5. FIXED ASSETS

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered to be impaired when the sum of the undiscounted future net cash flows expected to result from the use of the asset and its eventual disposition exceeds its carrying amount. The amount of impairment loss, if any, is measured as the difference between the net book value of the asset and its estimated fair value.

In December 2013, the Company changed its business model for the MelaFind^® system from a rental-based to a sales-based model. In accordance with this new sales model, the Company reclassified approximately $5.4 million of MelaFind^® systems from property and equipment into inventory at December 31, 2013. The systems reclassified into inventory represent new and unused systems. Systems that have been leased under the rental-based model remain in property and equipment.

Property and equipment, at cost, consists of the following:


	March 31,			December 31,			Estimated
	2014			2013			Useful Life	Useful Life

Leasehold improvements	$	905,888		$	905,888		Lease Term	Lease Term
Laboratory and research equipment		1,083,661			1,083,661		3-5 years	3-5 years
Office furniture and equipment		2,022,833			2,022,833		3-5 years	3-5 years
MelaFind^® Systems		5,081,816			5,081,816		3 years	3 years

		9,094,198			9,094,198
Accumulated depreciation and amortization		(6,098,945	)		(5,403,414	)

	$	2,995,253		$	3,690,784