The Company follows SFAS No. 128, "Earnings per Share." SFAS No. 128 requires the presentation of two amounts, basic earnings per share and diluted earnings per share. Basic earnings per share is calculated by dividing net income by the weighted average number of shares of common stock and special common stock outstanding during the period. Diluted earnings per share is computed using the weighted average number of common stock and special common stock outstanding during the period, plus the dilutive effect of common stock equivalents.

In accordance with FAS 109, the Company recognizes deferred tax assets and liabilities for the expected consequences of temporary differences between the financial statement basis and tax basis of the Company’s assets and liabilities. A deferred tax valuation allowance is established if, in management’s opinion, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Actual results could differ from those estimates.

Property and equipment consists of the following:

Depreciation and amortization expense relating to fixed assets was $536, $676 and $668 for the years ended March 31, 2001, 2000 and 1999, respectively, of which $22, $13 and $37, respectively, related to amortization of office furniture and equipment held under capital leases. Accumulated amortization of office furniture and equipment held under capital leases was approximately $122, $100 and $87 at March 31, 2001, 2000 and 1999, respectively.

4. ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following: