Reclassification Adjustment

12 Months Ended

Mar. 31, 2014

Reclassification Adjustment

Reclassification Adjustment

2. Reclassification Adjustment

During the year ended March 31, 2014, the Company corrected an error in the classification of its hosting services revenues to reclassify the revenues from licenses to services revenues.  The Company also corrected the classification of related hosting service costs to reclassify the costs from research and development to cost of service revenue. Management has evaluated the materiality of the reclassification adjustments in fiscal 2013 and on each of the quarterly and year-to-date periods during the nine months ended December 31, 2013 both quantitatively and qualitatively and concluded that the errors were immaterial in each of the prior periods.

The Company has revised the accompanying consolidated statement of comprehensive loss for the year ended March 31, 2013 to 1) decrease license revenue by approximately $237,000 and increase services revenue by the same amount, and 2) decrease research and development costs by approximately $109,000 and increase cost of service revenue by the same amount. The Company also revised the presentation of revenues and costs during each of the quarters during the nine months ended December 31, 2013, as follows (in thousands):

	Quarter Ended						Fiscal Year Ended
	June 30, 2013		September 30, 2013		December 31, 2013		March 31, 2013
As orginally reported:
(adjusted for sale of MDMS business)
Licenses	$	913	$	937	$	912	$	2,327
Services	454		580		530		1,450
Total net revenues	$	1,367	$	1,517	$	1,442	$	3,777
Operating expenses:
Cost of service revenue	$	100	$	106	$	103	$	246
Research and development	$	1,026	$	1,121	$	1,234	$	3,806
As corrected:
Licenses	$	649	$	616	$	591	$	2,090
Services	718		901		851		1,687
Total net revenues	$	1,367	$	1,517	$	1,442	$	3,777
Operating expenses:
Cost of service revenue	$	127	$	137	$	159	$	355
Research and development	$	999	$	1,090	$	1,178	$	3,697