Significant Accounting Policies (Tables)

12 Months Ended

Jan. 31, 2016

Bad debt expense for fiscal years 2015 and 2014 was as follows:



	2015		2014
Bad debt expense	$	124,000	$	441,000

Property, Plant and Equipment

Property and equipment are stated at cost. Depreciation is computed using the straight-line method, over the estimated useful lives of the related assets. Estimated useful lives are as follows:



Computer equipment and software	3-4 years
Office equipment	5 years
Office furniture and fixtures	7 years
Leasehold improvements	Term of lease

Fair Value of Liabilities on a Recurring Basis

The table below provides information on our liabilities that are measured at fair value on a recurring basis:



	Total Fair Value		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
At January 31, 2016
Warrants liability (1)	$	205,000	$	—	$	—	$	205,000
Royalty liability (2)	2,292,000		—		—		2,292,000

At January 31, 2015
Warrants liability (3)	$	1,834,000	$	—	$	—	$	1,834,000
Royalty liability (2)	2,386,000		—		—		2,386,000

_______________

(1)

The initial fair value of warrants liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. See Note 4 - Derivative Liabilities, and Note 14 - Private Placement Investment for further details. Changes in fair value of the warrants are recognized within miscellaneous income in the consolidated statements of operations.

(2)

The initial fair value of royalty liability was determined by management with the assistance of an independent third-party valuation specialist, and by management thereafter. The fair value of the royalty liability is determined based on the probability-weighted revenue scenarios for the Looking Glass® Clinical Analytics solution licensed from Montefiore Medical Center (discussed in Note 3 - Acquisitions). Fair value adjustments are included within miscellaneous income in the consolidated statements of operations.


(3)	The fair value of warrants liability as of January 31, 2015 was determined by management with the assistance of an independent third-party valuation specialist using Monte-Carlo simulations. See Note 4 - Derivative Liabilities for further details.

Schedule of Capitalized Software Development Costs

Amortization expense on all internally developed software was $3,073,000 and $3,678,000 in fiscal 2015 and 2014, respectively, and was included in the consolidated statements of operations as follows:



	Fiscal Year
Amortization expense on internally developed software included in:	2015		2014
Cost of systems sales	$	2,747,000	$	3,352,000
Cost of software as a service	326,000		326,000
Total amortization expense on internally developed software	$	3,073,000	$	3,678,000

Schedule of Earnings Per Share, Basic and Diluted

The following is the calculation of the basic and diluted net loss per share of common stock:



	Fiscal Year
	2015			2014
Net loss	$	(4,290,115	)	$	(12,011,457	)
Less: deemed dividends on Series A Preferred Stock	(1,336,072		)	(1,038,310		)
Net loss attributable to common shareholders	$	(5,626,187	)	$	(13,049,767	)
Weighted average shares outstanding used in basic per common share computations	18,689,854			18,261,800
Stock options and restricted stock	—			—
Number of average shares used in diluted per common share computation	18,689,854			18,261,800
Basic net loss per share of common stock	$	(0.30	)	$	(0.71	)
Diluted net loss per share of common stock	$	(0.30	)	$	(0.71	)