INCOME TAXES (Tables)

12 Months Ended

Apr. 30, 2013

Schedule of Income before Income Tax, Domestic and Foreign

Loss from continuing operations before provision for income taxes show below is based on the geographic locations to which such loss is attributed for the years ended April 30:

	2013		2012
Loss from continuing operations before income taxes:

Domestic	$	(4,186,354)	$	(14,245,758)
Foreign		(3,037,790)		(569,023)

Totals	$	(7,224,144)	$	(14,814,781)

Schedule of Components of Income Tax Expense (Benefit)

The provision for income taxes from continuing operations for the years ended April 30, 2013 and 2012 is summarized as follows:

	2013		2012
Current
Federal	$	-	$	-
State		13,859		53,218
Foreign		192,736		266,216
Totals		206,595		319,434
Deferred
Federal		-		1,618,303
State		-		237,388
Foreign		551,549		(298,649)
Totals		551,549		1,557,042
Total provision for income taxes	$	758,144	$	1,876,476

Schedule of Effective Income Tax Rate Reconciliation

The principal differences between the statutory income tax and the actual provision for income taxes are summarized as follows:

	2013		2012
Expected tax (benefit) provision at statutory rate (34%)	$	(2,456,209)	$	(5,037,026)
Rate differential between US statutory rate (34%) and foreign tax rates		1,777,133		161,035
State and local taxes, net of federal tax benefit		(230,928)		(870,784)
Valuation allowance		259,196		7,578,992
Non deductible financing costs		1,379,848		-
Non deductible change in fair value of acquisition-related contingent consideration		-		28,434
Other permanent differences		29,104		15,825
Totals	$	758,144	$	1,876,476

Schedule of Deferred Tax Assets and Liabilities

The components of the Company’s deferred tax assets and liabilities are as follows:

	2013		2012
Deferred tax assets:

Allowance for doubtful accounts	$	226,998	$	246,238
Inventory markdown reserve		3,597		-
Reserve for loss on work-in-progress		8,610		648,096
Net operating loss carryforward		484,827		180,741
Bonus and vacation accruals		148,282		86,120
Non-qualified stock options		67,050		51,712
Federal benefit for foreign tax credit		132,800		132,800
Valuation allowance		(966,902)		(972,884)
Deferred tax assets-current		105,262		372,823

Intangible assets		3,375		3,682
Goodwill		39,210		42,782
Property and equipment		355,489		355,489
Net operating loss carryforward		8,551,386		6,889,345
Valuation allowance		(8,853,193)		(6,586,769)
Deferred tax assets-long-term		96,267		704,529

Deferred tax liabilities:

Deferred revenue		(13,888)		(65,273)
Deferred tax liabilities-current		(13,888)		(65,273)

Property and equipment		(111,801)		(134,661)
Intangible assets		(75,840)		(118,107)
Cumulative translation adjustments		-		(207,762)
Deferred tax liabilities-long-term		(187,641)		(460,530)

Net deferred tax assets	$	-	$	551,549

Summary of Valuation Allowance

The tax change in the valuation allowance is listed below:

	2013		2012
Balance at beginning of the year	$	7,559,653	$	1,221,800

Charged to costs and expenses		2,260,442		6,545,615
Reversed to gross tax assets and other accounts		-		(207,762)

Balance at end of the year	$	9,820,095	$	7,559,653