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                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                               FORM CORRESPONDENCE

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

                                  JUNE 14, 2005
                      (Date of the earliest event reported)

                             SIMULATIONS PLUS, INC.
             (Exact name of Registrant as specified in its charter)

          CALIFORNIA                                              95-4595609
(State or other jurisdiction of                               (I.R.S. Employer
 Incorporation or Organization)                              identification No.)

                                    001-32046
                             Commission file number

                                1220 W. AVENUE J
                            LANCASTER, CA 93534-2902
           (Address of principal executive offices including zip code)

                                 (661) 723-7723
                (Issuer's telephone number, including area code)

<PAGE>

                            Response to Commissioners

June 14, 2005

Security and Exchange Commission
Washington, D.C. 20549

Commissioners:

Our reply to your comments dated June 1, 2005, follows.

1.       SUPPLEMENTALLY TELL ME WHETHER YOUR ARRANGEMENTS WITH GOVERNMENT
         AGENCIES INVOLVE FISCAL FUNDING CLAUSES. IF SO, TELL US ABOUT THESE
         ARRANGEMENTS, SPECIFICALLY WHETHER THEY ARE CANCELABLE, AND HOW YOU
         ACCOUNT FOR THEM. IN THIS REGARDS, WE NOTE THAT ONE GOVERNMENT AGENCY
         ACCOUNTED FOR 19% OF WORDS+ NET REVENUE IN FISCAL 2004. SEE PARAGRAPH
         32 OF SOP 97-2.

              No, our arrangements with government agencies do not involve
              fiscal funding clauses. Words+ manufactures software and hardware
              for people with speech impairments. These speech generating
              devices (please see Words+ product information at
              www.words-plus.com) are covered by Medicare and Medicaid, which
              accounted for 19% of Words+ revenues in fiscal 2004. SEE PARAGRAPH
              32 of service. Since such orders are treated on an accrual basis
              like any other system order, the Company does not believe that SOP
              97-2 applies to revenue recognition for Words+ products.

2.       YOU DISCLOSE THAT PCS REVENUE IS RECOGNIZED AT THE TIME OF PRODUCT
         SHIPMENT BECAUSE PCS OBLIGATIONS ARE INSIGNIFICANT. PARAGRAPH 59 OF SOP
         97-2 INCLUDES OTHER CRITERIA THAT MUST BE MET TO ALLOW FOR RECOGNITION
         OF PCS REVENUE AT THE TIME OF PRODUCT SHIPMENT, SUCH AS THE PCS
         INCLUDED WITH THE LICENSE FEE MUST BE FOR A PERIOD OF ONE YEAR OR LESS.
         WE NOTE FROM DISCLOSURES THROUGHOUT YOUR FILING THAT CERTAIN
         ARRANGEMENTS EXTEND FOR A PERIOD GREATER THAN ONE YEAR. TELL US HOW YOU
         ACCOUNT FOR THE PCS REVENUE FROM THESE MULTI-YEAR ARRANGEMENTS AND FROM
         ANY OTHER ARRANGEMENTS THAT EXTEND FOR A PERIOD GREATER THAN ONE YEAR.

              We have no PCS revenue as such. As with most software companies,
              we continue to make upgrades/enhancements to gain future sales in
              a competitive market. For sales made in the past, our contractual
              obligation has been completed. Minor technical support has proved
              to average less than 1 person-hour per year per customer over the
              past eight years, with many customers never asking for support,
              and a few needing a few hours. This low level is such that the
              costs of accounting for PCS ratably would exceed the value of the
              service provided, so we believe it is not significant enough to

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              warrant separate accounting. The Company offers free upgrades, if
              and when any are produced, to our customers during the contractual
              period and makes them available through mailed CD-ROM or FTP site
              download. All Simulations Plus software licenses are annual or
              multi-year licenses that include any upgrades that may be
              released, but no upgrades are required of us and none are
              promised. No upgrade is sold separately, such as is often done for
              perpetual licenses. Since we do not guarantee any upgrades during
              contractual periods, regardless of the length of the contractual
              period, and because actual technical support has been negligible,
              we consider our PCS to be insignificant.

3.       PARAGRAPH 59 OF SOP 97-2 STATED THAT ANOTHER CONDITION THAT MUST BE MET
         IN ORDER TO RECOGNIZE PCS REVENUE TOGETHER WITH THE INITIAL LICENSING
         FEE AT THE TIME OF DELIVERY IS THAT UNSPECIFIED UPGRADES/ENHANCEMENTS
         OFFERED DURING PCS ARRANGEMENTS MUST HISTORICALLY HAVE BEEN AND ARE
         EXPECTED TO CONTINUE TO BE MINIMAL AND INFREQUENT. CONSISTENT WITH THIS
         AUTHORITATIVE GUIDANCE, YOU STATE ON PAGE F-11 THAT ONGOING
         IMPROVEMENTS AND UPGRADES OF ANY SIGNIFICANCE ARE INFREQUENT AND
         MINIMAL IN NATURE AND TIMING. HOWEVER, FROM THE DISCLOSURES IN THE
         BUSINESS SECTION OF THE DOCUMENT (PAGES 1-8) IT WOULD APPEAR THAT
         UPGRADES/ENHANCEMENTS HAVE BEEN HISTORICALLY MORE THAN MINIMAL AND
         INFREQUENT. FOR EXAMPLE, WE NOTE THAT YOU CONTINUE TO ENHANCE
         GASTROPLUS, QMPRPLUS, AND QMPRCHITECT (PAGE3) AND THAT YOU HAVE SEVERAL
         ENHANCEMENTS AND NEW PRODUCTS SCHEDULED TO BE RELEASED IN THE 12 MONTHS
         SUBSEQUENT TO THE END OF YOUR FISCAL YEAR. EXPLAIN TO US WHY YOU
         BELIEVE UPGRADES/ENHANCEMENTS ARE INFREQUENT AND MINIMAL IN NATURE AND
         TIMING AS USED IN PARAGRAPH 59(D) OF SOP 97-2 GIVEN THE DISCLOSURES IN
         THE BUSINESS SECTION OF YOUR FORM 10-KSB.

              The majority of our software upgrades are developed as part of the
              activities directed toward the development of new additional
              modules which are sold at an additional charge to the prices
              charged before the new module was released. Often, as part of
              these development activities, we add features to the core product
              or to other previously released modules that make them compatible
              with the new module(s). Such upgrades are provided to licensees
              without charge during their license period as a matter of
              convenience for the Company (we don't want to maintain multiple
              versions of the same software) and as an incentive for existing
              users to renew their licenses when they expire.

4.       ON PAGE F-11, YOU DISCLOSE THAT FROM TIME-TO-TIME THE COMPANY ENTERS
         INTO LICENSE AGREEMENTS THAT PROVIDE FOR EXTENDED PAYMENT TERMS GREATER
         THAN ONE-YEAR AND THAT YOU BELIEVE YOU HAVE SUFFICIENT HISTORY OF
         COLLECTING FROM CUSTOMERS TO PERMIT REVENUE RECOGNITION AT DELIVERY.
         TELL US WHAT EVIDENCE YOU RELIED UPON TO ESTABLISH THAT YOU HAVE A
         STANDARD BUSINESS PRACTICE OF USING LONG-TERM OR INSTALLMENT CONTRACTS
         AND A HISTORY OF SUCCESSFULLY COLLECTING UNDER THE ORIGINAL PAYMENT
         TERMS, WHICH ARE SUFFICIENTLY SIMILAR IN NATURE AND TIMING, WITHOUT
         MAKING CONCESSIONS. IN THIS REGARDS, WE NOTE THAT THE COMPANY GENERALLY
         ENTERS INTO ONE-YEAR LICENSE AGREEMENTS WITH ITS CUSTOMERS. SEE
         PARAGRAPH 28 OF SOP 97-2. AS PART OF YOUR RESPONSE, EXPLAIN HOW YOU
         CONCLUDED THAT YOUR FEES WERE FIXED OR DETERMINABLE AT THE OUTSET OF
         THE $1.2 MILLION THREE-YEAR LICENSE ARRANGEMENT WITH ADME ENTERED INTO
         IN 2003.

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              The companies we have dealt with who have purchased multi-year
              licenses are significant global pharmaceutical companies with
              reputations for timely payment, including our own collections in
              previous years. Thus, collectibility is highly probable. In fact,
              the company has never had a failure to collect on any invoice with
              any pharmaceutical industry customer, and has never made
              concessions. Payment arrangements are done to cooperate with
              customers' budgeting systems. Please note that none of the
              payments are due after expiration of the license. In fact,
              payments are heavier in the early years and all payments are to be
              made prior to the expiration of the license. Our contract also
              provides that licenses are not cancelable and not refundable.

              With regards to the $1.2 million three-year license arrangement in
              fiscal year 2003, the licensing fee was fixed and determinable
              because the purchase order was for a fixed price and a fixed
              quantity of licenses, all of which were unlocked for the entire
              license period at the beginning, thus delivery was complete. The
              aggregate revenue attributable to all copies of the software
              products delivered is equal to the fixed fee, and we are not
              obligated to deliver additional software products under the
              arrangement (Paragraph 45 of SOP 97-2). Please note that we
              recognized the net present value of future payments using a
              discount rate of 10.7 percent.

5.       WE NOTE THAT YOU MARKET AND SELL YOUR PRODUCTS THROUGH DIRECT SALES
         CHANNELS AS WELL AS THROUGH DISTRIBUTORS AND DEALERS. SUPPLEMENTALLY
         TELL US YOUR REVENUE RECOGNITION POLICY ON SALES MADE THROUGH
         DISTRIBUTORS AND DEALERS. INDICATE HOW YOU CONFIRM THAT AN END-USER HAS
         PURCHASED YOUR PRODUCT AND THE PRODUCT HAS BEEN SHIPPED. DESCRIBE THE
         TYPE OF EVIDENCE OBTAINED FROM THE DISTRIBUTORS OR DEALERS AND
         TIMELINESS OF THIS EVIDENCE. INDICATE WHETHER THERE ARE ANY RIGHTS OF
         RETURN HELD BY THE DISTRIBUTOR, DEALERS OR END USER. IF SO, TELL US HOW
         YOUR ACCOUNTING COMPLIES WITH PARAGRAPH 5 OF SFAS 48. ALSO
         SUPPLEMENTALLY TELL US HOW MUCH REVENUE HAS BEEN RECOGNIZED FROM SALES
         BY DISTRIBUTORS AND DEALERS IN EACH OF THE PERIODS PRESENTED. TELL US
         WHAT CONSIDERATION YOU GAVE TO INCLUDING ANY OF THE FOREGOING REVENUE
         RECOGNITION POLICIES IN YOUR NOTES TO CONSOLIDATED FINANCIAL
         STATEMENTS.

              All orders from distributors are binding on the distributor with
              no right of return, and revenues were recognized at the time of
              shipment/invoicing to the distributor. Our only pharmaceutical
              software sales through a distributor have been in Japan, where we
              have had two distributors over the past seven years. For the first
              distributor, we relied on the shipping date to the distributor
              (following receipt of the distributor's purchase order to us at
              wholesale price) as our date for revenue recognition. After
              changing distributors last year, we have modified our distributor
              arrangement and we now invoice the customer directly in most
              instances, except where Japanese companies insist on ordering from
              a Japanese distributor. We receive copies of all such customer
              purchase orders from our new distributor. (Our previous
              distributor refused to provide such copies, and this was one of
              the reasons we dismissed that distributor last year). In all
              instances, orders from distributors have identified the end user
              (i.e., the Japanese pharmaceutical company for whom the order was
              being placed).

<PAGE>

              The nature of our software is that it is a significant investment
              on the part of the customer, so the usual course of business is to
              provide a free evaluation period and training either at the
              customer's site or via Internet as part of our marketing and sales
              efforts. Such activities are expensed at the time they take place.
              Customers obtain approval to order after justifying the license(s)
              to their management, which is usually an involved process and is
              not taken lightly.

              Because of this, we have never had a return of a product or cancel
              an order from either a distributor or a customer. Also, we have
              never had a failure to pay from either a distributor or a
              customer.

              We believe this history over seven years justifies the
              "probability of receipt of payment" assumption we have used in
              recognizing revenues upon receipt of a valid purchase order and
              shipment of goods, whether from a distributor or a pharmaceutical
              industry customer.

              Note: for renewal license orders, no shipment is required. For
              these orders, only a set of unlocking codes delivered by telephone
              or e-mail are required to deliver the product. In Japan, our
              distributor has a copy of the unlocking software and reports their
              unlocking activities to us. (The unlocking software is itself
              unlocked by us one month at a time for our Japanese distributors).

              Revenues recognized from our distributors for fiscal year 2004 and
              2003 were as follows:

------------- --------------------- ---------------------- ---------------------
                                                            Percentage of
                  Total Revenue       Sales to Japanese     Distributor Sales
                                         Distributor        over Total Revenue
------------- --------------------- ---------------------- ---------------------
    2004           $5,206,674            $475,724                 9.1%
------------- --------------------- ---------------------- ---------------------
    2003           $5,484,720            $300,738                 5.5%
------------- --------------------- ---------------------- ---------------------

6.       WE NOTE FROM YOUR BUSINESS SECTION THAT YOU CONDUCT CONTRACTED STUDIES
         FOR CUSTOMERS RATHER THAN LICENSING THE SOFTWARE TO THESE CUSTOMERS.
         EXPLAIN HOW YOU ACCOUNT FOR THE FEES GENERATED FROM THESE CONTRACT
         RESEARCH SERVICES. CITE THE AUTHORITATIVE LITERATURE RELIED UPON IN
         YOUR RESPONSE. ALSO TELL US WHAT CONSIDERATION WAS GIVEN TO INCLUDING A
         DESCRIPTION OF YOUR RELATED REVENUE RECOGNITION POLICY FOR THESE
         SERVICES IN YOUR NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

              The revenue from contracted studies are accounted by using the
              percentage-of-completion method, in which profit is recognized
              each period during the life of the contract in proportion to the
              amount of the contract that has been completed during the period.
              Most of the contracted studies we have done were completed within
              one month, with the exception of one study which took
              approximately three months. Since the most of them are short term,
              we bill our customer at the time of completion and revenue is
              recognized at that time. We made a progress billing, with the
              customer's approval, at the mid point (50% completion) for one
              study, which took three months to complete, and the remaining 50%
              was billed at the time of completion. We believe this method is in
              accordance with AICPA Statement of Pos