Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jan. 31, 2014 | Mar. 14, 2014 | |
Document And Entity Information | ' | ' |
Entity Registrant Name | 'Pharma-Bio Serv, Inc. | ' |
Entity Central Index Key | '0001304161 | ' |
Document Type | '10-Q | ' |
Document Period End Date | 31-Jan-14 | ' |
Amendment Flag | 'false | ' |
Current Fiscal Year End Date | '--10-31 | ' |
Is Entity a Well-known Seasoned Issuer? | 'No | ' |
Is Entity a Voluntary Filer? | 'No | ' |
Is Entity's Reporting Status Current? | 'Yes | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Common Stock, Shares Outstanding | ' | 23,049,462 |
Document Fiscal Period Focus | 'Q1 | ' |
Document Fiscal Year Focus | '2014 | ' |
Consolidated_Balance_Sheets_Un
Consolidated Balance Sheets (Unaudited) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
ASSETS: | ' | ' |
Cash and cash equivalents | $13,782,775 | $12,045,923 |
Marketable securities | 64,124 | 71,260 |
Accounts receivable | 5,671,395 | 7,403,987 |
Other | 658,729 | 767,452 |
Total current assets | 20,177,023 | 20,288,622 |
Property and equipment | 884,477 | 976,423 |
Other assets | 16,839 | 16,891 |
Total assets | 21,078,339 | 21,281,936 |
LIABILITIES AND STOCKHOLDERS' EQUITY: | ' | ' |
Current portion-obligations under capital leases | 27,680 | 32,188 |
Accounts payable and accrued expenses | 1,844,385 | 2,825,532 |
Income taxes payable | 419,238 | 322,731 |
Total current liabilities | 2,291,303 | 3,180,451 |
Obligations under capital leases | 45,873 | 51,724 |
Total liabilities | 2,337,176 | 3,232,175 |
Stockholders' equity: | ' | ' |
Preferred Stock, $0.0001 par value; authorized 10,000,000 shares; none outstanding | 0 | 0 |
Common Stock, $0.0001 par value; authorized 50,000,000 shares; issued and outstanding 23,043,094 and 22,702,186 shares at January 31, 2014 and October 31, 2013, respectively | 2,304 | 2,271 |
Additional paid-in capital | 978,136 | 931,039 |
Retained earnings | 17,855,106 | 17,193,203 |
Accumulated other comprehensive loss | -94,383 | -76,752 |
Total stockholders' equity | 18,741,163 | 18,049,761 |
Total liabilities and stockholders' equity | $21,078,339 | $21,281,936 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
Stockholders' equity: | ' | ' |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, Authorized | 10,000,000 | 10,000,000 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, Authorized | 50,000,000 | 50,000,000 |
Common stock, Issued | 23,043,094 | 22,702,186 |
Common stock, outstanding | 23,043,094 | 22,702,186 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (Unaudited) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Income Statement [Abstract] | ' | ' |
REVENUES | $7,007,652 | $7,654,392 |
COST OF SERVICES | 4,635,451 | 5,087,624 |
GROSS PROFIT | 2,372,201 | 2,566,768 |
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES | 1,544,581 | 1,276,464 |
INCOME FROM OPERATIONS | 827,620 | 1,290,304 |
OTHER INCOME, NET | 0 | 229 |
INCOME BEFORE INCOME TAXES | 827,620 | 1,290,533 |
INCOME TAX EXPENSE | 165,687 | 237,288 |
NET INCOME | $661,933 | $1,053,245 |
BASIC EARNINGS PER COMMON SHARE | $0.03 | $0.05 |
DILUTED EARNINGS PER COMMON SHARE | $0.03 | $0.05 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC | 22,776,093 | 20,785,934 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED | 23,725,279 | 22,818,031 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Consolidated Statements Of Comprehensive Income | ' | ' |
NET INCOME | $661,933 | $1,053,245 |
OTHER COMPREHENSIVE (LOSS) INCOME, NET OF RECLASSIFICATION ADJUSTMENTS AND TAXES: | ' | ' |
Foreign currency translation (loss) gain | -10,495 | 28,360 |
Net unrealized losses on available-for-sale securities | -7,136 | 0 |
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME | -17,631 | 28,360 |
COMPREHENSIVE INCOME | $644,302 | $1,081,605 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ' | ' |
Net income | $661,933 | $1,053,245 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Stock-based compensation | 17,100 | 2,166 |
Depreciation and amortization | 91,655 | 81,078 |
Decrease (increase) in accounts receivable | 1,731,636 | -66,693 |
Decrease (increase) in other assets | 108,691 | -57,849 |
Decrease in liabilities | -859,363 | -568,961 |
NET CASH PROVIDED BY OPERATING ACTIVITIES | 1,751,652 | 442,986 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ' | ' |
Acquisition of property and equipment | 0 | -81,455 |
NET CASH USED IN INVESTING ACTIVITIES | 0 | -81,455 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ' | ' |
Proceeds from issuance of common stock | 0 | 109,859 |
Payments on obligations under capital lease | -10,359 | -9,563 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | -10,359 | 100,296 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | -4,441 | 12,011 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 1,736,852 | 473,838 |
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD | 12,045,923 | 6,538,113 |
CASH AND CASH EQUIVALENTS - END OF PERIOD | 13,782,775 | 7,011,951 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION: | ' | ' |
Income taxes | 69,180 | 146,224 |
Interest | 1,305 | 2,100 |
SUPPLEMENTARY SCHEDULES OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ' | ' |
Income tax withheld by clients to be used as a credit in the Company's income tax return | 9,070 | 0 |
Conversion of cashless exercise of warrants and options to shares of common stock | 30 | 0 |
Issuance of common stock pursuant to agreement with investor relations firm | $30,000 | $60,000 |
A_ORGANIZATION_AND_SUMMARY_OF_
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended | ||
Jan. 31, 2014 | |||
A. Organization And Summary Of Significant Accounting Policies | ' | ||
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||
ORGANIZATION | |||
Pharma-Bio Serv, Inc. (“Pharma-Bio”) is a Delaware corporation organized on January 14, 2004. Pharma-Bio is the parent company of Pharma-Bio Serv PR, Inc. (“Pharma-PR”), Pharma Serv, Inc. (“Pharma-Serv”), both Puerto Rico corporations, Pharma-Bio Serv US, Inc. (“Pharma-US”), a Delaware corporation, Pharma-Bio Serv Validation & Compliance Limited (“Pharma-IR”), an Irish corporation, and Pharma-Bio Serv SL (“Pharma-Spain”), a Spanish limited liability company. Pharma-Bio, Pharma-PR, Pharma Serv, Pharma-US, Pharma-IR and Pharma-Spain are collectively referred to as the “Company.” The Company operates in Puerto Rico, the United States, Ireland and Spain under the name of Pharma-Bio Serv and is engaged in providing technical compliance consulting service, and microbiological and chemical laboratory testing services primarily to the pharmaceutical, chemical, medical device and biotechnology industries. | |||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
The condensed consolidated balance sheet of the Company as of October 31, 2013 is derived from audited consolidated financial statements but does not include all disclosures required by generally accepted accounting principles. The unaudited interim condensed consolidated financial statements, include all adjustments, consisting of normal recurring adjustments, which are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations and cash flows for the interim periods. The results of operations for the three months ended January 31, 2014 are not necessarily indicative of expected results for the full 2014 fiscal year. | |||
The accompanying financial data as of January 31, 2014, and for the three-month period ended January 31, 2014 and 2013 has been prepared by us, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally contained in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our audited Consolidated Financial Statements and the notes thereto for the fiscal year ended October 31, 2013. | |||
Consolidation | |||
The accompanying condensed consolidated financial statements include the accounts of the Company and all of its wholly owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |||
Use of Estimates | |||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. | |||
Fair Value of Financial Instruments | |||
Accounting standards have established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting standards have established three levels of inputs that may be used to measure fair value: | |||
Level 1: | Quoted prices in active markets for identical assets and liabilities. | ||
Level 2: | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | ||
Marketable securities available-for-sale consist of U.S. Treasury securities and an obligation from the Puerto Rico Government Development Bank valued using quoted market prices in active markets. Accordingly, these securities are categorized in Level 1. | |||
The carrying value of the Company's financial instruments (excluding marketable securities and obligations under capital leases), cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to their liquidity or short-term nature. Management believes, based on current rates, that the fair value of its obligations under capital leases approximates the carrying amount. | |||
Revenue Recognition | |||
Revenue is primarily derived from: (1) time and materials contracts (representing approximately 93% of total revenues), which is recognized by applying the proportional performance model, whereby revenue is recognized as performance occurs, (2) short-term fixed-fee contracts or "not to exceed" contracts (representing approximately 1% of total revenues), which revenue is recognized similarly, except that certain milestones also have to be reached before revenue is recognized, and (3) laboratory testing revenue (representing approximately 6% of total revenues) is mainly recognized as the testing is completed and certified (normally within days of sample receipt from customer). If the Company determines that a contract will result in a loss, the Company recognizes the estimated loss in the period in which such determination is made. | |||
Cash Equivalents | |||
For purposes of the consolidated statements of cash flows, cash equivalents include investments in a money market obligations trust that is registered under the U.S. Investment Company Act of 1940, as amended, and liquid investments with original maturities of three months or less. | |||
Marketable Securities | |||
We consider our marketable security investment portfolio and marketable equity investments as available-for-sale and, accordingly, these investments are recorded at fair value with unrealized gains and losses generally recorded in other comprehensive income; whereas realized gains and losses are included in earnings and determined based on the specific identification method. | |||
Accounts Receivable | |||
Accounts receivable are recorded at their estimated realizable value. Accounts are deemed past due when payment has not been received within the stated time period. The Company's policy is to review individual past due amounts periodically and write off amounts for which all collection efforts are deemed to have been exhausted. Due to the nature of the Company’s customers, bad debts are mainly accounted for using the direct write-off method whereby an expense is recognized only when a specific account is determined to be uncollectible. The effect of using this method approximates that of the allowance method. | |||
Income Taxes | |||
The Company follows an asset and liability approach method of accounting for income taxes. This method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. | |||
The Company follows guidance from the Financial Accounting Standards Board (“FASB”) related to Accounting for Uncertainty in Income Taxes, which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. As of January 31, 2014, the Company had no significant uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. | |||
Property and equipment | |||
Owned property and equipment, and leasehold improvements are stated at cost. Vehicles under capital leases are stated at the lower of fair market value or net present value of the minimum lease payments at the inception of the leases. | |||
Depreciation and amortization of owned assets are provided for, when placed in service, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using straight-line basis. Assets under capital leases and leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or initial lease term. Major renewals and betterments that extend the life of the assets are capitalized, while expenditures for repairs and maintenance are expensed when incurred. As of January 31, 2014 and October 31, 2013, the accumulated depreciation and amortization amounted to $1,972,001 and $1,880,346, respectively. | |||
The Company evaluates for impairment its long-lived assets to be held and used, and long-lived assets to be disposed of, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on management estimates, no impairment of the operating properties was present. | |||
Stock-based Compensation | |||
Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of awards that will be forfeited. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at the grant date. Excess tax benefits related to stock-based compensation are reflected as cash flows from financing activities rather than cash flows from operating activities. The Company has not recognized such cash flow from financing activities since there has been no tax benefit related to the stock-based compensation. | |||
Income Per Share of Common Stock | |||
Basic income per share of common stock is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted income per share includes the dilution of common stock equivalents, which include principally shares that may be issued upon the exercise of warrants, stock option and restricted stock unit awards. | |||
The diluted weighted average shares of common stock outstanding were calculated using the treasury stock method for the respective periods. | |||
Foreign Operations | |||
The functional currency of the Company’s foreign subsidiaries is its local currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for subsidiaries using a functional currency other than the U.S. dollar is included as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income. | |||
The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income, while gains and losses resulting from the remeasurement of intercompany receivables from those international subsidiaries for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statements of operations. The net gains and losses recorded in the condensed consolidated statements of income were not significant for the periods presented. | |||
Reclassifications | |||
Certain reclassifications have been made to the January 31, 2013 condensed consolidated financial statements to conform them to the January 31, 2014 condensed consolidated financial statements presentation. Such reclassifications do not affect net income as previously reported. | |||
Recently issued and adopted accounting standards | |||
Recently issued FASB pronouncements, and SEC Staff Accounting Bulletins, have either been implemented or are not applicable to the Company. |
B_MARKETABLE_SECURITIES_AVAILA
B. MARKETABLE SECURITIES AVAILABLE FOR SALE | 3 Months Ended | |||||||||||||||
Jan. 31, 2014 | ||||||||||||||||
Text Block [Abstract] | ' | |||||||||||||||
B. MARKETABLE SECURITIES AVAILABLE FOR SALE | ' | |||||||||||||||
The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale securities by type of security were as follows as of January 31, 2014 and October 31, 2013: | ||||||||||||||||
Type of security as of January 31, 2014 | Amortized Cost | Gross | Estimated | |||||||||||||
Unrealized Gains | Gross | Fair Value | ||||||||||||||
Unrealized | ||||||||||||||||
Losses | ||||||||||||||||
U.S. Treasury securities | $ | 4,500,000 | $ | — | $ | — | $ | 4,500,000 | ||||||||
Other government-related debt securities: | ||||||||||||||||
Puerto Rico Commonwealth Government Development Bond | 95,000 | — | (30,876 | ) | 64,124 | |||||||||||
Total interest-bearing and available-for-sale securities | $ | 4,595,000 | $ | — | $ | (30,876 | ) | $ | 4,564,124 | |||||||
Type of security as of October 31, 2013 | Amortized Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized Gains | Unrealized | Fair Value | ||||||||||||||
Losses | ||||||||||||||||
U.S. Treasury securities | $ | $4,500,000 | $ | — | $ | — | $ | 4,500,000 | ||||||||
Other government-related debt securities: | ||||||||||||||||
Puerto Rico Commonwealth Government Development Bond | 95,000 | — | (23,740 | ) | 71,260 | |||||||||||
Total interest-bearing and available-for-sale securities | $ | $4,595,000 | $ | — | $ | (23,740 | ) | $ | 4,571,260 | |||||||
At January 31, 2014 and October 31, 2013, the above marketable securities included a $95,000 5.4% Puerto Rico Commonwealth Government Development Bank Bond, purchased at par and maturing in August 2019. | ||||||||||||||||
The fair values of available-for-sale securities by classification in the Consolidated Balance Sheets were as follows as of January 31, 2014 and October 31, 2013: | ||||||||||||||||
Classification in the Consolidated Balance Sheets | January 31, | October 31, | ||||||||||||||
2014 | 2013 | |||||||||||||||
Cash and cash equivalents | $ | 4,500,000 | $ | 4,500,000 | ||||||||||||
Marketable securities | 64,124 | 71,260 | ||||||||||||||
Total available-for-sale securities | $ | 4,564,124 | $ | 4,571,260 | ||||||||||||
Cash and cash equivalents in the table above exclude cash in banks of approximately $9.3 and $7.5 million as of January 31, 2014 and October 31, 2013, respectively. | ||||||||||||||||
The primary objectives of the Company’s investment portfolio are liquidity and safety of principal. Investments are made with the objective of achieving the highest rate of return consistent with these two objectives. Our investment policy limits investments to certain types of debt and money market instruments issued by institutions primarily with investment grade credit ratings and places restrictions on maturities and concentration by type and issuer. | ||||||||||||||||
We review our available-for-sale securities for other-than-temporary declines in fair value below their recorded basis on a quarterly basis and whenever events or changes in circumstances indicate that the recorded basis of an asset may not be recoverable. This evaluation is based on a number of factors including, the length of time and extent to which the fair value has been less than our recorded basis and adverse conditions specifically related to the security including any changes to the rating of the security by a rating agency. As of January 31, 2014 and October 31, 2013, we believe that the recorded base for our available-for-sale securities were recoverable in all material respects. |
C_INCOME_TAXES
C. INCOME TAXES | 3 Months Ended |
Jan. 31, 2014 | |
Income Tax Disclosure [Abstract] | ' |
C. INCOME TAX | ' |
In June 2011, Pharma-Bio, Pharma-PR and Pharma-Serv obtained a Grant of Industrial Tax Exemption pursuant to the terms and conditions set forth in Act No. 73 of May 28, 2008 (“the Grant”) issued by the Puerto Rico Industrial Development Company (“PRIDCO”). The Grant was effective as of November 1, 2009 and covers a fifteen year period. The Grant provides relief on various Puerto Rico taxes, including income tax, with certain limitations, for most of the activities carried on within Puerto Rico, including those that are for services to parties located outside of Puerto Rico. The Grant establishes a threshold (“Baseline”) on the Industrial Development Income (“IDI”) subject to the favorable income tax rates. Within a four year term ending with the taxable year ending October 31, 2013, the Baselines were gradually reduced to zero. Certain activities covered under the Grant were not subject to a Baseline and were allowed a four year gradual phase-in from the maximum income tax rate of 30%, as provided by the 1994 Puerto Rico Internal Revenue Code, to the favorable fixed Act 73 income tax rate of 4%, which is effective to the taxable year ended in October 31, 2013. In addition, IDI earnings distributions accumulated since November 1, 2009 are totally exempt from Puerto Rico earnings distribution tax. | |
Effective with our fiscal year ended October 31, 2014, Puerto Rico operations not covered in the exempt activities of the Grant are subject to Puerto Rico income tax at a maximum tax rate of 39% as provided by the 1994 Puerto Rico Internal Revenue Code, as amended. The operations carried out in the United States by the Company’s subsidiary are taxed in the United States at a maximum regular federal income tax rate of 35%. | |
Distribution of earnings by the Puerto Rican subsidiaries to its parent are taxed at the federal level, however, the parent is able to receive a credit for the taxes paid by the subsidiary on its operations in Puerto Rico, to the extent of the federal taxes that result from those earnings. As a result, the income tax expense of the Company, under its present corporate structure, would normally be the Puerto Rico taxes on operations in Puerto Rico, federal taxes on operations in the United States, plus the earnings distribution tax in Puerto Rico from dividends paid to the Puerto Rican subsidiaries’ parent, and the parent’s federal income tax, if any, incurred upon the subsidiary’s earnings distribution. | |
Deferred income tax assets and liabilities are computed for differences between the consolidated financial statements and tax bases of assets and liabilities that will result in taxable or deductible amounts in the future, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. | |
The Company has not recognized deferred income taxes on undistributed earnings of its Puerto Rican subsidiaries, since such earnings are considered to be reinvested indefinitely. If the earnings were distributed in the form of dividends, the Company would be subject to Puerto Rico earnings distribution tax and United States federal income tax, as applicable. | |
Pharma-Spain and Pharma-IR have unused operating losses which result in a potential deferred tax asset. However, an allowance has been provided covering the total amount of such balance since it is uncertain whether the net operating losses can be used to offset future taxable income before their expiration dates. Realization of future tax benefits related to a deferred tax asset is dependent on many factors, including the company’s ability to generate taxable income. Accordingly, the income tax benefit will be recognized when realization is determined to be more probable than not. These net operating losses are available to offset future taxable income until October 31, 2018 for Pharma-Spain and indefinitely for Pharma-IR. | |
The statutory income tax rate differs from the effective rate, mainly due to the effect of the Puerto Rico Act 73 Tax Grant over income tax expense, and income tax permanent differences between financial and tax books income. | |
The Company files income tax returns in the United States (federal and various states jurisdictions), Puerto Rico and Ireland. The 2010 (2009 for Puerto Rico) through 2013 tax years are open and may be subject to potential examination in one or more jurisdictions. Currently, the Company has no federal, state, Puerto Rico or foreign income tax examination. |
D_WARRANTS
D. WARRANTS | 3 Months Ended |
Jan. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
D. WARRANTS | ' |
At October 31, 2013, the Company had outstanding warrants to purchase 240,800 shares of the Company’s common stock at an exercise price of $0.06. In January 2014, all of these warrants were exercised on a cashless basis, resulting in a net issuance of 233,763 shares of common stock. As of January 31, 2014, the Company had no warrants outstanding. |
E_CAPITAL_TRANSACTIONS
E. CAPITAL TRANSACTIONS | 3 Months Ended |
Jan. 31, 2014 | |
Notes to Financial Statements | ' |
E. CAPITAL TRANSACTIONS | ' |
On January 23, 2013, the Company entered into an agreement with an investor relations firm to assist in the Company’s shareholder communication efforts. For these services, in addition to a monthly fee of $10,000, the Company agreed to issue to the investor relations firm a total of 150,000 shares during the one year term of the agreement (75,000, 37,500 and 37,500 shares in January 2013, July 2013 and January 2014, respectively). As of January 31, 2014, pursuant to the terms of the agreement with the investor relations firm, all shares were issued. Effective February 1, 2014, the agreement with the investor relations firm was renegotiated for a term of one year. Under the new provisions of the agreement, the Company will no longer grant common shares to the investor relations firm, all other provisions of the original agreement were maintained. | |
During the three months ended January 31, 2014, in addition to the 37,500 common shares issued pursuant to the agreement with the investor relations firm, warrants and options were exercised on a cashless basis resulting in a net issuance of the Company’s common shares in the aggregate amount of 233,763 and 69,645, respectively. |
F_EARNINGS_PER_SHARE
F. EARNINGS PER SHARE | 3 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
F. EARNINGS PER SHARE | ' | ||||||||
The following data shows the amounts used in the calculations of basic and diluted earnings per share. | |||||||||
Three months | |||||||||
ended January 31, | |||||||||
2014 | 2013 | ||||||||
Net income available to common equity holders - used to compute basic and diluted earnings per share | $ | 661,933 | $ | 1,053,245 | |||||
Weighted average number of common shares - used to compute basic earnings per share | 22,776,093 | 20,785,934 | |||||||
Effect of warrants to purchase common stock | 190,387 | 1,892,881 | |||||||
Effect of restricted stock units to common stock | 17,345 | - | |||||||
Effect of options to purchase common stock | 741,454 | 139,216 | |||||||
Weighted average number of shares - used to compute diluted earnings per share | 23,725,279 | 22,818,031 | |||||||
Options for the purchase of 80,000 shares of common stock for the three-month period ended in January 31, 2014 were not included in computing diluted earnings per share because their effect were antidilutive. |
G_CONCENTRATIONS_OF_RISK
G. CONCENTRATIONS OF RISK | 3 Months Ended |
Jan. 31, 2014 | |
Risks and Uncertainties [Abstract] | ' |
G. CONCENTRATIONS OF RISK | ' |
Cash and cash equivalents | |
The Company domestic cash and cash equivalents consist of cash deposits in FDIC insured banks (substantially covered by FDIC insurance by the spread of deposits in multiple FDIC insured banks), a money market obligations trust registered under the US Investment Company Act of 1940, as amended, and U.S. Treasury securities with maturities of three months or less. In the foreign markets we serve, we also maintain cash deposits in foreign banks, which tend to be not significant and have no specific insurance. No losses have been experienced or are expected on these accounts. | |
Accounts receivable and revenues | |
Management deems all of its accounts receivable to be fully collectible, and, as such, does not maintain any allowances for uncollectible receivables. | |
The Company's revenues, and the related receivables, are concentrated in the pharmaceutical industry in Puerto Rico, the United States of America, Ireland and Spain. Although a few customers represent a significant source of revenue, the Company’s functions are not a continuous process, accordingly, the client base for which the services are typically rendered, on a project-by-project basis, changes regularly. | |
The Company provided a substantial portion of its services to three customers, which accounted for 10% or more of its revenues in either of the three-month periods ended January 31, 2014 and 2013. During the three months ended January 31, 2014, revenues from these customers were 24.7%, 15.0%, and 6.1%, or a total of 45.8%, as compared to the percentages for the same period last year of 28.3%, 13.5%, and 13.1%, or a total of 54.9%, respectively. At January 31, 2014, amounts due from these customers represented 32.4% of the Company’s total accounts receivable balance. | |
The information related to major customers in the above paragraph is based on revenues earned from said customers at the segment level because in management’s opinion contracts by segments are totally independent of each other, and therefore such information is more meaningful to the reader. These revenues pertain to two global groups of affiliated companies. During the three months ended January 31, 2014, aggregate revenues from these global groups of affiliated companies were 45.3% and 6.1%, or a total of 51.4%, as compared to the same period last year for 51.4% and 13.1%, or a total of 64.5%, respectively. At January 31, 2014 amounts due from these global groups of affiliated companies represented 42.7% of total accounts receivable balance. |
H_SEGMENT_DISCLOSURES
H. SEGMENT DISCLOSURES | 3 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
H. SEGMENT DISCLOSURES | ' | ||||||||
The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the Company’s senior executive management to determine resource allocation and assess performance. Each reportable segment is managed by its own management team and reports to executive management. The Company has four reportable segments: (i) Puerto Rico technical compliance consulting, (ii) United States technical compliance consulting, (iii) Europe technical compliance consulting, and (iv) a Puerto Rico microbiological and chemical laboratory testing division (“Lab”). These reportable segments provide services primarily to the pharmaceutical, chemical, medical device and biotechnology industries in their respective markets. | |||||||||
The following table presents information about the reported revenue from services and earnings from operations of the Company for the three month period ended in January 31, 2014 and 2013. There is no intersegment revenue for the mentioned periods. Corporate expenses that support the operating units have been allocated to the segments. Asset information by reportable segment is not presented, since the Company does not produce such information internally, nor does it use such data to manage its business. | |||||||||
Three months ended January 31, | |||||||||
2014 | 2013 | ||||||||
REVENUES: | |||||||||
Puerto Rico consulting | $ | 3,521,211 | $ | 3,544,765 | |||||
United States consulting | 2,321,340 | 2,749,703 | |||||||
Europe consulting | 683,329 | 854,774 | |||||||
Lab (microbiological and chemical testing) | 453,056 | 366,646 | |||||||
Other segments¹ | 28,716 | 138,504 | |||||||
Total consolidated revenues | $ | 7,007,652 | $ | 7,654,392 | |||||
INCOME (LOSS) BEFORE TAXES: | |||||||||
Puerto Rico consulting | $ | 618,347 | $ | 778,303 | |||||
United States consulting | 334,923 | 572,311 | |||||||
Europe consulting | (81,444 | ) | (84,733 | ) | |||||
Lab (microbiological and chemical testing) | 19,073 | (10,291 | ) | ||||||
Other segments¹ | (63,279 | ) | 34,943 | ||||||
Total consolidated income before taxes | $ | 827,620 | $ | 1,290,533 | |||||
¹ | Other segments represent activities that fall below the reportable threshold and are carried out in Puerto Rico and the United States. These activities include a technical seminars/training division, an information technology services and consulting division, and corporate headquarters, as applicable. | ||||||||
Long lived assets (property and equipment and intangible assets) as of January 31, 2014 and October 31, 2013, and related depreciation and amortization expense for the three months ended January 31, 2014 and 2013, were concentrated in the domestic markets (Puerto Rico and the United States). The aggregate amount of long lived assets for the international operations (Europe) is considered insignificant. |
A_ORGANIZATION_AND_SUMMARY_OF_1
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended | ||
Jan. 31, 2014 | |||
A. Organization And Summary Of Significant Accounting Policies Policies | ' | ||
Consolidation | ' | ||
The accompanying condensed consolidated financial statements include the accounts of the Company and all of its wholly owned and majority-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |||
Use of Estimates | ' | ||
The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results may differ from these estimates. | |||
Fair Value of Financial Instruments | ' | ||
Accounting standards have established a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting standards have established three levels of inputs that may be used to measure fair value: | |||
Level 1: | Quoted prices in active markets for identical assets and liabilities. | ||
Level 2: | Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3: | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). | ||
Marketable securities available-for-sale consist of U.S. Treasury securities and an obligation from the Puerto Rico Government Development Bank valued using quoted market prices in active markets. Accordingly, these securities are categorized in Level 1. | |||
The carrying value of the Company's financial instruments (excluding marketable securities and obligations under capital leases), cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, are considered reasonable estimates of fair value due to their liquidity or short-term nature. Management believes, based on current rates, that the fair value of its obligations under capital leases approximates the carrying amount. | |||
Revenue Recognition | ' | ||
Revenue is primarily derived from: (1) time and materials contracts (representing approximately 93% of total revenues), which is recognized by applying the proportional performance model, whereby revenue is recognized as performance occurs, (2) short-term fixed-fee contracts or "not to exceed" contracts (representing approximately 1% of total revenues), which revenue is recognized similarly, except that certain milestones also have to be reached before revenue is recognized, and (3) laboratory testing revenue (representing approximately 6% of total revenues) is mainly recognized as the testing is completed and certified (normally within days of sample receipt from customer). If the Company determines that a contract will result in a loss, the Company recognizes the estimated loss in the period in which such determination is made. | |||
Cash Equivalents | ' | ||
For purposes of the consolidated statements of cash flows, cash equivalents include investments in a money market obligations trust that is registered under the U.S. Investment Company Act of 1940, as amended, and liquid investments with original maturities of three months or less. | |||
Marketable Securities | ' | ||
We consider our marketable security investment portfolio and marketable equity investments as available-for-sale and, accordingly, these investments are recorded at fair value with unrealized gains and losses generally recorded in other comprehensive income; whereas realized gains and losses are included in earnings and determined based on the specific identification method. | |||
Accounts Receivable | ' | ||
Accounts receivable are recorded at their estimated realizable value. Accounts are deemed past due when payment has not been received within the stated time period. The Company's policy is to review individual past due amounts periodically and write off amounts for which all collection efforts are deemed to have been exhausted. Due to the nature of the Company’s customers, bad debts are mainly accounted for using the direct write-off method whereby an expense is recognized only when a specific account is determined to be uncollectible. The effect of using this method approximates that of the allowance method. | |||
Income Taxes | ' | ||
The Company follows an asset and liability approach method of accounting for income taxes. This method measures deferred income taxes by applying enacted statutory rates in effect at the balance sheet date to the differences between the tax basis of assets and liabilities and their reported amounts on the financial statements. The resulting deferred tax assets or liabilities are adjusted to reflect changes in tax laws as they occur. A valuation allowance is provided when it is more likely than not that a deferred tax asset will not be realized. | |||
The Company follows guidance from the Financial Accounting Standards Board (“FASB”) related to Accounting for Uncertainty in Income Taxes, which includes a two-step approach to recognizing, de-recognizing and measuring uncertain tax positions. As of January 31, 2014, the Company had no significant uncertain tax positions that would be reduced as a result of a lapse of the applicable statute of limitations. | |||
Property and equipment | ' | ||
Owned property and equipment, and leasehold improvements are stated at cost. Vehicles under capital leases are stated at the lower of fair market value or net present value of the minimum lease payments at the inception of the leases. | |||
Depreciation and amortization of owned assets are provided for, when placed in service, in amounts sufficient to relate the cost of depreciable assets to operations over their estimated service lives, using straight-line basis. Assets under capital leases and leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or initial lease term. Major renewals and betterments that extend the life of the assets are capitalized, while expenditures for repairs and maintenance are expensed when incurred. As of January 31, 2014 and October 31, 2013, the accumulated depreciation and amortization amounted to $1,972,001 and $1,880,346, respectively. | |||
The Company evaluates for impairment its long-lived assets to be held and used, and long-lived assets to be disposed of, whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Based on management estimates, no impairment of the operating properties was present. | |||
Stock-based Compensation | ' | ||
Stock-based compensation expense is recognized in the consolidated financial statements based on the fair value of the awards granted. Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which generally represents the vesting period, and includes an estimate of awards that will be forfeited. The Company calculates the fair value of stock options using the Black-Scholes option-pricing model at the grant date. Excess tax benefits related to stock-based compensation are reflected as cash flows from financing activities rather than cash flows from operating activities. The Company has not recognized such cash flow from financing activities since there has been no tax benefit related to the stock-based compensation. | |||
Income Per Share of Common Stock | ' | ||
Basic income per share of common stock is calculated by dividing net income by the weighted average number of shares of common stock outstanding. Diluted income per share includes the dilution of common stock equivalents, which include principally shares that may be issued upon the exercise of warrants, stock option and restricted stock unit awards. | |||
The diluted weighted average shares of common stock outstanding were calculated using the treasury stock method for the respective periods. | |||
Foreign Operations | ' | ||
The functional currency of the Company’s foreign subsidiaries is its local currency. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for subsidiaries using a functional currency other than the U.S. dollar is included as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income. | |||
The Company’s intercompany accounts are typically denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in stockholders’ equity and as a component of comprehensive income, while gains and losses resulting from the remeasurement of intercompany receivables from those international subsidiaries for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statements of operations. The net gains and losses recorded in the condensed consolidated statements of income were not significant for the periods presented. | |||
Reclassifications | ' | ||
Certain reclassifications have been made to the January 31, 2013 condensed consolidated financial statements to conform them to the January 31, 2014 condensed consolidated financial statements presentation. Such reclassifications do not affect net income as previously reported. | |||
Recently issued and adopted accounting standards | ' | ||
Recently issued FASB pronouncements, and SEC Staff Accounting Bulletins, have either been implemented or are not applicable to the Company. | |||
B_MARKETABLE_SECURITIES_AVAILA1
B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Tables) | 3 Months Ended | |||||||||||||||
Jan. 31, 2014 | ||||||||||||||||
B. Marketable Securities Available For Sale Tables | ' | |||||||||||||||
Summary of available-for-sale securities | ' | |||||||||||||||
Type of security as of January 31, 2014 | Amortized Cost | Gross | Estimated | |||||||||||||
Unrealized Gains | Gross | Fair Value | ||||||||||||||
Unrealized | ||||||||||||||||
Losses | ||||||||||||||||
U.S. Treasury securities | $ | 4,500,000 | $ | — | $ | — | $ | 4,500,000 | ||||||||
Other government-related debt securities: | ||||||||||||||||
Puerto Rico Commonwealth Government Development Bond | 95,000 | — | (30,876 | ) | 64,124 | |||||||||||
Total interest-bearing and available-for-sale securities | $ | 4,595,000 | $ | — | $ | (30,876 | ) | $ | 4,564,124 | |||||||
Type of security as of October 31, 2013 | Amortized Cost | Gross | Gross | Estimated | ||||||||||||
Unrealized Gains | Unrealized | Fair Value | ||||||||||||||
Losses | ||||||||||||||||
U.S. Treasury securities | $ | $4,500,000 | $ | — | $ | — | $ | 4,500,000 | ||||||||
Other government-related debt securities: | ||||||||||||||||
Puerto Rico Commonwealth Government Development Bond | 95,000 | — | (23,740 | ) | 71,260 | |||||||||||
Total interest-bearing and available-for-sale securities | $ | $4,595,000 | $ | — | $ | (23,740 | ) | $ | 4,571,260 | |||||||
Fair values of available-for-sale securities | ' | |||||||||||||||
Classification in the Consolidated Balance Sheets | January 31, | October 31, | ||||||||||||||
2014 | 2013 | |||||||||||||||
Cash and cash equivalents | $ | 4,500,000 | $ | 4,500,000 | ||||||||||||
Marketable securities | 64,124 | 71,260 | ||||||||||||||
Total available-for-sale securities | $ | 4,564,124 | $ | 4,571,260 |
F_EARNINGS_PER_SHARE_Tables
F. EARNINGS PER SHARE (Tables) | 3 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Earnings Per Share [Abstract] | ' | ||||||||
Schedule of calculations of basic and diluted earnings per share | ' | ||||||||
Three months | |||||||||
ended January 31, | |||||||||
2014 | 2013 | ||||||||
Net income available to common equity holders - used to compute basic and diluted earnings per share | $ | 661,933 | $ | 1,053,245 | |||||
Weighted average number of common shares - used to compute basic earnings per share | 22,776,093 | 20,785,934 | |||||||
Effect of warrants to purchase common stock | 190,387 | 1,892,881 | |||||||
Effect of restricted stock units to common stock | 17,345 | - | |||||||
Effect of options to purchase common stock | 741,454 | 139,216 | |||||||
Weighted average number of shares - used to compute diluted earnings per share | 23,725,279 | 22,818,031 |
H_SEGMENT_DISCLOSURES_Tables
H. SEGMENT DISCLOSURES (Tables) | 3 Months Ended | ||||||||
Jan. 31, 2014 | |||||||||
Segment Reporting [Abstract] | ' | ||||||||
Schedule of Segment Reporting Information | ' | ||||||||
Three months ended January 31, | |||||||||
2014 | 2013 | ||||||||
REVENUES: | |||||||||
Puerto Rico consulting | $ | 3,521,211 | $ | 3,544,765 | |||||
United States consulting | 2,321,340 | 2,749,703 | |||||||
Europe consulting | 683,329 | 854,774 | |||||||
Lab (microbiological and chemical testing) | 453,056 | 366,646 | |||||||
Other segments¹ | 28,716 | 138,504 | |||||||
Total consolidated revenues | $ | 7,007,652 | $ | 7,654,392 | |||||
INCOME (LOSS) BEFORE TAXES: | |||||||||
Puerto Rico consulting | $ | 618,347 | $ | 778,303 | |||||
United States consulting | 334,923 | 572,311 | |||||||
Europe consulting | (81,444 | ) | (84,733 | ) | |||||
Lab (microbiological and chemical testing) | 19,073 | (10,291 | ) | ||||||
Other segments¹ | (63,279 | ) | 34,943 | ||||||
Total consolidated income before taxes | $ | 827,620 | $ | 1,290,533 | |||||
¹ | Other segments represent activities that fall below the reportable threshold and are carried out in Puerto Rico and the United States. These activities include a technical seminars/training division, an information technology services and consulting division, and corporate headquarters, as applicable. | ||||||||
A_ORGANIZATION_AND_SUMMARY_OF_2
A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
A. Organization And Summary Of Significant Accounting Policies Details Narrative | ' | ' |
Accumulated depreciation and amortization | $1,972,001 | $1,880,346 |
B_MARKETABLE_SECURITIES_AVAILA2
B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details) (USD $) | 3 Months Ended | 12 Months Ended |
Jan. 31, 2014 | Oct. 31, 2013 | |
Available-for-sale securities | ' | ' |
Amortized Cost | $4,595,000 | $4,595,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | -30,876 | -23,740 |
Estimated Fair Value | 4,564,124 | 4,571,260 |
U.S. Treasury securities | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 4,500,000 | 4,500,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 4,500,000 | 4,500,000 |
Puerto Rico Commonwealth Government Development Bond | ' | ' |
Available-for-sale securities | ' | ' |
Amortized Cost | 95,000 | 95,000 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | -30,876 | -23,740 |
Estimated Fair Value | $64,124 | $71,260 |
B_MARKETABLE_SECURITIES_AVAILA3
B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details 1) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
B. Marketable Securities Available For Sale Tables | ' | ' |
Cash and cash equivalents | $4,500,000 | $4,500,000 |
Marketable securities | 64,124 | 71,260 |
Total available-for-sale securities | $4,564,124 | $4,571,260 |
B_MARKETABLE_SECURITIES_AVAILA4
B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details Narrative) (USD $) | Jan. 31, 2014 | Oct. 31, 2013 |
B. Marketable Securities Available For Sale Details Narrative | ' | ' |
Marketable securities | $64,124 | $71,260 |
D_WARRANTS_Details_Narrative
D. WARRANTS (Details Narrative) | Jan. 31, 2014 | Oct. 31, 2013 |
D. Warrants Details Narrative | ' | ' |
Outstanding Warrants | 0 | 240,800 |
F_EARNINGS_PER_SHARE_Details
F. EARNINGS PER SHARE (Details) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Notes to Financial Statements | ' | ' |
Net income available to common equity holders - used to compute basic and diluted earnings per share | $661,933 | $1,053,245 |
Weighted average number of common shares - used to compute basic earnings per share | 22,776,093 | 20,785,934 |
Effect of warrants to purchase common stock | 190,387 | 1,892,881 |
Effect of restricted stock units to common stock | 17,345 | 0 |
Effect of options to purchase common stock | 741,454 | 139,216 |
Weighted average number of shares - used to compute diluted earnings per share | 23,725,279 | 22,818,031 |
F_EARNINGS_PER_SHARE_Details_N
F. EARNINGS PER SHARE (Details Narrative) | 3 Months Ended |
Jan. 31, 2014 | |
F. Earnings Per Share Details Narrative | ' |
Antidilutive options excluded from computation of earnings per share | 80,000 |
G_CONCENTRATION_OF_RISKS_Detai
G. CONCENTRATION OF RISKS (Details Narrative) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Major Customer A | ' | ' |
Revenue from major customers | 24.70% | 28.30% |
Major Customer B | ' | ' |
Revenue from major customers | 15.00% | 13.50% |
Major Customer C | ' | ' |
Revenue from major customers | 6.10% | 13.10% |
Major Customer Total | ' | ' |
Revenue from major customers | 45.80% | 54.90% |
Amount due from major customers as percentage of accounts receivable | 32.40% | ' |
Global Customer A | ' | ' |
Revenue from major customers | 45.30% | 51.40% |
Global Customer B | ' | ' |
Revenue from major customers | 6.10% | 13.10% |
Global Customer Total | ' | ' |
Revenue from major customers | 51.40% | 64.50% |
Amount due from major customers as percentage of accounts receivable | 42.70% | ' |
H_SEGMENT_DISCLOSURES_Details
H. SEGMENT DISCLOSURES (Details) (USD $) | 3 Months Ended | |
Jan. 31, 2014 | Jan. 31, 2013 | |
Revenues | $7,007,652 | $7,654,392 |
Income (loss) before taxes | 827,620 | 1,290,533 |
Puerto Rico consulting | ' | ' |
Revenues | 3,521,211 | 3,544,765 |
Income (loss) before taxes | 618,347 | 778,303 |
United States consulting | ' | ' |
Revenues | 2,321,340 | 2,749,703 |
Income (loss) before taxes | 334,923 | 572,311 |
Europe consulting | ' | ' |
Revenues | 683,329 | 854,774 |
Income (loss) before taxes | -81,444 | -84,733 |
Lab (microbiological and chemical testing) | ' | ' |
Revenues | 453,056 | 366,646 |
Income (loss) before taxes | 19,073 | -10,291 |
Other segments | ' | ' |
Revenues | 28,716 | 138,504 |
Income (loss) before taxes | ($63,279) | $34,943 |