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Note 5 - Capitalized Software Costs

3 Months Ended

Apr. 30, 2021

5.	CAPITALIZED SOFTWARE COSTS

Capitalized software costs and accumulated amortization at April 30, 2021 and January 31, 2021 were as follows:

	April 30, 2021			January 31, 2021
	(in thousands)
Capitalized software costs:
Capitalized software development costs	$	3,671		$	3,655
Acquired software technology		9,391			6,191
Impact of foreign currency translation		7			-
		13,069			9,846
Less accumulated amortization		(2,224	)		(1,866	)
Capitalized software costs, net	$	10,845		$	7,980

The Company’s capitalized software development costs relate to translations and localizations of QAD Adaptive Applications. Acquired software technology costs relate to intellectual property purchased during the second and third quarters of fiscal 2019, the fourth quarter of fiscal 2021 and the first quarter of fiscal 2022.

It is the Company’s policy to write off capitalized software development costs once fully amortized. Accordingly, during the first three months of fiscal 2022, approximately $0.3 million of costs and accumulated amortization were removed from the Condensed Consolidated Balance Sheet, related to capitalized software development costs which were fully amortized during the first three months of fiscal 2022.

Amortization of capitalized software costs was $0.7 million and $0.3 million for the three months ended April 30, 2021 and 2020, respectively. Amortization of capitalized software costs is included in “Cost of subscription” and “Cost of license” in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

The following table summarizes the estimated amortization expense relating to the Company’s capitalized software costs as of April 30, 2021 (in thousands):

Fiscal Years	Cost of License		Cost of Subscription		Total
2022 remaining	$	847	$	1,389	$	2,236
2023		808		1,852		2,660
2024		363		1,852		2,215
2025		24		1,852		1,876
Thereafter		-		1,858		1,858
	$	2,042	$	8,803	$	10,845