Annual report pursuant to Section 13 and 15(d)

Segment Information

v3.5.0.2
Segment Information
12 Months Ended
Oct. 31, 2010
Segment Reporting [Abstract]  
Segment Information

NOTE 15 - SEGMENT INFORMATION

 

Due to the nature of our businesses, we are operating in two reportable segments, which are managed separately based upon fundamental differences in their operations. Martech, Dragon, Colmek, Tactical and Innalogic operate as contractors, and the balance of our operations is comprised of product sales.

 

Segment operating income is total segment revenue reduced by operating expenses identifiable with the business segment. Corporate includes general corporate administrative costs.

 

The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies.

 

There are inter-segment sales between our engineering contracting businesses and our products businesses, which have been removed from the information shown below.

 

The following table summarizes asset and operating balances by reportable segment.

 

    October 31, 2010     October 31, 2009  
    Contracting     Products     Corporate     Contracting     Products     Corporate  
Current assets, excl. interco.   $ 2,365,546     $ 1,996,444     $ 1,324,982     $ 3,033,658     $ 2,706,461     $ 1,636,319  
Property and equipment, net     18,131       62,221       34,117       98,277       99,131       70,556  
Deferred financing costs     -       -       -       -       -       1,271,170  
Goodwill     3,037,260       369,945       -       3,462,224       62,315       -  
Other intangible assets     445,644       -       68,998       640,928       -       56,341  
Total assets     5,866,581       2,428,610       1,428,097       7,235,301       2,867,907       3,034,386  
                                                 
Current liabilities, excl. interco.     2,791,350       2,953,940       16,854,297       3,062,818       1,253,173       3,502,967  
Long term liabilities     -       160,350       -       -       165,594       13,067,929  
Total liabilities     2,791,350       3,114,290       16,854,297       3,062,818       1,418,767       16,570,896  
                                                 
Capital expenditure     -       -       -       7,825       32,747       7,186  

  

    Year ended October 31, 2010     Year ended October 31, 2009  
Revenues   $ 7,152,989     $ 4,352,223     $ 4,721     $ 8,355,041     $ 4,869,393     $ -  
Gross profit (loss)     2,859,903       2,469,676       4,721       3,033,337       3,875,137       -  
                                                 
Research and development     -       1,762,035       -       2,240,189       412,524       -  
Selling, general & administrative     2,918,173       2,931,157       533,268       2,493,261       1,679,450       6,824,122  
Stock based compensation     -       *51,771       -       73,305       -       217,417  
Depreciation & amortization     *316,472       *66,795       *33,182       311,246       98,677       279,821  
                                                 
Total operating expenses     2,918,173       4,693,192       533,268       4,733,450       2,091,974       6,824,122  
                                                 
Operating income (loss)     (58,270 )     (2,223,516 )     (528,547 )     (1,700,113 )     1,783,163       (6,824,122 )
                                                 
Other income     1,636       916,363       833,478       343,834       (153,494 )     11,408  
Interest expense     (130,307 )     (91,562 )     (1,783,967 )     (184,396 )     (27,722 )     (1,634,765 )
Amortization of deferred financing costs     -       -       (1,271,170 )     -       -       (242,128 )
Impairment of investment     -       -       -       -       -       (782,595 )
Gain on change in fair value of derivative liability     -       -       2,557,546       -       -       -  
Net income (loss) before income taxes   $ (186,941 )   $ (1,398,715 )   $ (192,660 )   $ (1,540,675 )   $ 1,601,947     $ (9,472,202 )

 

*) These amounts are included in the amounts stated for Selling, general and administrative

 

The Company’s reportable business segments operate in two geographic locations. Those geographic locations are:

 

* United States

* Europe

 

The Company evaluates performance and allocates resources based upon operating income. The accounting policies of the reportable segments are the same as those described in the summary of accounting policies. There are inter-segment sales which have been removed upon consolidation and for the purposes of the information shown below.

 

Information concerning principal geographic areas is presented below according to the area where the activity is taking place for the years ended October 31, 2010 and 2009 respectively:

 

    2010     2009  
Revenues:                
United States   $ 5,791,411     $ 5,939,535  
Europe     5,718,522       7,284,899  
Corporate and other     -       -  
Total Revenues   $ 11,509,933     $ 13,224,435  
                 
Assets:                
United States   $ 4,029,742     $ 5,882,644  
Europe     5,006,304       4,220,350  
Corporate and other     687,242       3,034,386  
Total Assets   $ 9,723,288     $ 13,137,380