ACCOUNTS RECEIVABLE

9 Months Ended

Oct. 31, 2011

ACCOUNTS RECEIVABLE

4. ACCOUNTS RECEIVABLE

Accounts receivable primarily consists of amounts due from third-party payors, including government sponsored Medicare and Medicaid programs, and insurance companies, and amounts due from hospitals, and patients. Accounts receivable are recorded and stated at the amount expected to be collected.

The Company maintains reserves for potential credit losses on accounts receivable. Management reviews the composition of accounts receivable and analyzes historical bad debts, customer concentrations, customer credit worthiness, current economic trends and changes in customer payment patterns to evaluate the adequacy of these reserves. Reserves are recorded primarily on a specific identification basis. Accounts Receivable totals $885,161, net of a provision for bad debt expense of $20,000, and represents amounts invoiced by the Company. Accounts Receivable was $704,971, net of the provision for bad debt expense of $34,746, on January 31, 2011.