NOTE 4 - CAPITALIZED SOFTWARE

The Company performed reviews of the recoverability of such capitalized software costs. Based upon the sale of BTX on November 26, 2014, a determination was made that approximately $1.8 million of capitalized software was recoverable (See Note 1). During the quarter ended October 31, 2014, the Company recognized an impairment loss of $827,000, relating to non-recoverable capitalized software development costs. The impairment charge which reduced the capitalized costs related to a specific software project to $1.8 million were based on non-recurring Level 3 fair value measurement and which are based on unobservable inputs (which reflect the Company’s internal markets assumptions) that are supported by little or no market activity and that are significant to the fair value of the asset.

The gross carrying amounts and accumulated amortization related to the acquired intangible assets as of October 31, 2014 are as follows:

Capitalized Software at April 30, 2014, net	$	3,207,305
Additions acquired		2,279
Less: amortization expense		534,730
Less: impairment loss		827,448
Capitalized Software at October 31, 2014, net	$	1,847,406

The Company incurred amortization expense associated with its finite-lived intangible assets of $267,000 and $0 for the three months ended October 31, 2014 and 2013, respectively, and $535,000 and $0 for the six months ended October 31, 2014 and 2013, respectively.