4. Income Taxes

3 Months Ended

Apr. 30, 2012

4. Income Taxes:

4. Income Taxes

4.  Income Taxes

   The benefit for income taxes for the three and six months ended April 30, 2012 and 2011 is estimated using the estimated annual effective tax rate for the fiscal years ending October 31, 2012 and 2011.  The effective income tax rate for the first six months of the Companies’ fiscal year ending October 31, 2012 (such fiscal year “Fiscal 2012”) and Fiscal 2011 was estimated at 34%.

   The Companies’ practice is to recognize interest and/or penalties related to income tax matters as income tax expense in its combined financial statements. As of and for the six months ended April 30, 2012, no interest and penalties have been accrued in the combined balance sheet and no expense is reflected in the combined statement of operations.  At April 30, 2012, federal and state tax returns for fiscal years ending October 31, 2008 and later are subject to future examination by the respective tax authorities.