<SEC-DOCUMENT>0001019687-14-004842.txt : 20141229
<SEC-HEADER>0001019687-14-004842.hdr.sgml : 20141225
<ACCEPTANCE-DATETIME>20141229170034
ACCESSION NUMBER:		0001019687-14-004842
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20141226
FILED AS OF DATE:		20141229
DATE AS OF CHANGE:		20141229
EFFECTIVENESS DATE:		20141229

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:		141313313

	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>DEFINITIVE PROXY STATEMENT
<TEXT>
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<P STYLE="margin: 0"></P>

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

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

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

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

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

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

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

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

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

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

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



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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Preliminary Proxy Statement</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Definitive Proxy Statement </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Definitive Additional Material</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Soliciting Material under &sect;240.14a-12</FONT></TD></TR></TABLE>

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

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

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

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

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

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

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">No fee required.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.</FONT></TD></TR></TABLE>

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

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

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

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



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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Fee paid previously with preliminary materials:</FONT></TD></TR></TABLE>

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

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left; vertical-align: middle"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">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.</FONT></TD></TR></TABLE>

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

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

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

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

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

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 3pt; margin-bottom: 3pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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

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

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

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

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">To be held February 24, 2015</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 24, 2015, 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1. To elect five (5) individuals to serve
on the Company&rsquo;s Board of Directors 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2. To ratify the appointment of Rose, Snyder,
and Jacobs LLP as the independent registered public accounting firm for the Company for the fiscal year ended August 31, 2015.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 31, 2014, the record date for
the Meeting, will be entitled to notice of, and to vote at, the 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 10<SUP>th</SUP> 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Shares can be voted at the Meeting only
if the holder thereof is present in person or represented by a proxy. To ensure that your shares are represented at the Meeting,
we urge you to vote your shares promptly by either completing, signing and returning the accompanying proxy card in the accompanying
envelope or voting online at www.proxyvote.com. We encourage you to do so even if you plan to attend the Meeting in person. The
prompt voting of your shares, regardless of the number of you hold, will aid the Company in reducing the expense of additional
proxy solicitation.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Important Notice Regarding the Availability
of Proxy Materials for the Shareholder Meeting to be Held on February 24, 2015. </B>This notice of meeting, the accompanying proxy
statement and our annual report to shareholders, which includes our Annual Report on Form 10-K for the year ended August 31, 2014,
will be available at www.proxyvote.com and are available on our website www.simulations-plus.com</P>

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">December 29, 2014</P>

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

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


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

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

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

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="width: 85%; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING</B></FONT></TD>
    <TD STYLE="width: 15%; padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>&nbsp;1</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Why am I receiving these materials?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">What am I voting on?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Who can vote at the annual meeting?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Am I a shareholder of record for purpose of the annual meeting?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">What if my shares are held in an account at a brokerage firm, bank or dealer?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">How Do I vote?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">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?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">How are votes counted?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">How many votes are needed to approve each proposal?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">How many votes do I have?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">What is the quorum requirement?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">What does it mean if I receive more than one proxy card?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">What if I return a proxy card but do not make specific choices?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Can I change my vote after submitting my proxy?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right">4</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">How can I find out the results of the voting at the annual meeting?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Who is paying for this proxy solicitation?</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>PROPOSAL No. 1:&nbsp;&nbsp;ELECTION OF DIRECTORS</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>5</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Nomination of Directors</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">5</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Information Concerning Directors</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">6</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Board Recommendation</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">7</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>PROPOSAL No. 2:&nbsp;&nbsp;RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>8</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Background</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">8</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Independent Registered Public Accounting Firm Fee Information</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;8</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Audit Committee Policy Regarding Pre-Approval of Audit and Permissible Non-Audit Services of Our Independent Registered Public Accounting Firm</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right">9</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Board Recommendation</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">9</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><B>10</B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Security Ownership</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">10</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Section 16(a) Beneficial Ownership Reporting Compliance</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">11</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>BOARD MATTERS AND CORPORATE GOVERNANCE</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>12</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Information Regarding the Board and Its Committees</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">12</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Board Leadership Structure</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">13</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Board&rsquo;s Role in Risk Management</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">14</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director Compensation</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">14</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Shareholder Communications with the Board</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">15</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Certain Relationships and Related Transactions</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">15</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt"><P>Interest of Certain Persons in Matters to be Acted Upon</P>


</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">15</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>EXECUTIVE COMPENSATION AND OTHER INFORMATION</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>16</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Compensation Discussion and Analysis</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Determining Compensation</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Employment and Other Compensation Agreements</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">16</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Risk Assessment</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">17</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Executive Officers</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">17</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Summary
    Compensation Table</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">18</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Outstanding Equity
    Awards at Fiscal Year-End 2014</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">19</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify">Grants of Plan-Based Awards</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">20</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Option Exercised and Stock Vested</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">20</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Equity Compensation Plan Information</FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">21</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>HOUSEHOLDING INFORMATION</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>22</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>SHAREHOLDER COMMUNICATIONS</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>22</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>SHAREHOLDER PROPOSALS</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>22</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-left: 0pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>OTHER MATTERS</B></FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>22</B></FONT></TD></TR>
</TABLE>


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

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

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


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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO BE HELD ON FEBRUARY 24, 2015</B></P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Simulations Plus, Inc. (&ldquo;we&rdquo;,
&ldquo;us&rdquo;, &ldquo;our&rdquo;, &ldquo;Simulations Plus&rdquo; or the &ldquo;Company&rdquo;) is making proxy materials, including
this proxy statement (&ldquo;Proxy Statement&rdquo;) and the related proxy card, available to its shareholders via the Internet
because its Board of Directors (the &ldquo;Board&rdquo;) is soliciting proxies to vote at the annual meeting of shareholders (&ldquo;Meeting&rdquo;)
to be held on February 24, 2015, at 2:00 p.m. Pacific Time, at the Company&rsquo;s principal executive offices located at 42505
10<SUP>th</SUP> Street West, Lancaster, California 93534.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Proposal No. 1 &ndash; </B>To<B> </B>elect
five (5) individuals to the Board to serve until the next 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Proposal No. 2 &ndash; </B>To<B> </B>ratify
the appointment of Rose, Snyder, and Jacobs LLP (&ldquo;RSJ&rdquo;) as our independent registered public accounting firm for the
fiscal year ending August 31, 2015.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Only shareholders of record at the close
of business on December 31, 2014, the record date for the Meeting, will be entitled to notice of and to vote at the Meeting. The
Company&rsquo;s common stock is its only class of voting securities. As of the record date there were 16,845,614 shares of the
Company&rsquo;s common stock issued and outstanding.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify">If, on December 31, 2014, your shares were
registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc., then you are the shareholder
of record for purposes of the Meeting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify">If, on December 31, 2014, your shares were
held in an account at a brokerage firm, bank or dealer (commonly referred to as being held in &ldquo;street name&rdquo;) and these
proxy materials are being forwarded to you by the organization holding your account, the organization holding your account is considered
the shareholder of record with respect to your shares for purposes of the Meeting and you are considered the beneficial owner of
such shares. 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: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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

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

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify">If you are a shareholder of record, you
may vote your shares by proxy over the Internet by following the instructions provided in the Notice of Internet Availability of
Proxy Materials you received, or, if you requested to receive printed proxy materials, you may vote by marking, dating and signing
the enclosed proxy card and returning it in the postage-paid envelope provided. Additionally, you may vote your shares in person
at the Meeting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are voting your shares by proxy
over the Internet, we request that you cast your vote by February 20, 2015, though you can cast your vote over the Internet until
11:59 P.M. Eastern Time the day before the Meeting. If you are voting your shares by returning a proxy card, we request that you
return your completed proxy card to us by no later than February 12, 2015, though you can return your proxy card at any time before
voting begins at the Meeting. Please note that you may still attend the Meeting and vote in person, even if you have already voted
by proxy via either the Internet or mail.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify">If you are a beneficial owner of shares
held in &ldquo;street name,&rdquo; you should have received instructions from the organization holding your shares that you must
follow for your shares to be voted. The availability of telephonic or Internet voting will depend on the voting process of such
organization. Alternatively, you may vote in person at the Meeting, however, in order to do so you must obtain a
&ldquo;legal&rdquo; proxy from the organization holding your shares, and present it and proof of identification to the inspector
of elections at the Meeting. Please contact the organization that holds your shares if you wish to obtain a &ldquo;legal&rdquo;
proxy.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 your shares via the Internet or by returning a proxy
card to ensure that your vote is counted.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 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 may exercise its
discretion to vote your shares only on &ldquo;routine&rdquo; 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 the election of directors.
The proposal to ratify the appointment of RSJ as our independent registered public accounting firm is a routine matter. Therefore,
your broker or other nominee will be able to vote on that proposal even if it does not receive voting instructions from you. If
you do not provide voting instructions to your broker or other nominee on the election of directors, and your broker or other nominee
votes your shares on the ratification of the appointment of RSJ as our independent registered public accounting firm, your shares
will be considered &ldquo;broker non-votes&rdquo; as to the election of directors. A broker non-vote will not be considered shares
voting or as votes cast with respect to the particular proposal. As a result, a broker non-vote will not have any effect on the
outcome of the particular proposal.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Votes will be counted by the Company&rsquo;s
corporate secretary who will separately count &ldquo;for&rdquo; and &ldquo;against&rdquo; votes (other than with respect to the
election of directors as to which there is no &ldquo;against&rdquo; vote), abstentions and &ldquo;broker non-votes&rdquo;.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -44pt; text-align: justify; text-indent: 44pt">&nbsp;</P>


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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Proposal No.&nbsp;2: </B>The ratification
of the selection of RSJ as our independent registered public accounting firm 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 at the Meeting. Abstentions will have the same effect
as &ldquo;against&rdquo; votes. Brokers and other nominees generally will have discretionary authority to vote on this proposal
because it is considered a routine matter under NASDAQ rules and therefore we do not expect broker non-votes with respect to this
proposal.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Each shareholder of record as of December
31, 2014, 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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 shares
such shareholder is entitled to vote. 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 or any other shareholder entitled to vote 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 the election
of directors. 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 shares represented by proxies solicited
by 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: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A quorum of shareholders is necessary to
hold the Meeting. A quorum will be present if at least a majority of the outstanding shares on the record date are present either
in person or by proxy at the Meeting. On the record date, December 31, 2014, there were 16,845,614 shares outstanding and entitled
to vote. Accordingly, 8,422,808 shares must be present either in person or by proxy at the Meeting in order to establish a quorum
at the Meeting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you submit a valid proxy (by Internet
or mail), regardless of whether you abstain from voting on one or more matters, your shares will be counted as present at the Meeting
for purposes of determining a quorum. Broker non-votes will also be counted as present at the Meeting for purposes of determining
a quorum. If there is no quorum, a majority of the shares 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: 0pt 0; text-align: justify">&nbsp;</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 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 described herein and &ldquo;for&rdquo; the ratification of RSJ as our independent registered public accounting firm. 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: 0pt 0; text-align: justify">&nbsp;</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><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">By delivering to our corporate secretary
(c/o Virginia Woltosz, Simulations Plus, Inc. 42505 10<SUP>th</SUP> Street West, Lancaster, CA 93534) a duly executed proxy bearing
a date later than the date of the proxy you wish to revoke. Such later-dated proxy must be delivered before voting begins at the
Meeting.</FONT></TD></TR></TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><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">By delivering to our corporate secretary
(c/o Virginia Woltosz, Simulations Plus, Inc. 42505 10<SUP>th</SUP> Street West, Lancaster, CA 93534) a written notice of revocation
dated later than the date of the proxy you wish to revoke. Such written notice of revocation must be delivered before voting begins
at the Meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt; margin-bottom: 0pt"><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">By attending the Meeting and voting 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 &ldquo;legal&rdquo; proxy from the organization holding your shares and present it to the inspector of elections, along with
proof of identification, at the Meeting.</FONT></TD></TR></TABLE>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify">Preliminary voting results are expected
to be announced at the Meeting. We will report final voting results in a Current Report on Form 8-K filed 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: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We are soliciting proxies from our shareholders
on behalf of our Board and will pay for all costs incurred in connection with such solicitation. In addition to soliciting proxies
by this proxy statement, 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: 0pt 0; text-align: justify">&nbsp;</P>


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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Governance and Nominating Committee
of the Board (the &ldquo;Nominating Committee&rdquo;) is charged with making recommendations to the Board regarding qualified candidates
to serve as members of the Board. The Nominating Committee&rsquo;s goal is to assemble a board of directors with the skills and
characteristics that, taken as a whole, will assure a strong board of directors 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: 0pt 0; text-indent: 0.5in">&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: 6%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1)&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="width: 94%"><FONT STYLE="font-family: Times New Roman, Times, Serif">The appropriate size of the Board;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2)&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">The Company&rsquo;s needs with respect to the particular talents and experience of its directors; and</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(3)&nbsp;&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">The knowledge, skills and experience of nominees, including experience in technology, business, finance, administration or public service.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 the Company&rsquo;s and its shareholders&rsquo; best interests. 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
listing standards. The Nominating Committee also believes it is appropriate for our Chief Executive Officer to serve on the Board.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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, and then uses its network of contacts to compile a list of candidates.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We do not have a formal policy concerning
shareholder recommendations of nominees for director 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 recommend a 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">There are no arrangements or understanding
between any of our directors, nominees for directors or officers and any other person pursuant to which any director, nominee for
director, or officer was or is to be selected as a director, nominee or officer, as applicable.</P>

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

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</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: 22%; padding-right: 5.4pt; padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>NAME</U></FONT></TD>
    <TD STYLE="width: 7%; padding-right: 5.4pt; padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>AGE</U></FONT></TD>
    <TD STYLE="width: 45%; padding-right: 5.4pt; padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>POSITION
    WITH THE COMPANY&nbsp;&nbsp;&nbsp;</U></FONT></TD>
    <TD STYLE="width: 26%; padding-right: 5.4pt; padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>ELECTED
    DIRECTOR SINCE</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Walter S. Woltosz</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">68</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chairman of the Board and Chief Executive Officer of the Company</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1996</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. Thaddeus H. Grasela*</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">60</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director and President of the Company</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2014</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. David Z. D&rsquo;Argenio </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">64</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1997</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. David L. Ralph</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">67</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2012</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. John K Paglia**</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">47</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2014</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 3%">*</TD><TD STYLE="width: 97%">Dr. Grasela was appointed President of the Company and to the Board on September 2, 2014. He filled the vacancy on the Board
created by the resignation of Virginia E. Woltosz that same day. Ms. Woltosz continues to be the Secretary and Treasurer of the
Company.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 3%">**</TD><TD STYLE="width: 97%">Dr. Paglia was appointed to the Board on December 3, 2014. He filled the vacancy on the Board created by the resignation of
Harold W. Rosenberger that same day.</TD></TR></TABLE>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">WALTER S. WOLTOSZ is a co-founder of the
Company and has served as its Chief Executive Officer and as Chairman of the Board since its incorporation in July 1996. He also
served as President of the Company until Dr. Grasela was appointed to that office on September 2, 2014. Mr. Woltosz is the husband
of Mrs. Woltosz, the Company&rsquo;s Treasurer and Corporate Secretary, and a former director. Mr. Woltosz &lsquo;s knowledge of
the industry and his 18 years of experience running Simulations Plus makes him a qualified candidate for the Board.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">THADDEUS GRASELA has been President of
the Company since the Company acquired Cognigen Corporation on September 2, 2014. He was the founder, President and Chief Executive
Officer of Cognigen for 22 years prior to the acquisition, and continues to serve as its President. Dr. Grasela has had extensive
experience in the strategic oversight of scientific consulting projects, promoting new revenue generation, managing profitability,
and overseeing the growth of the organization. He is a Fellow of the American Association of Pharmaceutical Scientists and Adjunct
Professor in the Department of Pharmaceutical Sciences at the State University of New York at Buffalo. He received his PharmD in
1979 from the Philadelphia College of Pharmacy and Science and his doctorate in Epidemiology from the University at Buffalo in
1999. Dr. Grasela&rsquo;s knowledge of the Pharma industry and his experience running Cognigen Corporation makes him a qualified
candidate for the Board.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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. Dr. D&rsquo;Argenio&rsquo;s
pharmaceutical research experience makes him a qualified candidate for the Board.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; 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. His business experience,
knowledge of business operations, and marketing skills qualify him as a candidate for the Board.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="background-color: white">DR.
JOHN K. PAGLIA was appointed as a director of the Company as of December 3, 2014. Dr. Paglia holds a Ph.D. in finance, an MBA,
a B.S. in finance, and is a Certified Public Accountant and Chartered Financial Analyst. He is currently Associate Dean at the
Graziadio School of Business and Management at Pepperdine University, Dr. Paglia leads the design and delivery of evening and weekend
business degree programs for working professionals, as well as oversees student recruitment for these programs and the school-wide
marketing, communications, and public relations functions. He founded the award-winning Pepperdine Private Capital Markets Project.
From 2003 to 2009, Dr. Paglia was the managing director of Paglia Consulting Group, LLC, a business valuation, financial consulting
and litigation support firm. We believe his knowledge of technical accounting issues and business experience qualify him as an
expert in financial matters and as a candidate for the Board.</FONT></P>

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

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

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

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

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

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

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

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

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

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

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee of the Board has selected
Rose, Snyder, and Jacobs, LLP (RSJ) as our independent registered public accounting firm for the fiscal year ending August 31,
2015, 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 do not 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 appoint 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: 0pt 0; text-align: justify">&nbsp;</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 0pt 0; text-align: justify; text-indent: 0.5in">&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; padding-left: -11pt">&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, 2014</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, 2013</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; padding-left: 0pt">Audit Fees (1)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">65,245</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">59,570</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0pt">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; padding-left: 0pt">Tax Fees (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,800</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; padding-left: 0pt">All Other Fees (3)</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">13,890</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="text-align: justify; padding-left: 0pt; padding-bottom: 2.5pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Total Fees </B></FONT></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">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">81,935</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">59,570</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: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 3%"></TD><TD STYLE="width: 3%">(1)</TD><TD STYLE="text-align: justify; width: 94%">Includes fees for (i)&nbsp;the audit of our annual financial statements for the fiscal years ended
August 31, 2014 and 2013, included in our Annual Reports on Form&nbsp;10-K, (ii)&nbsp;the review of our interim period financial
statements for fiscal years 2014 and 2013 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.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 3%"></TD><TD STYLE="width: 3%">(2)</TD><TD STYLE="text-align: justify; width: 94%">Represents the aggregate fees billed for tax compliance.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 3%"></TD><TD STYLE="width: 3%">(3)</TD><TD STYLE="text-align: justify; width: 94%">These fees represent billing related to accounting associated with the acquisition of Cognigen
Corporation and the accounting for the Company&rsquo;s May 2014 agreement with TSRL, Inc.</TD></TR></TABLE>

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Audit Committee has adopted policies
and procedures for the preapproval of all audit and non-audit 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. All of the Audit Fees and Audit-Related Fees set forth in the table
above were approved by the Audit Committee. The Audit Committee has approved RSJ to perform tax services for the Company for the
year ended August 31, 2014 and 2015.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board recommends a vote &ldquo;for&rdquo;
the ratification of the selection by the Audit Committee of RSJ as our independent registered public accounting firm for the fiscal
year ended August 31, 2015.</P>

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

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

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

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

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

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

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

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


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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth information
as of December 22, 2014, regarding the beneficial ownership of our common stock by (a)&nbsp;each person known to the Company to
own beneficially more than 5% of our common stock, (b)&nbsp;each of our directors and director nominees, (c)&nbsp;each of our Named
Executive Officers (as defined below), and (d)&nbsp;all of our current 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The percent of class is calculated based
on 16,845,614 shares of our common stock (net of treasury shares) outstanding as of December 22, 2014. 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 22, 2014.</P>

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



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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="padding-left: -11pt; border-bottom: Black 1pt solid">Beneficial owner (1) (2)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Amount and Nature of Beneficial Ownership</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">Percent of Class</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; padding-left: 0pt">Walter S. 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">6,144,909</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">36.07%</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0pt">Dr. Thaddeus H. Grasela (4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">319,254</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.87%</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; padding-left: 0pt">John R. Kneisel </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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0pt">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">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></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; padding-left: 0pt">Dr. David Z. D&rsquo;Argenio (6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">58,612</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 0pt">Harold W. Rosenberger (7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,400</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></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; padding-left: 0pt">Dr. David L. Ralph (8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></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; padding-left: 0pt">Dr. John Paglia</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">0</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"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></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; padding-left: 0pt">&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; padding-left: 0pt; padding-bottom: 2.5pt">All directors and executive officers as a group</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">6,591,375</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">38.69%</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>



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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Non directors and officers: In November
2013 Momoko A. Beran resigned her position of as CFO of the company, at December 22, 2014 she holds 363,381 shares of common stock
representing 2.13% of the outstanding class. Up to the time of her resignation she was a named officer of the company.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 3%; text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(1) </FONT></TD>
    <TD STYLE="width: 97%; padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Unless otherwise indicated in the footnotes to the table, 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, subject to community property laws, where applicable.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(2) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The address of each director and executive officer is c/o the Company, 42505 10th Street West, Lancaster, California 93534-7059.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(3) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 5,998,909 shares of common stock and 146,000 shares of common stock underlying an option exercisable within the 60 days of December 22, 2014. The common shares are held jointly with Ms. Virginia Woltosz.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(4) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 319,254 shares of common stock.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(5) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 22,200 shares of common stock and 15,000 shares of common stock underlying an option exercisable within the 60 days of December 22, 2014.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(6) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 43,812 shares of common stock and 14,800 shares of common stock underlying an option exercisable within the 60 days of December 22, 2014.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(7) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 7,000 shares of common stock and 12,400 shares of common stock underlying an option exercisable within the 60 days of December 22, 2014.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(8) </FONT></TD>
    <TD STYLE="padding-left: 0pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Consists of 2,000 shares of common stock underlying an option exercisable within the 60 days of December 22, 2014.</FONT></TD></TR>
</TABLE>


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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Section 16(a) of the Securities Exchange
Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;), requires that the Company&rsquo;s directors and 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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, 2014, all Section&nbsp;16(a)&nbsp;filing requirements applicable to our officers, directors and 10%
beneficial owners were timely met except the following: each of Mr. Woltosz and Mr. D&rsquo;Argenio failed to file one Form 4 in
a timely manner, but which was subsequently filed.</P>

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board met eight times during the fiscal
year ended August 31, 2014. 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: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&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: 28%; padding-right: 5.4pt; padding-left: 0pt; border-bottom: Black 1pt solid; text-align: center; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt -22pt; text-align: center"><B>Name</B></P></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Audit Committee</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Compensation Committee</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; padding-bottom: 1pt; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Nominating Committee</B></FONT></TD>
    <TD STYLE="width: 2%; padding-right: 5.4pt; padding-left: 5.4pt; padding-bottom: 1pt; text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. David D&rsquo;Argenio</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. John K. Paglia**</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. David Ralph </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">X</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">__________</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">** On December 3, 2014, Dr. Paglia was appointed to each of
the committees.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 Mr. Woltosz
and Dr. Grasela, is &ldquo;independent&rdquo; within the meaning of the applicable listing standards of the NASDAQ Stock Market,
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.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The 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 in the &ldquo;Investors&rdquo; section of our corporate
website at www.simulations-plus.com, under &ldquo;Investors &ndash; Shareholder Information&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.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Board has determined that Dr. Paglia
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. The Audit Committee met two (2) times during the fiscal year ended August 31, 2014.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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, 2014 (the &ldquo;2014 Form 10-K&rdquo;). The Audit
Committee has also discussed with the independent registered public accounting firm matters required to be discussed by Auditing
Standard No. 16, Communications with Audit Committees, as adopted by the PCAOB. 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 2014 Form
10-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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: 45%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 55%; padding-right: 5.4pt; padding-left: 5.4pt; text-decoration: underline; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>Audit Committee</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Harold W. Rosenberger (Chair)*</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">David D&rsquo;Argenio </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">David Ralph</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Mr. Rosenberger is not currently on the
Board. However, he served as the chairman of the Audit Committee and was on the Board through December 3, 2014.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 is responsible to review and make recommendations regarding
the compensation of our Chief Executive Officer as well as reviewing the compensation of other executive officers. The Compensation
Committee serves as the administrative committee of the Company&rsquo;s stock option plan and advises the Board on other incentive
compensation plans and equity-based plans. The Compensation Committee has the sole authority to retain and terminate compensation
consultants, independent legal counsel and other advisers and have sole authority to approve any such consultant&rsquo;s and or
advisor&rsquo;s fees associated with their duties. The committee&rsquo;s charter is available on the company&rsquo;s website at
www.simulations-plus.com.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Compensation Committee met four times
during the fiscal year ended August 31, 2014.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 recommending the appointment of new directors to our Board, committee structure and membership, director compensation, and
chief executive officer succession planning.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Nominating Committee provides instructions
in each annual proxy statement regarding how shareholders can make director nominations. The Nominating Committee has never received
a recommendation from a shareholder, but any such nomination, 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. The
committee&rsquo;s charter is available on the company&rsquo;s website at www.simulations-plus.com.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Nominating Committee met three times
during the fiscal year ended August 31, 2014.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s CEO also serves as
Chairman of the Board and 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 our size.<B> </B></P>

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


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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">During fiscal year 2014, independent directors
received annual stipends of $9,000 and an additional $5,000 per year of service on the Board to purchase shares of the Company&rsquo;s
common stock. In addition, the Company pays each independent director $1,500 per Board meeting. 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.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Compensation paid to independent directors
during fiscal year 2013 was the same as above except that the annual stipend was $5,000 and the meeting fee was $1,000 per Board
meeting.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company&rsquo;s President and Chief
Executive Officer, Mr. Woltosz, serves also as director and has a role in determining/recommending the amount or form of compensation
for independent directors. Neither Mr. Woltosz nor Dr. Grasela, each of whom is also one of our executive officers, receives any
compensation for their service as a directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></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: center; border-bottom: Black 1pt solid; padding-left: -11pt">Name of Director</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Fiscal Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Fees earned or <BR>
paid in cash <BR>($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Option Awards <BR>($)</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">All other compensation <BR>($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Total ($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(a)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(b) (e)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(c)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 20%; text-align: left; padding-bottom: 1pt; padding-left: 0pt">Dr. David Z. D&rsquo;Argenio</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">28,500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">11,370</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">353</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">*</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">40,223</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">438</TD><TD STYLE="padding-bottom: 1pt; text-align: left">*</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,914</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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: left; padding-bottom: 1pt; padding-left: 0pt">Harold W. Rosenberger (d)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,870</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="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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: left; padding-bottom: 1pt; padding-left: 0pt">Dr. David L. Ralph (e)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,370</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">38,870</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="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23,476</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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: left; padding-bottom: 1pt; padding-left: 0pt">Virginia E. Woltosz (f)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">**</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</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="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">**</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">60,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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: left; padding-bottom: 1pt; padding-left: 0pt">Dr. John K. Paglia (d)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(a)</TD><TD STYLE="text-align: justify; width: 95%">Represents annual stipend and per meeting fees described above.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(b)</TD><TD STYLE="text-align: justify; width: 95%">Amount represents the stock-based compensation expense recorded by us measured using the Black-Scholes
option pricing model at the grant date based on the fair value of the option awards. The amounts disclosed in the &ldquo;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 2014 Form 10-K</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39.75pt; text-align: justify; text-indent: 0in">&nbsp;</P>


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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(c)</TD><TD STYLE="text-align: justify; width: 95%">* Represents reimbursement of mileage expense to attend Board meetings.</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, is 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>
</TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(d)</TD><TD STYLE="text-align: justify; width: 95%">Mr. Rosenberger resigned from the Board as of December 3, 2014 and was replaced by Dr. Paglia as
of that same day.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(e)</TD><TD STYLE="text-align: justify; width: 95%">As of August 31, 2014, the aggregate number of shares subject to outstanding stock options held
by each non-employee director was as follows: Dr. D&rsquo;Argenio &ndash; 24,600; Mr. Rosenberger &ndash; 21,000; Dr. Ralph &ndash;
11,000; Mrs. Woltosz &ndash; 0; and Dr. Paglia &ndash; 0.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2%"></TD><TD STYLE="width: 3%">(f)</TD><TD STYLE="text-align: justify; width: 95%">Mrs. Woltosz resigned from the Board on September 2, 2014.</TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 attended our 2014 annual meeting
of shareholders.</P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 2013 and we are not currently
considering any proposed transactions with related persons.</P>

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Other than the election of directors, none
of our directors, nominees for director, executive officers or their associates have any interest, direct or indirect, by security
holdings or otherwise, in any of the matters to be acted upon at the Meeting as described in this Proxy Statement.</P>

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


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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The purpose of our compensation program
is to attract and retain talented and dedicated professionals to manage and execute our strategic plans and tactical operations.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The goal of our Named Executive Officer
compensation program is the same as our goal for operating our business - 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: 0pt 0; text-align: justify">&nbsp;</P>

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In July 2011, we entered into an employment
agreement with Mr. Woltosz for his services as our President and Chief Executive Officer, which was effective from September 1,
2011 through August 31, 2013. This agreement provided for an annual base salary of $300,000, an annual performance bonus of up
to 10% of his annual base salary, and the grant of option each year during the term to purchase 50 shares of the Company&rsquo;s
common stock for each $1,000 of net income before taxes that the Company earns at the end of each fiscal year (up to a maximum
of 120,000 shares over the term of the agreement).</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2013, we entered into another
employment agreement with Mr. Woltosz for his services as our President and Chief Executive Officer, which was effective from September
1, 2013 through August 31, 2014. This agreement provided for an annual base salary of $300,000, an annual performance bonus of
up 5% of the Company&rsquo;s net income before taxes of the previous fiscal year, not to exceed $60,000, and the grant of an option
to purchase 10 shares of the Company&rsquo;s common stock for each $1,000 of net income before taxes that the Company earns at
the end of each fiscal year (up to a maximum of 20,000 shares over the term of the agreement) with an exercise price equal to 10%
over the market value per share as of the date of grant.</P>

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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In August 2014, we entered into another
employment agreement with Mr. Woltosz for his services as our Chief Executive Officer, which was effective September 1, 2014 and
continues until August 31, 2015. Under the terms of this employment agreement, Mr. Woltosz is required to devote a minimum of 60%
of his productive time to performing the duties as our Chief Executive Officer. The agreement provides for annual base salary of
$180,000, an annual performance bonus of up 5% of the Company&rsquo;s net income before taxes of the previous fiscal year, not
to exceed $36,000, and the grant of an option to purchase six shares of the Company&rsquo;s common stock for each $1,000 of net
income before taxes that the Company earns at the end of each fiscal year (up to a maximum of 12,000 shares over the term of the
agreement) with an exercise price equal to 10% over the market value per share as of the date of grant.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under his current employment agreement,
we agreed to provide Mr. Woltosz, at 60% of our actual costs, with such health insurance and other benefits which are appropriate
to his office and position, adequate to the performance of his duties and not inconsistent with that which we customarily provide
to our other management employees. We also agreed to reimburse him for customary, ordinary and necessary business expenses incurred
in connection with the rendering of services.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The agreement also provides that we may
terminate the agreement without cause upon thirty (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 agreement from the date of notice of termination. Further, the agreement provides that we may terminate the
agreement for cause (as defined in the 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: 0pt 0; text-align: justify">&nbsp;</P>

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</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: 24%; padding-right: 5.4pt; padding-left: 0pt; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>NAME</U></FONT></TD>
    <TD STYLE="width: 11%; padding-right: 5.4pt; padding-left: 0pt; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>AGE</U></FONT></TD>
    <TD STYLE="width: 41%; padding-right: 5.4pt; padding-left: 0pt; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>POSITIONS WITH THE COMPANY</U></FONT></TD>
    <TD STYLE="width: 24%; padding-right: 5.4pt; padding-left: 0pt; text-decoration: underline"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>OFFICER SINCE</U></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Walter S. Woltosz </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">68</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chairman and Chief Executive Officer</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1996</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Thaddeus H. Grasela</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">47</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director and President</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2014</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">John R. Kneisel</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">56</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chief Financial Officer of the Company</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2013</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(238,238,238)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">John A. DiBella&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">34</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Vice President, Marketing and Sales of the Company</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 0pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2012</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Set forth below is biographical information
regarding each of our executive officers, other than Mr. Woltosz and Dr. Grasela. For biographical information regarding Mr. Woltosz
and Dr. Grasela, see &ldquo;PROPOSAL No. 1: ELECTION OF DIRECTORS-Information Concerning Directors&rdquo; above.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">JOHN R. KNEISEL joined the Company in November
2013. Mr. Kneisel worked as the Western Regional Controller of Group 1 Automotive Inc. from August 2004 through October 2009. In
November 2009 he started a consulting business providing outsourced financial management services (CFO and Controller) to small
to medium sized companies. In October 2010 he became the CFO of Dreamhammer, Inc. where he worked until August 2012. At that time
he returned full time to his consulting practice. Mr. Kneisel is a certified public accountant. During his time in public accounting,
he served as a general business consultant, assisting in the implementation of operation controls as well as providing assurance
services to his clients.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">JOHN DIBELLA joined the Company in June
2003 as a Modeling &amp; Simulations Scientist. In 2005, Mr. DiBella moved to the Marketing and Sales Department, and worked as
a Field Scientist. Mr. DiBella took over the Marketing and Sales Department and worked as Director until February 2012. 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: 0pt 0; text-align: justify">&nbsp;</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth certain
information concerning compensation paid or accrued for the fiscal years ended August 31, 2014 and 2013, by the Company to or for
the benefit of our principal executive officer and our two most highly compensated executive officers other than our principal
executive officer, who were serving as executive officers at the end of our last completed fiscal year and our former chief financial
officer who would have been one of our two most highly compensated executive officers except that she was not serving as an executive
officer at the end of our last completed fiscal year. We refer to these executive officers as our Named Executive Officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 COLSPAN="23" STYLE="text-align: center; border-bottom: Black 1pt solid">Summary Compensation Table</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; padding-left: -11pt">Name and Principal Position</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Fiscal Year</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Salary <BR>($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Bonus ($)</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">Option Awards <BR>($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">All other compensation <BR>($)</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">Total&nbsp;($)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(a)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(b)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(c)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 26%; text-align: left; padding-bottom: 1pt; padding-left: 0pt">Walter S. Woltosz</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">300,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">30,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">137,264</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">12,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">479,264</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">Chief Executive Officer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30,221</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">363,221</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: right; padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">John R. Kneisel (d)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">120,292</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">637</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,132</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169,061</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: left; padding-bottom: 1pt; padding-left: 0pt">Chief Financial Officer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</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: left; padding-bottom: 1pt; padding-left: 0pt">Momoko A. Beran (e)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71,919</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,330</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,132</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46,631</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,012</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">Former Chief Financial Officer</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">184,770</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,128</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,156</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">212,053</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: right; padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">John DiBella</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2014</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">169,070</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,601</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">132,232</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,387</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">324,290</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: left; padding-bottom: 1pt; padding-left: 0pt">Vice President of Marketing and Sales</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">2013</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">155,875</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15,721</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,864</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">178,460</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">                                                                                                                                          <TR STYLE="vertical-align: top">
<TD>(a)</TD><TD STYLE="text-align: justify">Amount represents bonus earned during
the applicable year.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 3%">(b)</TD><TD STYLE="text-align: justify">Amount represents the stock-based compensation expense recorded by us for the applicable year measured
using the Black-Scholes option pricing model at the grant date based on the fair value of the option award. See the &ldquo;Grants
of Plan-Based Awards&rdquo; table below.</TD></TR>                                                  <TR STYLE="vertical-align: top">
<TD>(c)</TD><TD STYLE="text-align: justify">Other than for Ms. Beran, the amount
in this column represents the amounts paid by the Company in respect of matching contributions under the Company 401(k) Plan. The
amount listed for Ms. Beran consists of accrued vacation pay of $33,662, 401(k) matching of $3,570, and consulting fees of $12,400
for services rendered subsequent to her resignation.</TD></TR>
<TR STYLE="vertical-align: top">
<TD>(d)</TD><TD STYLE="text-align: justify">Mr. Kneisel was appointed as our Chief Financial Officer in November 2013.</TD></TR>
<TR STYLE="vertical-align: top">
<TD>(e)</TD><TD STYLE="text-align: justify">Ms. Beran resigned as our Chief Financial Officer in November 2013.</TD></TR>
</TABLE>

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

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


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


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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Outstanding Equity Awards at Fiscal
Year-End 2014</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth information
regarding outstanding equity awards held by our Named Executive Officers at the end of fiscal 2014. Ms. Beran did not hold any
equity awards at the end of fiscal 2014.</P>

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

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

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></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 COLSPAN="19" STYLE="text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">Outstanding
    Equity Awards at Fiscal Year-End</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: -11pt"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="17" STYLE="text-align: center; border-bottom: Black 1pt solid">Option Awards</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; padding-left: -11pt">Name</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Securities Underlying Unexercised Options (Exercisable) <BR>(a)</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Securities Underlying Unexercised Options (Unexercisable)</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Option Exercise Price</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Option Expiration Date</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 17%; text-align: left; padding-bottom: 1pt; padding-left: 0pt">Walter Woltosz</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">100,000</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">5.61</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 13%; text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">11/27/2018</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">56,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">24,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">12/19/2016</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-bottom: 1pt; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.27</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">11/30/2015</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: -11pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">14,000</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6,000</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5.06</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid; padding-left: 5.4pt">9/10/2017</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt; padding-left: 0pt">&nbsp;&nbsp;Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">82,000</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">130,000</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">John DiBella</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.85</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">8/28/2024</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.00</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">4/7/2019</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="padding-bottom: 1pt; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.11</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">6/22/2015</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: -11pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.13</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">7/20/2016</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: -11pt">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,000</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">3.02</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid; padding-left: 5.4pt">1/21/2018</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt; padding-left: 0pt">&nbsp;&nbsp;Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">19,500</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">50,000</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid; padding-left: 0pt">John Kneisel</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">18,200</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">0</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6.85</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid; padding-left: 5.4pt">8/28/2024</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt; padding-left: 0pt">&nbsp;&nbsp;Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">18,200</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double; padding-left: 0pt">Grand Total</TD><TD STYLE="font-weight: bold; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">101,500</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">198,200</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">0</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 2.5pt double; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>



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

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 24pt">(a)</TD><TD STYLE="text-align: justify">All options vest as to 20% of the shares subject to the option on each of the first five anniversaries
of the grant date and have a 10-year term, except for the options granted to Mr. Woltosz. His options vest on each of the first
three anniversaries of the grant date at a rate of 40%, 30%, and 30% of the shares subject to the option, respectively, and have
a five-year term.</TD></TR></TABLE>

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table discloses information
about option grants to the Named Executive Officers during the fiscal year ended August 31, 2014. No options were granted to Ms.
Beran during the fiscal year ended August 31, 2014.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></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: center; border-bottom: Black 1pt solid; padding-left: -11pt">Name</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Grant Date</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">All Other Option Awards: Number of Securities Underlying Options</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">Exercise or Base Price of Option Awards</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">Grant Date Fair Value of Stock and Option Awards (b)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 32%; text-align: left; padding-left: 0pt">Walter Woltosz</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; padding-left: 5.4pt">11/27/2013</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">100,000</TD><TD STYLE="width: 1%; text-align: left">(a)</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">5.61</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">137,264</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0pt">John Kneisel</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">8/28/2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.85</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,132</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; padding-left: 0pt; padding-bottom: 1pt">John DiBella</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">8/28/2014</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">50,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6.85</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">132,232</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-left: 0pt; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;Total</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">168,200</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="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">317,628</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: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.5pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><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 was granted an option to purchase 100,000 shares of stock.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><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 this column equal 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 6 to the financial statements included in our 2014 Form 10-K.</TD></TR></TABLE>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table sets forth information
for the Named Executive Officers for the fiscal year ended August 31, 2014, regarding exercises of stock options. There were no
stock awards that vested during the fiscal year ended August 31, 2014.</P>

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

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: -11pt"></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">Option Awards</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; padding-left: -11pt">Name</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">Number of Shares Acquired on Exercise <BR>(a)</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">Value Realized on Exercise</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 26%; text-align: left; padding-bottom: 1pt; padding-left: 0pt">Walter Woltosz</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 13%; text-align: right">0</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 13%; text-align: right">0.00</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">John Kneisel</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.00</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: left; padding-bottom: 1pt; padding-left: 0pt">John DiBella</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.00</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0pt">Momoko Beran</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">70,717</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">368,440</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; padding-bottom: 2.5pt; padding-left: 11pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">70,717</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&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">368,440</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

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

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table provides information
as of August 31, 2014 regarding our equity compensation plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 COLSPAN="7" STYLE="text-align: justify; border-bottom: Black 1pt solid">Equity Compensation Plan Information (1)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid">Plan category</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Number of securities to be issued upon exercise of outstanding options, warrants and rights</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Weighted-average exercise price of outstanding options, warrants and rights</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; border-bottom: Black 1pt solid; vertical-align: bottom">Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 5.4pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">(a)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">(b)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">(c)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="width: 49%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">Equity compensation plans approved by security holders</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">855,100</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">$&nbsp;2.02</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 15%; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">834,200</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">Equity compensation plans not approved by security holders</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">0</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">0</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">0</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(238,238,238)">
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt">Total</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">855,100</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: bottom">834,200</TD></TR>
</TABLE>

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

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


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

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

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

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">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: http://www.simulations-plus.com/InvestorForm.aspx or through the general
information request page: </FONT>http://www.simulations-plus.com/contact.aspx<FONT STYLE="font-family: Times New Roman, Times, Serif">.</FONT></P>

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 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 2016 Annual Meeting of Shareholders must submit such
proposals to the Company no later than September 5, 2015, which is 120 calendar days before the date this Proxy Statement is released
to shareholders, unless the date of the 2015 Annual Meeting of the Shareholders has been changed by more than 30 days from the
corresponding month and day of the 2015 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 will be 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: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Shareholders who intend to submit proposals
to the Company&rsquo;s shareholders at the 2016 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 November 19, 2015, which is 45 calendar days before the date
this Proxy Statement is released to shareholders, unless the corresponding date of the 2015 Annual Meeting of the Shareholders
has been changed by more than 30 days from the month and day of the 2014 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 2015 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 forty-five (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: 0pt 0; text-align: justify">&nbsp;</P>

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

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

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

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


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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>This proxy is solicited by the Board
of Directors of Simulations Plus, Inc. for use at the Annual Meeting of Shareholders to be held on February 24, 2015.</B></P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Important Notice Regarding the Availability
of Proxy Materials for the Shareholder Meeting to be Held on February 24, 2015. </B>This notice of meeting, the accompanying proxy
statement and our annual report to shareholders, which includes our Annual Report on Form 10-K for the year ended Aug. 31, 2014,
are available at www.proxyvote.com.</P>

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The undersigned hereby appoints Walter
S. Woltosz and John Kneisel, 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 31, 2014, 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 24, 2015, 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. <B>If no direction is given, this proxy will be voted &ldquo;FOR&rdquo; each of the director nominees listed below and
&ldquo;FOR&rdquo; Proposal 2, and in the discretion of the proxy as to such other matters as may properly come before the meeting.</B></P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Nominees: Walter S. Woltosz, Dr. Thaddeus
H. Grasela, Dr. David Z. D&rsquo;Argenio, Dr. John K Paglia, and Dr. David Ralph.</P>

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

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

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

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

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

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">FOR
&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">o</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AGAINST&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">o</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ABSTAIN&nbsp;&nbsp;</FONT><FONT STYLE="font-family: Wingdings">o</FONT></P>

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

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

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

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

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

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

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

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

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

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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