Significant Accounting Policies (Tables)

12 Months Ended

Jan. 31, 2017

Bad debt expense for fiscal years 2016 and 2015 was as follows:



	2016		2015
Bad debt expense	$	121,000	$	124,000

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 or estimated useful life, whichever is shorter

Schedule of Capitalized Software Development Costs

Amortization expense on all internally-developed software was $2,771,000 and $3,073,000 in fiscal 2016 and 2015, respectively, and was included in the consolidated statements of operations as follows:



	Fiscal Year
Amortization expense on internally-developed software included in:	2016		2015
Cost of systems sales	$	2,495,000	$	2,747,000
Cost of software as a service	271,000		326,000
Cost of audit services	5,000		—
Total amortization expense on internally-developed software	$	2,771,000	$	3,073,000

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, 2017
Warrants liability (1)	$	46,000	$	—	$	—	$	46,000
Royalty liability (2)	2,351,000		—		—		2,351,000

At January 31, 2016
Warrants liability (1)	$	205,000	$	—	$	—	$	205,000
Royalty liability (2)	2,292,000		—		—		2,292,000

_______________

(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 to our consolidated financial statements included in Part II, Item 8 herein 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 and Divestitures to our consolidated financial statements included in Part II, Item 8 herein). Fair value adjustments are included within miscellaneous income in the consolidated statements of operations.

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
	2016			2015
Net loss	$	(5,161,566	)	$	(4,290,115	)
Less: deemed dividends on Series A Preferred Stock	(875,935		)	(1,336,072		)
Net loss attributable to common shareholders	$	(6,037,501	)	$	(5,626,187	)
Weighted average shares outstanding - Basic	19,528,341			18,689,854
Stock options and restricted stock	—			—
Weighted average shares outstanding - Diluted	19,528,341			18,689,854
Basic net loss per share of common stock	$	(0.31	)	$	(0.30	)
Diluted net loss per share of common stock	$	(0.31	)	$	(0.30	)