DISCONTINUED OPERATIONS

3 Months Ended

Jul. 31, 2012

Discontinued Operations

DISCONTINUED OPERATIONS

NOTE 9 - DISCONTINUED OPERATIONS

St. Louis and Sarasota Operations Common Stock Sales

Effective September 1, 2011, the Company entered into a Securities Purchase Agreement and Amendment No. 1 to the Escrow Agreement with Multiband, Inc. (Multiband) traded under the NASDAQ symbol MBND, for the acquisition by Multiband of the common stock of the Company’s former wholly-owned subsidiaries, the St. Louis and Sarasota Operations, for $2,000,000 in cash.  The $2,000,000 in proceeds was used to reduce the outstanding borrowings under a previous loan agreement with BOA.

Hartford and Lakewood Operations Asset Sales

On July 25, 2012, the Company and the Hartford and Lakewood Operations entered into an asset purchase agreement (the Purchase Agreement), pursuant to which the Hartford and Lakewood Operations sold substantially all of their assets to two newly-created subsidiaries of Kavveri Telecom Products Limited (Kavveri) for a purchase price of $5.5 million in cash, subject to adjustment, and the assumption of their various liabilities.  At closing, the Company received $4.9 million in cash, with the remaining $600,000 of the purchase price to be placed into escrow pursuant to the Purchase Agreement. The Company used the proceeds from this sale to repay the full amount outstanding under the Credit Agreement of $4,022,320 as of July 25, 2012.  The difference of $877,680 was deposited in its operating cash account.

The parties agreed to place $350,000 of the purchase price into escrow pending assignment of certain contracts post-closing, with the Company receiving those funds upon successful assignment of the contracts. The remaining $250,000 is to be escrowed for purposes of satisfying certain adjustments to the purchase price based on a final net asset valuation to be completed after closing as well as repurchase obligations of certain delinquent accounts receivable. No later than three days after the final determination of the net asset valuation, the purchasers are required to deposit the $600,000 into escrow. On September 4, 2012, the purchasers provided the Company with their net asset valuation as of the closing date.  The Company is currently evaluating the net asset valuation within its 30 day review period to approve or disagree with such calculations. If the parties disagree, they have 20 days to resolve any differences, and if they are unable to come to an agreement, the matter will then be submitted to one or more independent, nationally-recognized accounting firms for final determination.

The Company has reported the financial activity of these four operations as discontinued operations for all periods presented.  A summary of the operating results for the discontinued operations is as follows:

	Three Months Ended
	July 31,
	2012			2011
REVENUE	$	4,901,501		$	6,803,412
COSTS AND EXPENSES:
Cost of revenue		4,088,400			5,365,943
Selling, general and administrative expenses		1,291,164			1,898,584
Depreciation and amortization		101,750			165,659
		5,481,314			7,430,186
OPERATING LOSS FROM DISCONTINUED OPERATIONS		(579,813	)		(626,774	)
Interest expense		5,315			139
Loss from discontinued operations before income tax provision (benefit)		(585,128	)		(626,913	)
Income tax provision (benefit)		54,164			(438,228	)
Loss from discontinued operations, net of tax		(639,292	)		(188,685	)
Gain from disposal		2,324,631			-
TOTAL INCOME (LOSS) FROM DISCONTINUED OPERATIONS	$	1,685,339		$	(188,685	)

The Company incurred approximately $55,000 of expenses directly associated with the asset sales of the Hartford and Lakewood Operations.

There were no assets or liabilities included in the condensed consolidated balance sheet for the Hartford and Lakewood Operations at July 31, 2012.  The major classes of assets and liabilities included in the condensed consolidated balance sheets at April 30, 2012 for the Hartford and Lakewood Operations as discontinued operations were as follows:

	April 30, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	2,432
Accounts receivable, net of allowance of $134,929 at April 30, 2012		5,837,341
Costs and estimated earnings in excess of billings on uncompleted contracts		183,760
Inventory		1,416,773
Prepaid expenses and other current assets		82,971
Prepaid income taxes		47,920
Total current assets		7,571,197
PROPERTY AND EQUIPMENT, net		1,013,377
OTHER ASSETS		51,478
Total assets		8,636,052
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of loans payable		99,002
Income taxes payable		2,000
Accounts payable and accrued expenses		4,754,099
Billings in excess of costs and estimated earnings on uncompleted contracts		33,103
Deferred revenue		498,934
Total current liabilities		5,387,138
Loans payable, net of current portion		172,222
Total liabilities		5,559,360
Total net assets	$	3,076,692