their votes for candidates in nomination. Our Board does not, at
this time, intend to give such notice or to cumulate the votes it may hold pursuant to the proxies solicited herein unless the
required notice by a Shareholder is given, in which event votes represented by proxies delivered pursuant to this Proxy Statement
may be cumulated at the discretion of the proxy holders, in accordance with the recommendation of our Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>What is the quorum requirement? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">A quorum of Shareholders is necessary to hold
a valid annual meeting of shareholders. A quorum will be present if at least a majority of the outstanding shares are present either
in person or by proxy at the Meeting. On the record date, December 14, 2012, there were 15,927,806 shares outstanding and entitled
to vote. Accordingly, 7,963,904 shares must be present either in person or by proxy at the Meeting in order to establish a proper
quorum to enable us to conduct a vote on each of the proposals at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Your shares will be counted towards the quorum
only if you submit a valid proxy or vote in person at the Meeting. Abstentions and broker non-votes will be counted towards the
quorum requirement. If there is no quorum, a majority of the votes present either in person or by proxy at the Meeting may adjourn
the Meeting to another date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>What does it mean if I receive more than
one proxy card? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If you receive more than one proxy card, then
your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each
proxy card to ensure that all of your shares are voted at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>What if I return a proxy card but do not
make specific choices? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">If you return a signed and dated proxy card
without marking any voting selections, all of your shares will be voted &ldquo;for&rdquo; the election of the nominees for director
and &ldquo;for&rdquo; the other proposals described in this Proxy Statement. If any other matter is properly presented at the Meeting,
your proxy (one of the individuals named on your proxy card) will vote your shares using his or her best judgment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Can I change my vote after submitting my
proxy? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">You can change your vote with respect to any
proposal by revoking your proxy at any time prior to the commencement of voting with respect to that proposal at the Meeting. You
may revoke your proxy in one of three ways:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">You may submit another properly completed
proxy card with a later date. Please note that we request that all Shareholders voting by proxy return their completed proxy cards
to us by no later than February 4, 2013, which is 10 days prior to the Meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">You may send a written notice that you
are revoking your proxy to our Secretary (c/o Virginia Woltosz, Simulations Plus, Inc. 42505 10<SUP>th</SUP> Street West, Lancaster,
CA 93534). To properly revoke your proxy via written notice, this notice must be received by us no later than the close of business
on Monday, February 4, 2013.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">You may attend the Meeting and vote in
person. Bear in mind that simply attending the Meeting will not, by itself, revoke your proxy. In addition, please recall that
if you are a beneficial owner of shares held in &ldquo;street name&rdquo; and wish to vote in person at the Meeting, you must obtain
a valid proxy from the organization holding your account and present it to the inspector of elections at the Meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Following the commencement of voting with respect
to each proposal, you may not revoke your proxy or otherwise change your vote with respect to each such proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>How can I find out the results of the voting
at the Meeting? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Preliminary voting results are expected to
be announced at the Meeting. Final voting results will be disclosed in a Current Report on Form 8-K, which we will file with the
U.S. Securities and Exchange Commission (the &ldquo;SEC&rdquo;) within four (4) business days after the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Who is paying for this proxy solicitation?
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We will pay for the entire cost of soliciting
proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone
or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies.
We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>When are shareholder proposals due for next
year&rsquo;s Meeting? </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Proposals of Shareholders that are intended
to be presented by such Shareholders at the Company&rsquo;s next Meeting of Shareholders for the fiscal year ending August 31,
2013, must be received by the Company no later than August 22, 2013, in order to be considered for inclusion in the proxy statement
and form of proxy relating to that meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>PROPOSAL No. 1: ELECTION OF DIRECTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Nomination of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Governance and Nominating Committee (the
&ldquo;Nominating Committee&rdquo;) is charged with making recommendations to the Board regarding qualified candidates to serve
as members of the Board (each, a &ldquo;Director&rdquo;). The Nominating Committee&rsquo;s goal is to assemble a Board with the
skills and characteristics that, taken as a whole, will assure a strong Board with experience and expertise in all aspects of corporate
governance. Accordingly, the Nominating Committee believes that candidates for Director should have certain minimum qualifications,
including personal integrity, strength of character, an inquiring and independent mind, practical wisdom and mature judgment. In
evaluating director nominees, the Nominating Committee considers the following factors:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font-size: 10pt; text-align: center">(1)&nbsp;&nbsp;</TD>
    <TD STYLE="font-size: 10pt">The appropriate size of the Board;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: center">(2)&nbsp;&nbsp;</TD>
    <TD STYLE="font-size: 10pt">Our needs with respect to the particular talents and experience of its directors; and</TD></TR>

<TR STYLE="vertical-align: top">
    <TD STYLE="width: 84px; font-size: 10pt; text-align: center">(3)&nbsp;&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: justify">The knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Other than the foregoing, there are no stated
minimum criteria for Director nominees, although the Nominating Committee may also consider such other factors as it deems to be
in our best interests and those of our Shareholders. The Nominating Committee does, however, believe it appropriate for at least
one member of the Board to meet the criteria for an &ldquo;audit committee financial expert&rdquo; as defined by SEC rules, and
for a majority of the members of the Board to meet the definition of an &ldquo;independent director&rdquo; under NASDAQ (as defined
below) listing standards. The Nominating Committee also believes it is appropriate for our Chief Executive Officer and our Corporate
Secretary to participate as members of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Nominating Committee identifies nominees
by first evaluating the current members of the Board willing to continue in service. Current members of the Board with skills and
experience that are relevant to our business and who are willing to continue in service are considered for re-nomination, but the
Nominating Committee at all times seeks to balance the value of continuity of service by existing members of the Board with that
of obtaining a new perspective. If any member of the Board does not wish to continue in service, the Nominating Committee&rsquo;s
policy is to not re-nominate that member for reelection.&nbsp;&nbsp;The Nominating Committee identifies the desired skills and
experience of a new nominee for the criteria above, and then uses its network of contacts to compile a list of candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We do not have a formal policy concerning Shareholder
recommendations of Director candidates to the Nominating Committee. The absence of such a policy does not mean, however, that such
recommendations will not be considered. To date, we have not received any recommendations from Shareholders requesting the Nominating
Committee to consider a candidate for inclusion among the Nominating Committee&rsquo;s slate of nominees in our proxy statement.
Shareholders wishing to make such a recommendation of a Director candidate may do so by sending a written notice to the Nominating
Committee, Attn: Chairman, Simulations Plus, Inc., 42505 10th Street West, Lancaster, CA 93534, naming the proposed candidate and
providing detailed biographical and contact information for such proposed candidate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Information Concerning Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%; text-align: left; vertical-align: bottom"><U>NAME</U></TD>
    <TD STYLE="width: 7%; text-align: center; vertical-align: bottom"><U>AGE</U></TD>
    <TD STYLE="width: 62%; text-align: left; vertical-align: bottom"><U>POSITION WITH THE COMPANY</U></TD>
    <TD STYLE="width: 11%; text-align: center; vertical-align: bottom">ELECTED DIRECTOR<BR><U>SINCE</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Walter S. Woltosz</TD>
    <TD STYLE="text-align: center">67</TD>
    <TD>Chairman of the Board, Chief Executive Officer and President of the Company</TD>
    <TD STYLE="text-align: center">1996</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Virginia E. Woltosz</TD>
    <TD STYLE="text-align: center">61</TD>
    <TD>Secretary and Director of the Company</TD>
    <TD STYLE="text-align: center">1996</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Dr. David Z. D&rsquo;Argenio</TD>
    <TD STYLE="text-align: center">63</TD>
    <TD>Director</TD>
    <TD STYLE="text-align: center">1997</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>Harold W. Rosenberger</TD>
    <TD STYLE="text-align: center">72</TD>
    <TD>Director</TD>
    <TD STYLE="text-align: center">2007</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Dr. David L. Ralph</TD>
    <TD STYLE="text-align: center">66</TD>
    <TD>Director</TD>
    <TD STYLE="text-align: center">2012</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">WALTER S. WOLTOSZ is a co-founder of the Company
and has served as its Chief Executive Officer and President and as Chairman of the Board since its incorporation in July 1996.
Walter S. Woltosz is the husband of Virginia E. Woltosz.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">VIRGINIA E. WOLTOSZ is a co-founder of the
Company and has served as its Senior Vice President and Secretary since its incorporation in July 1996 until January 31, 2003.
Mrs. Woltosz retired from the position of Senior Vice President as of January 31, 2003, but remains as Secretary and Treasurer
of the Company. Virginia E. Woltosz is the wife of Walter S. Woltosz.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">DR. DAVID Z. D&rsquo;ARGENIO has served as
a Director of the Company since June 1997. He is currently Professor of Biomedical Engineering at the University of Southern California
(&ldquo;USC&rdquo;), and has been on the faculty at USC since 1979. He has also served since 1985 as the Co-Director of the Biomedical
Simulations Resource Project at USC, a project funded by the National Institutes of Health since 1985.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">HAROLD W. ROSENBERGER has served as a Director
of the Company since November 2007. Mr. Rosenberger has been a career banker, holding various senior and executive positions in
banking since 1963. From August 1997 to present, Mr. Rosenberger has been the Senior Regional Vice President of American Security
Bank. Prior to becoming an independent Director of the Company, Mr. Rosenberger acted as a member of the audit committee for the
Antelope Valley Hospital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">DR. DAVID L. RALPH has served as a Director
of the Company since March 2012. He is currently a Professor of Marketing at Pepperdine University, and has been on the faculty
since 1968. He is a member of the 2020 Strategic Planning Committee and the Marketing Task Force, and chairs the Curriculum Committee,
for The Graziadio School of Business and Management at Pepperdine University. Dr. Ralph serves as the Chair of the Fully Employed
MBA Program Administrative Committee and as a member of the University Academic Council at Pepperdine University. He has consulted
with key executives in a wide range of industries on marketing their companies. He also acted as President and Chief Executive
Officer of Antelope Valley Christian School from 1986 to 2005. He has served as the Associate Dean of The Graziadio School of
Business and Management at Pepperdine University and the Chair of the Marketing, Economics, and Quant Department.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Vote Required; Board Recommendation&#9;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board recommends that you vote all of your
shares &ldquo;for&rdquo; the election to the Board of the nominees described in this Proposal No. 1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>PROPOSAL No. 2: RATIFICATION OF SELECTION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Background</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Audit Committee of the Board has selected
RSJ as our independent registered public accounting firm for the fiscal year ending August 31, 2013, and has further directed us
to submit the selection of RSJ as our independent registered public accounting firm for ratification by the Shareholders at the
Meeting. Neither our governing documents nor any applicable laws require Shareholder ratification of the selection of RSJ as our
independent registered public accounting firm. However, the Audit Committee is submitting the selection of RSJ to the Shareholders
for ratification as a matter of good corporate practice. If the Shareholders fail to ratify the selection, the Audit Committee
will reconsider whether or not to retain RSJ. Even if the selection is ratified however, the Audit Committee, in its discretion,
may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines
that such a change would be in our best interests and those of our Shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Independent Registered Public Accounting
Firm Fee Information </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the audit of our financial
statements for the year ended August 31, 2012, we entered into an engagement agreement with RSJ which set forth the terms by which
RSJ has performed audit services for us. That agreement is subject to alternative dispute resolution procedures and an exclusion
of punitive damages.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth the aggregate
fees billed by RSJ for the services indicated for each of the last two fiscal years:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fiscal Year Ended August 31, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 66%; text-align: justify">Audit Fees (1)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">86,190</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">77,875</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Audit-Related Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Tax Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&ndash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">All Other Fees</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&ndash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&ndash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-align: justify; text-indent: 10pt; padding-bottom: 2.5pt">Total Fees</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">86,190</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">77,875</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(1) Includes fees for (i)&nbsp;the audit of
our annual financial statements for the fiscal years ended August 31, 2012 and 2011, included in our Annual Report on Form&nbsp;10-K,
(ii)&nbsp;the review of our interim period financial statements for fiscal years 2012 and 2011 included in our quarterly reports
on Form&nbsp;10-Q, and (iii)&nbsp;related services that are normally provided in connection with regulatory filings or engagements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Audit Committee Policy Regarding Preapproval
of Audit and Permissible Nonaudit Services of Our Independent Registered Public Accounting Firm </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Audit Committee has adopted policies and
procedures for the preapproval of all audit and nonaudit services to be rendered by our independent registered public accounting
firm. Under the policies and procedures, the Audit Committee generally preapproves specified services in defined categories up
to specified amounts. Preapproval may also be given as part of the Audit Committee&rsquo;s approval of the scope of the engagement
of the independent registered public accounting firm or on a case-by-case basis for specific tasks before engagement. The Audit
Committee has delegated the preapproval of services to the chairman of the Audit Committee who is required to report each preapproval
to the full Audit Committee no later than its next meeting. One hundred percent (100%) of Audit Fees and Audit-Related Fees were
approved by the Audit Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Vote Required; Board Recommendation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To be approved, this Proposal No.&nbsp;2 must
receive a &ldquo;for&rdquo; vote from the holders of a majority of the shares of common stock present and entitled to vote either
in person or by proxy at the Meeting. Abstentions will have the same effect as votes &ldquo;against&rdquo; Proposal No.&nbsp;2;
broker non-votes will have no effect. The Board recommends a vote &ldquo;for&rdquo; this Proposal No.&nbsp;2 to ratify the selection
by the Audit Committee of RSJ as our independent registered public accounting firm for the fiscal year ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Representatives of RSJ are not expected to
be present at the Meeting. Accordingly, RSJ will not have an opportunity to make a statement or be available to respond to questions
at the Meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Security Ownership </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth information
as of December 14, 2012, regarding the beneficial ownership of our common stock by (a)&nbsp;each person known to our Board to own
beneficially 5% or more of our common stock, (b)&nbsp;each Director of the Company, (c)&nbsp;the Named Executive Officers (as defined
below), and (d)&nbsp;all of our Directors and executive officers as a group. Information with respect to beneficial ownership is
based solely on a review of our capital stock transfer records and on publicly available filings made with SEC by or on behalf
of the Shareholders listed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The percent of class is calculated assuming
15,927,806 shares of our common stock (net of treasury shares) were outstanding as of December 14, 2012. Beneficial ownership is
determined in accordance with the rules&nbsp;of the SEC which generally attribute beneficial ownership of securities to persons
who possess sole or shared voting or investment power with respect to those securities and for such persons includes shares of
our common stock issuable to such persons pursuant to the exercise of stock options, warrants or other securities that are exercisable
or convertible into shares of our common stock within 60&nbsp;days of December 14, 2012. Unless otherwise indicated, the persons
or entities identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned
by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">Beneficial owner (1), (2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Amount and Nature of<U STYLE="text-decoration: none"> Beneficial Ownership</U></FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><U STYLE="text-decoration: none">Percent of Class</U></P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 66%; text-align: justify">Walter S. and Virginia E. Woltosz (3)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">6,317,406</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">39.08%</TD><TD STYLE="width: 1%; text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Momoko Beran (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">449,381</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.78%</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">John DiBella (5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">47,200</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Dr. David Z. D&rsquo;Argenio (6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">51,812</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">Harold W. Rosenberger (7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,400</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">Dr. David L. Ralph (8)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">&ndash;</TD><TD STYLE="padding-bottom: 1pt; text-align: left"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">*</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">All Directors and officers as a group</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,877,199</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">42.54%</TD><TD STYLE="text-align: left"></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">* Less than 1%</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(1) Such persons have sole voting and investment
power with respect to all shares of the Company&rsquo;s common stock shown as being beneficially owned by them, subject to community
property laws, where applicable, and the information contained in the footnotes to this table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(2) The address of each Director and executive
officer named is c/o the Company, 42505 10th Street West, Lancaster, California 93534-7059.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(3) Own an aggregate of 6,209,406 common stock,
plus 108,000 shares of common stock underlying an option exercisable within the 60 days of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(4) Owns 363,381 shares of common stock, plus
86,000 shares of common stock underlying an option exercisable within the 60 days of the date of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(5) Owns 22,700 shares of common stock, plus
24,500 shares of common stock underlying an option exercisable within the 60 days of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(6) Owns 43,812 shares of common stock, plus
8,000 shares of common stock underlying an option exercisable within the 60 days of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(7) Owns 11,400 underlying an option exercisable
within the 60 days of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(8) Owns no shares of common stock and does
not have any options exercisable within the 60 days of December 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Section&nbsp;16(a)&nbsp;Beneficial Ownership Reporting Compliance
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Section 16(a) of the Securities Exchange Act
of 1934, as amended (the &ldquo;Exchange Act&rdquo;), requires the Company&rsquo;s Directors, executive officers and beneficial
holders of more than 10% of the Company&rsquo;s common stock file with the SEC initial reports of ownership and reports of changes
in ownership of the Company&rsquo;s equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">To our knowledge, based solely on a review
of the copies of such reports furnished to us and written representations that no other reports were required during the fiscal
year ended August&nbsp;31, 2012, all Section&nbsp;16(a)&nbsp;filing requirements applicable to our officers, Directors and 10%
beneficial owners were complied with, with the exception of one known failure to file one Form&nbsp;3 which was filed late by John
DiBella.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>BOARD MATTERS AND CORPORATE GOVERNANCE </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Information Regarding the Board and Its Committees </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board met eleven times during the fiscal
year ended August 31, 2012. Each member of the Board attended 75% or more of the aggregate number of meetings of the Board and
of the committees of the Board on which he or she served that was held during the period for which he or she was a Director or
committee member, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board has three committees: its Audit Committee
(&ldquo;Audit Committee&rdquo;), Compensation Committee (&ldquo;Compensation Committee&rdquo;), and the Nominating Committee. The
following table provides meeting information for fiscal year 2012 and current membership for each of the committees of the Board:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; border: windowtext 1pt solid; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>&nbsp;Name</B></P></TD>
    <TD STYLE="width: 2%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"></TD>
    <TD STYLE="width: 17%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">Audit Committee</TD>
    <TD STYLE="width: 3%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 2%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"></TD>
    <TD STYLE="width: 17%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">Compensation Committee</TD>
    <TD STYLE="width: 3%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 2%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"></TD>
    <TD STYLE="width: 17%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">Nominating Committee</TD>
    <TD STYLE="width: 3%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid">Dr. David D&rsquo;Argenio</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">*</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">*</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid">H. Wayne Rosenberger</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">**</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid">Dr. David Ralph</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">X</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">* Committee Chairperson</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">** Audit Committee Financial Expert and Committee Chairperson</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Below is a description of each committee of
the Board. The Board has determined that each member of each committee, and each member of the Board, except for Walter S. Woltosz
and Virginia E. Woltosz, is &ldquo;independent&rdquo; within the meaning of the applicable listing standards of the NASDAQ Stock
Market (&ldquo;NASDAQ&rdquo;), as well as applicable SEC rules&nbsp;and regulations and that each member is free of any relationship
that would interfere with his or her individual exercise of independent judgment with regard to the Company. The Board has also
determined that Dr. Richard Weiss, who served as a member of the Board until his resignation on February 24, 2012, was &ldquo;independent&rdquo;
within the meaning of the applicable listing standards of the NASDAQ, as well as applicable SEC rules&nbsp;and regulations and
that during his tenure as a member of the Board, he was free of any relationships that would have interfered with his individual
exercise of independent judgment with regard to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><I>Audit Committee </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-size: 10pt">The Company&rsquo;s
Audit Committee has been established in accordance with Section 3(a)(58)(4) of the Exchange Act and bears direct responsibility
for the appointment and termination, compensation and oversight of the work of our independent registered public accounting firm,
who reports directly to the Audit Committee. The Audit Committee operates pursuant to a charter that is available upon a written
or oral request to: Renee Bouche, Simulations Plus, Inc., at 42505 10th Street West, Lancaster, CA 93534, or at (661) 723-7723.
The Audit Committee&rsquo;s charter can also be found in the &ldquo;Corporate Overview&rdquo; section of our corporate website
at </FONT>www.simulations-plus.com<FONT STYLE="font-size: 10pt">, under &ldquo;Investors &ndash; Corporate Overview&rdquo;. The
Audit Committee has received written disclosures and the letter from our independent registered public accounting firm pursuant
to the applicable requirements of Public Company Accounting Oversight Board (&ldquo;PCAOB&rdquo;) regarding the independent auditor&rsquo;s
communications with the Audit Committee concerning independence and the Audit Committee has discussed with the independent accountant
the independent accountant&rsquo;s independence. The Audit Committee also reviews and discusses with our management and independent
registered public accounting firm the financial statements and disclosures in our quarterly financial press releases and SEC filings.
Audit Committee members periodically meet separately with our management and independent registered public accounting firm to discuss
issues and concerns, and the Audit Committee has established procedures for the receipt, retention and treatment of complaints
received by us regarding accounting, internal accounting controls or audit matters, in a confidential manner. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In performing its responsibilities, the Audit
Committee has reviewed and discussed with management and the Company&rsquo;s independent auditors the audited financial statements
in the Company&rsquo;s Annual Report on Form 10-K for the year ended August 31, 2012. The Audit Committee has also discussed with
the independent registered public accounting firm matters required to be discussed by the Statement on Auditing Standards No. 61,
as amended (Codification of Statements on Auditing Standards, AU 380), as adopted by the PCAOB in Rule 3200T. Based on the reviews
and discussions referred to above, the Audit Committee unanimously recommended to the Board that the audited financial statements
be included in the Company&rsquo;s Annual Report on Form 10-K for the year ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 40%; text-decoration: underline; text-align: justify">Audit Committee</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Harold Rosenberger (Chair)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">David D&rsquo;Argenio</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">David Ralph</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The members of the Audit Committee are Mr.
Harold W. Rosenberger, Dr. David D&rsquo;Argenio, and Dr. David Ralph. Mr.&nbsp;Rosenberger serves as chairman of the Audit Committee
and the Board has determined that he qualifies as an &ldquo;audit committee financial expert&rdquo; in accordance with applicable
SEC rules and as &ldquo;independent&rdquo; under the applicable NASDAQ listing standards. Also see the Section entitled &ldquo;Election
of Directors&rdquo; with respect to Mr. Rosenberger&rsquo;s experience. The Audit Committee met three times during the fiscal year
ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><I>Compensation Committee</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Compensation Committee administers our
executive compensation program and is responsible for establishing, implementing and monitoring adherence to our philosophy with
respect to executive compensation. The Compensation Committee does not have a charter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Compensation Committee met one time during
the fiscal year ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><I>Nominating Committee </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Nominating Committee makes recommendations
to the Board regarding candidates for election to the Board, as well as the composition and size of the Board and its committees
and qualifications for membership. In connection with performing their duties, the members of the Nominating Committee are fully
empowered to engage one or more search firms to identify potential Director candidates. The Nominating Committee is also charged
with establishing the appointment of new Directors, committee structure and membership, Director compensation and chief executive
officer succession planning. The Nominating Committee does not have a charter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Nominating Committee provides instructions
in each annual proxy regarding how Shareholders can make director nominations. The Nominating Committee has never received a recommendation
from a Shareholder, but any such nominations, if received, would be considered on an equal basis with candidates identified by
the Nominating Committee. The Nominating Committee has not used any third party to identify, evaluate, or assist in identifying
and/or evaluating potential nominees and to date has not paid any fee to any third party for such services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The members of the Nominating Committee are
Dr. David D&rsquo;Argenio, Mr. Harold W. Rosenberger, and Dr. David Ralph. Dr. David D&rsquo;Argenio serves as chairman of the
Nominating Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Nominating Committee met once during the
fiscal year ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Board Leadership Structure</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company does not have a lead independent
director and does not believe one is necessary. We believe our leadership structure is appropriate for the size and scope of operations
of a company of this size.<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Board&rsquo;s Role in Risk Management</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board is responsible for oversight of risks
facing the Company, while our management is responsible for day-to-day management of risk. The Board, as a whole, directly oversees
our strategic and business risk, including financial reporting related risk, compensation practice risk, and product development
risk. We believe the Board, as a whole, supports its role in risk oversight, with our Chief Executive Officer and our Chief Financial
Officer responsible for assessing and managing risks facing the Company day-to-day and other members of the Board providing oversight
of such risk management.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Director Compensation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Independent Directors currently receive annual
stipends of $5,000 plus 4,000 options to purchase shares of the Company&rsquo;s common stock per person per year for their services.
In addition to their annual stipends, the Company pays each Independent Director $1000 per Board meeting attended. Mileage expense
to attend those meetings is reimbursed at the Internal Revenue Service defined rate for business use, except for the Independent
Directors who are local residents. The Company&rsquo;s CEO serves also as a Director and therefore has a role in determining/recommending
the amount or form of compensation for Independent Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Name of Directors<BR>* indicates Independent Director</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid">Fiscal<BR>Year</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Fees earned or<BR>paid in cash</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Option<BR>Awards</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">All other<BR>compensation</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Total<BR>($)</P></TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">(a)</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">(b)</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">(c)</TD><TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 25%; text-align: left">*Dr. David Z. D&rsquo;Argenio</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: center">2012</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">16,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">7,826</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">346*</TD><TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">24,172</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">243*</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,680</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">*Dr. Richard R. Weiss (d)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">*Harold W. Rosenberger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,826</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,826</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,437</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">*Dr. David L. Ralph (e)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,413</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Mrs. Virginia E. Woltosz</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000**</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000**</TD><TD STYLE="text-align: left"></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 21.75pt">(a)</TD><TD STYLE="text-align: justify">Independent Directors&rsquo; stipends are $5,000 per year for fiscal years 2012 and 2011, and $1,000
per Board meeting attended.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 21.75pt">(b)</TD><TD STYLE="text-align: justify">Amount represents the stock-based compensation expense recorded by us in fiscal year 2012 and fiscal
year 2011 measured using the Black-Scholes option pricing model at the grant date based on the fair value of the option awards.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">* Mileage expense to attend Board meetings is reimbursed at the rate set by Internal Revenue Service
for business use, except for the Independent Directors who are local residents.</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">** 5% of the Company&rsquo;s
net income before bonuses and taxes, not exceeding $60,000, paid to the Corporate Secretary, Virginia Woltosz, as an annual bonus
as part of the terms of the sale of Words+ to the Company in 1996.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify">Dr. Richard Weiss resigned as of February 29, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(e)</TD><TD STYLE="text-align: justify">Dr. David Ralph joined the Board on March 1, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.25in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of August 31,
2012, the aggregate number of stock options outstanding for each non-employee director was as follows: Dr. D&rsquo;Argenio &ndash;
15,600; Mr. Rosenberger &ndash; 19,000; Dr. Ralph &ndash; 2,000; Mrs. Woltosz &ndash; 0.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0in"><B>Shareholder Communications
with the Board</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We have not adopted a formal process for Shareholder
communications with the Board. However, any Shareholder comments and communications received by our Investor Relationship personnel
are forwarded to the Board or individual directors, as applicable, and appropriate responses are provided to Shareholders in a
timely manner. We believe that these informal communication efforts have proven effective, and obviate the need for any formal
process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Although we do not have a formal policy, members
of the Board are invited to attend annual meetings of our Shareholders. All of our directors, except Dr. Richard Weiss who was
anticipating his resignation, attended our 2012 annual meeting of shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Certain Relationships and Related Transactions </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><I>Transactions with Related Persons.</I> We
have not entered into any transactions with related persons since the beginning of fiscal year 2012 and we are not currently considering
any proposed transactions with related persons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 9pt 0 0; text-align: justify"><I>Review, Approval or Ratification of
Transactions with Related Persons. </I> We have not adopted any formal procedures for the review of, or standards for approval
of, related-party transactions but instead review such transactions on a case-by-case basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Material Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Currently there are no material legal proceedings
to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than 5% of the voting securities
of the Company, or any associate of any such director, officer, affiliate of the Company or security holder is an adverse party
to the Company or has a material interest adverse to the Company. There currently are no legal proceedings, and during the past
10 years there have been no legal proceedings, that are material to the evaluation of the ability or integrity of any of our Directors
or executive officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>EXECUTIVE COMPENSATION AND OTHER INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Compensation Discussion and Analysis</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The purpose of the Company&rsquo;s compensation
program is to attract and retain talented and dedicated professionals to manage and execute our strategic plans and tactical operations.
Although the Company&rsquo;s Named Executive Officer salaries have been and remain significantly lower than those of similar public
companies, management and the Board believe that the award of stock options has fairly rewarded loyal, long-term employees who
have contributed to our growth and financial success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The goal of our Named Executive Officer compensation
program is the same as our goal for operating the Company - to create long-term value for our Shareholders. Toward this goal, we
have designed and implemented our compensation programs for our Named Executive Officers to reward them for sustained financial
and operating performance and leadership excellence, to align their interests with those of our Shareholders and to encourage them
to remain with the Company for long and productive careers. Most of our compensation elements simultaneously fulfill one or more
of our performance, alignment and retention objectives. These elements consist of salary and annual bonus, equity incentive compensation,
and 401(k) matching retirement benefits. In deciding on the type and amount of compensation for each Named Executive Officer, we
focus on both current pay and the opportunity for future compensation. We combine the compensation elements for each Named Executive
Officer in a manner we believe optimizes the Named Executive Officer&rsquo;s contribution to the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Determining Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We rely on our judgment in making compensation
decisions, after reviewing the performance of the Company and carefully evaluating an executive&rsquo;s performance during the
year against established goals, leadership qualities, operational performance, business responsibilities, and career with the Company,
current compensation arrangements and long-term potential to enhance Shareholder value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The President and Chief Executive Officer&rsquo;s
compensation is determined by the Compensation Committee and as set forth below under the subsection entitled &ldquo;Employment
and Other Compensation Agreements&rdquo;. The salaries of all other officers are determined by the Company&rsquo;s President and
Chief Executive Officer (the &ldquo;CEO&rdquo;) and the Compensation Committee together. Option grants are recommended by the CEO
and the Company&rsquo;s Chief Financial Officer (&ldquo;CFO&rdquo;) and approved by the Board. The Company has not retained a compensation
consultant to date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The CEO&rsquo;s bonus had been determined based
on the terms of his original employment agreement entered into at the time of our initial public offering in 1997, which terms
were carried forward in subsequent employment agreements entered into by and between the CEO and the Company through the end of
fiscal year 2007. Beginning on September 1, 2007 (fiscal year 2008), the CEO&rsquo;s employment agreement was renewed for a period
of two years without an annual bonus, at his request and with the agreement of the Compensation Committee. Effective September
1, 2009 (fiscal year 2010), the CEO&rsquo;s employment agreement was renewed for another two years by the Compensation Committee
with an annual bonus of up to 10% of his annual salary. Effective September 1, 2011 (fiscal year 2012), the CEO&rsquo;s employment
agreement was renewed for another two years by the Compensation Committee with an annual bonus of up to 10% of his annual salary,
and is attached to the Company&rsquo;s Annual Report on Form 10-K filed with the SEC on November 15, 2012 (the &ldquo;Form 10-K)
as Exhibit 10.5.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Bonuses for all other employees are determined
through a calculation of two factors, one for longevity and one for performance, with the greater emphasis on performance. Supervisors
provide an evaluation of each employee in five areas: attendance; attitude; productivity; skill level with respect to the position
they occupy; and contribution to the Company&rsquo;s profitability. A scoring system is used and bonuses are awarded based on this
system and the total budget for bonuses as determined by the CEO and CFO with the approval of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company provides 401(k) matching up to
4% of employees&rsquo; salaries or wages up to the U.S. Internal Revenue Service maximum allowable, regardless of their position
within the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">We provide cell phones to the Named Executive
Officers and other employees for business communication purposes. However, we allow the personal use of cell phone usage as long
as it does not exceed our allowable minutes and text messages. In the event the personal usage exceeds the allowance, the employees
are financially responsible for the excess. There are no other perquisites or other benefits of any kind for any officer or any
other employee or director of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Employment and Other Compensation Agreements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company renewed its employment agreement
with Walter Woltosz, the CEO, commencing September 1, 2011, for two years. The agreement provides for: 1) a base salary of $300,000
per year; 2) options to purchase 50 shares of the Company&rsquo;s common stock for each $1,000 of net income before taxes at the
end of each fiscal year (up to a maximum of 120,000 options over the term &ndash; to be adjusted for stock split or reverse split)
over the term of agreement; and 3) a bonus not to exceed 10% of salary, or $30,000 per year. The specific amount of the bonus will
be determined by the Compensation Committee, based on the financial performance and achievements of the Company for the previous
fiscal year. Mr. Woltosz was entitled to such health insurance and other benefits that are not inconsistent with that which we
customarily provide to our other management employees and to reimbursement of customary, ordinary and necessary business expenses
incurred in connection with the rendering of services to the Company. The agreement also provides that we may terminate the agreement
without cause upon 30 days written notice, and that upon any such termination our only obligation to Mr. Woltosz would be for a
payment equal to the greater of (i) 12 months of salary or (ii) the amount of salary for the remainder of the term of the employment
agreement from the date of notice of termination. Further, the agreement provides that we may terminate the agreement for cause
(as defined in such employment agreement) and that our only obligation to Mr. Woltosz upon any such termination would be limited
to the payment of Mr. Woltosz&rsquo; salary and benefits through and until the effective date of any such termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As part of the agreement with the original
underwriter and as partial compensation for the sale of Words+ to Simulations Plus in 1996, commencing with our fiscal year ended
1997 and for each fiscal year thereafter, Virginia Woltosz is entitled to receive bonuses not to exceed $60,000, equal to 5% of
our net annual income before taxes. The bonus for fiscal year 2011 was paid on August 15, 2011, and the bonus for fiscal year 2012
was paid on September 14, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Risk Assessment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Compensation Committee has determined that
our compensation programs are designed and administered with the appropriate balance of risk and reward in relation to our overall
business strategy and do not encourage our executives to take unnecessary or excessive risks that are reasonably likely to have
a material adverse effect on the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Compensation Committee Report</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Compensation Committee has reviewed and
discussed with management the Compensation Discussion and Analysis provided above and based on such review, has recommended to
the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 40%; text-decoration: underline; text-align: justify">Compensation Committee</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">David D&rsquo;Argenio (Chair)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Harold Rosenberger</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">David Ralph</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Compensation Committee Interlocks and Insider Participation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During fiscal year 2012, the Compensation Committee
consisted of David D&rsquo;Argenio, Richard Weiss (09/01/2011 through 02/29/2012), H. Wayne Rosenberger, and David Ralph (03/01/2012
through 08/31/2012). All members of the Compensation Committee were independent directors, and no member has ever served as an
officer or employee of the Company or any of its subsidiaries or has any relationships with the Company or any of its subsidiaries
requiring disclosure under Item 404 of Regulation S-K. The compensation Committee members have no interlocking relationships requiring
disclosure under Item 407(e)(4)(iii) of Regulation S-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Executive Officers who are not also Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%; text-align: left; vertical-align: bottom"><U>NAME</U></TD>
    <TD STYLE="width: 7%; text-align: center; vertical-align: bottom"><U>AGE</U></TD>
    <TD STYLE="width: 62%; text-align: left; vertical-align: bottom"><U>POSITION WITH THE COMPANY</U></TD>
    <TD STYLE="width: 11%; text-align: center; vertical-align: bottom">OFFICER<BR><U>SINCE</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Momoko A. Beran</TD>
    <TD STYLE="text-align: center">60</TD>
    <TD>Chief Financial Officer of the Company</TD>
    <TD STYLE="text-align: center">1996</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>John A. DiBella</TD>
    <TD STYLE="text-align: center">33</TD>
    <TD>Vice President, Marketing and Sales of
the Company</TD>
    <TD STYLE="text-align: center">2012</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B></B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">MOMOKO A. BERAN joined our former subsidiary
Words+ in June 1993 as Director of Accounting and was named the Company&rsquo;s Chief Financial Officer in July 1996. Prior to
joining Words+, Ms. Beran had been Financial Controller for AB Component Systems Inc., which had its headquarters in the U.K. Since
February 1, 2003, Ms. Beran has also been the Company&rsquo;s Director of Human Resources and Director of Facilities and Equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">JOHN DIBELLA joined the Company in June 2003
as a Modeling &amp; Simulations Scientist. He developed our first DDDPlus software under supervision of Dr. Michael Bolger, out
Chief Scientist. In 2005, Mr. DiBella moved to the Marketing and Sales Department, and worked as a Field Scientist. After the former
VP of Marketing and Sales resigned, John took over the Marketing and Sales Department and worked as Director till February 2012.
With his successful record as Director of Marketing and Sales, he was appointed Vice President of Marketing and Sales of the Company
in March 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Summary Table of Named Executive Officer Compensation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth certain information
concerning compensation paid or accrued for the fiscal years ended August 31, 2012 and 2011, by the Company to or for the benefit
of our CEO, CFO, and Vice President of Marketing and Sales (the &ldquo;Named Executive Officers&rdquo;). No other executive officers
of the Company received total annual compensation for the fiscal years ended August 31, 2012 or 2011, which exceeded $100,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Name and Principal Position</TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Fiscal<BR>Year</TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Salary</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Bonus<BR>($)</TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Option<BR>Awards</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">All other<BR>compensation</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">($)</P></TD><TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Total<BR>($)</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">(a)</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">(b)</TD><TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: center">(c)</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left; width: 25%">Walter S. Woltosz</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; text-align: center">2012</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">300,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">27,500</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">147,559</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">0</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 11%; text-align: right">475,059</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Chief Executive Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">275,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">32,988</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">332,988</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Momoko A. Beran</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171,750</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,348</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,604</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,702</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Chief Financial Officer</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,581</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,983</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">181,564</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">John DiBella (d)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">141,450</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,432</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,235</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">162,117</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Vice President of Marketing and Sales</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">129,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,054</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,602</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">145,656</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Michael Bolger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171,750</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,700</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,578</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,028</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Chief Scientist</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">160,000</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,073</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,963</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">181,036</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Robert Clark</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2012</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">147,500</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,945</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,138</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">159,583</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left">Director, Life Science</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: center">2011</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">139,167</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,341</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,780</TD><TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,288</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(a) Amount represents bonus earned during
the applicable year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"> (b) Amount represents the stock-based compensation expense recorded by us in fiscal year 2012 and fiscal year 2011 measured using the Black-Scholes option pricing model at the grant date based on the fair value of the option award.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(c) Amount represents Company matching
for 401(k) Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">(d)&#9;Mr. DiBella became Vice President on
March 5, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Grants of Plan-Based Awards </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table discloses information about
option grants to the Named Executive Officers during the fiscal year ended August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Name</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Grant Date</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid">All Other<BR>Option Awards:<BR>Number of Securities<BR>Underlying Options</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid">Exercise or Base<BR>Price of<BR>Option Awards</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; border-bottom: Black 1pt solid">Grant Date Fair<BR>Value of Stock and<BR>Option Awards</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 29%; text-align: left">Walter Woltosz</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 14%; text-align: center">12/19/11</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">100,000 (a)</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">3.25</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 14%; text-align: right">$147,559 (b)</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">100,000</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">147,559</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 19.5pt">(a)</TD><TD STYLE="text-align: justify">Per his employment agreement, Mr. Woltosz received 100,000 options to purchase stock.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 19.5pt">(b)</TD><TD STYLE="text-align: justify">The amounts disclosed in the &ldquo;Grant Date Fair Value of Stock and Option Awards&rdquo; column
are equal to the aggregate grant date fair value of stock option awards computed in accordance with FASB ASC Topic 718. A discussion
of the assumptions used in calculating the grant date fair value is set forth in Note 5 to the consolidated financial statements
included in our Form 10-K.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Outstanding Equity Awards at Fiscal Year-End</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides a summary of all
outstanding equity awards for Named Executive Officers at the end of fiscal year 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="text-align: center">Name</TD>
    <TD COLSPAN="9" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid">Option Awards</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="7" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid">Stock Awards</TD></TR>
<TR>
    <TD STYLE="width: 15%; text-align: center; padding-bottom: 1pt; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">Number of<BR>Securities<BR>Underlying<BR>Unexercised<BR>Options<BR>(Exercisable)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">(a)</P></TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Number of<BR>Securities<BR>Underlying<BR>Unexercised<BR>Options<BR>(Unexercisable)</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 8%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Equity<BR>Incentive<BR>Plan Awards:<BR>Securities<BR>Underlying<BR>Unexercised<BR>Unearned<BR>Options</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Option<BR>Exercise<BR>Price</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Option<BR>Expiration<BR>Date</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Number of<BR>Shares or<BR>Units of<BR>Stock That<BR>Have Not<BR>Vested</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Market Value<BR>of Shares<BR>or Units of<BR>Stock That<BR>Have Not<BR>Vested</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Equity<BR>Incentive Plan<BR>Awards:<BR>Number of<BR>Unearned<BR>Shares, Units<BR>or other<BR>Rights That<BR>Have Not Vested</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom; border-bottom: Black 1pt solid">Equity<BR>Incentive Plan<BR>Awards:<BR>Market or<BR>Payout Value<BR>of Unearned<BR>Shares, Units<BR>or other<BR>Rights That<BR>Have Not<BR>Vested</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD ROWSPAN="3">Walter Woltosz</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$3.25</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">12/19/2016</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$3.27</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">11/30/2015</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">100,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.62</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">12/16/2014</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">108,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">112,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD ROWSPAN="4">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">John DiBella</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">3,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.00</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">4/7/2019</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">9,500</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.11</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">6/22/2015</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.13</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">7/20/2016</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">1,600</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">400</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$3.02</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">1/21/2018</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">22,100</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">2,400</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
<TR STYLE="background-color: rgb(238,238,238)">
    <TD ROWSPAN="4" STYLE="text-align: left; vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Momoko</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Beran</P></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: top; text-align: center">$1.00</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: top; text-align: center">4/7/2019</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.11</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">6/22/2015</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">40,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.13</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">7/20/2016</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$3.02</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">1/21/2018</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">86,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">14,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD ROWSPAN="3" STYLE="text-align: left; vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Michael Bolger</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">18,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.00</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">4/7/2019</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$1.11</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">6/22/2015</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$3.02</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">1/21/2018</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">38,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">14,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD>Robert Clark</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">$2.49</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">4/19/2020</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">30,000</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold">Grand Total</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">264,100</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">172,400</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 24pt">(a)</TD><TD STYLE="text-align: justify">Stock options vest over 5 years &ndash; 20% vesting on each anniversary of the date of grant, with
a 10-year term, except for the option of Mr. Woltosz. His options vest over 3 years &ndash; 40%, 30%, and 30%, with 5-year term.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 20; Value: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Option Exercised and Stock Vested</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table sets forth information
for the Named Executive Officers for the fiscal year ended August 31, 2012, regarding exercises of stock options and stock awards
vested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="5" STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: black 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">Options Exercised and Stock Vested</TD></TR>
<TR>
    <TD STYLE="border-right: black 1pt solid; border-left: windowtext 1pt solid; text-align: center">Name</TD>
    <TD COLSPAN="2" STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Option Awards</TD>
    <TD COLSPAN="2" STYLE="border-right: windowtext 1pt solid; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Stock Awards</TD></TR>
<TR>
    <TD STYLE="width: 28%; border-left: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-right: black 1pt solid; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Number of Shares<BR>Acquired on Exercise</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">(a)</P></TD>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">Value Realized<BR>on Exercise</TD>
    <TD STYLE="width: 18%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">Number of Shares<BR>Acquired on Vesting</TD>
    <TD STYLE="width: 18%; border-bottom: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; vertical-align: bottom">Value Realized<BR>on Vesting</TD></TR>
<TR STYLE="background-color: rgb(238,238,238)">
    <TD STYLE="border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid">Walter Woltosz</TD>
    <TD STYLE="vertical-align: top; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD STYLE="vertical-align: top; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="vertical-align: top; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="background-color: White">
    <TD STYLE="border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid">Virginia Woltosz</TD>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="vertical-align: top; border-top: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD STYLE="vertical-align: top; border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="vertical-align: top; border-top: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-right: black 1pt solid; border-left: windowtext 1pt solid">Momoko Beran</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-left: windowtext 1pt solid">John DiBella</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-left: windowtext 1pt solid">Michael Bolger</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">40,000</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$114,800</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-left: windowtext 1pt solid">Robert Clark</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">10,000</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$20,300</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: black 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$0.00</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; font-weight: bold; text-indent: 10pt">Total</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">50,000</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$135,100</TD>
    <TD STYLE="border-top: windowtext 1pt solid; border-right: black 1pt solid; border-bottom: windowtext 1pt solid; border-left: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">0</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: right">$0.00</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-right: 0; margin-bottom: 0; text-align: justify">(a) The value realized represents
the difference between the aggregate closing price of the shares on the date of exercise less the aggregate exercise price paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Equity Compensation Plan Information </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The following table provides a summary of Equity
Compensation Plan Information at August 31, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="4" STYLE="border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><B>Equity
    Compensation Plan Information (1)</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: center">Plan category</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Number of securities to be<BR>issued upon exercise of<BR>outstanding options,<BR>warrants and rights</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Weighted-average exercise<BR>price of outstanding options,<BR>warrants and rights</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Number
    of securities<BR>remaining available for<BR>future issuance under<BR>equity compensation plans<BR>(excluding securities reflected<BR>in
    column (a))</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: left">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(a)</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(b)</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: left">Equity compensation plans approved by security holders</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">726,400</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">$&nbsp;&nbsp; 1.83</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">320,700</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: left">Equity compensation plans not approved by security holders</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">0</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; text-align: left; text-indent: 10pt">Total</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">726,400</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">320,700</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 18.75pt">(1)</TD><TD STYLE="text-align: justify">The Company is authorized to issue stock options under the following compensation arrangements:</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(i)</TD><TD STYLE="text-align: justify">4,000 shares per year per person to Directors as a part of their annual stipends; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(ii)</TD><TD STYLE="text-align: justify">50 shares for each $1,000 of net income before taxes at the end of each fiscal year (up to a maximum of 120,000 options) to
the CEO over the term of his current employment agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Interest of Certain Persons in Matters to be Acted Upon</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">None of our directors or officers or their associates have any interest,
direct or indirect, by security holdings or otherwise, in any of the matters to be approved by the shareholders as described in
this Proxy Statement.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>HOUSEHOLDING OF PROXY MATERIALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>ANNUAL REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: center"><B>THE COMPANY WILL PROVIDE, WITHOUT
CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS AND RELATED FINANCIAL STATEMENT SCHEDULES, AS
FILED WITH THE SEC, UPON WRITTEN OR ORAL REQUEST.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><B>For documents
relating to Simulations Plus, Inc., direct requests to:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 40%">Simulations Plus, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">42505 10<SUP>th</SUP> Street West</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Lancaster, CA 93534</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>(661) 723-7723</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Attn: Renee Bouche</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">The SEC has adopted rules that permit
companies and intermediaries (e.g.,&nbsp;brokers) to satisfy the delivery requirements for proxy statements and annual reports
with respect to two or more shareholders sharing the same address by delivering a single proxy statement addressed to those shareholders.
This process, which is commonly referred to as &ldquo;householding,&rdquo; potentially means extra convenience for shareholders
and cost savings for companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">We have adopted householding for our
Shareholders who share an address. If you reside at the same address as another Shareholder of the Company, and wish to receive
a separate copy of the applicable materials, you may do so by making a written or oral request to: Renee Bouche, Simulations Plus,
Inc., at 42505 10th Street West, Lancaster, CA 93534, or call (661) 723-7723. Upon your request, we will promptly deliver a separate
copy to you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 10pt; text-align: justify">Some brokers household proxy materials,
delivering a single proxy statement or notice to multiple shareholders sharing an address unless contrary instructions have been
received from the affected shareholders. Once you have received notice from your broker that they will be householding materials
to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time,
you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, please notify
your broker directly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Any shareholders who share the same address
and currently receive multiple copies of our proxy statements and annual reports, as applicable, who wish to receive only one copy
in the future may contact their bank, broker, or other holder of record, or the Company at the contact information listed above,
to request information about householding.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>SHAREHOLDER COMMUNICATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0pt; text-align: justify">Shareholders are encouraged to contact
the Company with any requests for information or to communicate with the Board via telephone, mail, or through our web site investor
information request form at: <FONT STYLE="color: #1F497D">http://www.simulations-plus.com/InvestorForm.aspx </FONT>or through
the general information request page:<FONT STYLE="color: #1F497D"> http://www.simulations-plus.com/contact.aspx.</FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>SHAREHOLDER PROPOSALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Under certain circumstances, our Shareholders
are entitled to present proposals at Shareholder meetings. Shareholders of the Company who intend to submit proposals, including
proposals for director nominees, to the Company&rsquo;s Shareholders at the 2014 Annual Meeting of Shareholders must submit such
proposals to the Company no later than 120 calendar days before the date of this Proxy Statement is released to Shareholders (expected
to be approximately August 22, 2013), unless the date of the 2014 Annual Meeting of the Shareholders has been changed by more than
30 days from the date of the 2013 Annual Meeting of Shareholders, in which case the deadline is a reasonable time before we begin
to print and send our proxy materials in order for them to be included in our proxy materials for such meeting. Proposals received
by the Company after such date are considered untimely. Shareholder proposals should be directed to the attention of the Corporate
Secretary of the Company, Virginia Woltosz, at 42505 10<SUP>th</SUP> Street West, Lancaster, California 93534. The submission by
a Shareholder of a proposal does not guarantee that it will be included in the proxy statement. Shareholder proposals are subject
to certain regulations and requirements under the federal securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Shareholders who intend to submit proposals
to the Company&rsquo;s Shareholders at the 2014 Annual Meeting of Shareholders but intend to submit such proposals on their own,
either from the floor or through their own proxy statement and proxy, must, in order for such matters to be voted upon by the Company&rsquo;s
Shareholders, give notice of such to the management of the Company by 45 calendar days before the date this Proxy Statement is
released to Shareholders for the prior year (expected to be approximately December 3, 2013), unless the date of the 2014 Annual
Meeting of the Shareholders has been changed by more than 30 days from the date of the 2013 Annual Meeting of Shareholders, in
which case the deadline is a reasonable time before we begin to print and send our Proxy materials. The persons named as proxies
for the 2013 Annual Meeting of Shareholders will have discretionary authority to vote on any Shareholder proposal not included
in the Company&rsquo;s proxy materials for the meeting, unless the Company receives notice of the proposal within such 45-day period.
If proper notice is received by that date, the proxy holders will not have discretionary voting authority except as provided in
federal regulations governing shareholder proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>OTHER MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board knows of no other matters to be presented
at the Meeting other than those described above. However, if any other matters properly come before the Meeting, it is intended
that any shares voted by proxy will be voted in the discretion of the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Proxy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Solicited by the Board of Directors of Simulations
Plus, Inc. -- Meeting of Shareholders -- February 15, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The undersigned hereby appoints Walter S. Woltosz
and Momoko Beran, or either of them, attorneys and proxies for the undersigned, with full power of substitution, for and in the
name, place and stead of the undersigned, to represent and vote, as designated below, all shares of stock of Simulations Plus,
Inc., a California corporation, held of record by the undersigned on December 14, 2012, at the Annual Meeting of the Shareholders
to be held at 42505 10th Street West, Lancaster, California at 2:00 p.m. Pacific Standard Time on February 15, 2013, or at any
adjournment or postponement of such meeting, in accordance with and as described in the Notice of Meeting of Shareholders and Proxy
Statement. If no direction is given, this proxy will be voted FOR Proposals 1 and 2, and in the discretion of the proxy as to such
other matters as may properly come before the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> <FONT STYLE="font-family: Wingdings 2">&#83;</FONT>
Please mark the votes as in this example.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Board of Directors recommends a vote for
Proposals 1 and 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>1. Election of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Nominees: Walter S. Woltosz, Virginia E. Woltosz,
Dr. David Z. D&rsquo;Argenio, Harold W. Rosenberger, and Dr. David Ralph.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FOR  <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
WITHHELD <FONT STYLE="font-family: Wingdings 2">&#163;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">FOR all nominees except   <FONT STYLE="font-family: Wingdings 2">&#163;</FONT>
___________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>2.</B> <B>Ratification of selection of Rose,
Snyder and Jacobs CPA&rsquo;s as the Independent Registered Public Accounting Firm</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 0.75in; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt; width: 15%">FOR <FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD>
    <TD STYLE="text-align: justify; padding-left: 10pt; text-indent: -10pt; width: 15%">AGAINST <FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD>
    <TD STYLE="width: 70%">ABSTAIN <FONT STYLE="font-family: Wingdings 2">&#163;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The undersigned hereby revokes any proxy or
proxies heretofore given to vote upon or act with respect to such stock and hereby ratifies all that the proxies, their substitutes,
or any of them, may lawfully do by virtue hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Please sign exactly as your name appears on
the address label affixed hereto. If acting as attorney, executor, trustee or in other representative capacity, sign name and title.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Signature:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Signature if held jointly:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

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