Question-and-Answer Session
Operator
Thank you, sir. (Operator instructions) The first question comes from Richard Fetyko at MCF & Company. Please go ahead.
Richard Fetyko – Merriman Curhan Ford & Co.
Good afternoon, guys.
Lee Barba
Hey, Richard.
Ida Kane
Hey, Richard.
Richard Fetyko – Merriman Curhan Ford & Co.
A few questions. First off, I just want to get some housekeeping question out of the way. First, the settlement with SEC, or the inquiry from SEC, sounds like you – I wasn't clear whether you’ve reached an agreement and that ends the inquiry?
Lee Barba
No. Richard, that's – it’s an informal non-public inquiry. It is continuing, and there has not been a settlement reached, nor could we comment on one.
Richard Fetyko – Merriman Curhan Ford & Co.
Okay. So the $1.5 million is simply related to the legal expenses associated with it?
Lee Barba
Sorry, Richard. By way of clarifying, there was a separate agreement reached with a political entity in California relating to a completely different, unrelated with regard to specific language in our sales contracts. And we reached a settlement, at this point, subject to final documentation with that entity. That is included, the settlement, in the $1.5 million, which includes larger than normal legal fees related to both matters.
Richard Fetyko – Merriman Curhan Ford & Co.
Okay. Got it. And then, there was also $1 million expense related to the SAP implementation that ran through the P&L instead of CapEx? Is that correct?
Lee Barba
Yes. Ida can comment. The difference is, until you launch – it's an accounting policy –until you actually launch the product into utilization, you capitalize the cost, which is what we've done. When the product was launched at the end of last year, now you expense any costs related to that rollout. And Ida, is that correct?
Ida Kane
Well the only thing I'll add to that is that's the last phase. We rolled out to our sales and marketing organizations in December. And so that's the last kind of bubble, if you will, on the expense side related to that SAP project.
Richard Fetyko – Merriman Curhan Ford & Co.
Okay. All right. Thanks for clarifying that.
Lee Barba
Sure.
Richard Fetyko – Merriman Curhan Ford & Co.
And then more on to sort of the business related stuff. You mentioned in April you acquired over 6,000 graduates. I missed the exact number. And if so, it sounds like the pricing strategy is working—
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