Pharma-Bio Serv (PBSV) 10-K 29 Jan 16 2015 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Oct. 31, 2015	Jan. 28, 2016	Apr. 30, 2015
Document And Entity Information
Entity Registrant Name	Pharma-Bio Serv, Inc.
Entity Central Index Key	1,304,161
Document Type	10-K
Document Period End Date	Oct. 31, 2015
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 Public Float			$ 15,763,557
Entity Common Stock, Shares Outstanding		23,027,970
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,015

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($)	Oct. 31, 2015	Oct. 31, 2014
Current assets
Cash and cash equivalents	$ 14,893,387	$ 15,088,070
Marketable securities	33,429	67,877
Accounts receivable	7,447,984	6,385,575
Other	891,905	783,466
Total current assets	23,266,705	22,324,988
Property and equipment	853,945	869,041
Other assets	18,256	17,055
Total assets	24,138,906	23,211,084
Current liabilities
Current portion-obligations under capital leases	22,784	21,994
Accounts payable and accrued expenses	2,061,889	2,355,034
Income taxes payable	39,177	248,559
Total current liabilities	2,123,850	2,625,587
Obligations under capital leases	51,952	74,736
Total liabilities	$ 2,175,802	$ 2,700,323
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.0001 par value; authorized 10,000,000 shares; none issued or outstanding	$ 0	$ 0
Common stock, $0.0001 par value; authorized 50,000,000 shares; 23,185,975 and 23,049,462 shares issued, and 23,020,451 and 23,033,912 shares outstanding at October 31, 2015 and 2014, respectively	2,319	2,305
Additional paid-in capital	1,142,555	1,055,436
Retained earnings	21,231,629	19,606,817
Accumulated other comprehensive loss	(226,580)	(135,708)
Stockholders' equity before treasury stock	22,149,923	20,528,850
Treasury stock, at cost; 165,524 and 15,550 common shares held at October 31, 2015 and 2014, respectively	(186,819)	(18,089)
Total stockholders' equity	21,963,104	20,510,761
Total liabilities and stockholders' equity	$ 24,138,906	$ 23,211,084

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Oct. 31, 2015	Oct. 31, 2014
Stockholders' equity:
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, Authorized	10,000,000	10,000,000
Preferred stock, outstanding	0	0
Preferred stock, issued	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, Authorized	50,000,000	50,000,000
Common stock, Issued	23,185,975	23,049,462
Common stock, outstanding	23,020,451	23,033,912
Treasury stock	165,524	15,550

Consolidated Statements of Inco

Consolidated Statements of Income - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Income Statement [Abstract]
REVENUES	$ 23,384,861	$ 27,555,039
COST OF SERVICES	15,900,406	18,581,829
GROSS PROFIT	7,484,455	8,973,210
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES	5,703,111	6,109,061
INCOME FROM OPERATIONS	1,781,344	2,864,149
OTHER INCOME (EXPENSE):
Interest expense	(7,344)	(7,186)
Interest income	18,808	5,352
Gain on disposition of property and equipment	0	15,857
Other income (expense)	11,464	14,023
INCOME BEFORE INCOME TAXES	1,792,808	2,878,172
INCOME TAXES	167,982	464,527
NET INCOME	$ 1,624,826	$ 2,413,645
BASIC EARNINGS PER COMMON SHARE	$ 0.07	$ 0.105
DILUTED EARNINGS PER COMMON SHARE	$ 0.069	$ 0.102
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC	23,069,817	22,979,290
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - DILUTED	23,400,086	23,694,211

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Consolidated Statements Of Comprehensive Income
NET INCOME	$ 1,624,826	$ 2,413,645
OTHER COMPREHENSIVE LOSS, NET OF RECLASSIFICATION ADJUSTMENTS AND TAXES:
Foreign currency translation loss	(56,424)	(55,573)
Net unrealized losses on available-for-sale securities	(34,448)	(3,383)
TOTAL OTHER COMPREHENSIVE LOSS	(90,872)	(58,956)
COMPREHENSIVE INCOME	$ 1,533,954	$ 2,354,689

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders' Equity - USD ($)	Common Stock	Preferred Stock	Additional Paid-In Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock	Total
Beginning Balance - Shares at Oct. 31, 2013	22,702,186	0
Beginning Balance - Amount at Oct. 31, 2013	$ 2,271	$ 0	$ 931,039	$ 17,193,203	$ (76,752)	$ 0	$ 18,049,761
Stock-based compensation			$ 94,400				$ 94,400
Conversion Of Warrants To Shares Of Common Stock, Shares	233,763
Conversion Of Warrants To Shares Of Common Stock, Amount	$ 23			$ (23)
Issuance Of Common Stock Pursuant To The Cashless Exercise Of Stock Options, Shares	76,013
Issuance Of Common Stock Pursuant To The Cashless Exercise Of Stock Options, Amount	$ 8			$ (8)
Issuance Of Common Stock Pursuant To Agreement With Investor Relations Firm, Shares	37,500
Issuance Of Common Stock Pursuant To Agreement With Investor Relations Firm, Amount	$ 3		$ 29,997				$ 30,000
Purchase of treasury stock						$ (18,089)	(18,089)
COMPREHENSIVE INCOME:
NET INCOME				$ 2,413,645			2,413,645
Other Comprehensive Income (Loss), Net Of Tax					$ (58,956)		(58,956)
Ending Balance, Shares at Oct. 31, 2014	23,049,462	0
Ending Balance, Amount at Oct. 31, 2014	$ 2,305	$ 0	$ 1,055,436	$ 19,606,817	(135,708)	$ (18,089)	20,510,761
Stock-based compensation			87,119				87,119
Issuance Of Common Stock Pursuant To The Cashless Exercise Of Stock Options, Shares	120,066
Issuance Of Common Stock Pursuant To The Cashless Exercise Of Stock Options, Amount	$ 12			(12)
Issuance Of Common Stock Pursuant To Restricted Stock Agreements With Employees, Shares	16,447
Issuance Of Common Stock Pursuant To Restricted Stock Agreements With Employees, Amount	$ 2			(2)
Purchase of treasury stock						(168,730)	(168,730)
COMPREHENSIVE INCOME:
NET INCOME				1,624,826			1,624,826
Other Comprehensive Income (Loss), Net Of Tax					(90,872)		(90,872)
Ending Balance, Shares at Oct. 31, 2015	23,185,975	0
Ending Balance, Amount at Oct. 31, 2015	$ 2,319	$ 0	$ 1,142,555	$ 21,231,629	$ (226,580)	$ (186,819)	$ 21,963,104

Consolidated Statements of Cha7

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - shares	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Consolidated Statements Of Changes In Stockholders Equity Parenthetical
Purchase of treasury stocks	165,524	15,550

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 1,624,826	$ 2,413,645
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Gain on disposition of property and equipment	0	(15,857)
Stock-based compensation	87,119	94,400
Depreciation and amortization	357,460	377,195
(Increase) decrease in accounts receivable	(1,067,445)	1,050,843
Increase in other assets	(115,861)	(17,015)
Decrease in liabilities	(513,492)	(572,544)
NET CASH PROVIDED BY OPERATING ACTIVITIES	372,607	3,330,667
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(342,364)	(207,507)
Proceeds from disposition of property and equipment	0	38,800
NET CASH USED IN INVESTING ACTIVITIES	(342,364)	(168,707)
CASH FLOW FROM FINANCING ACTIVITIES:
Repurchase of common stock	(168,730)	(18,089)
Payments on obligations under capital lease	(21,994)	(73,177)
NET CASH USED IN FINANCING ACTIVITIES	(190,724)	(91,266)
EFFECT OF EXCHANGE RATE CHANGES ON CASH	(34,202)	(28,547)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(194,683)	3,042,147
CASH AND CASH EQUIVALENTS - BEGINNING OF YEAR	15,088,070	12,045,923
CASH AND CASH EQUIVALENTS - END OF YEAR	14,893,387	15,088,070
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes	151,932	535,267
Interest	4,856	7,186
SUPPLEMENTARY SCHEDULES OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment with accumulated depreciation of $770,267 and $53,532 disposed during the years ended October 31, 2015 and 2014, respectively.	770,267	76,475
Income tax withheld by clients to be used as a credit in the Company's income tax returns	35,586	79,635
Issuance of common stock pursuant to agreement with investor relations firm	0	30,000
Conversion of cashless exercise of warrants and options to shares of common stock	14	31
Obligations under capital lease incurred for the acquisition of a vehicle	$ 0	$ 85,995

Consolidated Statements of Cas9

Consolidated Statements of Cash Flows (Parenthetical) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Statement of Cash Flows [Abstract]
Accumulated depreciation on property and equipment disposed during the years ended October 31, 2015 and 2014, respectively	$ 770,267	$ 53,532

A. ORGANIZATION AND SUMMARY OF

A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Oct. 31, 2015
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, Pharma-Bio Serv SL (“Pharma-Spain”), a Spanish limited liability company, and Pharma-Bio Serv Brasil Servicos de Consultoria Ltda. (“Pharma-Brazil”), a Brazilian limited liability company. Pharma-Bio, Pharma-PR, Pharma-Serv, Pharma-US, Pharma-IR, Pharma-Spain and Pharma-Brazil are collectively referred to as the “Company.” The Company operates in Puerto Rico, the United States, Ireland, Spain and Brazil under the name of Pharma-Bio Serv and is engaged in providing technical compliance consulting service, and microbiological and chemical laboratory testing. Pharma-Brazil is a wholly owned subsidiary, which was organized in Brazil in April 2015. As of October 31, 2015, this subsidiary was in development stage and has not incurred significant revenues or expenses. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Consolidation The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of 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 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 90% 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 9% of total revenues), which 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 money market obligation’s trusts that are registered under the U.S. Investment Company Act of 1940 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. We review our available-for-sale securities for other-than-temporary declines in fair value below their cost basis on a quarterly basis and whenever events or changes in circumstances indicate that the cost basis of an asset may not be materially 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 cost basis and adverse conditions specifically related to the security including any changes to the rating of the security by a rating agency. 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, 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 amount 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. 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. 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 grant date, while for restricted stock units the fair market value of the units is determined by Company’s share market value at 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. However, 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 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. 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 are 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 consolidated statements of income were not significant for the periods presented. Subsequent Events The Company has evaluated subsequent events to the date of the audit report as of January 29, 2016. The Company has determined that there are no events occurring in this period that required disclosure or adjustment, except as disclosed in the accompanying consolidated financial statements. Reclassifications Certain reclassifications have been made to the October 31, 2014 consolidated financial statements to conform them to the October 31, 2015 consolidated financial statements presentation. Such reclassifications do not have effect on net income as previously reported. Recent Accounting Pronouncements In May 2014, a new accounting standard was issued that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. This new standard will be effective for interim and annual periods beginning January 1, 2017, is required to be adopted retrospectively and early adoption is not permitted. We are currently evaluating the provisions of this new standard and have not yet determined what impact it will have on our financial statements, if any.

B. MARKETABLE SECURITIES AVAILA

B. MARKETABLE SECURITIES AVAILABLE FOR SALE	12 Months Ended
	Oct. 31, 2015
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 October 31, 2015 and 2014: Type of security as of October 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury securities $ 4,500,000 $ — $ — $ 4,500,000 Other government-related debt securities: Puerto Rico Commonwealth Government Development Bond 95,000 — (61,571 ) 33,429 Total interest-bearing and available-for-sale securities $ 4,595,000 $ — $ (61,571 ) $ 4,533,429 Type of security as of October 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury securities $ 4,000,000 $ — $ — $ 4,000,000 Other government-related debt securities: Puerto Rico Commonwealth Government Development Bond 95,000 — (27,123 ) 67,877 Total interest-bearing and available-for-sale securities $ 4,095,000 $ — $ (27,123 ) $ 4,067,877 At October 31, 2015 and 2014, the above marketable securities includes 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 October 31, 2015 and 2014: Classification in the Consolidated Balance Sheets 2015 2014 Cash and cash equivalents $ 4,500,000 $ 4,000,000 Marketable securities 33,429 67,877 Total available-for-sale securities $ 4,533,429 $ 4,067,877 Cash and cash equivalents in the table above exclude cash in banks of approximately $10.4 million and $11.0 million as of October 31, 2015 and 2014, 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.

C. PROPERTY AND EQUIPMENT

C. PROPERTY AND EQUIPMENT	12 Months Ended
	Oct. 31, 2015
Property, Plant and Equipment [Abstract]
C. PROPERTY AND EQUIPMENT	The balance of property and equipment at October 31, 2015 and 2014 consisted of the following: October 31, Useful life (years) 2015 2014 Vehicles 5 $ 250,068 $ 302,182 Leasehold improvements 5-8 647,713 598,040 Computers 3 274,063 678,185 Equipment 3-7 1,196,953 1,345,151 Furniture and fixtures 10 82,256 149,492 Projects in process - 194,094 - Total 2,645,147 3,073,050 Less: Accumulated depreciation and amortization (1,791,202 ) (2,204,009 ) Property and equipment, net $ 853,945 $ 869,041

D. INCOME TAXES

D. INCOME TAXES	12 Months Ended
	Oct. 31, 2015
Income Tax Disclosure [Abstract]
D. INCOME TAXES	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. Industrial Development Income (“IDI”) covered under the Grant are subject to a fixed income tax rate of 4%. In addition, IDI earnings distributions accumulated since November 1, 2009 are totally exempt from Puerto Rico earnings distribution tax. For the years ended October 31, 2015 and 2014, the favorable consolidated net income aggregate dollar and weighted average earnings per share-basic effects of the Grant were approximately $852,000 and $890,000, and $0.037 and $0.039, respectively. 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 and state 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. The reconciliation between the United States federal statutory rate and our effective tax rate for the years ended October 31, 2015, and 2014 is as follows: October 31, 2015 2014 United States federal statutory rate 35.0 % 35.0 % Non United States earnings invested indefinitely, and Puerto Rico Act 73 Tax Grant effect (26.7 )% (20.1 )% Other, net 1.1 % 1.2 % Effective tax rate 9.4 % 16.1 % As of October 31, 2015 and 2014, the Company has not recognized deferred income taxes on $19.2 million and $16.9 million of undistributed earnings of its Puerto Rican subsidiaries, respectively, since such earnings are considered to be reinvested indefinitely. If the earnings were distributed in the form of dividends to the Company, the Company would be subject to Puerto Rico earnings distribution tax and United States federal income tax for the aggregate amount of approximately $4.3 million and $3.6 million at October 31, 2015 and 2014, respectively. At October 31, 2015, Pharma-Spain, Pharma-IR and Pharma-Bio have unused operating losses of approximately $776,000, $1,016,000 and 292,000, respectively. These net operating losses are available to offset future taxable income until October 31, 2028, 2029 and 2030 for the aggregate amounts of $178,000, 332,000 and $266,000, respectively for Pharma-Spain, indefinitely for Pharma-IR, and until October 31, 2035 for Pharma-Bio. After considering various timing differences for income tax purposes, these unused operating losses result in a potential deferred tax asset for Pharma-Spain, Pharma-IR and Pharma-Bio of approximately $155,000, $127,000 and $99,000, respectively. 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. 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. The Company files income tax returns in the United States (federal and various states jurisdictions), Puerto Rico, Ireland, Spain and Brazil. The 2011 (2010 for Puerto Rico) through 2014 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.

E. COMMITMENTS AND CONTINGENCIE

E. COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Oct. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
E. COMMITMENTS AND CONTINGENCIES	Capitalized lease obligations The following is a schedule, by year, of future minimum lease payments under the capitalized leases together with the present value of the net minimum lease payments at October 31, 2015: Twelve months ending October 31, Amount 2016 $ 26,214 2017 24,961 2018 18,697 2019 6,232 Total future minimum lease payments 76,104 Less: Amount of imputed interest ( 1,368 ) Present value of future minimum lease payments 74,736 Current portion of obligation under capital leases (22,784 ) Long-term portion $ 51,952 Operating facilities In February 2012, the Company automatically renewed a lease agreement with an affiliate of our Chairman of the Board, for the headquarters and laboratory testing facilities in Dorado, Puerto Rico. The renewal is for a term of five years with monthly rental payments of $23,930, $25,127, $26,383, $27,702 and $29,087 for each of the five years under the lease. The agreement also requires the payment of utilities, property taxes, insurance and a portion of expenses incurred by the affiliate in connection with the maintenance of common areas. In December 2013, the Company entered into a lease agreement for the U.S. office facilities located in Plymouth, Pennsylvania. The lease is for a term of seven years, with monthly rental payments of $6,282 for the first three years, and $6,596, $6,794, $6,998, and $7,208, respectively, thereafter. The lease has a renewal option for a term of three years with monthly rental payments of $7,424, $7,647 and $7,876, for each of the years, respectively. The Company maintains office facilities in Los Angeles, California, Madrid, Spain, and Sao Paulo, Brazil. These facilities are under month-to-month leases with monthly payments of approximately $1,300, $2,500, and $600 respectively. The Company leases certain apartments as dwellings for employees. The leases are under short-term lease agreements and usually are cancelable upon 30-day notification. Minimum future rental payments under non-cancelable operating leases having remaining terms in excess of one year as of October 31, 2015 are as follows: Amount 2016 $ 420,277 2017 166,101 2018 81,330 2019 83,770 2020 86,283 Thereafter 7,208 Total minimum lease payments $ 844,969 Rent expense for the years ended October 31, 2015 and 2014 was approximately $687,000 and $573,000 respectively. Contingencies - In the ordinary course of business, the Company may be a party to legal proceedings incidental to the business. These proceedings are not expected to have a material adverse effect on the Company’s business or financial condition.

F. WARRANTS

F. WARRANTS	12 Months Ended
	Oct. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
F. WARRANTS	On December 2014 the Company entered into an Agreement with a firm for providing (i) business development, and (ii) mergers and acquisition services to the Company. Pursuant to the Agreement terms, the Company issued warrants for the purchase of 1,000,000 common shares at an exercise price of $1.80 per share. The warrants contain provisions for the partial vesting of the common shares at different dates within eighteen months after the execution of the Agreement. Also, under certain circumstances the Agreement may be terminated, accordingly a portion of the underlying common shares of the warrants may be cancelled and/or forfeited depending on the date of termination. As of October 31, 2015, 844,444 of the underlying common shares of the warrants were fully vested. The warrants expire on December 1, 2019.

G. CAPITAL TRANSACTIONS

G. CAPITAL TRANSACTIONS	12 Months Ended
	Oct. 31, 2015
Notes to Financial Statements
G. 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). Pursuant to the terms of the agreement with the investor relations firm, all shares have been 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. The agreement with the investor relations firm was renewed on February 1, 2015 for an additional year under the same terms of the last renegotiated agreement. On June 13, 2014, the Board of Directors of the Company authorized the Company to repurchase up to two million shares of its outstanding common stock. The timing, manner, price and amount of any repurchases will be at the discretion of the Company, subject to the requirements of the Securities Exchange Act of 1934, as amended, and related rules. The program does not oblige the Company to repurchase any shares and it may be modified, suspended or terminated at any time and for any reason. No shares will be repurchased directly from directors or officers of the Company. As of October 31, 2015 and 2014, pursuant to the program a total of 165,524 and 15,550 shares of the Company’s common stock were purchased for an aggregate amount of $186,819 and $18,089, respectively.

H. EARNINGS PER SHARE

H. EARNINGS PER SHARE	12 Months Ended
	Oct. 31, 2015
Earnings Per Share [Abstract]
H. EARNINGS PER SHARE	The computation of basic earnings per share is based on the weighted-average number of our common shares outstanding. The computation of diluted earnings per share is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under: warrants, our stock option and restricted stock unit awards, determined using the treasury stock method. The following data show the amounts used in the calculations of basic and diluted earnings per share. Years ended October 31, 2015 2014 Net income available to common equity holders - used to compute basic and diluted earnings per share $ 1,624,826 $ 2,413,645 Weighted average number of common shares - used to compute basic earnings per share 23,069,817 22,979,290 Effect of warrants to purchase common stock - 47,706 Effect of restricted stock units to issue common stock 35,878 41,314 Effect of options to purchase common stock 294,391 625,901 Weighted average number of shares - used to compute diluted earnings per share 23,400,086 23,694,211 For the year ended October 31, 2015, warrants and options for the purchase of 1,000,000 and 160,000 shares of common stock, respectively, were not included in computing earnings per share because their effect were antidilutive. In addition, for the year ended on October 31, 2014, options for the purchase of 80,000 shares of common stock were not included in computing diluted earnings per share because their effect were also antidilutive.

I. STOCK OPTIONS, RESTRCTED STO

I. STOCK OPTIONS, RESTRCTED STOCK UNITS AND STOCK BASED COMPENSATION	12 Months Ended
	Oct. 31, 2015
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
I. STOCK OPTIONS, RESTRCTED STOCK UNITS AND STOCK BASED COMPENSATION	In October 2005, the Company's board of directors adopted, and on April 25, 2006, the Company’s stockholders approved, the 2005 Long-Term Incentive Plan (the “2005 Plan), covering 2,500,000 shares of common stock. The 2005 Plan provides for the grant of incentive and non-qualified options, stock grants, stock appreciation rights and other equity-based incentives to employees, including officers, consultants and directors for a period of ten years, which expired in October 2015. The 2005 Plan is to be administered by a committee of independent directors. In the absence of a committee, the plan is administered by the board of directors. Options intended to be incentive stock options must be granted at an exercise price per share which is not less than the fair market value of the common stock on the date of grant and may have a term which is not longer than ten years. If the option holder holds at least 10% of the Company’s common stock, the exercise price must be at least 110% of the fair market value on the date of grant and the term of the option cannot exceed five years. 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 fair value of stock-based awards to employees is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The expected term of the option has been estimated using the “simplified” method as provided in Securities Exchange Commission Staff Accounting Bulletin No. 107, for plans with insufficient exercise experience. Under this method, the expected term equals the arithmetic average of the vesting term and the contractual term of the option. The risk-free rate is based on the U.S. Treasury rates in effect during the corresponding period of grant. The expected volatility is based on the historical volatility of the Company’s stock price. These factors could change in the future, which would affect fair values of stock options granted in such future periods, and could cause volatility in the total amount of the stock-based compensation expense reported in future periods. The 2005 Plan stock options activity and status for the years ended October 31, 2015 and 2014 was as follows: Year ended October 31, 2015 2014 Weighted- Weighted- Number of Average Option Number of Average Option Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 1,100,000 $ 0.7985 1,170,000 $ 0.6831 Granted 80,000 $ 1.2800 80,000 $ 2.0500 Exercised (255,000 ) $ 0.6763 (100,000 ) 0.4830 Expired and/or forfeited (25,000 ) $ 0.7300 (50,000 ) $ 0.7300 Total outstanding at end of year 900,000 $ 0.8779 1,100,000 $ 0.7985 Outstanding exercisable stock options at end of year 860,000 $ 0.8592 763,324 $ 0.7614 October 31, 2015 October 31, 2014 Weighted average remaining years in contractual life for: Total outstanding options 1.7 years 2.4 years Outstanding exercisable options 1.6 years 2.3 years Shares of common stock available for issuance pursuant to future stock option grants - 1,300,000 The following weighted average assumptions were used to estimate the fair value of stock options granted for the years ended October 31, 2015 and 2014: Year ended October 31, 2015 2014 Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 61.8 % 54.6 % Risk free interest rate 1.0 % 0.8 % Expected life of options 3.2 years 3.2 years Weighted average fair value of options granted $ 0.5465 $ 0.7806 As of October 31, 2015, estimated stock based compensation expense to be recognized in future periods for granted nonvested stock options amounted to approximately $20,300. These nonvested stock options compensation expense will be recognized in a weighted average period of approximately 0.7 years. As of October 31, 2015 and 2014, the aggregate intrinsic value of options outstanding was approximately $165,000 and $571,000, respectively. The aggregate intrinsic value represents the difference between the Company’s stock price at year end and the exercise price, multiplied by the number of in-the money options had all option holders exercised their options. This amount changes based on the fair market value of the Company’s stock. During the years ended October 31, 2015 and 2014, 255,000 and 100,000 stock options were exercised on a cashless basis, resulting on the net issuance of 120,066 and 76,013 common shares, respectively. During the year ended October 31, 2014, some employees were awarded 49,391 restricted stock units for the aggregate amount at grant date of $100,000. The restricted stock units are subject to future service and vest approximately one third per year. The average grant date fair values of these restricted stock units was $2.02 per share unit. Stock based compensation expense related to these restricted stock units was approximately $33,300 and $27,800 for the years ended October 31, 2015 and 2014, respectively. During the year ended October 31, 2015, pursuant to the restricted units agreements, vested units were issued for an aggregate amount of 16,447 shares. As of October 31, 2015, there were approximately $38,900 of unrecognized compensation costs related to nonvested restricted stock units, which are expected to be recognized over a weighted average period of 1.2 years The following table presents the total stock-based compensation included in the Company’s consolidated statement of income and the effect in earnings per share: Year ended October 31, 2015 2014 Stock-based compensation expense: Cost of services $ 2,482 $ 10,018 Selling, general and administrative 84,637 84,382 Stock-based compensation before tax 87,119 94,400 Income tax benefit - - Net stock-based compensation expense $ 87,119 $ 94,400 Effect on earnings per share: Basic earnings per share $ (0.004 ) $ (0.004 ) Diluted earnings per share $ (0.004 ) $ (0.004 ) Because the 2005 Long-Term Incentive Plan was for a term of ten years, which expired in October 2015, on March 31, 2014, the Company's board of directors adopted, and on April 30, 2014, the Company’s stockholders approved, the 2014 Long-Term Incentive Plan (the “2014 Plan”), covering 2,300,000 shares of common stock. The 2014 Plan provisions are similar to those of the 2005 Plan. As of October 31, 2015, no awards have been granted under the 2014 Plan.

J. CONCENTRATIONS OF RISK

J. CONCENTRATIONS OF RISK	12 Months Ended
	Oct. 31, 2015
Risks and Uncertainties [Abstract]
J. 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 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 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, who accounted for 10% or more of its revenues in either of the years ended October 31, 2015 or 2014. During the year ended October 31, 2015, revenues from these customers were 13%, 10%, and 6%, or a total of 29%, as compared to the same period last year for 10%, 17% and 19%, or a total of 46%, respectively. At October 31, 2015 and 2014, amounts due from these customers represented 21% and 43% of total accounts receivable balance, respectively. The major customer information 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 year ended October 31, 2015, aggregate revenues from these global groups of affiliated companies were 17% and 13%, or a total of 30%, as compared to the same period last year for 40% and 10%, or a total of 50%, respectively. At October 31, 2015 and 2014, amounts due from these global groups of affiliated companies represented 20% and 38% of total accounts receivable balance, respectively.

K. SEGMENT DISCLOSURES

K. SEGMENT DISCLOSURES	12 Months Ended
	Oct. 31, 2015
Segment Reporting [Abstract]
K. SEGMENT DISCLOSURES	The Company’s segments are based on the organizational structure for which financial results are regularly evaluated by the Company’s chief operating decision maker 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 years ended in October 31, 2015 and 2014. 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. Year ended October 31, 2015 2014 REVENUES: Puerto Rico consulting $ 17,469,716 $ 15,586,343 United States consulting 2,685,242 7,760,941 Europe consulting 1,082,617 2,184,977 Lab (microbiological and chemical testing) 2,005,578 1,718,771 Other segments¹ 141,708 304,007 Total consolidated revenues $ 23,384,861 $ 27,555,039 INCOME (LOSS) BEFORE TAXES: Puerto Rico consulting $ 2,208,330 $ 2,380,745 United States consulting (320,897 ) 898,924 Europe consulting (370,995 ) (514,744 ) Lab (microbiological and chemical testing) (41,910 ) (116,711 ) Other segments¹ 318,280 229,958 Total consolidated income before taxes $ 1,792,808 $ 2,878,172 ¹ Other segments represent activities that fall below the reportable threshold and are carried out in Puerto Rico, United States and Brazil. These activities include a Brazilian compliance consulting division, technical seminars/training division, an information technology services and consulting division, a calibrations division and corporate headquarters, as applicable. Long lived assets (property and equipment) and related depreciation and amortization expense for the years ended October 31, 2015 and 2014, were concentrated in the domestic markets (Puerto Rico and United States). The aggregate amount of long lived assets for the international operations (Europe and Brazil) is considered insignificant.

L. RETIREMENT PLAN

L. RETIREMENT PLAN	12 Months Ended
	Oct. 31, 2015
Compensation and Retirement Disclosure [Abstract]
L. RETIREMENT PLAN	Pharma-PR and Pharma-US each have a separate qualified retirement plan in accordance with the applicable laws of the Commonwealth of Puerto Rico and the United States of America, for employees who meet certain age and service period requirements. The Company makes contributions to this plan as required by the provisions of the plan document. Contributions for the years ended October 31, 2015 and 2014 were $80,800 and $86,100, respectively.

M. RELATED PARTY TRANSACTIONS

M. RELATED PARTY TRANSACTIONS	12 Months Ended
	Oct. 31, 2015
Related Party Transactions [Abstract]
M. RELATED PARTY TRANSACTIONS	On December 31, 2013, the Company entered into a Consulting Agreement with a company (the “Consultant”) affiliated to our Chairman and our Chairman, effective as of January 1, 2014. Pursuant to the Consulting Agreement as amended, the Consultant will consult with the Board regarding the Company’s strategic initiatives, company services, management, operations and other matters as may be requested from time to time by the Board. Pursuant to the Consulting Agreement, the Consultant received a monthly fee of $42,000 during the term of the Consulting Agreement. Additionally, our Chairman will receive a company automobile and such insurance as she was provided by the Company during her last year of employment with the Company. The Consulting Agreement also included standard provisions relating to non-competition, confidentiality, non-transferability and non-disparagement. On December 31, 2015, the Consulting Agreement was renewed for an additional term of one year and the monthly fee for the services was changed to $31,500. As more fully disclosed in Note E to the consolidated financial statements, the Company leases its headquarters and laboratory testing facilities in Dorado, Puerto Rico, from an affiliate of our Chairman of the Board.

N. SUBSEQUENT EVENT

N. SUBSEQUENT EVENT	12 Months Ended
	Oct. 31, 2015
Related Party Transactions [Abstract]
N. SUBSEQUENT EVENT	On December 2015, the Company renewed the Consulting Agreement with a company affiliated to our Chairman and our Chairman, as more fully disclosed in Note M.

A. ORGANIZATION AND SUMMARY O24

A. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Oct. 31, 2015
A. Organization And Summary Of Significant Accounting Policies Policies
Consolidation	The accompanying consolidated financial statements include the accounts of the Company and all of its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates	The preparation of 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 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 90% 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 9% of total revenues), which 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 money market obligation’s trusts that are registered under the U.S. Investment Company Act of 1940 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. We review our available-for-sale securities for other-than-temporary declines in fair value below their cost basis on a quarterly basis and whenever events or changes in circumstances indicate that the cost basis of an asset may not be materially 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 cost basis and adverse conditions specifically related to the security including any changes to the rating of the security by a rating agency.
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,
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 amount 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. 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.
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 grant date, while for restricted stock units the fair market value of the units is determined by Company’s share market value at 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. However, 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 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. 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 are 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 consolidated statements of income were not significant for the periods presented.
Subsequent Events	The Company has evaluated subsequent events to the date of the audit report as of January 29, 2016. The Company has determined that there are no events occurring in this period that required disclosure or adjustment, except as disclosed in the accompanying consolidated financial statements.
Reclassifications	Certain reclassifications have been made to the October 31, 2014 consolidated financial statements to conform them to the October 31, 2015 consolidated financial statements presentation. Such reclassifications do not have effect on net income as previously reported.
Recently Accounting Pronouncements	In May 2014, a new accounting standard was issued that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. This new standard will be effective for interim and annual periods beginning January 1, 2017, is required to be adopted retrospectively and early adoption is not permitted. We are currently evaluating the provisions of this new standard and have not yet determined what impact it will have on our financial statements, if any.

B. MARKETABLE SECURITIES AVAI25

B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Tables)	12 Months Ended
	Oct. 31, 2015
B. Marketable Securities Available For Sale Tables
Summary of available-for-sale securities	Type of security as of October 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury securities $ 4,500,000 $ — $ — $ 4,500,000 Other government-related debt securities: Puerto Rico Commonwealth Government Development Bond 95,000 — (61,571 ) 33,429 Total interest-bearing and available-for-sale securities $ 4,595,000 $ — $ (61,571 ) $ 4,533,429 Type of security as of October 31, 2014 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value U.S. Treasury securities $ 4,000,000 $ — $ — $ 4,000,000 Other government-related debt securities: Puerto Rico Commonwealth Government Development Bond 95,000 — (27,123 ) 67,877 Total interest-bearing and available-for-sale securities $ 4,095,000 $ — $ (27,123 ) $ 4,067,877
Fair values of available-for-sale securities	Classification in the Consolidated Balance Sheets 2015 2014 Cash and cash equivalents $ 4,500,000 $ 4,000,000 Marketable securities 33,429 67,877 Total available-for-sale securities $ 4,533,429 $ 4,067,877

C. PROPERTY AND EQUIPMENT (Tabl

C. PROPERTY AND EQUIPMENT (Tables)	12 Months Ended
	Oct. 31, 2015
Property, Plant and Equipment [Abstract]
Summary of Property and Equipment	October 31, Useful life (years) 2015 2014 Vehicles 5 $ 250,068 $ 302,182 Leasehold improvements 5-8 647,713 598,040 Computers 3 274,063 678,185 Equipment 3-7 1,196,953 1,345,151 Furniture and fixtures 10 82,256 149,492 Projects in process - 194,094 - Total 2,645,147 3,073,050 Less: Accumulated depreciation and amortization (1,791,202 ) (2,204,009 ) Property and equipment, net $ 853,945 $ 869,041

D. INCOME TAXES (Tables)

D. INCOME TAXES (Tables)	12 Months Ended
	Oct. 31, 2015
D. Income Taxes Tables
Schedule of reconciliation between federal statutory rate and effective tax rate	October 31, 2015 2014 United States federal statutory rate 35.0 % 35.0 % Non United States earnings invested indefinitely, and Puerto Rico Act 73 Tax Grant effect (26.7 )% (20.1 )% Other, net 1.1 % 1.2 % Effective tax rate 9.4 % 16.1 %

E. COMMITMENTS AND CONTINGENC28

E. COMMITMENTS AND CONTINGENCIES (Tables)	12 Months Ended
	Oct. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments for Capital Leases	Twelve months ending October 31, Amount 2016 $ 26,214 2017 24,961 2018 18,697 2019 6,232 Total future minimum lease payments 76,104 Less: Amount of imputed interest ( 1,368 ) Present value of future minimum lease payments 74,736 Current portion of obligation under capital leases (22,784 ) Long-term portion $ 51,952
Schedule of Future Minimum Rental Payments for Operating Leases	Amount 2016 $ 420,277 2017 166,101 2018 81,330 2019 83,770 2020 86,283 Thereafter 7,208 Total minimum lease payments $ 844,969

H. EARNINGS PER SHARE (Tables)

H. EARNINGS PER SHARE (Tables)	12 Months Ended
	Oct. 31, 2015
Earnings Per Share [Abstract]
Schedule of calculations of basic and diluted earnings per share	Years ended October 31, 2015 2014 Net income available to common equity holders - used to compute basic and diluted earnings per share $ 1,624,826 $ 2,413,645 Weighted average number of common shares - used to compute basic earnings per share 23,069,817 22,979,290 Effect of warrants to purchase common stock - 47,706 Effect of restricted stock units to issue common stock 35,878 41,314 Effect of options to purchase common stock 294,391 625,901 Weighted average number of shares - used to compute diluted earnings per share 23,400,086 23,694,211

I. STOCK OPTIONS AND STOCK BASE

I. STOCK OPTIONS AND STOCK BASED COMPENSATION (Tables)	12 Months Ended
	Oct. 31, 2015
I. Stock Options And Stock Based Compensation Tables
2005 Plan stock options activity	Year ended October 31, 2015 2014 Weighted- Weighted- Number of Average Option Number of Average Option Shares Exercise Price Shares Exercise Price Outstanding at beginning of year 1,100,000 $ 0.7985 1,170,000 $ 0.6831 Granted 80,000 $ 1.2800 80,000 $ 2.0500 Exercised (255,000 ) $ 0.6763 (100,000 ) 0.4830 Expired and/or forfeited (25,000 ) $ 0.7300 (50,000 ) $ 0.7300 Total outstanding at end of year 900,000 $ 0.8779 1,100,000 $ 0.7985 Outstanding exercisable stock options at end of year 860,000 $ 0.8592 763,324 $ 0.7614 October 31, 2015 October 31, 2014 Weighted average remaining years in contractual life for: Total outstanding options 1.7 years 2.4 years Outstanding exercisable options 1.6 years 2.3 years Shares of common stock available for issuance pursuant to future stock option grants - 1,300,000
Assumptions used to estimate the fair value of stock options	Year ended October 31, 2015 2014 Expected dividend yield 0.0 % 0.0 % Expected stock price volatility 61.8 % 54.6 % Risk free interest rate 1.0 % 0.8 % Expected life of options 3.2 years 3.2 years Weighted average fair value of options granted $ 0.5465 $ 0.7806
Stock-based compensation	Year ended October 31, 2015 2014 Stock-based compensation expense: Cost of services $ 2,482 $ 10,018 Selling, general and administrative 84,637 84,382 Stock-based compensation before tax 87,119 94,400 Income tax benefit - - Net stock-based compensation expense $ 87,119 $ 94,400 Effect on earnings per share: Basic earnings per share $ (0.004 ) $ (0.004 ) Diluted earnings per share $ (0.004 ) $ (0.004 )

K. SEGMENT DISCLOSURES (Tables)

K. SEGMENT DISCLOSURES (Tables)	12 Months Ended
	Oct. 31, 2015
Segment Reporting [Abstract]
Schedule of Segment Reporting Information	Year ended October 31, 2015 2014 REVENUES: Puerto Rico consulting $ 17,469,716 $ 15,586,343 United States consulting 2,685,242 7,760,941 Europe consulting 1,082,617 2,184,977 Lab (microbiological and chemical testing) 2,005,578 1,718,771 Other segments¹ 141,708 304,007 Total consolidated revenues $ 23,384,861 $ 27,555,039 INCOME (LOSS) BEFORE TAXES: Puerto Rico consulting $ 2,208,330 $ 2,380,745 United States consulting (320,897 ) 898,924 Europe consulting (370,995 ) (514,744 ) Lab (microbiological and chemical testing) (41,910 ) (116,711 ) Other segments¹ 318,280 229,958 Total consolidated income before taxes $ 1,792,808 $ 2,878,172 ¹ Other segments represent activities that fall below the reportable threshold and are carried out in Puerto Rico, United States and Brazil. These activities include a Brazilian compliance consulting division, technical seminars/training division, an information technology services and consulting division, a calibrations division and corporate headquarters, as applicable.

B. MARKETABLE SECURITIES AVAI32

B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Available-for-sale securities
Amortized Cost	$ 4,595,000	$ 4,095,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(61,571)	(27,123)
Estimated Fair Value	4,533,429	4,067,877
U.S. Treasury securities
Available-for-sale securities
Amortized Cost	4,500,000	4,000,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	4,500,000	4,000,000
Puerto Rico Commonwealth Government Development Bond
Available-for-sale securities
Amortized Cost	95,000	95,000
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(61,571)	(27,123)
Estimated Fair Value	$ 33,429	$ 67,877

B. MARKETABLE SECURITIES AVAI33

B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details 1) - USD ($)	Oct. 31, 2015	Oct. 31, 2014
B. Marketable Securities Available For Sale Tables
Cash and cash equivalents	$ 4,500,000	$ 4,000,000
Marketable securities	33,429	67,877
Total available-for-sale securities	$ 4,533,429	$ 4,067,877

B. MARKETABLE SECURITIES AVAI34

B. MARKETABLE SECURITIES AVAILABLE FOR SALE (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
B. Marketable Securities Available For Sale Details Narrative
Marketable securities	$ 95,000	$ 95,000
Marketable securities maturity date	Aug. 31, 2019

C. PROPERTY AND EQUIPMENT (Deta

C. PROPERTY AND EQUIPMENT (Details) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Property and equipment gross	$ 2,645,147	$ 3,073,050
Less: Accumulated depreciation and amortization	(1,791,202)	(2,204,009)
Property and equipment, net	$ 853,945	$ 869,041
Vehicles
Useful life (years)	5 year	5 year
Property and equipment gross	$ 250,068	$ 302,182
Leasehold improvements
Useful life (years)	5-8 years	5-8 years
Property and equipment gross	$ 647,713	$ 598,040
Computers
Useful life (years)	3 year	3 year
Property and equipment gross	$ 274,063	$ 678,185
Equipment
Useful life (years)	3-7 year	3-7 year
Property and equipment gross	$ 1,196,953	$ 1,345,151
Furniture and fixtures
Useful life (years)	10 year	10 year
Property and equipment gross	$ 82,256	$ 149,492
Projects in process
Property and equipment gross	$ 194,094	$ 0

D. INCOME TAXES (Details)

D. INCOME TAXES (Details)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
D. Income Taxes Tables
United States federal statutory rate	35.00%	35.00%
Non United States earnings invested indefinitely, and Puerto Rico Act 73 Tax Grant effect	(26.70%)	(20.10%)
Other, net	1.10%	1.20%
Effective tax rate	9.40%	16.10%

D. INCOME TAXES (Details Narrat

D. INCOME TAXES (Details Narratives) - USD ($)	Oct. 31, 2015	Oct. 31, 2014
Undistributed earnings of Puerto Rican subsidiaries for which deferred income taxes have not been recognized	$ 19,200,000	$ 16,900,000
Approximate aggregate amount of Puerto Rico earnings distribution tax and United States federal income tax, if a distribution of Puerto Rican subsidiaries earnings is made	4,300,000	$ 3,600,000
Pharma-Bio
Unused operating losses	292,000
Potential deferred tax asset	99,000
Pharma-Spain
Unused operating losses	776,000
Potential deferred tax asset	155,000
Pharma-IR
Unused operating losses	1,016,000
Potential deferred tax asset	$ 127,000

E. COMMITMENTS AND CONTINGENC38

E. COMMITMENTS AND CONTINGENCIES (Details) - USD ($)	Oct. 31, 2015	Oct. 31, 2014
Twelve months ending October 31,
2,016	$ 26,214
2,017	24,961
2,018	18,697
2,019	6,232
Total future minimum lease payments	76,104
Less: Amount of imputed interest	(1,368)
Present value of future minimum lease payments	74,736
Current portion of obligation under capital leases	(22,784)	$ (21,994)
Long-term portion	$ 51,952	$ 74,736

E. COMMITMENTS AND CONTINGENC39

E. COMMITMENTS AND CONTINGENCIES (Details 1)	Oct. 31, 2015USD ($)
Commitments and Contingencies Disclosure [Abstract]
2,016	$ 420,277
2,017	166,101
2,018	81,330
2,019	83,770
2,020	86,283
Thereafter	7,208
Total minimum lease payments	$ 844,969

E. COMMITMENTS AND CONTINGENC40

E. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Rent expense	$ 687,000	$ 573,000
Vehicles
Leased vehicles under non-cancelable capital lease agreements	118,790	209,678
Accumulated amortization leased vehicles	49,982	117,112
Amortization expense	$ 23,758	$ 43,439

F. WARRANTS (Details)

F. WARRANTS (Details) - shares	Oct. 31, 2015	Oct. 31, 2014
Notes to Financial Statements
Outstanding Warrants	844,444	0

H. EARNINGS PER SHARE (Details)

H. EARNINGS PER SHARE (Details) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Notes to Financial Statements
Net income available to common equity holders - used to compute basic and diluted earnings per share	$ 1,624,826	$ 2,413,645
Weighted average number of common shares - used to compute basic earnings per share	23,069,817	22,979,290
Effect of warrants to purchase common stock	0	47,706
Effect of restricted stock units to issue common stock	35,878	41,314
Effect of options to purchase common stock	294,391	625,901
Weighted average number of shares - used to compute diluted earnings per share	23,400,086	23,694,211

I. STOCK OPTIONS AND STOCK BA43

I. STOCK OPTIONS AND STOCK BASED COMPENSATION (Details) - $ / shares	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Shares
Options Outstanding, Beginning	1,100,000	1,170,000
Options Granted	80,000	80,000
Options Exercised	(255,000)	(100,000)
Options Expired and or forfeited	(25,000)	(50,000)
Options Outstanding, Ending	900,000	1,100,000
Options Exercisable, Ending	860,000	763,324
Weighted Average Option Exercise Price
Options Outstanding, Beginning	$ 0.7985	$ 0.6831
Options Granted	1.2800	2.0500
Options Exercised	0.6763	0.4830
Options Expired and or forfeited	0.7300	0.7300
Options Outstanding, Ending	0.8779	0.7985
Options Exercisable, Ending	$ 0.8592	$ 0.7614
Weighted average remaining years in contractual life for: Total outstanding options	1 year 8 months 12 days	2 years 4 months 24 days
Weighted average remaining years in contractual life for: Outstanding exercisable options	1 year 7 months 6 days	2 years 3 months 18 days
Shares of common stock available for issuance pursuant to future stock option grants	0	1,300,000

I. STOCK OPTIONS AND STOCK BA44

I. STOCK OPTIONS AND STOCK BASED COMPENSATION (Details 1) - $ / shares	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Equity [Abstract]
Expected dividend yield	0.00%	0.00%
Expected stock price volatility	61.80%	54.60%
Risk free interest rate	1.00%	0.80%
Expected life of options	3 years 2 months 12 days	3 years 2 months 12 days
Weighted average fair value of options granted	$ 0.5465	$ 0.7806

I. STOCK OPTIONS AND STOCK BA45

I. STOCK OPTIONS AND STOCK BASED COMPENSATION (Details 2) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Stock-based compensation before tax	$ 87,119	$ 94,400
Income tax benefit	0	0
Net stock-based compensation expense	$ 87,119	$ 94,400
Effect on earnings per share: Basic earnings per share	$ (0.004)	$ (0.004)
Effect on earnings per share: Diluted earnings per share	$ (0.004)	$ (0.004)
Cost of services
Stock-based compensation before tax	$ 2,482	$ 10,018
Selling, general and administrative
Stock-based compensation before tax	$ 84,637	$ 84,382

I. STOCK OPTIONS AND STOCK BA46

I. STOCK OPTIONS AND STOCK BASED COMPENSATION (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
I. Stock Options And Stock Based Compensation Details Narrative
Aggregate intrinsic value of options outstanding	$ 165,000	$ 571,000
Stock options exercised on a cashless basis	255,000	100,000

J. CONCENTRATION OF RISKS (Deta

J. CONCENTRATION OF RISKS (Details Narrative)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Major Customer A
Revenue from major customers	13.00%	10.00%
Major Customer B
Revenue from major customers	10.00%	17.00%
Major Customer C
Revenue from major customers	6.00%	19.00%
Major Customer Total
Revenue from major customers	29.00%	46.00%
Amount due from major customers as percentage of accounts receivable	21.00%	43.00%
Global Customer A
Revenue from major customers	17.00%	40.00%
Global Customer B
Revenue from major customers	13.00%	10.00%
Global Customer Total
Revenue from major customers	30.00%	50.00%
Amount due from major customers as percentage of accounts receivable	20.00%	38.00%

K. SEGMENT DISCLOSURES (Details

K. SEGMENT DISCLOSURES (Details) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
Revenues	$ 23,384,861	$ 27,555,039
Income (loss) before taxes	1,792,808	2,878,172
Puerto Rico consulting
Revenues	17,469,716	15,586,343
Income (loss) before taxes	2,208,330	2,380,745
United States consulting
Revenues	2,685,242	7,760,941
Income (loss) before taxes	(320,897)	898,924
Europe consulting
Revenues	1,082,617	2,184,977
Income (loss) before taxes	(370,995)	(514,744)
Lab (microbiological and chemical testing)
Revenues	2,005,578	1,718,771
Income (loss) before taxes	(41,910)	(116,711)
Other segments
Revenues	141,708	304,007
Income (loss) before taxes	$ 318,280	$ 229,958

L. RETIREMENT PLAN (Details Nar

L. RETIREMENT PLAN (Details Narrative) - USD ($)	12 Months Ended
	Oct. 31, 2015	Oct. 31, 2014
L. Retirement Plan Details Narrative
Contributions made to retirement plan	$ 80,800	$ 86,100